This is thе third motion to dismiss filed by the defendant under Federal Rule of Civil Procedure 12(b) aimed at the first amended consolidated master class action complaint (FACMC) in this multidistrict litigation proceeding. The first two' motions challenged subject matter and personal jurisdiction under Rules 12(b)(1) and (2), respectively. The present motion is based on Rule 12(b)(6), but it adopts -the same reading of the FACMC that the Court rejected earlier as unfaithful to the plain text of that pleading. The motion here is necessarily more complex, however, because it addresses a complaint that alleges 86 counts under the laws of 18 states (although claims under only seven states’ laws are currently live), plus a federal count under the Magnuson-Moss Warranty Act. Although the laws of some of the states interpose certain procedural obligations that a few of the plaintiffs failed to meet— necessitating dismissal of some counts— the faulty premise rejected by the Court in its previous opinion on the Rule 12(b)(1) motion dooms the defendant’s principal arguments here, and therefore the Court will deny, for the most part, the motion to dismiss alleging failure to state a.,claim.
I. Facts and-Proceedings
A. Summary of Pending Claims
This. multidistrict case began with an October 5, 2016 order of the Judicial Panel on, Multidistrict Litigation (JPML). The proceeding presently comprises 23 cases
The FACMC, [dkt. # 88], which'was filed on March 24, 2017, collected the claims of 29 individual plaintiffs from 18' states. Since the FACMC was filed, some of the plaintiffs have dropped out and a few of the personal injury cases have settled. Claims for economic loss by 35: plaintiffs subsequently were. transferred to or' directly filed in this Court; and therefore have not yet been consolidated in the master pleading and-are not directly subject to the present motion to dismiss. Nonetheless, the counts of the FACMC are representative of.the claims in the more recent cases, and the defendant’s arguments as to those actions likely would be the same.
The FACMC, as filed, sets forth- 86 counts for violations of the federal Magnu-son-Moss Warranty Act, 15 Ú.S.C. § 2301 et seq., and for breaches of express and implied warranties, false'or déeeptive advertising, fraudulent concealment, and unjust enrichment, under the common law and consumer protection statutes of the various states. However, after the consolidated complaint was filed, the Court dismissed without prejudice the claims of 20 plaintiffs from several states who were named in a-case transferred here from-the Central' District of California (the Goldsmith case, No. 16-13681 (E.D. Mich.) (a.k.a. Goldsmith v. FCA US, LLC, No. 16-01341 (C.D. Cal); f/k/a Andollo v. FCA US, LLC). Those 20 non-California plaintiffs have re-asserted their claims in other civil .actions presently before the Court, but not before the defendant’s Rüle 12(b)(6) motion was argued. Therefore, as the plaintiffs note in their response to the motion to dismiss, after the dismissal of those 20 plaintiffs, the surviving claims pleaded in the consolidated master complaint involve only 11 plaintiffs from seven states:
• California (David Goldsmith, Michael Vincent Nathan, Jr., and Pascual Pietri) (Counts VI-XII)
• ‘ Massachusetts (Bernadine . Hartt) (Counts XXI-XXIII)
• Missouri (Taylor Brooks) (Counts XXIX-XXXIII)
• Nebraska (Nina .Walker) (Counts XXXIV-XXXVIII)
• New .York (John Lynd and Janella Mack) (Counts XLIX-LIII)
• Pennsylvania . (Timothy Weber and Bruce Vosburgh) (Counts LXVIII-LXXII)
• Wisconsin (Marc- Hughes) (LXXXI- ;■ II-LXXXVI)
, The separately filed consolidated personal injury complaint [dkt. # 74] asserted consolidated claims on behalf of 12 personal injury plaintiffs (five remain). Since that consolidated complaint' was filed, nine more plaintiffs’ cases have been transferred''to this Court.
B. Factual Background
This case concerns alleged design defects in certain cars made by defendant FCA US, LLC (commonly referred to as Fiat Chrysler Automotive, or FCA) between 2012 and 2015. The FACMC alleges the various liability theories noted-above on behalf of the named plaintiffs and all other persons in the United States “who purchased, leased or own a 2012-2014 Chrysler 300, 2012-2014 Dodge Charger, or 2014-2015 Jeep Grand Cherokee equipped with a monostable electronic gearshift, supplied ■ by ZF - Friedrichshaffen AG” .(the so-called “monostable shifter” or “defective shifter”). This shifter design does not use a lever that moves physically to different positions, but instead is pushed
As noted above, the defendant has recycled its arguments from the Rule 12(b)(1) motion based on its view that the plaintiffs claim that the vehicles are defective only because they do not include an auto-park feature — which was neither promised nor paid for — and little more. That assertion misrepresents the substance of the FACMC. To assess the defendant’s Rule 12(b)(6) motion, it is necessary to review the pleading in some detail.
1. Design Defects
The plaintiffs allege that the monostablе shifter design is defective and unsafe in two ways: (1) it gives insufficient indications to a driver about whether an intended gear selection was completed, and what gear the car is in; and (2) it can cause the car to shift into a gear other than the one that was selected, or to shift spontaneously out of “Park” and into a gear that allows the car to move. The plaintiffs assert that the danger posed by those defects is aggravated by the fact that the cars do not have any safety override or auto-park feature to automatically shift the transmission to “Park” if the driver side door is opened when the engine is running.
As stated in the FACMC, “the lack of a physical gear level for PRND and the Defective Shifter’s return to its predetermined location has led to hundreds of reports of Class Vehicles rolling away when drivers thought their vehicles were in Park.” The defendant acknowledged in its own recall notices the risk that, because “[g]ear-selection is conveyed to the driver by ... indicator lights, not gear-selector position ... drivers may draw erroneous conclusions about the status of their vehicles.” FACMC ¶¶ 119-20. The plaintiffs assert that “[t]he Defective Shifter’s use of solely visual cues to alert drivers to the Class Vehicles’ gear position is ineffective because drivers may not realize that they have not pushed the gear lever forward or backward enough to engage their desired gear.” They say that “[b]ecause there is no tactile feedback informing a driver whether the shifter lever has physically moved and is resting in P, R, N or D, drivers may think they have pushed the shifter lever forward enough to engage the Park gear and may exit the vehicle when it is not actually in Park.” Id. ¶ 124. They also allege that “[t]he Defective Shifter’s sole reliance on visual feedback to convey gear selection has been dangerously ineffective.” And they allege that the defendant knew as much because “consumer complaints beginning at least as early as 2013 ... document Class Vehicle owners’ and lessees’ inability to determine whether their vehicle is in the desired gear resulting in hundreds of rollaways, accidents and injuries.” Id. ¶ 125. The plaintiffs further assert that “numerous complaints to [the National Highway Transportation Safety Administration (NHTSA) ] allege that once a driver puts a Class Vehicle into Park, the vehicle can move into another gear on its own.” Ibid.
The plaintiffs allege that “[ujnlike other automobile manufacturers, FCA did not implement a safety override feature that would prevent Class Vehicles from moving when the vehicles are not in Park and a driver opens the driver door and disengages pressure on the gas or brake pedals to exit the vehicle.” “The lack of a fail-safe
The potential problems that this combination of features could cause were summarized by NHTSA in a report that followed its investigation of the rollaway incidents:
The Office of Defects Investigation (ODI) opened Preliminary Evaluation PE15-030 on August 30, 2015 to investigate 14 complaints alleging incidents of rollaway after intended shifts to Park in Model Year (MY) 2014 and 2015 Jeep Grand Cherokee vehicles. The MY 2014-2015 Grand Cherokee vehicles are equipped with Monostable electronic (“E-shift”) gearshift assemblies supplied by ZF Group (ZF). The E-shift system operates electronically and the gear requested by the driver is transmitted from the shifter via the CAN Bus to the Transmission Control Module which makes the requested shift. The Monostable gearshift does not move into a de-tent but springs back to a centered / neutral position after the driver selects a gear and releases the shifter. A button on the shift knob must be depressed to shift out of Park, shift out of Neutral, and to shift from Drive to Reverse or Park.
The gear selected is shown on a display in the dash and illuminated letters on the shifter. If the driver’s door is opened when the gearshift is not in Park, a chime sounds and a message is displayed on the [Electronic Vehicle Information Center (EVIC)] to warn the driver. In addition, the engine Start / Stop push-button contról logic does not permit normal engine shut-off when the transmission is not in Park. This logic may provide feedback to drivers who attempt to turn the engine off when the transmission- is not in Park. However, this function does not protect drivers who intentionally leave the engine running or drivers who do not recognize that the engine continues to run after an attempted shut-off.
NHTSA testing during PE15-030 indicates that operation of the Monostable shifter is not intuitive and provides poor tactile and visual feedback to the driver, increasing the potential for unintended gear selection.
FACMC, Ex. A, NHTSA Report (Initial) (Pg ID 2953-54). The FACMC incorporates NHTSA’s final analysis of the shifter design and its relation to the mishaps disclosed by its - own investigation and the manufacturer’s defect report to the agency, which reads: '
Although the Monostable gearshift has the familiar appearance of a conventional console mechanical gearshift assembly, it has unfamiliar movement that does not provide the tactile or visual feedback that drivers are accustomed to receiving from conventional shifters. Consequently, the driver must take additional time to verify that the desired gear position was achieved by checking the PRNDL display on the shift knob or the Electronic Vehicle Information Center (EVIC) display.
