FEDERICO A. MORENO, District Judge.
This multidistrict litigation ("MDL") consolidates allegations of economic loss and personal injury related to airbags manufactured by defendants Takata Corporation and TK Holdings (collectively, "Takata") and equipped in vehicles manufactured by defendants Honda, BMW, Ford, Mazda, Mitsubishi, Nissan, Subaru, and Toyota (collectively, the "Automotive Defendants") (collectively with Takata, the "Defendants"). This cause comes before the Court upon Ford Motor Company's ("Ford['s]") Motion to Dismiss (D.E. 612). The Court has reviewed the Motion, Plaintiffs' Omnibus Response (D.E. 658) and Ford's Reply (D.E. 694). Additionally, the parties raised some of their briefed arguments at oral argument. Ford's Motion asks the Court to dismiss all counts alleged against it in the Second Amended Economic Loss Complaint (D.E. 579).
Plaintiffs in this case are consumers of vehicles equipped with Takata airbags containing ammonium nitrate as a propellant. The Court has divided the MOL's component cases into two tracks: an economic loss track for plaintiffs alleging purely economic damages and a personal injury track for plaintiffs alleging damages to a person. This order pertains to the economic loss track cases. In the Complaint, Plaintiffs allege 11 counts against Ford.
These 11 counts against Ford consist of the following: Count 3 for violations of the Magnuson-Moss Warranty Act; Count 20 for fraudulent concealment; Count 21 for breach of Michigan's implied warranty of merchantability; Count 22 for unjust enrichment; Count 23 for violation of the Michigan Consumer Protection Act; Count 24 for negligence; Count 47 for violation of Florida's Deceptive and Unfair Trade Practices Act on behalf of a Florida sub-class; Count 48 for breach of Florida's implied warranty of merchantability on behalf of a Florida sub-class; Count 87 for violation of the Ohio Consumer Sales Practices Act on behalf of an Ohio sub-class; Count 97 for violation of Texas's Deceptive Trade Practices Act on behalf of a Texas sub-class; and Count 98 for breach of Texas's implied warranty of merchantability on behalf of a Texas sub-class.
These II counts arise out of seven Named Plaintiffs' Ford purchases. The seven Named Plaintiffs are: (I) Joseph Aliscio; (2) John Huebner; (3) Eugennie Sinclair; (4) Brooks Weisblat; (5) Nancy Barnett; (6) Alicia Benton and (7) Teresa Woodard.
"A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss, a "complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). Detailed factual allegations are not required, but a pleading must offer more than "labels and conclusions" or "a formulaic recitation of the elements of the cause of action." Twombly, 550 U.S. at 555.
Where a cause of action sounds in fraud, however, Federal Rule of Civil Procedure 9(b) must be satisfied in addition to the more relaxed standard of Rule 8. Under Rule 9(b), "a party must state with particularity the circumstances constituting fraud or mistake," although "conditions of a person's mind," such as malice, intent, and knowledge may be alleged generally. Fed. R. Civ. P. 9(b). "The `particularity' requirement serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." W. Coast Roofing & Waterproofing, Inc. v. Johns Manville, Inc., 287 F. App'x 81, 86 (11th Cir. 2008) (citations omitted).
Plaintiffs assert two counts against Ford arising only under Michigan law and one count arising only under Ohio law.
Applying the analysis from the Mazda Order, Florida's choice of law rules apply to the claims brought by Aliscio, Barnett, Benton, Sinclair, Weisblat, and Woodard because their cases were either transferred into the MDL from the Southern District of Florida or filed directly into the MDL. Pennsylvania's choice of law rules apply to Huebner's claims because his case was transferred into the MDL from the Western District of Pennsylvania.
This Court, in its order on BMW's motion to dismiss (D.E. 1256 at 9), discussed its analysis on Florida's choice of law, which is especially applicable to the claims against Ford.
