MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE.
In this putative consolidated class action, seventeen plaintiffs from thirteen states bring a variety of claims against Defendant General Motors Company ("GM") arising out of alleged defects in the air conditioning systems of their GM vehicles. GM has now moved to dismiss most of Plaintiffs' claims. (See Mot. to Dismiss, ECF #35.) For the reasons that follow, GM's motion is
GM is one of the world's leading automakers. Plaintiffs are consumers who purchased various GM vehicles under the Chevrolet, GMC, and Cadillac brands (the "Class Vehicles").
Plaintiffs filed their First Amended Consolidated Master Class Action Complaint (the "First Amended Complaint"), the operative pleading in this action, on August 14, 2018. (See Am. Compl., ECF #24.) The named Plaintiffs are as follows:
These Plaintiffs bring claims for breach of the Class Vehicles' express and implied warranties, unjust enrichment, fraud, and violations of the consumer protection laws of various states. GM moved to dismiss Plaintiffs' claims on November 13, 2018. (See Mot. to Dismiss, ECF #35.) The Court held a hearing on the motion on June 25, 2019.
GM moves to dismiss Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6). "To survive a motion to dismiss" under Rule 12(b)(6), "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, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible when a plaintiff pleads factual content that permits a court to reasonably infer that the defendant is liable for the alleged misconduct. See id. When assessing the sufficiency of a plaintiff's claim, a district court must accept all of a complaint's factual allegations as true. See Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 512 (6th Cir. 2001). "Mere conclusions," however, "are not entitled to the assumption of truth. While legal conclusions can provide the complaint's framework, they must be supported by factual allegations." Iqbal, 556 U.S. at 664, 129 S.Ct. 1937. A plaintiff must therefore provide "more than labels and conclusions," or "a formulaic recitation of the elements of a cause of action" to survive a motion to dismiss. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
GM moves to dismiss nearly all of Plaintiffs' claims on several different grounds.
The Court will address each of these categories in turn below.
In Counts 11, 12, 19, and 35 of the First Amended Complaint, Plaintiffs Carl Williams, Clarence Larry, Leslie Griffin, and James Won allege that GM breached the express "Limited Warranty" of the vehicles they purchased. (See Am. Compl., ECF #24 at Counts 11, 12, 19, and 35.) These "bumper-to-bumper" Limited Warranties provide that GM will pay for any necessary "repairs to correct any vehicle defect ... related to materials or workmanship occurring during the warranty period." (Limited Warranty, ECF #35-2 at Pg. ID 1755.
Likewise, Plaintiffs Carl Williams, Clarence Larry, Erica Wolfe, Andrew C. Hill, Edilberto Gomez, Leslie Griffin, Richie Ainsworth, Corey Steketee, James Won, Hayes Ellis, and Marcus Bell claim GM breached their vehicles' implied warranties. (See Am. Compl., ECF #24 at Counts 13, 14, 18, 20, 25, 28, 31, 37, and 42.) Under the terms of the Limited Warranty, any implied warranties are limited in duration to the same period (three years or 36,000 miles, whichever occurs first) that applies to the Limited Warranty: "
GM argues that all Plaintiffs — with the exception of Plaintiff Carl Williams
To maintain a claim for breach of an express or implied warranty, a plaintiff must, among other things, "seek warranty service within the [ ] period contained in the ... [w]arranty." In re Ford Motor Co. Speed Control Deactivation Switch Prods. Liab. Litig., 2007 WL 2421480, at *7 (E.D. Mich. Aug. 24, 2007) (noting that plaintiffs' breach of express and implied warranty claims "fail[ed]" because "[n]one of the named Plaintiffs allege[d] that they sought warranty service ... within the three-year warranty period"); see also In re OnStar Contract Litig., 600 F.Supp.2d 861, 877-79 (E.D. Mich. 2009) (dismissing breach of express warranty claim where plaintiffs "fail[ed] to allege that they sought service for the OnStar equipment in their vehicle, or actually incurred any problems with same, within the durational limits specified in their respective express warranties").
Here, no Plaintiff (other than Carl Williams) alleges that his or her air conditioning system failed and/or that he or she sought warranty coverage related to the air conditioning system during the durational limits covering the express and implied warranties. Indeed, the air conditioning systems in many of the named Plaintiffs' vehicles did not fail until tens of thousands of miles after they reached the 36,000-mile durational limit under their warranties.
Plaintiffs counter that their express and implied warranty claims are viable because "[a]ny time and mileage limits set forth in the [Limited] Warranty [are] unconscionable" and therefore unenforceable as a matter of law. (Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1907; see also id. at Pg. ID 1917-18, discussing unconscionability of implied warranties.) The Court disagrees.
"A plaintiff must allege both substantive and procedural unconscionability when claiming a breach of warranty based on the theory of unconscionability." Rivera v. Ford Motor Co., 2017 WL 3485815, at *3 (E.D. Mich. Aug. 15, 2017). "A contract is substantively unconscionable if its provisions are so outrageously unfair as to shock the judicial conscious." Id. at *4. In assessing procedural unconscionability, a court asks: "[W]hat is the relative bargaining power of the parties, their relative economic strength, the alternative sources of supply, in a word, what are their options?" Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 322 (6th Cir. 1998) (applying Michigan law); see also Smith v. Ford Motor Co., 749 F.Supp.2d 980, 993 (N.D. Cal. 2010) (applying California law and explaining that "[t]he procedural element
Plaintiffs fail to plausibly allege procedural unconscionability. They contend that the durational limits in the express and implied warranties are procedurally unconscionable because "there was unequal bargaining power between GM and Plaintiffs ... as Plaintiffs ... had no other options for purchasing warranty coverage other than directly from GM." (Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1908.) But as GM aptly points out, "the auto industry is one of the most competitive marketplaces that exists." (Mot. to Dismiss, ECF #35 at Pg. ID 1709.) An individual seeking to purchase one of the Class Vehicles has many other options — sometimes within walking distance of his local GM dealership — if he is unhappy with the warranty that GM provides. For this reason, "the clear weight of authority" has rejected the argument that a vehicle "warranty [is] procedurally unconscionable because [consumers] had no meaningful choice in determining the time limits [of the warranty]." Majdipour v. Jaguar Land Rover N. Am., LLC, 2013 WL 5574626, at *20 (D.N.J. Oct. 9, 2013) (dismissing breach of express warranty claim and rejecting argument that warranty was procedurally unconscionable); see also Rivera, 2017 WL 3485815, at *4 (rejecting argument that durational limits in automobile warranty were unconscionable and noting that "such limitations are ... routinely enforced by the courts").