FCA received negative consumer feedback for the Monostable shifters shortly after the subject vehicles entered the market. Field data indicates that the design resulted in, higher error rates during attempted shifts to Park and higher rates of powered rollaway incidents. The Monostable design appears to violate several basic design guidelines for vehicle controls such as: 1) be consistent; 2) controls and displays should function the way people expect them to function; 3) minimize what the user has to remember; and 4) operations thatoccur most often or have the greatest impact on driving safety should be the easiest to perform. FCA changed to Po-lystable electronic gearshift assemblies in MY 2015 Charger. / 300 cars and MY 2016 Grand Cherokee vehicles., The. Po-lystable gearshift assemblies stay in the position of the selected gear, similar to a standard mechanical shifter, providing drivers with the expected tactile and visual feedback (i.e., works as expected and does not require' additional thought or attention).
FACMC, Ex. B, NHTSA Report (Final) (Pg ID 2956-57).
2. Rollaway Incidents
Four of the individual plaintiffs allege that they had rollaway incidents with their own cars: Goldsmith, Nathan, Brooks, and Mack. Four others allege that they have had problems shifting the car into an intended gear: Hartt, Lynd, Weber, Vos-burgh. FACMC ¶¶36, 38, 56, 75, 79. Two plaintiffs, Nathan and Lynd, alleged that, as a result of the unreliable gear shifter, they no longer feél safe driving their cars. FACMC ¶ 38, 73.'
Missouri plaintiff Taylor Brooks alleged that he bought his “certified pre-owned” 2016 Jeep Grand Cherokee on May 28, 2016. He was not informed by .the déaler or the defendant about any recall. When he later learned about the recall on his own, he called the dealer to inquire if his car was safe, and the dealer told him the recall'issue had been fixed. On July 11, 2016, Brooks tried to put his car in “Park” at a gas station, but the “Park” setting did not engage, and the car rolled away across four lanes of- traffic, eventually crashing into- a-fence, Brooks later learned, after checking the VIN on his car, that no recall repair had been done, and the initial recall he had learned about was “educational” only. The dealer told Brooks that he would have to seek' coverage from his insurer for the damage to his car. . FACMC ¶¶ 55-59.
New York plaintiff John Lynd alleged that, before the recall, he-had “multiple instances” where he tried to plаce his car in “Park” and realized as he was about to exit the vehicle that- it actually was in “Drive” or “Reverse” instead. He took his car to the dealer for a recall-related software fix to be applied, but, since the fix was installed, he has more than once tried to put the car in “Park” using the shifter, “only to watch the transmission shift instead to a different gear.” FACMC ¶¶ 66-72.
New York plaintiff Janella Mack alleged that she put her car in “Park” and got out to unload it while it was' in the driveway of her grandmother’s home. However, as she was unloading items, the car rolled away and was damaged. FACMC ¶ 75,
Pennsylvania plaintiff Timothy ■ Weber alleged that he has . had incidents where he tried to put his car in “Park” and thought that it was in “Park,” only to discover when he tried to exit the car that it was in “Reverse” instead, FACMC ¶ 87.
The FACMC" also catalogs 15 examples of reports to NHTSA by owners of class vehicles, logged between April 2013 and May 2016, of incidents where a driver shifted the car into “Park,” and the car appeared to be in “Park,” but after the driver exited the car it rolled "away under its own power. FACMC ¶146 (Pg ID .2671-84). In several incidents the drivers reported that the gear selected indicator clearly “showed the vehicle to be in Park,” but the car nevertheless was in another gear, or shifted to another gear after the driver got out. Several others reported that when the driver attempted to place the car in “Park” using the shift lever, it instead shifted to “Drive” or “Reverse.” Others reported instances in which they selected an intended gear with the shifter such as “Park” or “Drive,” but the car instead "shifted -into another gear such as
NHTSA investigated the alleged shifter defect between August 2015 and February 2016, and its investigation “identified 306 incidents of vehicle rollaway following intended shifts to Park in the 2014-2015 Grand Cherokee.” FACMC ¶¶149, 154. NHTSA’s “analysis of these incidents determined that [they] resulted in 117 alleged crashes,”, and that 28 of the crashes resulted in serious injuries, with other incidents resulting in minor injuries. Id, ¶ 154. On April 22, 2016, FCA submitted a “defect-information, report” to NHTSA “regarding a defect that could result in unattended vehicle rollaway with the engine running in model year (MY) 2012- to 2014 Dodge Charger and Chrysler 300 vehicles and MY 2014 to 2015 Jeep Grand Cherokee vehicles equipped with 8-speed transmissions and a monostable gear selector.” FACMC, Ex. A, NHTSA Report (Pg ID 2956). NHTSA’s analysis of the defect report indicates that, its own investigation and the manufacturer’s defect report disclosed a combined total of 686 reports of rollaway incidents, .resulting in . 286 crashes, and 68 of those incidents produced injuries. Ibid.
3. Voluntary Recall
The plaintiffs allege that- FCA knew about the defects in the shifter since at least 2011, when the affected vehicles first went to market, but it took no steps to address the defect until it issued a voluntary recall in April 2016. In May 2016, FCA sent affected owners a letter explaining the problems and risks with the shifter design, but that letter stated only that FCA was .working -on a solution, to be released near the end of 2016. The NHTSA .report of the voluntary recall stated that FCA had assessed the defect and risks that led to the recall. It read:
Drivers erroneously concluding that their vehicle’s transmission is in the PARK position may be struck' 'by the vehicle and injured if they attempt- to get out of the vehicle while the engine is running and the parking brake is not engaged. FCA US has therefore determined that the absence of an additional mechanism to mitígate the effects of driver error in failihg to shift the monostable1 gear selector into PARK prior to exiting the vehicle constitutes a defect presenting a risk to motor vehicle safety.
FACMC, Ex. F, Recall Report dated May 24, 2016 (Pg ID 2971). The plaintiffs assert that in the meantime, because there was no remedy immediately available to fix the defect, they were left'with the alternatives of either driving a dangerous vehicle; or not driving their cars at all. The recall notice ultimately affected more than 800,-000 vehicles in the United States.' FCA also later phased out the problematic shifter 'design starting with the 2016' model year. •
According to the FACMC, on June 20, 2016, the problems with the shifter design became a subject of widespread public attention when news sources “reported that a young Hollywood actor, Anton Yelchin, was crushed to death when his 2015 Jeep Grand Cherokee rolled backward down his driveway and pinned him against his mailbox after he exited the. vehicle.” FACMC ¶ 17.
On June 24, 2016, FCA notified owners of certain affected vehicles that they could bring their cars to an FCA dealer for a software update that would add an “auto
4. Economic Losses
The plaintiffs allege that they have suffered losses in several ways as a result of the defect, the widespread reports of accidents caused by it, and the defendant’s attempts to fix it. They contend that they-overpaid for cars they thought were safe, which were not; had to take time off from work and other .obligations to accommodate the defendant’s failed attempts to fix their cars; and now own vehicles that have dropped in value much faster than previous similar models or competitor vehicles, due to the public perception that the cars are dangerous to own and drive. The plaintiffs allege as an example that, before new reports about the defective shifter surfaced, “2014 and 2015 Jeep Grand Cherokees held their value better than other cars in their class,” but “after the defect stories became known, the monthly depreciation of these cars increased drastically, causing them to hold value worse than other cars in their class.” FACMC ¶ 12.
Seven of the plaintiffs specifically allege that they bought and still own their class vehicles: Goldsmith, Hartt, Brooks, Mack; Weber, Vosburgh, and Hughes. Two plaintiffs, Nathan and Pietri,' allege that they bought class vehicles, but do not specifically allege that they still own them (however, they also do not allege that they have sold or disposed of the cars). New York plaintiff John Lynd alleged that he- leased a class vehicle, and the term of his lease has not ended. Nebraska plaintiff Nina Walker alleges that she leased a 2014 Dodge Charger, but decided not to purchase the car at the end of the lease term. However, during the term of the lease, Walker “had her vehicle repaired” by the dealer she leased it from. FACMC ¶¶ 60-61.
5. Product Advertising
The plaintiffs quote samples of the defendant’s advertising materials, from print and internet sources, including claims that “[t]o ensure that FCA vehicles deliver maximum safety and quality to customers over their entire life, every mechanical and electronic.component, body part and trim element is rigorously tested,” and that its car “designers work with a team of researchers during the testing -phase to ensure vehicles meet the highest standards in terms of safety, ecological profile, driving performance and quality.” FACMC ¶ 133. Advertising literature for the Dodge Charger states that “safety and security is a priority,” “safety and security are built in,” the “Dodge Charger is helping keep you and your passengers safe and secure,” the vehicle is “always on guard,” and “the Dodge Charger packs more than 80 standard and available safety and security features to help keep drivers and passengers protected.” FACMC ¶ 134. Similar promotional messages for the Chrysler 300 and Jeep Grand Cherokee state that “[t]he Chrysler 300 Offers Over 80 Standard and Available Safety and ‘Security Features,” and the Cherokee has “[o]ver 70 available safety and security features,” with “protection when and where you need it.” Marketing materials for the Cherokee also promote
All of the individual plaintiffs allege that they bought or leased their cars because of their reputation for safety and reliability, and that they were persuaded to do so by the defendant’s advertising about the cars’ safety features. The plaintiffs also believed that their cars would be a good value because of that reputation. The plaintiffs also all assert that, before the defendant issued its recall notice on April 22, 2016, they did not know that the shifter design in the cars was defective and dangerous, that the design had caused numerous reported rollaway incidents, or that some of those incidents had produced serious injuries. They assert that they were not notified by either the defendant or the dealers who sold or leased them the vehicles that their cars were subject to any recall notice or defect investigation, and that they only later learned about the recall. Five plaintiffs specifically allege that they bought or leased their cars before the April 22, 2016 recall notice was issued: Goldsmith, Nathan, Lynd, Weber, and Vosburgh. Two plaintiffs, Pietri and Brooks, specifically allege that they bought or leased their vehicles after the notice was issued (both in May 2016). Four plaintiffs do not specifically allege the date when they bought or leased their cars: Hartt, Walker, Mack, and Hughes.