Pennsylvania "employs a `flexible rule' which combines the `significant contacts' analysis of Restatement (Second) of Conflict of Laws §145 and a `governmental interest analysis.'" In re Tylenol (Acetaminophen) Mktg., No. 13-md-02436, 2015 WL 2417411, at *2 (May 20, 2015 E.D. Pa.) (citing Griffith v. United Air Lines, Inc., 203 A.2d 796,805 (Pa. 1964)). Pennsylvania's Supreme Court has stated, "[t]he merit of such a rule is that it gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context and thereby allows the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation." Griffith, 203 A.2d at 806 (internal quotations omitted). Pennsylvania "permits analysis of the policies and interests underlying the particular issue before the court and directs courts to apply the law of the state with the most interest in the problem." Travelers Prop. Cas. Co. of Am. v. Chubb Custom Ins. Co., 864 F.Supp.2d 301, 308 (E.D. Pa. 2012) (quoting Specialty Surfaces Int'l, Inc. v. Cont'l Cas. Co., 609 F.3d 223, 229 (3d Cir. 2010)).
For the reasons stated in the Mazda Order,
Applying Florida's choice of law rules, Florida substantive law applies to the claims brought by Aliscio, Sinclair, and Weisblat because they purchased their vehicles in Florida and reside in Florida. Florida's choice of law rules also dictate that Texas law applies to Barnett's claims because she purchased her vehicle and resides in Texas, and South Carolina law applies to the claims alleged by Benton and Woodard because they purchased their vehicles in South Carolina and reside in South Carolina. Applying Pennsylvania's choice of law rules to Huebner's claims, California law governs, as the purported harm would have occurred in California, where he purchased his vehicle.
Because neither Michigan nor Ohio law govern the claims brought against Ford, Ford's Motion to Dismiss is
Consistent with the Court's Mazda Order,
Consistent with the Court's Mazda Order,
Ford moves to dismiss Count 20 for fraudulent concealment as alleged by the seven Named Plaintiffs.
Ford argues that Plaintiffs' claims for fraudulent concealment under Florida law should be dismissed for five reasons: (1) Plaintiffs have not adequately pleaded Ford had knowledge of a defect; (2) Plaintiffs fail to meet the heightened pleading requirements of Rule 9(b); (3) Plaintiffs fail to meet the requirement of Rule 8; (4) Plaintiffs were not owed a duty by Ford to disclose any information regarding the Takata airbags; and (5) Plaintiffs' claims are barred by the economic loss rule.
Consistent with its Mazda Order, the Court finds that Plaintiffs have adequately pleaded manifestation and Ford's knowledge under Rule 9(b)'s heightened pleading standard for purposes of fraudulent concealment.
The Court also concludes that Plaintiffs have adequately alleged that Ford had a duty to disclose information about the Takata airbags. Florida law imposes a duty to disclose on a defendant if that "defendant's failure to speak would render the defendant's own prior speech misleading or deceptive." See, e.g., S.E.C. v. City of Miami, Fla., 988 F.Supp.2d 1343, 1356 (S.D. Fla. 2013). Plaintiffs have alleged that Ford had a duty to disclose the Inflator Defect because it "made incomplete representations about the safety and reliability of the Class Vehicles, while purposefully withholding material facts from Plaintiffs that contradicted these representations." (D.E. 579 at ¶ 667). Accordingly, the Court finds that Plaintiffs have sufficiently alleged that Ford had a duty to disclose additional facts about the safety of its vehicles under Florida law.
Ford argues that Barnett's claim for fraudulent concealment should be dismissed for four reasons. Specifically, Ford argues that (1) Plaintiffs have not adequately pleaded Ford had knowledge of a defect; (2) Plaintiffs fail to meet the heightened pleading requirements of Rule 9(b); (3) Plaintiffs fail to meet the requirement of Rule 8; and (4) Plaintiffs were not owed a duty by Ford to disclose any information regarding the Takata airbags.
