James Smith v. General Motors LLC, 988 F.3d 873

Background

Between 2005–2006 GM redesigned the GMT900-series vehicle dashboard into a one-piece panel (used in Silverado, Sierra, Tahoe, Escalade, etc.); plaintiffs allege this design later cracked and could cause airbag malfunctions or shrapnel in a crash.
Plaintiffs (residents of 25 states) sued as a nationwide class asserting fraudulent concealment, state consumer-protection claims, and unjust enrichment; no class member alleged any actual injury from the alleged airbag/shrapnel hazard.
Plaintiffs alleged GM knew of the defect from pre-production testing, online/NHTSA complaints, and increased warranty claims, but pled these allegations largely on information and belief without documents or specific internal communications.
The district court applied the standard from Mross v. GM (which looks to the Restatement) requiring plaintiffs to plead that GM knew of the safety implications of the defect before sale, dismissed the claims for failure to plead such knowledge, and Plaintiffs appealed.
The Sixth Circuit affirmed: because Plaintiffs had urged the district court to apply Mross, the invited-error doctrine bars them from now rejecting that standard; on the merits the complaint failed Rule 9(b)/Twombly–Iqbal pleading requirements to show GM’s pre-sale knowledge of the safety risk.
Judge Stranch concurred in the judgment but expressed concern that Mross imposes an unduly heightened pleading burden at the motion-to-dismiss stage.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Must plaintiffs plead that GM knew of the safety risk (not just the defect) pre-sale to state nondisclosure/fraud claims?	Knowledge of the defect is sufficient; not required to plead GM’s knowledge of safety implications.	Mross/Restatement requires pleading that GM knew the defect posed the alleged safety risks before sale.	Plaintiffs must plead pre-sale knowledge of the safety risk; Plaintiffs invited application of Mross and failed to plead such knowledge.
Do state statutory consumer-protection claims require a lesser pleading standard than fraudulent concealment?	Yes — many statutes only require capacity/tendency to deceive, not actual knowledge of safety risk.	Same knowledge requirement should apply here given parties’ briefing and the Mross framework.	Court declined to apply a separate, looser standard and required the same pleading of pre-sale knowledge; conclusory statutory labels insufficient.
Did the district court misapply Rule 9(b) (requiring probability rather than plausibility)?	District imposed an impermissibly high/ probabilistic standard and rejected reasonable inferences.	District correctly applied Rule 9(b) together with Twombly/Iqbal and required particularized allegations of knowledge.	Rule 9(b) and Twombly/Iqbal were properly applied; Plaintiffs failed to plead the who/what/when/where/how of GM’s knowledge.
Did failure to plead which state law governs (Erie issues) prevent disposition?	Plaintiffs relied on generalized tort principles and did not specify governing state law.	Parties urged application of Mross/Restatement; invited error prevents later challenge to that choice.	Court avoided a state-by-state Erie analysis by following Mross (as requested by parties) and resolved the case on the merits; invited-error doctrine bars Plaintiffs’ complaint about that choice.

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must permit reasonable inference of defendant’s liability)
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts in diversity must apply state substantive law)
Wilson v. Hewlett–Packard Co., 668 F.3d 1136 (9th Cir. 2012) (discussed re: linking defect to safety hazard and defendant knowledge)
In re Bayer Healthcare & Merial Ltd. Flea Control Prod. Mktg. & Sales Pracs. Litig., 752 F.3d 1065 (6th Cir. 2014) (invited-error doctrine applied)
Baranco v. Ford Motor Co., 294 F. Supp. 3d 950 (N.D. Cal. 2018) (district-court decisions on whether knowledge of safety implications must be alleged)
Republic Bank & Tr. Co. v. Bear Stearns & Co., 683 F.3d 239 (6th Cir. 2012) (Rule 9(b) particularity: who, what, when, where, how)