Schmidt v. Ford Motor Co.
972 F. Supp. 2d 712
E.D. Pa.2013Background
- Seven named plaintiffs (residents of NJ, PA, CA, AR, IL) sued Ford alleging latent defects in 5.4L V8–equipped vehicles (2004–2008) causing loss of power, stalling, and related problems; plaintiffs seek class-wide and state-class relief for warranty breaches, fraud/consumer-protection claims, negligent misrepresentation, and unjust enrichment.
- Plaintiffs allege Ford issued Technical Service Bulletins (TSBs) and that a federally-mandated emissions/design warranty (8 years/80,000 miles) applies; most plaintiffs’ vehicles were outside warranty periods and several never experienced manifest defects or incurred repair expenses.
- Ford moved to dismiss multiple counts: most express and implied warranty claims (except as to plaintiff Jason Schmidt), fraud and state consumer-protection claims, negligent misrepresentation, and unjust enrichment counts for certain plaintiffs.
- The Court applied Pennsylvania choice-of-law rules but evaluated claims under the law of each plaintiff’s state of residence per the parties’ agreement.
- The Court granted Ford’s motion: dismissed most warranty claims for failure to plead pre-suit notice (UCC § 2-607), dismissed fraud/consumer-protection and negligent misrepresentation claims for lack of Rule 9(b) particularity, and dismissed unjust enrichment claims for failure to allege a direct benefit conferred on Ford. Remaining: Jason Schmidt’s warranty claims, Stephen Gooder’s unjust-enrichment (IL) claim, Lee Pullen’s quasi-contract (CA) claim, and the nationwide injunctive relief claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal law governs breach-of-warranty claims | Warranty language and federal emissions warranties create federal substantive rule/no pre-suit notice required | State law governs breach claims; plaintiffs invoked diversity jurisdiction and cited no federal cause of action | State law governs; federal warranty statutes do not convert claim into federal cause of action |
| Whether plaintiffs pled required pre-suit notice under UCC §2-607 (state law) | Notice satisfied by Ford’s knowledge from TSBs, NHTSA complaints, and other class members’ complaints | Individual plaintiffs failed to allege they provided notice to Ford; third-party notice insufficient | Dismissed warranty claims for plaintiffs (except Jason Schmidt) for failure to plead pre-suit notice |
| Whether fraud, UTPCPL/consumer-protection, and negligent misrepresentation claims meet Rule 9(b) particularity | Plaintiffs allege omissions/deceptive conduct and reliance; class allegations suffice | Plaintiffs fail to plead who, when, where, what statements, or particular reliance; many vehicles were out of warranty | Dismissed fraud, consumer-protection, and negligent misrepresentation counts for lack of particularity (with prejudice) |
| Whether unjust enrichment claims adequately allege a direct benefit conferred on Ford | Plaintiffs allege they overpaid and conferred benefit on Ford | Plaintiffs did not allege direct payments or transfers to Ford or its dealers; benefits alleged are indirect or speculative | Dismissed unjust enrichment counts for failure to allege direct benefit |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to deference in Rule 12(b)(6) review)
- DeBenedictis v. Merrill Lynch & Co., 492 F.3d 209 (3d Cir. 2007) (standard for accepting allegations and inferences on Rule 12(b)(6))
- Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187 (3d Cir. 2009) (facial plausibility standard explained)
- Papasan v. Allain, 478 U.S. 265 (1986) (court not bound to accept legal conclusions couched as factual allegations)
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (Rule 9(b) requires particularity: date, time, place, or other precision)
- Hershey Foods Corp. v. Ralph Chaple, 828 F.2d 989 (3d Cir. 1987) (elements of unjust enrichment claim)