Plaintiffs respond that even if the automobile marketplace is competitive, the bargaining power here was especially unequal — and the warranty limitations were therefore procedurally unconscionable — because GM knowingly failed to disclose the AC Defect to Plaintiffs and the public. In support of that argument, Plaintiffs rely on In re Porsche Cars N. Am., Inc., 880 F.Supp.2d 801 (S.D. Ohio 2012). In In re Porsche, an automobile manufacturer moved to dismiss the plaintiffs' breach of warranty claims on the ground that the plaintiffs' claims were barred by the warranty's durational limits. The district court rejected that argument and held that
The Court respectfully disagrees with and is not persuaded by In re Porsche. In re Porsche conflates a difference in knowledge with a difference in bargaining power. Bargaining power comes primarily from having viable alternatives in the marketplace, and a vehicle consumer with many options — like the Plaintiffs here — has real and substantial bargaining power even where a seller like GM knowingly fails to disclose a defect. That is why the "majority" of courts have ruled that a seller's "presale knowledge [of an alleged defect,] ... standing alone, is insufficient to establish procedural unconscionability." Rivera, 2017 WL 3485815, at *4. The Court joins that majority.
Plaintiffs have also failed to plausibly allege that the warranties' durational limits are substantively unconscionable. Plaintiffs insist that the limits are substantively unconscionable because "GM knew of the defect and did not disclose it." (Mot. to Dismiss, ECF #43 at Pg. ID 1908.) But "[c]ourts have routinely rejected express warranty claims premised on [this] theory." Chiarelli v. Nissan N. Am., Inc., 2015 WL 5686507, at *7 (E.D.N.Y. Sept. 25, 2015) ("The case law is clear [ ] that a defendant's knowledge of a latent defect does not render unconscionable a limitation contained in an express warranty.").
Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir. 1986).
For all of the reasons explained above, the Court
In Counts 11-14 of the First Amended Complaint, Plaintiff Carl Williams alleges that his air conditioning system failed during the term of his express and implied warranties and that GM breached those warranties when it failed to adequately repair the AC Defect. (See Am. Compl. at ¶¶ 42-53, ECF #24 at Pg. ID 1024-28; see also id. at Counts 11-14.) GM moves to dismiss these claims on several grounds. (See Mot. to Dismiss, ECF #35 at Pg. ID 1710-13, 1716-17.) The Court will address each of these arguments separately.
GM first argues that the Court should dismiss Williams' breach of express warranty claims because Williams "does not plead facts sufficient to show that GM actually breached the Limited Warranty." (Id. at Pg. ID 1710.) GM says that it "complied with the promises in the express warranty by paying for repairs made to [Williams'] vehicle" and that Williams' air conditioning system is currently working. Thus, GM insists that Williams cannot maintain claims for breach of the Limited Warranty. (Id.) The Court disagrees.
Williams plausibly alleges that GM has not adequately repaired his vehicle and that his vehicle will therefore require additional repair work in the future. More specifically, Williams alleges that GM has addressed the AC Defect by installing "equally defective replacement parts [that] leaves the [air conditioning system] susceptible to repeated failure." (Am. Compl. at ¶230, ECF #24 at Pg. ID 1067.) Williams further alleges that:
(Id. at ¶232, Pg. ID 1067-68.) Finally, Williams alleges that he did have his air conditioning system repaired once, that the repair did not work, and that he needed to have his vehicle serviced a second time. (See id. at ¶¶ 49-50, Pg. ID 1026.) Taken together, at the motion to dismiss stage, Williams plausibly alleges that GM breached the express Limited Warranty by not sufficiently repairing his air conditioning system. The Court therefore
GM next argues that the Court should dismiss Williams' breach of express warranty claims because Williams did not comply with the terms of his warranty. GM says that the Limited Warranty required Williams to provide GM with "written notice of the purported defect and an opportunity to repair [his] vehicle[ ] prior to filing suit," but Williams failed to provide that pre-suit notice. (Mot. to Dismiss, ECF #35 at Pg. ID 1711.) The Court disagrees.
(Id.; emphasis added.)
The Court cannot conclude at this time, as a matter of law, that this provision applies to Williams' claims. The provision is included in a section of the Limited Warranty that appears to relate to claims under state "lemon laws."
Williams brings two implied warranty claims: one under California's Song-Beverly Consumer Warranty Act (see Am. Compl. at ¶¶ 519-32 (Count 13), ECF #24 at Pg. ID 1177-79) and one under California's commercial code (see id. at ¶¶ 533-45 (Count 14), Pg. ID 1179-81.) The Court will address these claims separately.
GM first moves to dismiss Williams' implied warranty claim under California's commercial code on the basis that the code requires privity of contract and Williams "do[es] not adequately allege privity." (Mot. to Dismiss, ECF #35 at Pg. ID 1716.) The Court declines to dismiss on that basis.
Strict contractual privity is not an essential element of every breach of warranty claim under California's commercial code. See In re Gen. Motors LLC CP4 Fuel Pump Litig., 393 F.Supp.3d 871, 881-83, 2019 WL 3315286, at *7-8 (N.D. Cal. July 2, 2019). On the contrary, a plaintiff may assert a warranty claim against a manufacturer under the code if the plaintiff was an intended third-party beneficiary of the contract between the manufacturer and the seller from whom the consumer purchased the product. See id. Applying this principle, the federal court in In re General Motors LLC, recently concluded that a purchaser of a GM vehicle could bring an implied warranty claim against GM under the California commercial code even though the purchaser was not in strict contractual privity with GM:
Id. at 882-83, 2019 WL 3315286 at *8 (N.D. Cal. July 2, 2019) (internal citation omitted). Here, Williams plausibly alleges that, like the plaintiff in In re General Motors, LLC, he is an intended third-party beneficiary of the contracts between GM and its authorized dealers. (See Am. Compl. at ¶541, ECF #24 at Pg. ID 1181.) Given that allegation, he may proceed with his implied warranty claim under the California commercial code even though he lacks strict contractual privity with GM. The Court therefore
GM next argues that the Court should dismiss Williams' implied warranty claim under the Song-Beverly Act because Williams fails to plausibly allege that his vehicle is unmerchantable. (See Mot. to Dismiss, ECF #35 at Pg. ID 1712-13.) GM contends that "a vehicle is merchantable if it is reasonably suited for ordinary use," and GM insists that Williams does "not [plead] facts to support that [his] alleged [air conditioning system's] failure[s] somehow rendered [his] vehicle inoperable." (Id.) The Court disagrees.
