Dunn v. Takata Corporation <font color="blue"><b> [Economic Loss Class Actions] </b></font>
1:14-cv-24009
| S.D. Fla. | Oct 14, 2016Background
- This MDL concerns economic-loss claims by owners of BMW vehicles equipped with Takata airbags using ammonium nitrate propellant; plaintiffs allege a uniform defect and various state-law consumer, warranty, and fraud claims against BMW of North America and BMW Manufacturing.
- Fifteen named BMW plaintiffs filed claims across multiple states; the Court conducted a choice-of-law analysis for each plaintiff and assigned substantive law accordingly (Alabama, California, Colorado, Florida, Illinois, Michigan, New York, Ohio, etc.).
- BMW moved to dismiss all claims against it under Fed. R. Civ. P. 12(b)(6) and 9(b); primary contested issues included choice of law, manifestation of defect, adequacy of fraud pleading/knowledge, statute of limitations, standing for state sub-classes, and various state-law claim elements.
- The Court followed reasoning in its prior Mazda Order on manifestation and knowledge, permitting allegations of a uniform defect at the motion-to-dismiss stage while reserving competing causation theories for later stages.
- The Court granted dismissal of several claims on choice-of-law and other grounds (e.g., New Jersey claims, certain Pennsylvania and Virginia sub-class claims, some implied-warranty and false-advertising claims, negligent-failure-to-recall claims under California, and all claims against BMW Manufacturing LLC) and denied dismissal of numerous other state consumer-protection, fraud, and warranty claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for each plaintiff | Apply law of plaintiffs’ forum/state of purchase to their state-law claims | Dismiss claims premised on states with no governing contacts (e.g., New Jersey) | Court applied state-specific choice-of-law rules and dismissed New Jersey, Pennsylvania-subclass, and Virginia-subclass claims where applicable |
| Manifestation of defect | Plaintiffs allege a uniform defect (ammonium nitrate propensity) sufficient at pleading stage | Defendants argue lack of manifestation (no specific inflator failure) bars claims | Court held manifestation adequately pleaded for motion to dismiss (following Mazda Order) |
| Sufficiency of fraud/knowledge allegations under Rule 9(b) | Plaintiffs allege particular facts and disclosures (Takata warnings, design approvals) and reliance on information and belief | BMW contended allegations were generic and insufficiently particular | Court found allegations sufficiently particular to satisfy Rule 9(b) at this stage |
| Standing and class-representative adequacy for state sub-classes (PA, VA) | Plaintiffs argued standing/class issues premature until certification | BMW argued no named plaintiff represents certain state sub-classes (no injury in that state) | Court dismissed Pennsylvania and Virginia sub-class claims for lack of standing or applicable substantive law |
| Statute of limitations and tolling (e.g., Florida, Alabama) | Plaintiffs allege fraudulent concealment and delayed discovery (recalls/May 2015 admissions) toll limitations | BMW argued claims are time-barred and delayed-discovery inapplicable | Court denied dismissal where fraudulent concealment was adequately pleaded and could toll limitations (e.g., Veser, Richardson) |
| State-law claim-specific defects (e.g., California false advertising, negligent failure to recall, implied warranty) | Plaintiffs claimed reliance and economic loss injuries tied to misrepresentations/failure to recall | BMW argued lack of reliance, temporal impossibility for some plaintiffs, and economic-loss rule bars tort claims | Court dismissed false-advertising claims for Dougherty and Lee (no plausible reliance), dismissed negligent-failure-to-recall claims under California economic-loss rule, but allowed other warranty/false-advertising claims to proceed where adequately pleaded |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard and rejection of mere labels and conclusions)
- Ziemba v. Cascade Intern., Inc., 256 F.3d 1194 (11th Cir. 2001) (Rule 9(b) particularity in fraud suits)
- Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (California governmental interest choice-of-law framework and place-of-wrong emphasis)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) (states make reasoned judgments about conduct within their borders; choice-of-law context)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (class certification standards and relation to Article III constraints)
- Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) (class certification and justiciability of claims by uninjured class members)
- Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353 (3d Cir. 2015) (standing elements applied to consumer vehicle defect claims)
- Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979 (2004) (California economic-loss rule barring purely economic tort recovery)