- 6. Limited Warranty
The defendant attached to its motion to dismiss copies of several new vehicle warranty documents covering the various class vehicles. E.g., Def.’s Mot., Ex. B, 2014 Chrysler All Vehicles Basic Limited Warranty (Pg ID 3284). All versions of the warranty have substantially identical terms and offer “Basic Limited Warranty” coverage of the entire vehicle for three years or 36,000 miles (3/36), and “Power-train Limited Warranty” coverage for five years or 100,000 miles- (6/100). Id. at 1 (‘Warranty Coverage”). The warranty documents all state that “[t]he warranties contained in this booklet are the only express warranties that [FCA] makes for your vehicle,” and that any “implied warranties are limited, to the extent allowed by law, to the time periods covered by the express written warranties contained in this booklet.” Id. at 4 (“Your. Legal Rights”). The “Basic Limited Warranty” language explains:
The Basic Limited Warranty covers the cost of all parts and labor needed to repair any item on your vehicle when it left the manufacturing plant that is defective in material, workmanship or factory preparation.
Id. at 5. Coverage under the “Basic Limited Warranty” extends to the following: “You are covered by the Basic Limited Warranty if you are a purchaser for use of the vehicle.” Ibid. The term of the “Basic Limited Warranty” begins on either (1) “the date you take delivery of the vehicle”; or (2) “the date when the vehicle was first put into service — for example, as a dealer ‘demo’ or as a Chrysler company vehicle.” Id. at 6. Similarly, the “Powertrain Limited Warranty” states the. spope of coverage as follows:
The Powertrain Limited Warranty covers the cost of all parts and labor needed to repair a powertrain component listed in section 2.4.E below that is defective in workmanship and materials.
Id.'at--9.-The coverage for “transmission” parts includes any “transmission range switch” or “transmission control module.” The “Powertrain Limited Warranty” similarly states that its coverage extends to any “purchaser for use” of the vehicle, and its term begins to run on the same date as
C. Procedural History
The transfer order from the JPML initiating this litigátion was issued on October 5, 2016. That order transferred and consolidated five cases filed in this and other districts. Subsequent’ conditional transfer orders, issued by the JPML added 18 more actions. Five more cases were originally filed in this district and reassigned to this Court.as companion matters. The Court subsequently entered orders of dismissal disposing of five personal injury cases involving eight individual- plaintiffs. -
On March 15, 2017, the plaintiffs filed a consolidated master class action complaint comprising the claims of all plaintiffs pursuing claims for economic losses only. On March 21, 2017, the Court granted the defendant's motion to strike that first iteration of the consolidated economic loss complaint, which had added claims of 17 individuals who were not named as plaintiffs in any case transferred to this Court by the MDL panel. The plaintiffs filed their first amended consolidated economic loss complaint on March 24,2017 and omitted those plaintiffs. However, the 17 individuals subsequently re-filed their claims in a new civil action in this district (Berken v. FCA US, LLC, No. 17-10983). Two of the plaintiffs in that case (Bruce Pollekoff and Brittani Sheppard) later voluntarily dismissed their claims.
On April 18, 2017, the Court issued an opinion denying the defendant’s motion to dismiss for lack of subject matter jurisdiction. On April 19,2017, the Court-issued an opinion- granting the defendant’s motion to dismiss for lack of personal jurisdiction and dismissing the claims of 20 non-California plaintiffs who were named in a case transferred here from the Central District of California (the Goldsmith case, No. 16-13681 (E.D. Mich.) (a.k.a. Goldsmith v. FCA US, LLC, No. 16-01341 (C.D. Cal.); f/k/a Andollo v. FCA US, LLC). Those 20 non-California plaintiffs have later re-filed their claims in a new case brought in this district (Andollo v. FCA US, LLC, No. 17-11376 (E.D. Mich. Apr. 28, 2017).
After the Court heard oral argument on the resent motion, New York plaintiff Michael Cruz voluntarily dismissed the claims he asserted in the FACMC on May 19, 2017.
II.
.- The defendant argues that none of the counts in the FACMC states a viable cause of action under any of the theories of liability set forth. The claims, are for false or deceptive advertising, fraudulent concealment, unjust enrichment, and breaches of express and implied warranties under the common law and consumer protection statutes of the various states, and lor violating the federal Magnuson-Moss Warranty Act, 15- U.S.C. § 2301 et seq. The defendant makes several arguments on each liability theory.
The defendant’s motion is based on Federal Rule of Civil Procedure 12(b)(6). The standards are well known to the parties: the purpose of the motion is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief if all the factual allegations in the complaint are taken as true. Rippy ex rel. Rippy v. Hattaway,
At this stage of the сase, the Court must accept as true the pleaded facts, but not factual conclusions unless they are plausibly supported by the pleaded facts. “[B]are assertions,” such as those that “amount.to nothing more than a ‘formulaic recitation of the elements’ ” of a claim, can provide context to the factual allegations, but are insufficient to- state a claim for relief and must be disregarded. Iqbal,
When deciding a motion under Rule 12(b)(6), the Court looks to the pleadings, Jones v. City of Cincinnati,
A. Fraud-based Claims
The defendant argues that all of the statutory and common law fraud and false advertising claims are insufficiently pleaded as a matter .of law because the plaintiffs have not stated facts to establish many of the general elements .of fraud. Those arguments are premised, in many respects, on the assertions that the plaintiffs have limited their claim of defect to the lack of an “auto-park” or “safety .override” feature; the defendant’s general representations’ the ■ ears were “safe” and “reliable” are “mere puffery” and therefore cannot supply a basis for any actionable consumer fraud or false advertising .claim; and the plaintiffs “effectively admit” that injury only could result from the plaintiffs’ own “intervening. acts” of ..leaving- the engine running and getting out of the car without putting the car in “Park” before exiting. The defendant also contends, that the allegations of fraud do not meet the specificity requirement of Federal-Rule of Civil Procedure 9(b); some of.the plaintiffs failed to satisfy the pre-suit notice requirements of some of the. states’ laws; the Pennsylvania pláintiffs’ claims are barred by the economic loss doctrine; some of the plaintiffs bought their cars after the initial recall, and therefore cannot allege reliance on a false statеment by the defendant; the Massachusetts .plaintiffs fraudulent concealment claim is defective because the law of that state requires that the plaintiff plead that he is in. privity with, the defendant, which he is not; .and the consumer fraud claims , by the Nebraska and .New York plaintiffs must be dismissed , because the laws- of those states, require the plaintiff
1. General Fraud Elements
a. State Laws
Many of the states’ common law fraud elements overlap. Some of the statutory causes of action incorporate fraud concepts along with additional elements.
• California — Unfair Competition (Cal. Bus. & Prof. Code § 17200) (Count VI)
California’s Unfair Competition Law (UCL) “addresses ‘unfair competition,’ which ‘mean[s] and include[s] any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law].’ ” McGill v. Citibank, N.A.,
• California — Consumers Legal Remedies Act (Cal. Civ. Code § 1750) (Count VII)
“The [California] Legislature enacted the [Consumers Legal Remedies Act (CLRA) ] ‘to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.’ ” McGill,
“[California Civil Code] Section 1782 imposes a condition on a consumer’s ability to sue for damages under the CLRA.” Benson v. S. California Auto Sales, Inc.,
• California — False Advertising (Cal. Bus. & Prof. Code § 17500) (Count VIII)
California’s False Advertising Law “makes unlawful ‘untrue or misleading' statements designed to ‘induce the public to enter into any obligation’ to purchase various goods and services.” McGill,
• California — Fraudulent Concealment (Common Law) (Count X)
Under California law, “[t]he elements of fraud are (a) misrepresentation (false representation,' concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Geraghty v. Shalizi,
• Massachusetts — Deceptive Acts or Practices (Mass. Gen. Laws Ch. 93A § 1) (Count XXI)
Massachusetts '“General Laws Chapter 93A § 2(a), states that ‘[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are ... unlawful.’ ” Silva v. Norfolk & Dedham Mutual Fire Insurance Company,
• Massachusetts — Fraudulent Concealment (Common Law) (Count XXII)
“Massachusetts does not recognize an independent claim for fraudulent concealment. Rather, [Massachusetts General Laws Chapter 260' § 12] tolls the statute of limitations for a cause of action if an alleged wrongdoer concealed its existence through some affirmative act done with the intent to deceive.” Niedner v. Ortho-McNeil Pharm., Inc.,
• Missouri — Merchandising Practices Act (Mo. Rev. Stat. § 107.010) (Count XXIX)
“The [Missouri Merchandising Practices Act (MMPA) ], as first adopted
• , Missowd- — Fraudulent Concealment (Common Law) (Count XXX) , .