Williams plausibly alleges that the AC Defect is sufficiently serious as to render his vehicle unmerchantable. Under the Song-Beverly Act, to be merchantable, a vehicle must be "fit for the ordinary purpose for which a vehicle is used," meaning that it is "in safe condition and substantially free of defects." Isip v. Mercedes-Benz USA, LLC, 155 Cal.App.4th 19,65 Cal.Rptr.3d 695, 700 (2007). Here, Williams plausibly alleges that his vehicle is not "substantially free of defects" and is not "in safe condition." Williams lives in Southern California in a warm climate where air conditioning is a standard and ordinary feature of an automobile that a consumer would expect to work. More importantly, Williams plausibly alleges that the lack of functioning air conditioning creates a safety risk by inhibiting his ability to de-fog his windshield and windows and thereby hindering his ability to see the road while he is driving. The safety risk that Williams identifies is not merely theoretical. The First Amended Complaint identifies numerous Class Vehicle owners who were unable to see the road or were unable to easily breathe inside the vehicle compartment due to the AC Defect.
Finally, the Court is not persuaded by GM's argument that Williams' vehicle is merchantable just because he continued to drive it despite the AC Defect. The California court in Isip, examining a similar claim under the Song-Beverly Act, expressly "reject[ed] the notion that merely because a vehicle provides transportation from point A to point B, it necessarily does not violate the implied warranty of merchantability." Isip, 65 Cal. Rptr. 3d at 699. The Court concludes that Williams plausibly alleges that his vehicle is not merchantable under the Song-Beverly Act.
For all of these reasons, the Court
In Count 1 of the First Amended Complaint, Plaintiffs seek to hold GM liable for breach of express and implied warranties under the federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (the "MMWA"). (See Am. Compl. at ¶¶ 337-58, ECF #24 at Pg. ID 1136-43.) GM moves to dismiss this claim for all of the same reasons that it moved to dismiss Plaintiffs' express and implied warranty claims. (See Mot. to Dismiss, ECF #35 at Pg. ID 1717.)
The parties agree that "[t]he MMWA lacks substantive requirements" and instead "provides a federal remedy for breach of warranties under state law." McKee v. Gen. Motors LLC, 376 F.Supp.3d 751, 760 (E.D. Mich. 2019). "Thus, the applicability of the MMWA is directly dependent upon a sustainable claim for breach of warranty." Id. (internal punctuation omitted). In other words, "if there exists no actionable warranty claim, there can be no violation of the [MMWA]." Temple v. Fleetwood Enters., Inc., 133 F. App'x 254, 268 (6th Cir. 2005).
Because the Court concluded in Sections IV(A) and (B) above that all Plaintiffs except for Carl Williams fail to state a viable claim for breach of warranty, the Court
In Count 4 of the First Amended Complaint, Plaintiffs allege that GM has been unjustly enriched under Michigan law.
"Under Michigan law, to plead a claim of unjust enrichment, a plaintiff must establish that the defendant has received and retained a benefit from the plaintiff and inequity has resulted." Bowlers' Alley, Inc v. Cincinnati Ins. Co., 32 F.Supp.3d 824, 833 (E.D. Mich. 2014). "Michigan courts will then imply a contract to prevent unjust enrichment. However, courts will not imply a contract where there is an express contract governing the same subject matter." Id. (internal citation omitted; emphasis in original). "The law operates to imply a contract in order to prevent unjust enrichment, and this will not occur if there is already an express contract on the same subject matter." Id. (internal punctuation omitted).
Plaintiffs cannot maintain their unjust enrichment claim here because there is an express contract governing the same subject matter as that claim — the express Limited Warranty. See id. (dismissing unjust enrichment claim where valid contract covered the same subject matter). Courts have regularly dismissed unjust enrichment claims filed against automobile manufacturers where a valid, enforceable express warranty covers the same subject matter as plaintiffs' unjust enrichment claims. See, e.g., McKee, 376 F. Supp. 3d at 762 ("Because the [w]arranty governs [p]laintiff's claims against GM for the Transmission Defect, a claim for unjust enrichment is unavailable to him."); Mitchell v. Gen. Motors, LLC, 2014 WL 1319519, at *15 (W.D. Ky. Mar. 31, 2014) (granting GM's motion to dismiss unjust
Plaintiffs respond that they may plead their unjust enrichment claim in the alternative to their breach of express warranty claims even if they cannot ultimately recover under both theories. (See Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1921-22.) In support of that argument, Plaintiffs rely on the Sixth Circuit's decision in Solo v. United Parcel Service, Co., 819 F.3d 788 (6th Cir. 2016). But Solo is no help to Plaintiffs.
In Solo, a defendant moved to dismiss a plaintiff's unjust enrichment claim on the ground that the "unjust enrichment claim was precluded by the existence of an express contract concerning the subject matter at issue." Id. at 796. The district court dismissed the enrichment claim on that basis, and the plaintiff appealed. The Sixth Circuit reversed. It held that it was "premature[ ]" to dismiss the unjust enrichment claim at the motion-to-dismiss stage because the plaintiff had "properly pled alternative claims." Id. and 796-97. But the court in Solo stressed that it was unclear whether the defendant would "dispute [the existence of a valid and binding agreement] in subsequent stages of the proceedings." Id. at 796.
Here, in contrast, GM has not only acknowledged the existence of the express Limited Warranty, it is actively trying to enforce that agreement. Moreover, during the hearing on the motion to dismiss, counsel for GM represented to the Court that GM is not disputing the existence of the Limited Warranty. Thus, unlike the plaintiff in Solo, GM has not "kept its options open" to "deny the existence of a contract." Id. (quoting Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174, 182 (6th Cir. 1996)). Courts have regularly rejected plaintiffs' attempts to plead an unjust enrichment claim in the alternative where, as here, there is no dispute that an express contract covers the same subject matter. See, e.g., Bowlers' Alley, 32 F. Supp. 3d at 834 ("A plaintiff can only plead breach of contract and implied contract claims in the alternative if there is doubt as to the existence of a contract."); Mitchell, 2014 WL 1319519, at *15 (holding that "[p]laintiff is not permitted to plead ... breach of express warranty claims and unjust enrichment in the alternative" where "the parties do not dispute the existence of [the warranty]); Miller, 2018 WL 2740240, at *15 ("Plaintiffs' unjust enrichment claim fails not because they pled an alternative claim for breach of the GM Limited Warranty, but rather because the GM Limited Warranty is an agreement between Plaintiffs and GM which governs the same subject matter as the unjust enrichment claims.").
