Lewis v. Mercedes-Benz USA, LLC, 9:19-cv-81220

Background

Plaintiffs (nine vehicle owners from FL, NY, NC, CA) allege Mercedes NECK-PRO Active Head Restraints (AHR) have a latent defect: a plastic bracket that degrades and causes spontaneous, forceful forward deployment, creating safety risks and diminishing vehicle value.
Plaintiffs assert a nationwide putative class plus state subclasses and advance federal RICO claims, state consumer-protection and warranty claims, fraud-by-concealment claims, MMWA claims, and unjust enrichment claims against Mercedes-Benz USA, LLC (MBUSA), Daimler AG, and Grammer AG (manufacturer of the headrest mechanism).
Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6) (and for lack of personal jurisdiction over some defendants/claims). The court addressed Article III standing and statutory/jurisdictional issues first.
Court found plaintiffs have Article III standing based on economic injury (overpayment/diminished value) from buying allegedly defective vehicles, but concluded named plaintiffs lack standing to assert nationwide state-law claims for out-of-state class members.
The court held it lacked subject-matter jurisdiction over the plaintiffs’ MMWA claims because the MMWA bars federal class actions with fewer than 100 named plaintiffs; CAFA does not override that statutory restriction.
The court found plaintiffs’ RICO claims colorable enough to permit nationwide service but, on the merits, RICO allegations failed for lack of a plausibly pleaded association-in-fact enterprise and insufficient particularized allegations of mail/wire fraud and scienter; with RICO dismissed, Grammer (no Florida contacts) was dismissed and pendent personal jurisdiction over remaining state claims could not be sustained as to non-Florida plaintiffs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing for named plaintiffs and nationwide class	Plaintiffs paid a premium for defect-free Mercedes; economic loss from latent defect gives Article III standing; class standing should await certification	Many plaintiffs never experienced a malfunction; no injury-in-fact; named plaintiffs lack standing to sue under other states’ laws	Plaintiffs have Article III standing for their own overpayment injuries; but named plaintiffs lack standing to assert nationwide state-law claims for out-of-state class members (Counts XIII–XVI dismissed as to nationwide class)
MMWA jurisdiction (numerosity)	CAFA’s grant of federal jurisdiction supersedes MMWA’s <100-named-plaintiff bar	MMWA text explicitly limits federal-district-court class actions to those with ≥100 named plaintiffs; CAFA does not repeal that limit	MMWA claims dismissed for lack of subject-matter jurisdiction (MMWA’s 100-named-plaintiff restriction controls)
RICO sufficiency (18 U.S.C. §1962(c)/(d))	Defendants formed an enterprise to conceal the defect, used mail/wire fraud to misrepresent safety, and engaged in a pattern of racketeering	Allegations are conclusory, lack details of coordinated communications/meeting-of-minds, and do not plead predicate mail/wire fraud with particularity or scienter	RICO claims dismissed: enterprise allegation implausible and predicate acts insufficiently pleaded; consequent §1962(d) conspiracy claim also dismissed
Personal jurisdiction over Daimler/Grammer; pendent jurisdiction for state claims	RICO permits nationwide service under §1965(d); pendent personal jurisdiction could carry state claims; Daimler purposefully availed via MBUSA and U.S. distribution	Grammer and Daimler lack sufficient U.S./Florida contacts for personal jurisdiction as to state claims; if RICO fails, no basis for Grammer to remain	Court had statutory/nationwide jurisdictional basis for RICO service but RICO merits failed, so Grammer (no Florida contacts) dismissed; personal jurisdiction exists for FDUTPA claims brought by Florida plaintiffs (Lewis, Massa) against Daimler/MBUSA; non-Florida plaintiffs’ state claims dismissed for lack of personal jurisdiction

Key Cases Cited

Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (jurisdictional issues may be addressed before the merits)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing pleading standards)
Twombly v. Bell Atlantic Corp., 550 U.S. 544 (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards and legal conclusions)
Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (mail/wire fraud predicate-act principles)
Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction)
Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935 (nationwide service under federal statutes and colorable-claim threshold)
Boyle v. United States, 556 U.S. 938 (association-in-fact enterprise elements)
Cisneros v. Petland, Inc., 972 F.3d 1204 (RICO elements, enterprise and pattern pleading requirements)
Gardner v. Mutz, 962 F.3d 1329 (standing implicates jurisdiction and is threshold)
Debernardis v. IQ Formulations, 942 F.3d 1076 (economic injury/benefit-of-the-bargain theory for standing)
Cole v. General Motors Corp., 484 F.3d 717 (economic injury at time of purchase for defective product)
In re Takata Airbag Products Liability Litigation, 396 F. Supp. 3d 1101 (RICO and jurisdictional analysis in automotive-defect context)
Leon v. Continental AG, 301 F. Supp. 3d 1203 (enterprise pleading deficiencies in automotive-defect RICO claim)
Cardenas v. Toyota Motor Corp., 418 F. Supp. 3d 1090 (examples of adequate enterprise/predicate-act pleadings in automotive-defect RICO cases)