Under Missouri law, the “elements of fraudulent misrepresentation are: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) the speaker’s intent that it should be acted on by the person in the manner reasonably contemplated; (6) the hearer’s ignorance of the falsity of the representation; (7) the hearer’s reliance on the representation being true; (8) the hearer’s right to rely thereon; and (9) the hearer’s consequent and proximately caused injury.” Finest Place, Inc. v. Skidmore,
• New. York — Deceptive Practices & False Advertising (N.Y. Gen. Bus. Law § 319, 350) (Counts XLIX, L) -
“Pursuant to.[New York] General Business Law § 349, ‘[deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state’ are unlawful, and the statute provides an injured -party with a private right of action to enjoin such unlawful acts or practices and to recover for violations of the statute.” JD & K Assocs., LLC v. Selective Ins. Grp., Inc.,
• New York — Fraudulent Concealment (Common Law) (Count LII)
Uncler New York Law, in order to plead a viable “cause of action to recover damages for fraud [the plaintiff] must allege: (1) a false representation of fact, (2) knowledge of the falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) damages.” Jgk Indus., LLC v. Hayes NY Bus., LLC,
• Pennsylvania — Unfair Trade Practices (73 Pa. Stat. § 201-1) (Count LXVI-II)
The Unfair Trade Practices Consumer Protection Law (UTPCPL) “is Pennsylvania’s consumer protection law. It seeks to prevent ‘[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce’ ” Richards v. Ameriprise Fin., Inc.,
• Pennsylvania — Fraudulent Concealment (Common Law) (Count LXIX)
“The essential elements of a cause of action for fraud or deceit are misrepresentation, a fraudulent utterance thereof, an intention to induce action thereby, justifiable reliance thereon and damage as a proximate result.” V-Tech Servs., Inc. v. St.,
The limitations period in Pennsylvania is two years for any “action or proceeding to recover damages for injury to
• Wisconsin — Deceptive Trade Practices Act (Wis. Stat. § 110.18) (Count LXXXIII)
“Wisconsin’s Deceptive Trade Practices Act, Wis. Stat. § 100.18(1), [] generally prohibits false, deceptive, or misleading representations or statements of fact in public advertisements or sales announcements.” Mueller v. Harry Kaufmann Motorcars, Inc.,
• Wisconsin — Fraud by Concealment (Common Law) (Count LXXXIV)
Under Wisconsin law, a viable claim “for intentional misrepresentation requires proof that: (1) the defendant made a factual representation; (2) which was untrue; (3) the defendant either made the representation knowing it was untrue or made it recklessly without caring whether it was true or false;- (4) the defendant made the representation with intent to defraud and to induce another to act upon it; and (5) the plaintiff believed the statement to be true and relied on it to [his or her] detriment.” John Doe 1 v. Archdiocese of Milwaukee,
b. Discussion
As an initial matter, there are several prominent and demonstrably false major premises that the defendant relies on for most of its challenges to the sufficiency of the pleaded claims for statutory and common law consumer fraud and breaches of warranties. Those must be dispelled. First among them is the assertion, which the defendant also relied upon throughout its briefing on the Rule 12(b)(1) motion, that the “only defect” alleged by the plaintiffs is “the absence of an auto park feature.” The Court rejected that charactеrization in its previous opinion on that motion, but the defendant has stuck with those arguments anyway. They incorporate at least three false assertions about the allegations of the FACMC.
First, the defendant repeatedly asserts that nothing in the FACMC suggests that the shifter is “defective” in any way. It styles its argument this way:
Plaintiffs’ express warranty claims are flawed at thejr core because there is no allegation in the FA[C]MC that any “item on [Plaintiffs’] vehicle” actually .has a defect. Indeed, Plaintiffs’ claims are based on the notion that the “defect” is the absence of an “item”, i.e., an auto-park feature. Since the auto-park feature was not an “item on your vehicle when it left the manufacturing plant,” the New Vehicle Limited Warranty simply does not apply.
Furthermore, the allegations of the FA[C]MC do not even suggest that the monostable shifter itself is defective. To the contrary, the allegations allow for only one conclusion: the monostable shifter operates exactly as it was designed to operate so that when placed in the park position, the vehicle is in that gear and remains there until a driver takes it out of that gear. Because the monostable shifter performs exactly as it was designed to perform, it cannot be deemed “defective” for purposes of an express warranty claim.
Def.’s Mot. to Dismiss at 87-38 (Pg ID 3266-67); see also id. at 1-2 (“Plaintiffs seek to impose massive liabilities on Defendant FCA US LLC based on the notion that monostable shifter vehicles are unsafe unless they are equipped with an ‘automatic park’ feature that engages whenever a driver exits the vehicle without first engaging the park gear.”) (Pg ID 3230-31); id. at 5-6 (“Plaintiffs do not allege that the monostable shifter itself is defective. Rather, they aver that their vehicles as a whole are ‘defective’ because they are not equipped with a purported ‘safety override’ that Plaintiffs did not pay for and which FCA US did not promise.”) (Pg ID 3234-35); id. at 8 (“[T]here is no allegation that Plaintiffs’ vehicles have ever actually malfunctioned, or that any vehicle at issue in this lawsuit is prone to any actual malfunction.”) (Pg ID 3237); id. at 15-16 (“Plaintiffs’ statutory and common law fraud claims are all based on the notion that FCA US told Plaintiffs their vehicles were safe and it failed to tell them that the vehicles had no auto-park feature that would engage the park gear automatically whenever Plaintiffs exited a vehicle without taking the steps necessary to engage park.”) (Pg ID 3243-44); id. at 20 (“[Plaintiffs] do not aver that they were led to believe that their vehicles had an auto-park feature, or that they could exit their vеhicles without first engaging the park gear.”) (Pg ID 3249). .
Those assertions misrepresent the substance of the pleading. As is evident from the fact summary above, the plaintiffs allege in the FACMC that the gear shifter design is defective because (1) it gives insufficient indications to a driver about whether or not an intended gear selection has been completed, and about what gear actually is selected; and (2) even when an intended gear is selected, the mechanism may shift to another gear instead, allowing the car to move. They contend that the gear shifter design' is defective because, due to “the lack of a physical gear level for PRND and the Defective Shifter’s return to its predetermined location,” and because “[g]ear-selection is conveyed to the driver by ... indicator lights, hot gear-selector position ... drivers may draw erroneous conclusions about the status of their vehicles.” FACMC ¶¶ 119-20. The plaintiffs also assert that “[t]he Defective Shifter’s use of solely visual cues to alert drivers to the Class Vehicles’ gear position is ineffective because drivers may not realize that they have not pushed the gear lever forward or backward enough to engage their desired gear,” and that “[b]ecause there is no tactile feedback informing a driver whether the shifter lever has physically moved and is resting in P, R, N or D, drivers may think they have pushed the shifter lever forward enough to engage the Park gear and may exit the vehicle when it is not actually in Park.” Id. ¶ 124. .They contend that “[t]he Defective- Shifter’s sole reliance on visual feedback to convey gear selection has been dangerously ineffective,” and that -the defendant knew as much because “consumer complaints beginning at least as early as 2013 ... document Class Vehicle owners’ and lessees’ inability to determine whether their vehicle is in the desired gear resulting in hundreds of rollaways, accidents and injuries.”
The plaintiffs also allege in the FACMC that “numerous complaints to NHTSA allege that once a driver puts a Class Vehicle into Park, the vehicle can move into another gear on its own,” FACMC ¶ 125, and they describe in detail instances where the individual plaintiffs had similar experiences. Kg., FACMC ¶¶ 55-59 (Plaintiff Brooks tried to put his car in “Park” at a gas station, but the “Park” setting did not engage, and the car rolled away across four lanes of traffic, eventually crashing into a fence.); FACMC ¶¶ 66-72 (Plaintiff Lynd had “multiple instances” where he tried to place his car in “Park” and realized as he was about to exit the vehicle that it actually was in “Drive” or “Reverse” instead, and even after he took his car to the dealer for a recall-related software fix to be applied, he has more than once tried to put the 'car in “Park” using the shifter, “only to watch the transmission shift instead to a different gear.”); FACMC ¶ 75 (Plaintiff Mack put her car in “Park” and got out to unload' it while it was in the driveway of her grandmother’s home, but, as she was unloading items, the car rolled away and was damaged.); FACMC ¶ 87 (Plaintiff Weber had incidents where he tried to put his car in “Park” and thought that it was in “Park,” only to discover when he tried to exit the car that it was in “Reverse” instead.). The complaint further enumerates 15 examples of reports to NHTSA by owners of class vehicles, logged between April -2013 and May 2016, of incidents where a driver shifted the car into “Park,” and the car appeared to be in “Park,” but after the driver exited the car it rolled away under its own power. FACMC ¶ 146 (Pg ID 2671-84). In several of those incidents the drivers reported that the gear shift indicator clearly “showed the vehicle to be in Park,” but the car nevertheless was in another gear, or shifted to another gear after the driver got out.
Chrysler’s assertion that the FACMC’s only allegation of defect is that the vehicles did not include an auto-park feature is a canard that undermines the arguments that flow from it.