For all of these reasons, Plaintiffs may not maintain an unjust enrichment claim as an alternative to their breach of express warranty claims. Accordingly, the Court
In the First Amended Complaint, Plaintiffs Rodney Martin, Kenneth Gay, Carl Williams, Clarence Larry, Erica Wolfe, Andrew C. Hill, Edilberto Gomez, Leslie Griffin, Corey Steketee, James Won,
"For claims involving fraudulent omissions," like those at issue here, Federal Rule of Civil Procedure 9(b) "requires a plaintiff to plead the who, what, when, where, and how of the alleged omission." McKee, 376 F. Supp. 3d at 760-61. "Specifically, a plaintiff pleading a fraudulent omission must allege (1) precisely what was omitted; (2) who should have made a representation; (3) the content of the alleged omission and the manner in which the omission was misleading; and (4) what [defendant] obtained as a consequence of the alleged fraud." Id. at 761 (internal quotation marks omitted). In the context of an allegedly defective product, "[a] complaint may suffice if it alleges that a manufacturer knew of a defect before sale, the various venues the manufacturer used to sell the product failed to disclose the defect, and that the plaintiffs would not have purchased the product or would have paid less for it had they known of the defect." Id.
GM first argues that the Court should dismiss Plaintiffs' fraud claims because Plaintiffs "fail[ ] to allege that GM had knowledge of the [AC Defect] at the time the majority of Plaintiffs purchased their vehicles." (Mot. to Dismiss, ECF #35 at Pg. ID 1720.) The Court disagrees.
Plaintiffs make several allegations that could plausibly establish GM's pre-sale knowledge of the AC Defect. (See Am. Compl. at ¶¶ 241-75, ECF #24 at Pg. 1072-1112.) For example, Plaintiffs allege that "at least as early as 2012" (i.e., before any of the named Plaintiffs purchased their vehicles) "GM learned of the [AC Defect] ... through sources such as pre-release evaluation and testing; investigations leading to dealer service bulletins; repair data; replacement part sales data; early consumer complaints made directly to GM, collected by [the National Highway Safety Administration], and/or posted on public online vehicle owner forums; testing done in response to those complaints; [and] aggregate data from GM dealers." (Id. at ¶241, Pg. ID 1072.) Plaintiffs also allege that:
When taken together and accepted as true for the purposes of GM's motion to dismiss, these allegations (and others in the First Amended Complaint) plausibly establish GM's knowledge of the AC Defect.
GM next argues that the Court should dismiss Plaintiffs' fraud claims under Alabama, Arizona, California, Georgia, and Tennessee law because GM "had no duty to disclose the alleged defects." (Mot. to Dismiss, ECF #35 at Pg. ID 1723.) GM insists that in each of these states, a duty to disclose "arises [only] where a confidential [or fiduciary] relationship exists between the parties or where particular circumstances mandate disclosure," and GM says Plaintiffs do not plausibly allege either of those requirements here. (Id.) The Court disagrees.
The Court begins with the Plaintiffs who bring fraud claims under Alabama, Florida, and Georgia law because
Here, Plaintiffs plausibly allege facts that could support a duty to disclose under Alabama, Florida, and Georgia law. Plaintiffs plausibly allege that (1) GM knew of the AC Defect before Plaintiffs purchased their vehicles, (2) GM "willfully failed to disclose the [AC] Defect" and "misrepresented the [air conditioning] systems in the Class Vehicles as functional"
Courts applying the laws of Florida, Alabama, and Georgia have repeatedly concluded that allegations like these are sufficient to support a duty to disclose. See, e.g., Majdipour, 2015 WL 1270958, at *13 (holding that plaintiff plausibly alleged that auto manufacturer "had superior knowledge of the alleged defect" which could "establish a duty to disclose" under Florida law); Amin, 301 F. Supp. 3d at 1296 (declining to dismiss fraud claim under Georgia law where plaintiffs plausibly alleged that "Mercedes concealed an intrinsic quality of the Class Vehicles, that [p]laintiffs and consumers generally could not have discovered in the exercise of reasonable care"); In re Takata Airbag Prods.
Plaintiffs also plausibly allege a duty to disclose under California and Tennessee law. Under California law, manufactures have a duty to disclose "safety issue[s]." McCabe, 948 F. Supp. 2d at 1371 (applying California law). The same is true under Tennessee law. See Bearden v. Honeywell Intern. Inc., 720 F.Supp.2d 932, 940 (M.D. Tenn. 2010) (internal quotation marks omitted) (applying Tennessee law, refusing to dismiss "plaintiffs' fraudulent concealment claim simply because the parties were not in a fiduciary relationship," and holding that a seller "must disclose any condition or defect that it knows or should know about that renders the product defective or dangerous, and it must disclose basic, material information if it knows that the buyer is about to act without knowledge of the information and is without reasonable means to acquire the information itself").
In this case, Plaintiffs plausibly allege that the AC Defect is a "safety issue," and therefore GM had a duty to disclose it. Plaintiffs specifically allege that the defect "creates a safety risk for Plaintiffs.... because [the failure of the air conditioning system] subjects the occupants of the [Class] Vehicles to unsafely high temperatures and can lead to decreased visibility due to fogging of the windows and an inability to use the [air conditioning s]ystem to de-fog the windows." (Am. Compl. at ¶11, ECF #24 at Pg. ID 1015.) And, as noted above, Plaintiffs also specifically identify complaints consumers made to the National Highway Traffic Safety Administration and GM regarding the safety risk posted by the AC Defect. (See id. at ¶240, Pg. ID 1070-72.) In one such complaint, a driver told the National Highway Traffic Safety Administration that the inability to de-fog his windows due to the air conditioning system defect left him "[u]nable to see a thing" requiring him to "pull over[ ] on the freeway." (Id. at Pg. ID 1071.) Another consumer complained about "serious breathing issues in hot weather" due to the lack of functioning air conditioning. (Id. at Pg. ID 1070.) Put simply, Plaintiffs plausibly allege that the AC Defect is a safety issue that required disclosure by GM.
GM responds that the AC Defect "simply do[es] not rise to the level of a serious safety issue." (GM Reply Br., ECF #46 at Pg. ID 2528.) But for all of the reasons stated above, the Court concludes that Plaintiffs do plausibly allege that the failure of their air conditioning systems is a safety issue. GM also argues that it "could not disclose an issue of which it was not aware." (Id.) But, as explained above, Plaintiffs plausibly allege GM's knowledge of the air AC Defect. For all of these reasons, Plaintiffs plausibly allege that GM had a duty to disclose the AC Defect under California and Tennessee law.
Finally, "Arizona does not require a duty to disclose to support a claim for fraudulent concealment." Garcia v. Chrysler Grp. LLC, 127 F.Supp.3d 212, 237 (S.D.N.Y. 2015). GM is therefore not entitled to dismissal of Plaintiffs' fraud claim under Arizona law on the basis that Plaintiffs fail to plausibly allege a duty to disclose.