Consistent with its Mazda Order, the Court finds that Plaintiffs have adequately pleaded manifestation and knowledge under Rule 9(b)'s heightened pleading standard for purposes of fraudulent concealment. The Court also finds Plaintiffs have adequately alleged a duty to disclose information about the Takata airbags.
Texas law states that "[a] duty to disclose may arise in four situations: (1) when there is a fiduciary relationship; (2) when one voluntarily discloses information, the whole truth must be disclosed; (3) when one makes a representation, new information must be disclosed when that new information makes the earlier representation misleading or untrue; and (4) when one makes a partial disclosure and conveys a false impression." Vial v. Gas Sol., Ltd., 187 S.W.3d 220, 230 (Tex. App. 2006). For the reasons discussed supra, the Court finds that Plaintiffs have sufficiently alleged that Ford had a duty to disclose additional facts about the safety of its vehicles under Texas law.
Ford argues that Huebner's claim for fraudulent concealment should be dismissed because (1) Plaintiffs have not adequately pleaded Ford had knowledge of a defect; (2) Plaintiffs fail to meet the heightened pleading requirements of Rule 9(b); (3) Plaintiffs fail to meet the requirement of Rule 8; and (4) Plaintiffs were not owed a duty by Ford to disclose any information regarding the Takata airbags. Consistent with its prior Mazda Order, the Court finds that Plaintiffs have adequately pleaded both the manifestation and Ford's knowledge of the inflator defect.
The Court also concludes that Plaintiffs have adequately alleged that Ford had a duty to disclose information about the Takata airbags under California law. Under California law, "concealment or partial suppression of material facts constitutes fraud when there is a duty to disclose those facts. The duty to disclose generally requires a relationship grounded in `some sort of transaction between the parties.' Thus, a duty to disclose may arise from the relationship between seller and buyer." Los Defensores, Inc. v. Gomez, 166 Cai.Rptr.3d 899, 915 (Cal. Ct. App. 2014) (internal citations omitted). Accordingly, the Court finds that Plaintiffs have sufficiently alleged that Ford had a duty to disclose additional facts about the safety of its vehicles under California law.
Ford argues that Benton's and Woodard's claims for fraudulent concealment should be dismissed because (1) Plaintiffs have not adequately pleaded Ford had knowledge of a defect; (2) Plaintiffs fail to meet the heightened pleading requirements of Rule 9(b); (3) Plaintiffs fail to meet the requirement of Rule 8; and (4) Plaintiffs were not owed a duty by Ford to disclose any information regarding the Takata airbags. Consistent with its Mazda Order, the Court finds Plaintiffs have adequately pleaded both the manifestation and Ford's knowledge of the inflator defect.
The Court also concludes that Plaintiffs have adequately alleged that Ford had a duty to disclose information about the Takata airbags under South Carolina law. Like Florida, South Carolina law does not always require a fiduciary relationship for a duty to disclose to exist for purposes of a fraudulent concealment claim. See Fisher v. Pelstring, 817 F.Supp.2d 791,823 (D.S.C. 2011). The Court finds that Plaintiffs have sufficiently alleged that Ford had a duty to disclose additional facts about the safety of its vehicles under South Carolina law.
Ford moves to dismiss Count 22, for unjust enrichment, as alleged by the seven Named Plaintiffs.
Ford moves to dismiss Aliscio's, Sinclair's, and Weisblat's claims for unjust enrichment because (1) Plaintiffs have an adequate remedy at law and (2) Plaintiffs have failed to allege that they conferred a benefit on Ford.
For the reasons stated in the Mazda Order
Ford argues that the unjust enrichment claims must be dismissed because Plaintiffs have failed to allege that they conferred any benefit on Ford. Plaintiffs respond that, while plaintiffs must "directly confer a benefit on defendants, they need not have direct contact with the defendants to do so" and that a plaintiffs money could pass to a defendant by a third party. (D.E. 658 at 54-55).