Second, the defendant asserts that the plaintiffs “admit” that their cars are perfectly safe, and that' there will be “no problem” when the vehicles are used as intended. Chrysler says it reads the FACMC to include an admission that if drivers “put the monostable' shifter into the park position before exiting their vehicles, there will be absolutely no problem at all.” Chrysler maintains that “most” of the plaintiffs fail to allege that “they have ever had, or that they even anticipate having, any problem with the monostable shifter.” Def.’s Mot. at 41 (Pg ID 3270); see also id. at 15 (“Plaintiffs effectively admit that their , own intervening acts — failing to engage the park gear — is the ultimate and necessary prerequisite to the threat of any injury.”); id. at 32 (“It is inconceivable that an alleged defect that could not possibly manifest absent customer misuse, and which now cannot manifest even with misuse, could significantly impact the public interest.”) (Pg ID 3261); id. at 42 (“Plaintiffs do not allege that their vehicles are unfit for driving. At best they allege that if they fail to move the. monostable shifter to the park position, and if they exit their vehicles with the motor still .running,t an unsafe condition might result.”) (Pg ID 3271).
Those assertions likewise misrepresеnt the contents of the pleading. The plaintiffs do not “admit” any such thing anywhere in
Third, the defendant asserts that “[t]here are no averments that [Chrysler] knew, prior to the sale of each Plaintiffs vehicle, that the driver of a .vehicle equipped with a monostable shifter would be any more likely to leave the vehicle •without putting it in park than the driver of any other vehicle.” Defi’s Mot. at 18 (Pg ID 3247); see also id. .at 16 (“Failing to install a feature that a consumer was never promised ánd that a manufacturer was not duty-bound to provide is not an ‘omission’ encompassed by common-law or statutory fraud”) (Pg ID 3245); id. at 19 (“The failure to allege facts establishing pre-sale knowledge requires dismissal of the fraudulent concealment claims under all states’ laws.”) (Pg ID 3248); id. at 21 (“Plaintiffs also do not, and cannot plausibly, allege that they believed their vehicles would automatically engage park when they exited. Nor can they plausibly claim that the failure to tell them that their vehicles would not automatically engage park led them to exit their vehicles without engaging the park gear.”) (Pg ID 3250).
But defense counsel must have missed the allegations in paragraph 140 and Exhibit B, where the plaintiffs assert that' the defendant had specific knowledge of the shifter defect based on its own internal testing and design process, and based on customer complaints -it received soon after the vehicles entered, the market: “Based on pre-production testing, pre-production design failure mode analysis, production design failure mode analysis, early consumer complaints made to Defendant’s network of exclusive dealers and NHTSA, basic design guidelines, and testing performed in response to consumer complaints, inter alia, Defendant was aware (or should have been aware) of the defect in the Defective Shifter.” FACMC ¶ 140. The plaintiffs also point to a design analysis by NHTSA, which concluded that the shifter design violates several basic design principles, and that FCA received reports about problems with the shifter soon after vehicles-went on the market (as early as 2011):
FCA received negative consumer feedback for the Monostable shifters shortly after the subjеct vehicles entered the market. Field data' indicates that the design resulted in higher error rates during attempted shifts to Park and higher rates of powered rollaway incidents. The Monostable design appears to violate several basic design guidelines for vehicle controls such as: 1) be consistent; 2) controls and displays should function the way people expect them to function; 3) minimize what the user has to remember; and 4) operations that occur most often or have the greatest impact on driving safety should be the easiest to perform. FCA changed to Po-lystable electronic gearshift assemblies in MY 2015 Charger / 300 cars and MY 2016 Grand Cherokee vehicles. The Po-lystable gearshift assemblies stay in the position of the selected gear, similar to a standard mechanical shifter, providing drivers with the expected tactile and visual feedback (i.e., works as expected and does not require additional thought or attention).
FACMC,. Ex. B, NHTSA Report (Final) (Pg ID, 2956-57). In those sections of the FACMC, the plaintiffs positively allege that the defendant knew that the gear shift was dangerously unreliable based on its own internal design and testing analy-ses, and- that the defect was confirmed by
In its reply brief the defendant purports to be startled and alarmed by these “new” assertions about the nature of the defect. It professes to be unable to locate any such allegations in the FACMC, and it declares that the plaintiffs are “try[ing] to save their claims by changing what this case is about.” The defendant contends that “[i]f, as it now appears, Plaintiffs want this case to be about a ‘defect’ where a shifter fails ‘to engage’ or ‘stay’ in Park, then the FA[C]MC should be dismissed forthwith,” because “[a] complaint cannot be amended by making new allegations in a response brief.” Def.’s Reply at 1 (Pg ID 4380).
That position simply ignores the plain text of the FACMC, as discussed above. And the defendant does not explain when, or how, the case was “about” something other than what is alleged in the FACMC. It does not . cite any authority for the unusual proposition that an amended pleading must be dismissed because it clarifies or expands allegations or the factual basis for them, or because, as seems to be the case here, it makes allegations that the defendant simply does not want to confront. Moreover, this stage of the case, as was made clear by the Court’s earlier orders directing the parties to file consolidated pleadings and motions challenging them, is precisely the time for establishing and clarifying “what the ease is about.” And true to the Court’s direction, the FACMC ■ sets forth “what the case is about” according to the plaintiffs. The pending motions are (or were intended to be), the defendant’s chance to challenge the legal sufficiency of those allegations, and, where appropriate, to narrow the issues “that the case is about.” Instead, it appears that the defendant has expended the bulk of its effort recharacterizing the FACMC in a way that deviates from its actual allegations, and complicates the task of taking seriously its attacks on the claims pleaded.
Turning to the specific challenges, Chrysler says that the plaintiffs have not alleged adequately the elements of common law and statutory consumer fraud, including the elements of “reliance,” “causation,” and “loss,” where those elements are required by the law of the various states. The Court disagrees.
The consumer fraud statutes of all the states in question prohibit by various terms “deceptive,” “misleading,” or “unfair,” conduct, and here the plaintiffs adequately allege as much where they assert that the defendant advertised its cars as “safe” and “reliable,” while failing to disclose to them any hint of the risks posed by the gear shifter design, which they say is dangerously unreliable. On similar allegations, the district court in In re Toyota Motor Corp.,
Here, all Plaintiffs allege that they relied on Toyota’s representations about safety and reliability when purchasing their Toyota vehicles. All allege that they would have made a different purchasing decision had it been disclosed that Toyota vehicles could accelerate suddenly and dangerously out of the driver’s control and lacked a fail-safe mechanism to overcome this. Because Plaintiffs allege that they would have made a different purchasing decision butfor Toyota’s misrepresentations, Plaintiffs have lost “money or property” -within the meaning of the UCL and FAL.
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[Likewise,] [b]ecause Plaintiffs allege that they would have made a different purchasing decision but for Toyota’s misrepresentations, Plaintiffs satisfy the actual reliance requirement under the UCL and FAL.
Furthermore, actual reliance may be presumed because the alleged SUA defect is material. As discussed more fully in the Court’s November 30, 2010 Order, the propensity of a vehicle to accelerate suddenly and dangerously out of control is material to a reasonable person,' which satisfies the causation requirement under the UCL and FAL.
[The] [p]laintiffs also sufficiently allege a material misrepresentation [for purposes of their claim under the CLRA]: the propensity of a vehicle to accelerate suddenly and dangerously out of control is material to a reasonable person. This satisfies the actual causation and reliance requirements for purposes of the CLRA.
In re Toyota Motor Corp.,
The defendant argues that all of the statutory and common law fraud and false advertising claims are insufficiently pleaded as a matter of law because the plaintiffs do not allege (1) that the cars lack a specific safety feature that was advertised or that they desired, and instead they assert only that the cars lack a feature (“auto-park” or “safety override”) that none of the plaintiffs allege that they expected or bargained for; or (2) that the defendant ever made any affirmative representation that the cars had an “auto park” feature or that they relied on the presence of that feature in deciding to buy or lease their cars. Those arguments, as discussed above, are fallacious and immaterial. The plaintiffs allege that the gear shift design is dangerously defective, with or without an “auto park” feature. They assert that the danger is exaggerated by the lack of such a feature, but they do not allege that the lack of that feature is the only defect. Whether the defendant ever represented' that the cars had an “auto park” feature is irrelevant to the basis of the defect and concealment claims that actually were, pleaded.
Moreover, while persistently fixating on the “auto park” feature, the defendant overlooks the fact' that the retrofitted feature only would work if one of the car’s doors is opened. If, as the plaintiffs allege, the gear shifter does not reliably inform drivers about what gear the car is in, or indicates one gear when another is selected, or allows' the car randomly to shift from the “Park” setting to a travel gear, then the design poses a serious risk of unintended vehicle movement any time a driver attempts to select a gear, not only when a drivеr opens the door and exits the vehicle. This risk is borne out by reports enumerated in the FACMC, which were received by NHTSA after the recall remedy was issued and installed, showing that it does not eliminate the dangers posed by the unreliable shifter. See FACMC ¶ 185 at 98-99 (Pg ID 2706-07). The defendant’s contention that the defect fully was cured by installation of the “auto park” remedy does not square with the facts plainly described in the FACMC.
