418 F.Supp.3d 1090
S.D. Fla.2019Background
- Plaintiffs (Cardenas, a Florida buyer of a new 2014 Camry; Kirton, a Tennessee buyer of a used 2015 Camry) allege 2012–2017 Camry and Camry Hybrid HVAC systems have a defect that traps moisture and produces foul, potentially hazardous odors.
- Plaintiffs assert Toyota entities and a distributor (Southeast Toyota) knew about the defect from NHTSA complaints, dealer reports, technical service bulletins (1997, 2009, 2011, 2013, 2015), testing, and internal communications.
- Complaint alleges defendants concealed the defect, marketed Camrys as safe/comfortable, and profited by avoiding recalls/Lemon Law exposure and charging for ineffective repairs.
- Causes of action: RICO (racketeering and conspiracy), fraud/fraudulent concealment, Magnuson-Moss Warranty Act, breach of implied warranty of merchantability, Florida Deceptive and Unfair Trade Practices Act (FDUTPA), and Tennessee Consumer Protection Act (TCPA).
- Defendants moved to dismiss. The Court granted dismissal of Counts III, IV (fraud/fraudulent concealment), V (implied warranty), and VI (Magnuson-Moss), and denied dismissal of Counts I, II (RICO), VII (FDUTPA), and VIII (TCPA).
- Key legal predicates in the opinion: Rule 8 plausibility and Rule 9(b) particularity for fraud-based RICO predicates; Florida and Tennessee economic loss doctrines; privity requirement for implied warranty claims; Rule 23 class-permissibility under Eleventh Circuit precedent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO — racketeering (Count I) | Plaintiffs allege a mail/wire fraud scheme: concealment and misleading communications and TSBs show intent to defraud and use of mails/wires. | Defendants contend plaintiffs fail to plead a scheme, pattern, enterprise, or scienter with required particularity. | Denied. Court finds pleadings (NHTSA complaints, TSBs, internal emails) sufficiently allege scheme, enterprise, pattern, and scienter under Rule 9(b) for fraud predicates. |
| RICO — conspiracy (Count II) | Defendants agreed to further the enterprise’s unlawful objectives; agreement can be inferred. | Defendants argue no plausible agreement alleged. | Denied. Conspiracy pleaded under Rule 8; conduct supports reasonable inference of agreement. |
| Fraud / Fraudulent concealment (Counts III & IV) | Plaintiffs claim fraudulent concealment nationwide and under Florida law based on nondisclosure of defect and health risks. | Defendants assert claims are barred by the economic loss rule and thus are subsumed by warranty/contract remedies. | Granted. Fraud/fraudulent concealment claims dismissed as barred by Florida and Tennessee economic loss doctrines. |
| FDUTPA (Count VII) | Cardenas alleges nondisclosure and deceptive marketing caused ascertainable loss and diminished vehicle value. | Defendants argue inadequacy of deception, causation, or damages. | Denied. Complaint plausibly alleges deceptive act/omission, causation, and actual damages under FDUTPA. |
| TCPA (Count VIII) — class and individual claims | Kirton asserts individual and Tennessee-class TCPA claims for concealment/misrepresentation causing loss. | Defendants: TCPA disallows class actions, individual claim time-barred, allegations insufficient. | Denied. Court follows Eleventh Circuit (Lisk) permitting Rule 23 class actions despite state statute’s bar; individual claim not facially time-barred and tolling alleged; factual allegations sufficient. |
| Implied warranty (Count V) & Magnuson-Moss (Count VI) | Plaintiffs assert state-law implied warranty breaches and federal Magnuson-Moss warranty claims. | Defendants argue plaintiffs lack contractual privity with manufacturers (vehicles bought from dealers), so warranty claims fail; Magnuson-Moss depends on viable state warranty claims. | Granted. Implied-warranty claims dismissed for lack of privity; Magnuson-Moss dismissed because state warranty claims do not stand. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must state plausible claim; legal conclusions need factual support)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaints)
- Boyle v. United States, 556 U.S. 938 (U.S. 2009) (elements of an association-in-fact RICO enterprise)
- United States v. Turkette, 452 U.S. 576 (U.S. 1981) (enterprise must function as a continuing unit)
- Williams v. Mohawk Industries, Inc., 465 F.3d 1277 (11th Cir. 2006) (elements of a Section 1962(c) RICO claim)
- Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) (Rule 9(b) applies to fraud-based RICO predicates)
- United States v. Maxwell, 579 F.3d 1282 (11th Cir. 2009) (elements of scheme-to-defraud and mail/wire fraud requirements)
- Lisk v. Lumber One Wood Preserving, LLC, 792 F.3d 1331 (11th Cir. 2015) (Rule 23 may permit class actions even where state statute bars private class suits)
- Tiara Condo. Ass'n, Inc. v. Marsh & McLennan Cos., Inc., 110 So. 3d 399 (Fla. 2013) (Florida economic loss rule definition and scope)