GM next argues that the Court should dismiss Plaintiffs' fraud claims under Arizona, California, Florida, and Tennessee
Whether the economic loss doctrine bars Plaintiffs' fraud claims is an especially complex issue with seemingly persuasive authority on both sides and with potentially different applications of the doctrine under the laws of different states. Given the page limits imposed on the motion-to-dismiss briefing, neither party was able to fully develop their arguments concerning the applicability of the doctrine to Plaintiffs' claims.
The Court concludes that, given the complexity of the economic-loss-doctrine issues in this case, the soundest course of action is to defer decision on application of the doctrine until the summary judgment stage of these proceedings. At that time, if necessary, the Court will grant the parties additional page extensions in order to fully brief this issue on a state-by-state basis.
Deferring a decision on GM's economic-loss-doctrine arguments should not meaningfully change the scope of proceedings moving forward. GM has not moved to dismiss all of Plaintiffs' common-law fraud claims under the doctrine. Thus, even if the Court agreed with GM that the doctrine barred some of the fraud claims here, others would remain, and discovery to support Plaintiffs' fraud theory would proceed. Likewise, Plaintiffs have asserted fraud-like statutory claims under various state laws, and, for the reasons explained below, the Court is permitting Plaintiffs to proceed with several of those claims. For this reason, too, even if the Court dismissed some of Plaintiffs' common-law fraud claims under the economic loss doctrine, discovery into GM's allegedly fraudulent conduct would proceed. Simply put, postponing a decision on GM's economic-loss-doctrine arguments until full briefing at the summary judgment stage will not substantially enlarge or impact the scope of discovery or the course of proceedings, and that fact further convinces the Court to delay decision on the economic-loss-doctrine questions.
For all of these reasons, the Court declines, at this time, to dismiss Plaintiffs' fraud claims under Arizona, California, Florida, and Tennessee law based on the economic loss doctrine.
Finally, GM argues that the Court should dismiss Plaintiffs' fraud claims "to the extent they rely on alleged advertisements." (Mot. to Dismiss, ECF #35 at Pg. ID 1725.) GM insists that because Plaintiffs "fail to allege the advertisements they supposedly viewed with specificity or particularity," Plaintiffs cannot plausibly allege that they relied on these advertisements. (Id. at Pg. ID 1725-26.) The Court disagrees.
In Plaintiffs' briefing and at the hearing on GM's motion to dismiss, Plaintiffs made clear that their fraud claims are not based on affirmative misrepresentations made in GM's advertisements. Instead, Plaintiffs explain that their fraud claims are premised on "GM's failure to disclose the AC Defect." (Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1934; emphasis in original.) And Plaintiffs' failure-to-disclose allegations are much like those found sufficient to state a viable fraud claim in Beck, supra.
In Beck, the plaintiff alleged that the defendant automaker had "fail[ed] to disclose [a] defective rotary shifter system" in his vehicle. See Beck v. FCA US LLC, 273 F.Supp.3d 735, 750 (E.D. Mich. 2017). The automaker moved to dismiss the fraud claim on multiple grounds, including that the plaintiff had failed to plead the elements
Id. at 751-52.
Likewise here, Plaintiffs plausibly allege the "who" (GM), the "what" (knowing about, yet failing to disclose, the alleged air conditioning system defect), the "when" (from the time the vehicles were first placed on the market to the present day), the "where" (various advertisements, window stickers on Class Vehicles, and discussions with GM dealers who did not disclose the defect), and the "how" (if Plaintiffs had known of the alleged defect, they would not have purchased or leased the Class Vehicles, or they would have paid less for them). Thus, like the plaintiff in Beck, Plaintiffs satisfied their pleading burden, including the burden to plead reliance. See also Bryde v. Gen. Motors, LLC, 2016 WL 6804584, at *12 (N.D. Cal. Nov. 17, 2016) (rejecting argument that "plaintiffs fail[ed] to sufficiently plead a fraudulent omission claim because plaintiffs [did] not allege that they viewed and relied on specific GM advertising" and holding that plaintiffs had satisfied burden to plead reliance where plaintiffs "alleged that they interacted with a GM dealer sales representative" and the sales representative did not disclose alleged defect).
Finally, the United States District Court for the Northern District of California's recent decision in In re General Motors LLC CP4 Fuel Pump Litigation, supra, further confirms that Plaintiffs' allegations are sufficient even though they did not identify specific advertisements. In that case, GM moved to dismiss the plaintiffs' fraud claims on the basis that the plaintiffs had failed to plead fraud with the required particularity in part because they did not identify the specific advertisements on which they allegedly relied. The Court disagreed. It held that where a plaintiff alleges fraudulent omissions, as opposed to affirmative misrepresentations, "the relevant questions [] are whether [p]laintiffs have adequately alleged (1) that GM had knowledge of the defect, and (2) that defect was material." Id. at 878, 2019 WL 3315286 at *4. Here, for all of the reasons explained above, Plaintiffs plausibly allege that GM "had knowledge" of the AC Defect and the AC Defect "was material." Id. Plaintiffs therefore satisfy the pleading requirements of their fraud claims.
For all of the reasons stated above, the Court
GM moves to dismiss many of Plaintiffs' state-law consumer-protection-act claims on several grounds. The Court will address each of GM's arguments separately below.
GM first argues that all of Plaintiffs' state-law consumer-protection-act claims fail because "Plaintiffs cannot advance claims under the state consumer protection statutes unless they sufficiently allege that a defendant was aware of a defect at the time of sale." (Mot. to Dismiss, ECF #35 at Pg. ID 1728; internal quotation marks omitted.) And GM says that Plaintiffs do not sufficiently allege that GM knew about the AC Defect prior to the purchase of Plaintiffs' vehicles. (See id.) For all of the reasons explained in Section IV(E)(2) above, the Court concludes that Plaintiffs do sufficiently allege that GM had knowledge of the AC Defect before Plaintiffs purchased their vehicles. The Court therefore
In Count 27 of the First Amended Complaint, Plaintiff Corey Steketee asserts that GM violated the Michigan Consumer Protection Act Mich. Comp. Laws § 445.903, et seq., (the "MCPA") when it "engaged in unfair, unconscionable, or deceptive methods, acts or practices." (Am. Compl. at ¶ 730, ECF #24 at Pg. ID 1222.) GM moves to dismiss Steketee's MCPA claim on two grounds. GM first argues that the Court should dismiss Steketee's MCPA claim because one of the elements of that claim is reliance, and Steketee fails to plausibly allege "that [he] relied on [ ] allegedly fraudulent statements or omissions" by GM. (Mot. to Dismiss, ECF #35 at Pg. ID 1728.) The Court disagrees.