The defendant argues that the representations cited in the FACMC that, the cars were “safe” and “reliable” are “mere puf-fery” and therefore cannot supply a basis for any actionable consumer fraud or false advertising claim. Whether or not that is true, the FACMC states cognizable claims for fraud by omission. It alleges that the defendant knew about the dangerously unreliable design of the shifter through design
Similarly, the defendant argues that the plaintiffs have not alleged any facts ■ to establish that the defendant.had. “superi- or” or “exclusive” knowledge that the cars lacked an “auto park” feature and that any duty was imp.osed on it to disclose the absence of that feature. Once again, the FACMC plainly alleges that Chrysler knew the gear shifter was defective, princi-' pally because it designed it, and it.therefore knew that, by design,, the shifter was dangerously unreliable. The complaint plausibly alleges that the dangers, of the design were, or should have been, obvious from the fact that the shifter violates several basic design principles, and from analysis and testing that the defendant conducts on its cars. FACMC ¶ 140; see also FACMC ¶ 133 (“every, mechanical and electronic component, body part and trim element is rigorously tested”; “designers work with a team of researchers during the testing phase to ensure vehicles meet the highest standards in terms of safety, ecological profile, driving performance and quality.”). The FACMC’s allegations plausibly establish that the shifter does nót perform as intended,' because it certainly cannot have been the intent of any reasonable car designer to create a shifter- that only shifts into the intended gear some of the time, or that randomly shifts'to gears other than the one selected. And the defendant has not pointed to any information that it gave to buyers about any aspeсt- of the shifter design that would inform pro-, spective buyers that the gear shifter was unreliable in those ways.
The defendant further argues that (1) the plaintiffs cannot plausibly allege that they did not know their cars lacked an “auto park” feature, because all of them alleged that they shifted (or tried to shift) their cars into “Park” before exiting the vehicles, and none alleged that they regularly exited their cars without first putting them in “Park”; (2) failing to install a particular safety feature in a product that was not advertised by the maker or sought by the purchaser, and that the maker had no duty to provide, is not an “omission” cognizable as statutory or common law fraud; and (3) scattered references to anonymous “consumer complaints” from the Internet and elsewhere are not sufficient to show.plausibly that the defendant knew that the vehicles were defective without an “auto park” feature-before any of the plaintiffs, bought or leased their cars. Again,- all of those arguments either lack a factual basis or are immaterial to the substance of the actual allegations in the FACMC, where the plaintiffs allege that the. gear shifter is dangerously unreliable with or without an “auto park” feature. The plaintiffs plainly do not allege that the absence of that feature is the sole or principal safety hazard of the design, and they do. allege that the defendant was well aware of the actual dangers of the design as a result of its own analysis and testing, its awareness of elementary design principles, and numerous reports of rollaway incidents received from customers, starting from soon after the vehicles entered the market.
Finally, the defendant contends that no misrepresentation about any feature of the ears could have produced any injuries to which the plaintiffs allude, because the plaintiffs “effectively admit” that injury only could result from the plaintiffs’ own “intervening acts” of leaving the engine running and getting out of the car without putting the car in “Park” before exiting.
2. Specificity (Rule 9(b))
The defendant argues that the common law and statutory fraud claims do not meet the requirements of Rule 9(b) because none of the plaintiffs have alleged what specific information was presented to them, and when, that comprised a false representation about the cars, and, similarly, as to the claims of omission or concealment, the plaintiffs have failed to allege what specific information was concealed from them, or when it should have been revealed.
“To file a fraud claim, a plaintiff must state with ‘particularity the circumstances constituting fraud.’ ” Wall v. Michigan Rental,
. The plaintiffs here allege that the defendant failed to disclose to them anything about the risks posed by the dangerous and unreliable shifter design; that it knew about the problems with that design as a result of its own testing and design analysis, and customer complaints received from early in the market life of the product; that it should have disclosed the defect at or before-the respective dates on which they bought their cars; and that, instead, the defendant concealed its knowledge of the defect until it finally declared a recall of the vehicles on April 22, 2016 and sent a letter to affected owners and lessees in June 2016. The plaintiffs assert that the defendant concealed its .knowledge of the defect to induce them to pay more than they otherwise would for the cars, if they knew about the risks of the shifter design. As a result, they paid more for the cars than they actually were worth, suffered increased depreciation as a result- of negative -market perceptions about the cars, and also had to absorb the expense and inconvenience of accommodating the defendant’s failed repair attempts, which they contend have not so far" fixed the problems with the shifter design. Those allegations áre sufficiently specific to state viable claims for fraudulent concealment and congruent statutory violations. Falk v. Gen. Motors Corp.,
3. Pre-Suit Notice
The defendant argues that the statutory consumer, fraud claims by California plaintiffs Goldsmith, Nathan, and-Pietri (Counts VI-VIII) and Massachusetts plaintiff Hartt (Count XXI) must be dismissed because the applicable statutes mandate that, before filing suit, a plaintiff in a consumer fraud case must send a “demand letter” to the defendant identifying the specific deceptive practice and the injury suffered as a result.-
The FACMC adequatеly alleges facts to show that the California plaintiffs gave timely notice of their CLRA claims at least 30 days before asserting any claim for money damages under the Act, which first was raised in the consolidated pleading filed in this Court in December 2016.
In accordance with Civil Code § 1780(a), Plaintiffs and the other Class members seek injunctive and equitable relief for FCA’s violations of the CLRA, including an injunction to enjoin FCA from continuing its deceptive advertising and sales practices. In addition, after mailing appropriate notice and demand in accordance with Civil Code § 1782(a) & (d), Plaintiffs and the other Class members will amend this Class Action Complaint to include a request for damages.
First Am. Compl. [dkt. # 2] ¶ 118, Goldsmith v. FCA US, LLC, No. 16-13681 (E.D. Mich.) (filed on July 7, 2016 in Goldsmith v. FCA US, LLC, No. 16-01341 (C.D. Cal.)). California law approves of that procedure where a plaintiff raises only a demand for injunctive relief under the CLRA in an initial pleading, and then later sends a demand letter- before filing an amended complaint adding a claim for money damages. Morgan v. AT & T Wireless Servs., Inc.,
The demand for money damages first was asserted in the original version of the FACMC [dkt. #31], which was filed in this litigation on December 23, 2016, well beyond the statutory 30-day notice window. The defendant contends that the demand letter which was sent was inadequate because it did not describe the claims in sufficient detail. But the Court is obligated at this stage of the pleadings to accept the summаry allegation that notice sufficient to satisfy the statute was sent. See Fed R. Civ. P. 9(c) (“In pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed”). Moreover, the defendant has not cited any authority holding that the pre-suit notice required by section 1782 (which is a specific provision of the CLRA) is mandated before filing suit under the UCL or FAL. Those claims, therefore, do not implicate any pre-suit notice requirement.
Massachusetts plaintiff Hartt was not required to send a demand letter under the circumstances, so far as they may be extracted from the allegations of the FACMC. The Massachusetts Supreme Court has held that a consumer is excused from the pre-suit notice requirement under Massachusetts General Laws Chapter 93A § 9 where the defendant does not maintain a place of business within the state, or
4. Economic Loss Doctrine
The defendant argues that the common law and statutory consumer fraud claims by Pennsylvania plaintiffs Weber and Vosburgh (Counts LXVIII and LXIX) must be dismissed because under the law of that state the “economic loss doctrine” bars recovery on any such claims where the only damages alleged are loss of value or benefit of the bargain, and the plaintiffs do not allege any injury apart from diminished value of the allegedly defective product. However, the plaintiffs correctly point out that subsequent controlling decisions of the Pennsylvania courts have held that the “economic loss doctrine does not apply to UTPCPL claims,” because “applying the economic loss doctrine to UTPCPL claims would render the catchall provision [subsection xxi] virtually meaningless.” Dixon v. Nw. Mut.,
Similarly, the controlling Pennsylvania decisions on point have -not expande'd the application of the economic loss doctrine to common-law tort claims 'beyond limiting the damages available in actions for negligence, and lower Pennsylvania courts have resisted the invitation to do so. Excavation Techs., Inc. v. Columbia Gas Co. of Pennsylvania,
5. Post-Recall Purchases
The defendant argues that- the fraud claims by California plaintiff Pietri (Counts VI-VIII, X), and Missouri plaintiff Brooks (Counts XXIX and XXX) must be dismissed because under the laws of those states a plaintiff alleging consumer fraud must plead that some fact was misrepresented or concealed before or in connection with a. purchase, and those plaintiffs specifically allege that they bought their cars after the April 22, 2016 recall was issued. According to the FAGMC, Pietri bought his car on May 1, 2016, and Brooks bought his on May 28, 2016. Both plaintiffs contend that they .still have viable claims because the defendant did not specifically inform them, as prospective purchasers, about the recall defect before they bought their cars. Plaintiff Brooks also asserts that he was falsely informed by the dealer that sold him the car that his car already had received the recall fix when it had not. FACMC ¶ 56-67 (“After Plaintiff Brooks independently learned of the recall, he called his dealership to inquire into the safety of his defective vehicle. The dealership informed Plaintiff Brooks that the recall on his specific vehicle had been fixed.[However, ajfter [he experienced a rollaway] incident [on July 11, 2016], Plaintiff Brooks double-checked his vehicle’s VIN number and learned that his vehicle had not, in fact, been fixed; rather, the recall was simply ‘educational.’ ”).