Under Florida law, "[a] claim for unjust enrichment has three elements: (1) the plaintiff has conferred a benefit on the defendant; (2) the defendant voluntarily accepted and retained that benefit; and (3) the circumstances are such that it would be inequitable for the defendants to retain it without paying the value thereof." Virgilio v. Ryland Grp., Inc., 680 F.3d 1329, 1337 (11th Cir. 2012). Plaintiffs are correct, however, that a plaintiff may satisfy the first element through indirect contact with a defendant, e.g. through an intermediary. See Williams v. Wells Fargo Bank N.A., No. 11-21233-CIV-ALTONAGA, 2011 U.S. Dist. LEXIS 119136, at *15-16 (S.D. Fla. Oct. 14, 2011) ("It would not serve the principles of justice and equity to preclude an unjust enrichment claim merely because the `benefit' passed through an intermediary before being conferred on a defendant."); Romano v. Motorola, Inc., No. 07-60517-CIV, 2007 WL 4199781, *2 (S.D. Fla. Nov. 26, 2007) ("Defendant erroneously equates direct contact with direct benefit in arguing that because plaintiff here did not purchase either his phone or his batteries from Motorola, plaintiff conferred no direct benefit on Motorola.").
Aliscio, Sinclair, and Weisblat purchased their used vehicles in Florida from Bev Smith Toyota, CarMax, and CNC Exotics, respectively. Plaintiffs do not allege these dealerships had any affiliation with Ford. The Court cannot reasonably infer from the facts alleged that Ford ever held any money belonging to Aliscio, Sinclair, or Weisblat. Accordingly, the Court finds that Ford's motion to dismiss Count 22 as to Aliscio, Sinclair, and Weisblat should be
Ford argues that Barnett's claim for unjust enrichment should be dismissed because Texas law does not acknowledge unjust enrichment as a freestanding cause of action.
To be sure, Texas courts have held that "[u]njust enrichment, is not an independent cause of action but rather characterizes the result of a failure to make restitution benefits either wrongfully or passively received under circumstances that give rise to an implied or quasi-contractual obligation to repay." Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App. 2009) (citation omitted). However, "[i]n some circumstances, overpayments under a valid contract may give rise to a claim for restitution or unjust enrichment." Id. at 690-91 (citation omitted).
However, Barnett purchased her used vehicle in Texas from Henna Chevrolet LP. Plaintiffs do not allege this dealership had any affiliation with Ford. The Court cannot reasonably infer from the facts alleged that Ford ever held any money belonging to Barnett. Accordingly, the Court finds that Ford's motion to dismiss Count 22 as to Barnett should be
Ford also argues that Huebner's claim for unjust enrichment should be dismissed because California law does not acknowledge unjust enrichment as a freestanding cause of action. California recognizes the principle behind unjust enrichment by requiring "restitution if [a defendant] is unjustly enriched at the expense of another. The recipient of the benefit is liable only if the circumstances are such that, as between two persons, it is unjust for the recipient to retain it." City of Chula Vista v. Gutierrez, 143 Cal.Rptr.3d 689, (Cal. Ct. App. 2012) (internal citation omitted).
Here, Plaintiffs only state that Huebner's used 2005 Ford Mustang was purchased in Burbank, California. It is unclear if Huebner purchased this vehicle from a Ford dealership like Plaintiffs Benton and Woodard, or if he purchased it from a dealership with no affiliation to Ford, such as CarMax. Accordingly, the Court finds that Ford's motion to dismiss Count 22 as to Huebner should be
Finally, Ford argues that Benton's and Woodard's claims for unjust enrichment should be dismissed because (1) Plaintiffs have an adequate remedy at law and (2) Plaintiffs have failed to allege that they conferred a benefit on Ford.
Unjust enrichment claims in South Carolina have the following three elements: "(1) a benefit conferred by plaintiff upon the defendant; (2) realization of that benefit by the defendant; and (3) retention of the benefit by the defendant under circumstances that make it inequitable for her to retain it without paying its value." QHG of Lake City, Inc. v. McCutcheon, 600 S.E.2d 105, 108 (S.C. Ct. App. 2004).
