381 F. Supp. 3d 853
E.D. Mich.2019Background
- Plaintiffs (multiple related putative class actions) allege Ford Super Duty 6.7L Power Stroke diesels were marketed as "clean" and compliant but in real-world driving emitted far more NOx due to alleged "defeat devices," and they sue Ford, Robert Bosch GmbH, and Bosch LLC for RICO and state consumer-protection claims.
- Four separate complaints filed in 2018 were before the Eastern District of Michigan; defendants moved to consolidate and filed motions to dismiss; plaintiffs moved to appoint interim class counsel.
- Plaintiffs seek damages and equitable relief on theories of fraud by omission/concealment, misrepresentation, and RICO (mail/wire fraud predicates and an association-in-fact enterprise).
- Defendants argued (inter alia) that plaintiffs’ state-law claims are preempted by the Clean Air Act (Section 209), that fraud claims fail under Rule 9(b), and that RICO standing, predicate acts, enterprise, and proximate causation are not adequately pleaded.
- The court consolidated the four actions, appointed interim class counsel, denied Ford and Bosch LLC’s motions to dismiss in large part (but dismissed claims based on affirmative puffery misrepresentations), and permitted plaintiffs 30 days to file a consolidated amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the four actions should be consolidated | Consolidation promotes efficiency; cases involve common facts/law | Consolidation might allow defendants to re-file or revise motions and prejudice plaintiffs | Consolidation granted: common questions of law/fact and judicial economy outweigh asserted prejudice |
| Whether interim class counsel should be appointed | Plaintiffs’ counsel have investigated claims and have relevant class-action experience; coordination needed | Appointment premature because only two suits then pending | Interim class counsel and executive committee appointed |
| Whether CAA §209 preempts state-law fraud/consumer-protection claims | Claims seek consumer relief for deception, not to enforce federal emission standards | CAA preempts any state standard relating to control of emissions; plaintiffs effectively seek to enforce federal rules and/or numerical standards | Court rejected preemption: plaintiffs’ claims target deception about vehicles, not imposition of federal emission standards; implied preemption not shown |
| Whether fraud claims meet Rule 9(b) | Plaintiffs pleaded omissions with particularity (who, what, when, where, how); reliance/materiality alleged | Plaintiffs fail to identify specific misrepresentations relied upon; many statements are puffery | Omissions fraud adequately pleaded under Rule 9(b); affirmative misrepresentations characterized as non-actionable puffery and dismissed |
| Whether RICO standing and proximate cause exist | Plaintiffs plead economic injury via overpayment (paid premium for a "clean" vehicle) fairly traceable to defendants’ scheme | Overpayment theory speculative; proximate causation attenuated by EPA certification and third-party actions; enterprise and predicate acts not alleged with specificity | RICO standing and proximate causation plausibly pleaded; enterprise and mail/wire fraud predicate acts (as omissions) sufficiently alleged; claim survives pleading stage |
| Whether Bosch LLC may be liable and whether plaintiffs have Article III standing against Bosch | Plaintiffs allege Bosch designed/supplied ECU and participated in concealment, causing overpayment | Bosch lacked direct advertising/pricing control and plaintiffs cannot trace injury to Bosch; standing insufficient or speculative | Plaintiffs have Article III standing and pleaded a plausible causal link to Bosch; Bosch’s arguments are fact questions for later stages |
| Whether unnamed class members’ state-law claims must be dismissed for lack of standing | Plaintiffs contend class-certification stage is proper time to resolve multi-state standing | Defendants urge early dismissal to avoid nationwide discovery burden | Court declines to dismiss multi-state claims for lack of standing now; issue reserved for class-certification analysis |
Key Cases Cited
- Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88 (preemption framework)
- Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246 (definition of "standard" under CAA)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (presumption against federal preemption in areas of traditional state regulation)
- Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (start with assumption states' police powers not displaced absent clear congressional purpose)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading standard - plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (complaint must allege factual content permitting plausible inference of liability)
- Holmes v. Sec. Inv'r Prot. Corp., 503 U.S. 258 (proximate causation in RICO suits)
- Boyle v. United States, 556 U.S. 938 (broad definition of RICO "enterprise")
- Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393 (RICO elements and pleading)
- Counts v. Gen. Motors, LLC, 237 F. Supp. 3d 572 (E.D. Mich.) (persuasive treatment of CAA preemption and fraud-on-consumer theory)