Brooks does not allege that the defendant made any representation to him about the recall defect or any fix for it, before or after he bought his car. And neither of those plaintiffs has cited any authority for the proposition that a consumer can maintain a viable claim for statutory or common law consumer fraud concerning an allegedly concealed defect after the date when the defendant had filed a recall notice of the defect with NHTSA. Although both plaintiffs contend that the defendant- and their car dealers did not inform them personally about the recall before they bought their cars, there does not appear to be any set of facts on which they plausibly can allege, under the circumstances, that the defendant intended to, or actually did, conceal from them as consumers information about a defect that was the subject of the April 22, 2016 recall notice.
The Court, therefore, will dismiss the statutory and common law fraud claims by California plaintiff Pietri under Counts VI-VIII, X, and those by Missouri plaintiff Brooks (Counts XXIX and XXX), Since Brooks is the only surviving plaintiff at this stage of ■ the - case with live claims under Counts XXIX and XXX, those counts will be dismissed in their entirety.
6. Privity
The defendant contends that Massachusetts plaintiff Hartt’s fraudulent concealment claim (Count XXII) is defective because the law of that state requires a plaintiff to plead that he is in privity with the defendant, but Hartt admits that he bought his car from a third party, not the defendant. However, this count is subject to dismissal for a different reason: “Massachusetts does not recognize an independent claim for fraudulent concealment. Rather, [Massachusetts General Laws Chapter 26Ó § 12] tolls the statute of limitations for a cause of action if an alleged wrongdoer concealed its existence through some affirmative act done with the intent to deceive.” Niedner v. Ortho-McNeil Pharm., Inc.,
Chrysler contends that the plaintiffs have not set out facts to show that their claims implicate the public interest. It bases: that argument on the assertion that it “is undisputed that the vehicles at issue stay in park if placed in park, and that a safety risk arises only if a driver exits the vehicle while it is running and simultaneously fails to shift to park.” The defendant also argues that the “public interest” cannot be impacted where the alleged safety defect — lack of an “auto park” feature — has been remedied by the defendant’s provision of that very feature for free via the recall. Those arguments, of course, are based on the same false premises discussed at length above, and they are groundless for the same reasons.
The plaintiffs have stated sufficient facts to establish that the alleged defect meets the public interest requirement under the New York consumer protection statute. They allege in the FACMC that (1) the defective gear shifter design was installed in more than 800,000 vehicles sold by the defendant; (2) the defect has not effectively been remedied in at least'13,000 of those vehicles; and (3) the defect has produced at least 686 reports of rollaway incidents, resulting in 286 crashes, and 68 of those incidents produced injuries. Those allegations certainly áre sufficient to meet New York’s “threshold requirement of consumer-oriented conduct ... by a showing that the acts or practices have a broader impact on consumers at large in that they are directed to consumers or potentially affect similarly situated consumers.” Benetech, Inc. v. Omni Fin. Grp., Inc.,
B. Unjust Enrichment
Chrysler argues that all of the unjust enrichment claims must be dismissed because (1) the plaintiffs cannot plausibly allege that any benefit was conferred on the defendant by their purchases of the vehicles where all of those purchases were from third-party dealers and not the defendant; (2) the assertion that some benefit was conferred on the defendant when the plaintiffs visited dealers to receive a free post-recall software fix for their cars that installed an “auto, park” feature “defies logic”; and (3) the plaintiffs cannot proceed on an unjust enrichment theory where the separately-pleaded consumer fraud and breach of warranty claims offer them an adequate remedy at law for any losses caused by the alleged defect.
• The defendant also contends that the claims by Massachusetts • plaintiff Hartt (Count XXIII), New York plaintiffs Lynd, and' Mack (Count LIII), Pennsylvania plaintiffs Weber and ' Vosburgh (Count LXXII), and Wisconsin plaintiff Marc Hughes (Count LXXXVT) all are bárred as a matter of law because the plaintiffs affirmatively allege that they were indirect purchasers and bought their cars from third-party dealers, not directly from the defendant.
As with the. fraud claims, the various states’ common law defining the elements of unjust enrichment overlap. The plaintiffs argue that the law of the forum— Michigan — should govern.. But those fine distinctions are not necessary to address the present motion. “[T]he typical elements of a cause of action for unjust enrichment are:. (1) the plaintiff conferred a benefit upon the defendant; (2) the defendant accepted and retained the benefit; and (3) it would be unjust for the defendant not to pay the plaintiff the value of the benefit.” In re Cardizem CD Antitrust Litig.,
Under Massachusetts law, recovery is allowed on an unjust enrichment theory where the defendant has received and retained some benefit where equity requires the restoration of the same to the plaintiff. “What is required, generally, is that a party hold property under such circumstances that in equity and good conscience he ought not retain it.” Stevens v. Nagel,
• Missouri (Count XXXIII)
Under Missouri law, the “essential elements of unjust enrichment are: (1) the defendant was enriched by the receipt of a benefit; (2) that the enrichment was at the expense of the plaintiff; and (3) that it would be unjust to allow the defendant to retain the benefit.” Central Parking System of Missouri, LLC v. Tucker Parking Holdings, LLC,
• New York (Count LIII)
Under New York law, the “elements of a cause of action to recover for unjust enrichment are (1) the defendant was enriched, (2) at the plaintiffs expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered.” Travelsavers Enters., Inc. v. Analog Analytics, Inc.,
• Pennsylvania (Count LXXII)
Pennsylvania law recognizes “unjust enrichment [as] an equitable doctrine.” Commonwealth v. Golden Gate Nat’l Senior Care LLC,
• Wisconsin (Count LXXXVI)
Under Wisconsin law, the “elements of unjust enrichment are: (1) a benefit conferred upon the defendant by the plaintiff; (2) knowledge or appreciation of the benefit by the defendant; and (3) acceptance or retention by the defendant of such benefit under such circumstances that it would be inequitable for him or her to retain it without paying the value thereof.” Admiral Ins. Co. v. Paper Converting Mach. Co.,
The plaintiffs adequately have pleaded that the defendant received a benefit (the inflated prices paid by them for their cars), that it knew it received it, and that it would be unfair for the defendant to retain it (because of its wrongful concealment of the defective gear shift design, which all of the plaintiffs alleged would have led them to reconsider the purchase of their car, or to have paid less for it).
The defendant argues that all of the unjust enrichment claims must be dismissed because the plaintiffs cannot plausibly allege that any benefit was conferred on the defendant by their purchases of the vehicles where all of those purchases were from third-party dealers and not the defendant.
• The defendant also questions the assertion that some benefit was conferred on the defendant when the plaintiffs visited dealers to receive a free post-recall softwаre fix for their cars that installed an “auto park” feature. However, that plainly is not the only — or even the predominant — benefit conferred that the plaintiffs have alleged. As noted above, their claims also are supported by the allegation that a benefit was conferred in the form of the inflated purchase price paid for defective and unsafe vehicles that were worth much-less.
The defendant also contends that the claims by claims by Massachusetts plaintiff Hartt (Count XXIII), New York plaintiffs Lynd and Mack (Count LIII), Pennsylvania plaintiffs Weber and Vosburgh (Count LXXII), and Wisconsin plaintiff Marc Hughes (Count LXXXVT) all are barred as a matter of law because the plaintiffs affirmatively allege that they were indirect purchasers and bought their cars from third-party dealers, not directly from the defendant. However, district courts in this circuit in multidistrict, actions have repeatedly rejected that argument when raised by defendants under the authority of various state laws. In re Auto. Parts Antitrust Litig.,
There is no basis at this stage of the case to dismiss the unjust enrichment claims.
C. Express Warranty (U.C.C. § 2-313)
The defendant, argues that all of- the express warranty claims fail because the plaintiffs rely on the “.New Vehicle Limited Warranty” that covered their vehicles, but they have failed to- identify any “item” on the vehicles that was defective and needed repair. The New. Vehicle Warranty “covers the cost of all parts and labor needed to repair’ any item on your vehicle when it left the manufacturing plant that is defective in material, workmanship or factory preparation.” The- basis of the defendant’s argument is the flawed premise that the
Chrysler also argues that the laws- of every state other than New York that -are implicated by the express warranty claims require that the plaintiffs provide pre-suit notice directly to the defendant of the ah leged breach before filing suit, and the few plaintiffs who allege that they provided a pre-suit. notice, (California plaintiffs Goldsmith, Nathan, and Pietri), do not allege, any details of when or how that notice was provided.
1. Product Defect
Looking to the allegations, discussed in detail above, describing the allegedly random and unreliable behavior of the monostable shifter, it is readily apparent that the plaintiffs here have alleged sufficiently that there is an “item” on their vehicles that is defective in “workmanship” or “materials,”- and that the defendant has failed or refused to fix it. The Pennsylvania enactment of U.C.C. § 2-313 -is typical of this uniformly adopted statute and states that “an express warranty [is] ‘(1) Any affirmation of fact or promise made by-the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. (2) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.’" Allen-Myland, Inc. v. Garmin Int’l, Inc.,
The defendant contends that because the only alleged “ ‘defect’ is the absence of an ‘item;’ i.e.,-an auto-park feature,” and “the auto-park feature was not an ‘item оn [the] vehicle[s] when it left the manufacturing plant,’” the New Vehicle Limited Warranty “simply does not apply” and does not offer any promise of repair that the defendant could have breached. The defendant also contends* that nothing in the FACMC plausibly suggests that the monostable shifter is defective. But those arguments are flawed because they are. based on a mischaracterization of the allegations in the FACMC, as discussed in detail above. The plaintiffs have alleged that something much more is wrong with their cars than the absence of an “auto park” feature. Moreover, the plaintiffs allege that the gear shifter remains defective
The defendant .also insists that the complaint, in “scattered eonclusory allegations, [alleges only] that the monostable shifter, itself, has some undefined design defect,” and that “it is axiomatic that express warranties covering defects in ‘material’ and ‘workmanship,’ like those at issue here, do not cover design defects.” The defendant correctly points out that it is widely held that a written express warranty covering defects in “materials” and “workmanship” does not extend to “design defects.” E.g., Daniel v. Ford Motor Co.,
However, notwithstanding its assessment of the law, the premise of. the defendant’s argument on this point is false, and dismissal is not warranted on the basis that the FACMC contains ah insufficient or inscrutable description of the alleged defect. The FACMC alleges in quite specific terms that the gear shift mechanism violates recognized basic design guidelines for vehicle controls, that it offers 'insufficient and unreliable information- to drivers about the gear that has been selected, or whether an intended gear selection was made, and that it spontaneously shifts from one gear to another. Those allegations, which include the inability of the gear shifter to maintain a gear setting once selected, adequately suggest that the shifter is, in addition to being poorly designed, also poorly constructed or- installed, with the result that it does not; in fact, “stay in ‘Park’ when' placed in ‘Park,’” even if, as the defendant insists, it- was designed to do so.