Benton purchased her used Ford from Summerville Ford in South Carolina. Woodard purchased her new Ford from Fairway Ford in South Carolina. The Court is unaware of any South Carolina case law that would require the Court to reach a different result as to Benton and Woodard in light of its decisions from previous orders regarding other Plaintiffs who purchased used and new cars from intermediary dealerships. Accordingly, the Court finds that Ford's motion to dismiss Count 22 as to Benton and Woodard should be
Ford moves to dismiss Count 47 for violation of Florida's Deceptive and Unfair Trade Practices Act as alleged by the Florida sub-class. Ford proffers three reasons Count 47 must be dismissed: (1) Plaintiffs have not alleged manifestation of the purported defect; (2) Plaintiffs fail to adequately allege their fraud-based claims pursuant to Rule 9(b)'s heightened pleading standard; and (3) Plaintiff Aliscio's claim is time-barred by Florida's four-year statute of limitations for these claims. Consistent with its prior rulings, Ford's motion to dismiss Count 47 is
Ford moves to dismiss Count 97 for violation of Texas's Deceptive Trade Practices Act because Plaintiffs fail to adequately allege the deceptive conduct occurred in connection with a consumer transaction. The Court finds that Plaintiff Barnet has adequately alleged deceptive conduct on Ford's part. Specifically, Barnett alleges that Ford knew of the inflator defect and "allowed unsuspecting new and used car purchasers to continue buy/lease the Class Vehicles." Ford's motion to dismiss Count 97 is
Ford moves to dismiss Count 48, asserting breach of Florida's implied warranty of merchantability and Count 3, asserting violation of the Magnuson-Moss Warranty Act. In response, Plaintiffs state they "have elected not to pursue implied warranty claims under Florida" law." (D.E. 658 at 91 n.75). Consistent with the Mazda Order regarding the Magnuson-Moss Warranty Act claims asserted by Florida Plaintiffs,
Ford moves to dismiss Count 98 for breach of Texas's implied warranty of merchantability and Count 3 for violation of the Magnuson-Moss Warranty Act because Plaintiffs fail to identify an implied warranty breach that occurred during the warranty period. Consistent with the Mazda Order,
Ford also moves to dismiss the Magnuson-Moss Warranty Act claims brought by the remaining non-Florida Plaintiffs-Huebner, Benton, and Woodard. Ford makes three arguments in support of its position: (I) Plaintiffs failed to provide the required pre-suit notice; (2) the implied warranties were limited to the duration of Ford's New Vehicle Limited Warranty, and that it has expired; and (3) Plaintiffs have not alleged manifestation of the purported defect.
Ford argues that Plaintiffs' failure to provide pre-suit notice bars their implied warranty claims. Plaintiffs allege, however, that Defendants were put on notice of their breaches of implied warranties from consumer complaints, internal investigations, numerous individual letters sent by consumers, and their knowledge of the alleged inflator defect. Plaintiffs also argue that this notice is sufficient, as the applicable provisions do not specify a particular kind of notice, only that notice to the defendant be given. Furthermore, Ford Plaintiff Barnett sent Ford a notice letter on October 27, 2014, prior to the filing of Plaintiffs' Consolidated Class Action Complaint. Thus, the Court finds that Plaintiffs have alleged sufficient facts to satisfy the pre-suit notice requirement.
Ford argues that the Non-Florida Plaintiffs' Magnuson-Moss Warranty Act claims must be dismissed because the implied warranties on their vehicles were limited to the duration of their New Vehicle Limited Warranties, which have all expired. Plaintiffs respond (1) that they adequately alleged that any durational limits on the New Vehicle Limited Warranties and associated implied warranties are unconscionable, and therefore unenforceable; and (2) that they adequately alleged that Ford breached the implied warranty within the warranty period because the inflator defect existed in the vehicles-and Ford knew about the defect at the time of sale.
As discussed in the Mazda Order,
Based on the foregoing, it is hereby