For all of the reasons that the Court rejected GM's reliance-based argument in Section IV(E)(5) above, the Court concludes that Steketee's reliance allegations are sufficient at this stage of the proceedings. For example, Steketee specifically alleges that he viewed and relied upon the window sticker of his vehicle prior to purchasing it, that the window sticker touted the vehicle's air conditioning system without disclosing the AC Defect, and that the functioning air conditioning system was central to his purchasing decision (See Compl. at ¶ 200, ECF #24 at Pg. ID 1059.) The Court therefore rejects GM's argument that, as a matter of law, Steketee does not plausibly allege reliance.
GM next argues that the Court should dismiss Steketee's MCPA claim because "vehicle sales are highly regulated activities that are exempt from" the MCPA. (Mot. to Dismiss, ECF #35 at Pg. ID 1730-31.) At this time, the Court declines to dismiss Steketee's MCPA claim on the basis that vehicle sales are exempt from the MCPA.
GM relies on a section of the MCPA exempting from the Act's reach any "transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States." (Mot. to Dismiss, ECF #35 at Pg. ID 1730 (quoting Mich. Comp. Laws § 445.904(1)(a)).) In the motion to dismiss, GM cites cases in which courts have held that this exemption bars claims similar to Steketee's MCPA claim here. See, e.g., Feliciano v. Gen. Motors LLC, 2016 WL 9344120, at 12-13 (S.D.N.Y. Mar. 31, 2016). And this Court has found at least one recent decision by another Judge on this court doing the same. See Matanky v. Gen. Motors LLC, 370 F.Supp.3d 772 (E.D. Mich. 2019). Furthermore, Plaintiffs have not cited any cases refusing to apply the exemption under circumstances like those here.
However, the Court is not yet prepared to join the courts that have barred similar MCPA claims based on this exemption. An analysis of whether claims are barred by the exemption requires the identification
For all of these reasons, the Court declines to dismiss Steketee's MCPA claim on the basis that GM's vehicle sales are exempt from the MCPA. The Court will reconsider this line of argument, on a more developed record and on full briefing, at the summary judgment stage of these proceedings. The Court therefore
In Count 5 of the First Amended Complaint, Plaintiff Rodney Martin asserts that GM violated the Alabama Deceptive Trade Practices Act, Ala. Code § 8-19-5, (the "ADTPA") when it sold Class Vehicles with the AC Defect. (See Am. Compl. at ¶ 392, ECF #24 at Pg. ID 1150.) In Count 6, Martin brings a claim of common-law fraudulent concealment. (See id. at ¶¶ 404-14, Pg. ID 1153-55.) GM moves to dismiss Martin's ADTPA claim on the ground that the ADTPA "does not allow" Martin to bring "both" a common-law fraud claim and an ADTPA claim simultaneously. (Mot. to Dismiss, ECF #35 at Pg. ID 1732.) GM relies on the "savings clause" of the ADTPA which provides that "the civil remedies provided herein and the civil remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment are mutually exclusive." Ala. Code. § 8-19-15(a).
The "savings clause" of the ADTPA does not bar Martin's ADTPA claim as a matter of law. The "savings clause" refers to exclusive remedies, not causes of action or theories of liability. Therefore, while the "savings clause" may prohibit Martin from recovering on both his fraud and ADTPA claims, the "savings clause" does not bar Martin from pursuing the claims as alternatives. See, e.g., In re Gen. Motors LLC Ignition Switch Litig., 257 F. Supp. 3d at 405 (allowing Alabama plaintiff to plead both fraud and ADTPA claims because, among other reasons, the ADTPA "does not specify when in the proceedings the plaintiff must ... elect one or the other remedy"). Moreover, GM's counsel candidly acknowledged at the hearing on the motion to dismiss that Martin should be allowed to at least plead both claims as alternatives. (See 6/25/2019 Hr'g Tr., ECF #55 at Pg. ID 2706.) Accordingly, the Court
In Counts 21 and 22 of the First Amended Complaint, Plaintiff Leslie Griffin asserts
GM first argues that the Court should dismiss Griffin's GFBPA claim because Griffin failed to provide GM pre-suit notice in compliance with the GFBPA. (See Mot. to Dismiss, ECF #35 at Pg. ID 1733-34.) The Court agrees.
Under the GFBPA, a plaintiff must make a "written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered. . . [a]t least 30 days prior to the filing of any [GFBPA] action.'" Ga. Code § 10-1-399(b). "The failure to provide such notice is fatal to a GFBPA claim." Burns v. Halsted Fin. Servs., LLC, 2016 WL 5417218, at *4 (N.D. Ga. Sept. 14, 2016).
Griffin did not provide timely written notice to GM under the GFPBA. Griffin asserts that she provided written notice to GM on June 29, 2018. (See Am. Compl. at ¶647, ECF #24 at Pg. ID 1203.) She then filed this action three days later — on July 2, 2018. See Marin v. Gen. Motors Co., E.D. Mich. Case No. 18-cv-12066 at Dkt. #1 (E.D. Mich. July 2, 2018). Griffin therefore did not comply with the GFBPA's 30-day notice requirement.
Griffin counters that her notice should be deemed timely because it was given more than thirty days before the filling of the First Amended Complaint (which was filed on August 14, 2018). (See Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1941.) Griffin insists that the Court should measure the thirty-day notice period from the date of the filing of the First Amended Complaint because that is now the operative pleading in this action. (See id.) But the GFBPA clearly provides that notice must be provided thirty days before the filing of an "action." Ga. Code § 10-1-399(b) (emphasis added). Thus, contrary to Griffin's argument, notice is not measured with reference to amended pleadings. Because Griffin failed to provide written notice of her claim thirty days before filing her action, she may not pursue her claim under the GFPBA.
GM next argues that the Court should dismiss Griffin's claim for injunctive relief under the GUDTPA. (See Mot. to Dismiss, ECF #35 at Pg. ID 1735.) GM argues that the GUDTPA only provides injunctive relief for future, ongoing violations, and Griffin does not allege wrongs that can be remedied through an injunction. (See id.) GM insists that Griffin "has had her vehicle repaired, and she does not allege any post-repair issues, even after GM requested Plaintiffs to include any such allegations when amending their complaint."
