Leon v. Cont'l AG
301 F. Supp. 3d 1203
S.D. Fla.2017Background
- Plaintiffs (13 vehicle purchasers) allege vehicles manufactured by Honda and Mercedes-Benz contained defective airbag control units (ACUs) due to a faulty ASIC (supplied by Atmel; ACUs manufactured by Continental), causing non-deployment and unintended deployment. NHTSA opened an investigation in 2015; over 630,000 vehicles were then subject to warning/recall.
- Plaintiffs seek to represent nationwide and several state subclasses and assert claims including MMWA (implied warranty), fraudulent concealment, RICO (against airbag manufacturers), state consumer-protection statutes (FDUTPA, NJCFA, MCPA, etc.), and California consumer claims against Atmel.
- Defendants moved to dismiss: MBUSA (Mercedes-Benz USA), Honda, Atmel, and Continental filed Rule 12(b)(1),(2),(6) (and some 12(b)(7)) motions. The court held oral argument and granted all four motions.
- Key factual allegations: Continental and Atmel allegedly learned of ASIC corrosion as early as 2008; defendants allegedly implemented ineffective countermeasures and failed to timely disclose the defect; plaintiffs allege ongoing communications among airbag manufacturers about the defect and public statements about safety.
- Procedural result: Court dismissed Honda for lack of personal jurisdiction (12(b)(2)) without prejudice; dismissed MBUSA claims for failure to state claims (12(b)(6)) and limited standing (no standing for claims on models plaintiffs did not buy); dismissed Atmel and Continental after finding (a) no personal jurisdiction under Florida long-arm, (b) RICO claim failed (and thus pendent personal jurisdiction unavailable), and (c) the remaining state-law claims therefore dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Honda (Florida forum) | Honda sold/marketed vehicles nationwide and delivered vehicles into Florida stream of commerce; Florida plaintiffs bought in Florida | Complaint lacks facts tying Honda specifically to Florida (no office, no Florida dealer relationship alleged); insufficient contacts for general or specific jurisdiction | Dismissed for lack of personal jurisdiction; plaintiffs may amend to plead facts showing Honda's Florida contacts |
| Standing & prudential mootness re: MBUSA (recall) | Plaintiffs seek economic/diminished-value and injunctive relief despite MBUSA recall; recall does not fully compensate alleged losses | MBUSA's voluntary recall/repair program moots some claims; some plaintiffs lack standing as to models they did not purchase | Plaintiffs have Article III standing except for claims on vehicle models the named plaintiffs did not buy (GLK-class). Recall did not render claims prudentially moot here |
| MMWA / implied warranty against MBUSA (privity) | Plaintiffs allege sufficient dealings with defendants/dealers to establish privity or third‑party beneficiary status | MBUSA is a distributor, not the dealer; Florida law requires privity for implied warranty; no factual allegations of privity or agency/control over dealers | Implied warranty (MMWA) claim dismissed for failure to plead privity; third‑party beneficiary theory inadequately pleaded |
| Fraudulent concealment (MBUSA) vs Florida economic loss rule | Alleged concealment induced purchase; damages are diminished value or contract losses | Florida's economic loss rule bars tort recovery for purely economic losses in products context absent physical injury | Fraudulent-concealment claims dismissed under Florida's economic loss rule |
| FDUTPA claim against MBUSA (particularity) | Defendants engaged in deceptive trade practices by concealing known defect | FDUTPA fraud-based allegations must meet Rule 9(b); MBUSA also argues lack of particularized allegations tying MBUSA itself to specific misrepresentations | FDUTPA claim dismissed for failure to plead with required particularity (Rule 9(b) applies to fraud-sounding FDUTPA claims) |
| Personal jurisdiction and RICO against Atmel & Continental | Nationwide distribution, web-based advertising, shipments, and inter-company communications placed defendants in Florida stream of commerce; RICO alleges mail/wire fraud predicate acts and an association-in-fact enterprise | Complaint alleges only generic nationwide distribution and generalized contacts; fails to plead an enterprise, pattern, or predicate acts with Rule 9(b) specificity; Florida long-arm contacts inadequate | Court lacked personal jurisdiction under Florida long-arm; exercised Fifth Amendment/nationwide-service jurisdiction only for RICO but dismissed RICO for failure to plead enterprise/predicate acts with required specificity; dismissal of RICO foreclosed pendent jurisdiction and all state claims were dismissed |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (limits general personal jurisdiction; defendant must be "essentially at home" in forum)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state plausible claims; legal conclusions are not entitled to deference)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935 (when federal statute provides nationwide service, Fifth Amendment due process balancing applies to personal jurisdiction)
- Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309 (civil RICO and fraud-based claims are subject to Rule 9(b) heightened pleading requirements)
- Brooks v. Blue Cross & Blue Shield of Fla., 116 F.3d 1364 (Rule 9(b) requires fraud allegations with particularity; cannot lump defendants together)
- Ayres v. Gen. Motors Corp., 234 F.3d 514 (Motor Vehicle Safety Act does not create civil RICO predicate duty to disclose to NHTSA)
- Boyle v. United States, 556 U.S. 938 (enterprise for RICO must have purpose, relationships, and longevity)