406 F.Supp.3d 618
E.D. Mich.2019Background
- Seventeen plaintiffs from multiple states sued GM alleging a latent defect in air-conditioning systems ("AC Defect") in certain 2014–2017 GM trucks/SUVs that causes cracking, refrigerant leaks, loss of pressure, failure to cool, and safety risks (e.g., window fogging, heat exposure).
- Plaintiffs assert GM knew of the defect pre-sale (testing, dealer complaints, technical service bulletins, parts sales, NHTSA complaints) but concealed it; claims include breach of express and implied warranties, Magnuson-Moss, unjust enrichment, fraudulent concealment, and multiple state consumer-protection statutes.
- GM moved to dismiss under Rule 12(b)(6). The Court applied Iqbal/Twombly plausibility standards and accepted the warranty documents attached to the motion.
- Court dismissed nearly all express and implied warranty claims for plaintiffs whose AC failures occurred after the warranty durational limits (3 years/36,000 miles), holding those limits enforceable and not unconscionable, except for Carl Williams who alleged failure within the warranty period.
- The Court denied dismissal of Carl Williams’s warranty claims (express and California implied/Song-Beverly) based on allegations that GM’s repairs were inadequate and the warranty notice provision did not clearly apply; it also denied dismissal of many fraudulent-concealment and state statutory claims where plaintiffs plausibly alleged GM’s pre-sale knowledge, materiality, and a duty to disclose.
- The Court dismissed Plaintiffs’ unjust-enrichment claim (Michigan law) as precluded by the express warranty and dismissed several state claims on procedural or preemption grounds (e.g., Georgia pre-suit notice, Louisiana LPLA exclusivity, New Jersey CFA where failure occurred after warranty period). Leave to amend was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of warranty durational limits / unconscionability | Limits are unconscionable because GM knowingly concealed a latent safety defect | Time/mileage limits are routine, plaintiffs had market alternatives; presale knowledge alone does not show unconscionability | Court: Limits enforceable; dismissed express/implied warranty claims for plaintiffs whose failures occurred after limits (only Williams survives) |
| Breach of express warranty (Carl Williams) — adequacy of repairs & notice requirement | Williams alleges repair attempts were ineffective and replacements equally defective; warranty notice provision does not clearly apply to his claims | GM says it repaired vehicle and complied with warranty and that Williams failed to provide required written pre-suit notice | Court: Denied dismissal — plausible inadequate repair theory; notice clause construed as lemon-law oriented and not clearly applicable at this stage |
| Fraudulent concealment / duty to disclose and pre-sale knowledge | Plaintiffs allege GM had pre-sale knowledge (testing, TSBs, complaints, parts sales) and omitted material safety information; omission is actionable and reliance pleaded | GM contends plaintiffs fail to plead GM’s pre-sale knowledge or a duty to disclose; some states require fiduciary/confidential relationship | Court: Denied dismissal — allegations plausibly establish GM’s knowledge and, under several states’ law, a duty to disclose (safety-related omission); Rule 9(b) satisfied for omission claims; economic-loss doctrine deferred to summary judgment |
| State consumer-protection claims — procedural or substantive defenses | Plaintiffs assert state statutes were violated by concealment and deceptive practices | GM raises multiple defenses: statutory notice requirements (GA), statutory exemptions (Michigan), exclusivity or preemption (Louisiana LPLA), warranty-period bar (NJ CFA), lack of reliance | Court: Mixed rulings — allowed many statutory claims to proceed (including Arizona, California, Georgia injunctive claim), dismissed some: GA GFBPA for failure of 30-day pre-suit notice, LA LUTPA (preempted by LPLA), NJCFA dismissed where defect manifested after warranty expiry; other defenses reserved for summary judgment |
| Unjust enrichment alternative pleading | Plaintiffs may plead unjust enrichment alternatively to warranty claims | GM argues express warranty forecloses implied contract recovery | Court: Dismissed unjust enrichment — where an express contract governs same subject matter, unjust enrichment unavailable |
| Leave to amend after motion to dismiss | Plaintiffs asked leave to replead deficient claims | GM opposed further amendment; Court considered prior scheduling and opportunity to amend | Court: Denied leave to file second amended consolidated complaint based on prior procedural opportunities and efficiency concerns |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (more than labels and conclusions required to survive dismissal)
- Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509 (6th Cir. 2001) (accept factual allegations as true on motions to dismiss)
- Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308 (6th Cir. 1998) (factors for procedural unconscionability and choice-of-law reasoning)
- Abraham v. Volkswagen of Am., Inc., 795 F.2d 238 (2d Cir. 1986) (manufacturer knowledge of latent defects does not render warranty time limit unconscionable)
- Solo v. United Parcel Service, Co., 819 F.3d 788 (6th Cir. 2016) (permissive pleading of alternative theories; limits on dismissing unjust enrichment at motion-to-dismiss stage when contract existence disputed)
- Isip v. Mercedes-Benz USA, LLC, 65 Cal. Rptr. 3d 695 (Cal. Ct. App. 2007) (vehicle may be unmerchantable for Song-Beverly purposes even if it still transports)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 647 N.E.2d 741 (N.Y. 1995) (NY law recognizes § 349 claims for material omissions when duty to disclose exists)
- In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936 (N.D. Cal. 2014) (internal testing, complaints, and TSBs can support manufacturer knowledge for omission claims)