Griffin makes several allegations that, if proven, may establish "ongoing harm" and may entitle her to injunctive relief under the GUDTPA. For example, Griffin alleges that she "may continue to experience failure of [her] Class Vehicle[']s [air conditioning s]ystem[] for which there is no effective fix and for which [she] must have to pay out of pocket [to repair]." (Am. Compl. at ¶666, ECF #24 at Pg. ID 1208.) In addition, at the hearing on the motion to dismiss, Griffin's counsel directed the Court to the following additional claims of ongoing harm in the Complaint (See 6/25/2019 Hr'g Tr., ECF #55 at Pg. ID 2700):
Taken as a whole, Griffin's allegations state a plausible claim for injunctive relief under the GUDTPA. Indeed, "the existence of an alleged defect, coupled with failed attempts at repairs, or `band aid' fixes only, along with representations made after each repair that the vehicles are free from the defect, is sufficient to establish likely future harm resulting from similar unsatisfactory efforts by the defendant to skirt liability for the problem without an effective fix." In re: FCA US LLC Monostable Electronic Gearshift Litig., 355 F.Supp.3d 582, 597 (E.D. Mich. 2018) (denying defendant's motion to dismiss GUDTPA claim); see also Amin, 301 F.Supp. 3d at 1294-95 (denying defendant's motion to dismiss GUDTPA claim and holding that plaintiff had plausibly alleged "both ongoing and future harm"). GM's motion to dismiss Griffin's GUDTPA claim (Count 22) is therefore
In Counts 24 and 26 of the First Amended Complaint, Plaintiff Richie Ainsworth asserts two statutory claims under Louisiana law. First, in Count 24, Ainsworth alleges that "[b]y failing to disclose that the [AC] Defect was not safe, by marketing its vehicles as safe, reliable, and of high quality, and by presenting itself as a reputable manufacturer ... [GM] engaged in deceptive business practices in violation" of the Louisiana Unfair Trade Practices and Consumer Protection Law, La. Stat. § 51:1401 et seq. (the "LUTPA"). (Am. Compl. at ¶693, ECF #24 at Pg. ID 1214-15.) Second, in Count 26, Ainsworth claims that GM violated the Louisiana Products Liability Act, La. Stat. § 8:2800.51 et seq. (the "LPLA"). (See id. at ¶¶ 713-25, Pg. ID 1219-22.) More specifically, Ainsworth says that the Class Vehicles were "unreasonably dangerous" under the LPLA due to (1) their "construction and/or composition," (2) their "design," (3)
GM first argues that the Court should dismiss Ainsworth's LUTPA claim (Count 24) because it is barred by the LPLA. (See Mot. to Dismiss, ECF #35 at Pg. ID 1735.) In support of this argument, GM directs the Court to La. Stat. § 9:2800.52. That statute provides that the LPLA "establishes the exclusive theories of liability for manufacturers for damage caused by their products." La. Stat. § 9:2800.52 (emphasis added). GM maintains that this statutory exclusion applies in this case because GM manufactured the product Ainsworth alleges is defective. (See id.)
The Court agrees that Ainsworth's LUPTA claim fails because the LPLA provides the exclusive theory of liability for the wrongs Ainsworth alleges. Therefore, Ainsworth must proceed, if at all, under the LPLA. This is the same conclusion that the court reached in In re Gen. Motors LLC Ignition Switch Litig., 2016 WL 3920353, at *29 (S.D.N.Y. July 15, 2016). In In re General Motors, GM moved to dismiss a plaintiff's LUPTA claims on the basis that because GM manufactured the vehicles at issue, plaintiff's LUPTA claim was barred by the LPLA. The district court agreed. It held that because the damages at issue in that case "were directly tied to the products manufactured by [GM] ... the only method of recovery under Louisiana is through the LPLA." Id. For all of the same reasons, Ainsworth is limited to pursuing claims, if at all, under the LPLA.
Ainsworth counters that he may plead his LUPTA and LPLA claims as alternatives to one another. (See Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1943.) This plain language of the LPLA forecloses this argument. The LPLA provides that it establishes the exclusive theory of liability; the LPLA does not merely create an exclusive remedy.
For all of these reasons, the Court
GM argues that the Court should dismiss Ainsworth's LPLA claim (Count 26) for two reasons — because it is time-barred and because its allegations fall short of an LPLA violation. (See Mot to Dismiss., ECF #35 at Pg. ID 1737-39.) The Court disagrees on both grounds.
The Court is not persuaded that Ainsworth's LPLA claim is time-barred. GM asserts that the LPLA has a one-year statute of limitations "that runs from the date of sale or from the day the buyer discovers the defect." (Id. at Pg. ID 1737). GM then says that this "period began to run in January 2017, when the [air conditioning] in Ainsworth's vehicle allegedly failed." (Id.) And GM asserts that Ainsworth did not file this action until March 8,
The Court also concludes that Ainsworth plausibly alleges a violation of the LPLA. To state a viable LPLA claim, Ainsworth must plead that the AC Defect made his vehicle "unreasonably dangerous in one of the four ways provided in the statute." Becnel v. Mercedes-Benz USA, LLC, 2014 WL 1918468, at *7 (E.D. La. May 13, 2014). A product may be unreasonably dangerous under the LPLA based upon (1) its "construction or composition"; (2) its "design"; (3) an "inadequate warning"; or (4) its "nonconformity to express warranty." La. Rev. Stat. Ann. §§ 9:2800.55-58.
Ainsworth plausibly alleges (at least) a failure to warn under the LPLA. As Ainsworth points out, GM's Limited Warranty includes only a general warning that the Class Vehicle as a whole may not be defect-free. But the LPLA requires a manufacturer to provide a warning about specific characteristics of a product that may cause unreasonable danger:
La. Rev. Stat. § 9:2800.57 (emphasis added). The general warning in the Limited Warranty that GM's vehicles may not be "defect-free" did not advise Ainsworth the air conditioning system, in particular, may be defective and may render his vehicle unsafe (in the ways described above). Thus, the Court
Plaintiff James Won purchased three Class vehicles in New York and one Class Vehicle in New Jersey. In the First Amended Complaint, he alleges violations of both New Jersey and New York law. In Count 30, Won asserts that GM violated the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8:1, et seq. (the "NJCFA"). (See Am. Compl. at ¶¶ 768-88, ECF #24 at Pg. ID 1233-38.) Won claims that "GM engaged in unconscionable or deceptive acts or practices that violated the New Jersey CFA ..., and did so with the intent that Class members rely on their acts, concealment, suppression or omission." (Id. at ¶772, ECF #24 at Pg. ID 1234.) In Counts 33 and 34 of the First Amended Complaint, Won claims that GM violated New York General Business Law ("NYGBL") §§ 349, 350. (Compl. at ¶¶ 809-37, ECF #24 at Pg. ID 1242-48.) NYGBL
GM first argues that the Court should dismiss Won's NJCFA claim because he is also pursuing a claim under the NYGBL. (See Mot. to Dismiss, ECF #35 at Pg. ID 1740.) GM insists that "Won cannot recover double damages for the same injury." (Id.) But Won is not attempting to seek the same damages twice. He bought three vehicles in New York and one vehicle in New Jersey, and he seeks separate damages arising out of each purchase. Won is therefore entitled to bring claims under both the NJCFA and the NYGBL because they arise out of the separate purchase of different vehicles.
GM next argues that the Court should dismiss Won's NJCFA claim (Count 30) because "an NJFCA claim cannot proceed based on an alleged defect that manifests after the warranty expires," and Won "has not alleged that any alleged [defect] appeared within the warranty period." (Id. at Pg. ID 1740-41; emphasis added.) The Court agrees.
"The NJCFA authorizes `[a]ny person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act' to bring a private action." Chiarelli, 2015 WL 5686507, at *14 (quoting N.J. Stat. Ann. § 56:8-19). "Accordingly, `[t]o state a prima facie case under the [NJCFA], a plaintiff must demonstrate three elements: (1) unlawful conduct by the defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal connection between the defendant's unlawful conduct and the plaintiff's ascertainable loss.'" Id. (quoting Mickens v. Ford Motor Co., 900 F.Supp.2d 427, 436 (D.N.J. 2012)).
"A plaintiff cannot demonstrate an `ascertainable loss' where the allegedly defective component outperforms its warranty period." Id. at *16. New Jersey courts have rejected NJCFA claims by plaintiffs whose products outlasted their warranties because "recognizing a viable [NJ]CFA claim [under those] circumstances [] would essentially compel manufacturers and sellers to warrant their products and component parts beyond that to which the parties expressly agreed." Perkins v. DaimlerChrysler Corp., 383 N.J.Super. 99, 890 A.2d 997, 1005 (N.J. Super. Ct. App. Div. 2006). Here, Won does not allege that the vehicle he purchased in New Jersey failed within the warranty period. He therefore fails to state a claim under the NJCFA.
Won responds that the Court should not dismiss his NJFCA claim because he "alleges the [air conditioning s]ystems in three of his Class Vehicles failed twice within three years of purchase, with the remaining vehicle failing once within five years." (See Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1946.) But, the First Amended Complaint does not allege that the Class Vehicle that Won purchased in New Jersey, in particular, failed within the warranty period. (See Compl. at ¶¶ 99-118, ECF #24 at Pg. ID 1037-41.) Won asserts that three of his four Class Vehicles failed twice within the first three years, but, despite being offered the opportunity to amend his allegations (see infra at Section V), he does not allege that the sole vehicle he purchased in New Jersey was among them.
GM next maintains that the Court should dismiss Won's NYGBL claims on the basis that "[u]nder New York law, a promise to repair consumer goods, accompanied by a disclaimer that the product may contain defects, acts as a warning that the product at issue may fail, and `undermine[s] any claim under [GBL] § 349 of a materially misleading or deceptive omission' of a product defect." (Mot. to Dismiss, ECF #35 at Pg. ID 1741.) GM's primary authority for this argument is Against Gravity Apparel, Inc. v. Quarterdeck Corp., 267 A.D.2d 44, 699 N.Y.S.2d 368, 369 (1999). In Against Gravity, a plaintiff accused a software maker of violating the NYGBL when the software company allegedly concealed from plaintiff that its software was not "Y2K complaint." The New York state court disagreed. It held that the software maker did not violate the NYGBL because the software had a 90-day warranty and the warranty "expressly `did not warrant that the operation of the Software will be uninterrupted or error free.'" Id.
The Court concludes that Against Gravity does not control here for at least two reasons. First, the opinion in Against Gravity is just two paragraphs long and, "due to its length[, it] provides little analysis." In re OnStar, 600 F. Supp. 2d at 870 (rejecting defendant's reliance on Against Gravity). Second, Against Gravity "does not address the holding of [Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 623 N.Y.S.2d 529, 647 N.E.2d 741, 745 (1995)], where... New York's highest court established the possibility of a § 349 claim based on material omissions when there is a duty to disclose." Feliciano v. Gen. Motors LLC, 2016 WL 9344120, at *10 (S.D.N.Y. Mar. 31, 2016). Here, for the reasons explained above, Plaintiffs plausibly allege that GM omitted material facts and that GM had a duty to disclose. Thus, Won may be able to prevail on his NYGBL claims under Oswego and Feliciano even though GM included
Finally, in Count 7 of the First Amended Complaint, Plaintiff Kenneth Gay alleges that GM violated Arizona's Consumer Fraud Act, AZ Rev. Stat. 44-1521, et seq. GM moves to dismiss this claim because Gay fails to "plausibly plead that [he] relied on the allegedly fraudulent statements or omissions" by GM. (Mot. to Dismiss, ECF #35 at Pg. ID 1728-29.) The Court disagrees. Gay specifically alleges that
As explained above in Section IV(E)(5), the Court concludes that Gay plausibly alleges the required reliance element of his claim under the Arizona Consumer Fraud Act. Accordingly, the Court
At the conclusion of Plaintiffs' response to GM's motion to dismiss, Plaintiffs "respectfully request[ed] leave to replead" any of Plaintiffs' claims that the Court concluded were deficiently pleaded. (Resp. to Mot. to Dismiss, ECF #43 at Pg. ID 1948.) While leave to amend should be "freely give[n] when justice so requires," Fed. Rule Civ. Proc. 15(a)(2) (emphasis added), justice does not require that Plaintiffs be permitted to file a Second Amended Consolidated Master Class Action Complaint. A careful review of the history of this action shows why.
On April 11, 2018, the Court entered its initial scheduling order in this action. (See Scheduling Order, ECF #14.) In the scheduling order, the Court set forth a procedure for Plaintiffs to file a Consolidated Master Class Action Complaint and for GM to file a motion to dismiss. More specifically, the Court ordered Plaintiffs to file a Master Complaint by no later than May 4, 2018. (See Master Compl., ECF #18.) It then required GM to deliver a substantive "meet and confer" letter to Plaintiffs in which GM would "identif[y] deficiencies in [the] Master Complaint that would be raised in a motion to dismiss." (Scheduling Order, ECF #14 at Pg. ID 303.) The Court then permitted Plaintiffs to file a First Amended Consolidated Master Complaint that sought to address the deficiencies raised in GM's letter. (See id.)
This procedure allowed Plaintiffs a full opportunity to allege any and all facts in a First Amended Consolidated Master Class
For all of the reasons stated above, GM's motion to dismiss (ECF #35) is