At this early stage of the case, without the benefit of any factual development as to the cause and origin of the alleged defect, dismissal of .the express warranty claims is not justified by a premature and uninformed classification of the alleged defect as being categorically in the realm of “design” or “manufacturing.” As one district. court recently observed, when confronting allegations of defective behavior of the operating controls on the defendant’s stoves:
At -the pleading stage, ..,. where the distinction between a defect in design and defect in materials or workmanship is a matter of semantics, and. sufficient facts are alleged-to assert both, the defendant’s characterization of the nature of the claim • pre-discovery should not control whether the complaint survives. It is unclear what may have caused the alleged Surface Knob and Ignition System Defects; a fortiori, it is not clear whether (assuming they exist) they should be classified as design defects or defects in materials or workmanship. Such issues must await' factual development. '
Volin v. Gen. Elec. Co.,
2. Pre-Suit Notice
Pennsylvania’s version of U.C.C. § 2-607, which is typical of language of this uniform provision, states in relevant part as follows: “Where a tender has been accepted ,... the buyer must within a reasonable time.after he discovers or should have discovered-any breach notify the seller of breach .or be barred from any remedy.”
Moreover, under the laws of most of the states mentioned in the express warranty claims in the FÁCMC, the courts have construed section 2-607 to permit the required “notice” to be given by the filing of a civil complaint, at least where suit is commenced “within a reasonable time.” Even those states that have construed this section most strictly have focused almost exclusively on the timeliness of the suit; none have held that failure to serve some form of notice before filing suit is a bar to litigation. The New York Superior Court explained, for instance, that in normal commercial transactions, a seller has the right to believe all is well,- “and it is the buyer’s duty to inform him otherwise or waive his objections.” Mid Island LP v. Hess Corp.,
[tjimely commencing litigation through a formal complaint would obviously accomplish this task. Various ancillary virtues have been attributed to the 2-607 notice, such as affording the seller the opportunity to investigate the claim while the facts are fresh, take whatever steps it deems necessary to defend itself or offer a cure or remedy. However, the mere fact that the buyer has chosen to drag the seller into- court in the first instance does not prevent the seller from doing any of these things; indeed,' the normal rules of civil procedure are designed to accomplish exactly these tasks within the litigation process. The court notes, moreover, that in contrast to rejection (UCC 2-508), the seller has no right to cure accepted nonconforming goods. The UCC does not require pre-action mediation, and the court will not read Section 2-607 as creating such an obligation.
Ibid. That court expressly recognized that the commencement of litigation, as long as it is within a reasonable timé, adequately provides the notice required.
A federal court applying Pennsylvania law reached the same conclusion. Bednarski v. Hideout Homes & Realty, Inc.,
The decisions in Wisconsin do not elaborate on this point, but there the focus of all the holdings has been on the timeliness of the notice; no authority from that state has held that the absence of pre-suit notice is a bar to litigation. .The Wisconsin Court of Appeals explained that the purpose of section 2-607 is to ensure that the plaintiff gives notice of a breach while a reasonable
Here, the defendant has not pointed to any pleaded fact that shows that it has been deprived of a commercially reasonable opportunity to resolve the plaintiffs’ claims of breach by any delay in the filing of this case, and the pendency of the litigation certainly does not foreclose any further timely efforts to cure. There is no basis to find that the express warranty claims are defectively pleaded for want of reasonable notice.
D. Implied Warranty (U.C.C. § 2-314)
1. Fitness for Purpose
The defendant argues that the implied warranty claims all are fatally defective because the plaintiffs have failed plausibly to allege that their cars are unfit for the ordinary purpose of providing transportation. Chrysler bases that argument on the contention that if a driver puts the car in “Park” before exiting, “there will be absolutely no problem at all.” As the defendant reads the FACMC, “most Plaintiffs do not allege that they have ever had, or that they even anticipate having, any problem with the monostable shifter.” Def.’s Mot. at 41.
The elements of an implied warranty claim among the several states are quite similar, as one might expect with a uniform statute, and are summarized here.
• California — Uniform Commercial Code (Cal Com. Code § 2311) (Count IX)
“[California] ' Commercial Code section 2314 provides that a ‘warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.’ ” Arriaga v. CitiCapital Commercial Corp.,
• California — Song-Beverly Consumer Warranty Act (Cal. Civ. Code §§ 1791.1 & 1792) (Count XII)
“Under the Song-Beverly Act, there is an implied warranty . of merchantability with respect to consumer goods that are sold (Cal. Civ. Code, § 1792), unless the goods are sold with an express disclaimer stating they are sold ‘as is’, or ‘with all faults.’” Jones v. Credit Auto Ctr., Inc.,
• Missouri (Mo. Rev. Stai § 100.2-8 U) (Count XXXI)
.“To prove a claim.for breach of implied warranty of merchantability in Missouri, a plaintiff must show: (1) that a merchant sold .goods, (2) which were not ‘merchantable’ at the time of the sale, (3) injury and damages to the plaintiff or his property (4) which were caused prpximately or in fact by the defective nature of the goods, and (5) notice to the seller of the injury.” Hope v. Nissan N. Am., Inc.,
• Pennsylvania (18 Pa. Cons. Stat. § 2811) (Count LXXI) ,
Under Pennsylvania law, “[t]o prove a breach of the warranty of - merchantability, a plaintiff must show that the equipment obtained from the supplier was defective.” Visual Communications, Inc. v. Konica Minolta Bus. Sols. U.S.A., Inc.,
The defendant contends that it is undisputed that the cars are “minimally fit for the ordinary purpose of providing basic transportation,” Haag v. Hyundai Motor Am.,
Moreover, the decisions on point in implied warranty cases concerning defective cars have recognized that merchantability implies not only that a vehicle can provide transportation, but that it can do so in a reasonably safe, and controlled man-, ner. In order to plead a viable claim for breach of the implied warranty, the plaintiff must allege, that the defect rendered the car “unfit for its intended purpose [by] .compromising] the vehicle’s safety, rendering] it inoperable, or drastically reducing], its mileage range.” Troup v. Toyota Motor Corp.,
It is well recognized, both as a matter of law and common sense, that “a merchantable vehicle under the statute requires more than the mere capability of just getting from point A to point B.” Brand v. Hyundai Motor Am.,
Hyundai contends Brand’s safety argument is specious because if open sunroofs rendered cars unfit for their ordinary purpose; then no cars would have sunroofs. The - contention is itself specious, however, because- it ignores the element of surprise and lack of control that differentiate a properly working sunroof and one that, as Brand describes it, -spontaneously creates a gaping, intermittent hole in [the] vehicle as [one is] driving down the road. Iii mini- - mizing the sunroof problem, Hyundai implicitly maintains that its vehicle remained roadworthy in its present condi«tion without any repairs. But a • jury reasonably could agree Brand prudently turned the vehicle in immediately because it was not safe for him to continue driving it.
Id. at 460-61 (2014). In this case, as in Brand, the facts alleged nr the FACMC would allow a jury reasonably to infer “a multitude of similar unsafe scenarios” that could result from the failure by a class vehicle to select an intended gear, and the “element of surprise and lack of control” that would' result from spontaneous and undirected shifts by the vehicle from one gear into another.
2. Manifestation
The defendant argues that all of the implied warranty claims are barred because the New Vehicle Warranty states that all implied warranties are subject to the same time and mileage" limitations as the express warranty, and none of the plaintiffs claim • that the alleged - defect “manifested” within the ‘applicable limited warranty period. The defendant further contends that the implied warranty claims by California plaintiffs Goldsmith, Nathan, and Pietri (Counts IX.and XII), Missouri plaintiff Brooks (Count XXXI), and Pennsylvania plaintiffs Weber and Vosburgh (Count LXXI) all are barred because under the laws of those-states the plaintiff must show that .the defect, has “manifest-
The FACMC sets forth claims for breach of implied warranty under the law of four states: California (Goldsmith, Nathan, Pietri); Missouri (Brooks); Nebraska (Walker); and Pennsylvania (Weber and Vosburgh). Four of the individual plaintiffs allege thаt they had rollaway incidents with their own cars: Goldsmith, Nathan, Brooks, and Mack. Those allegations certainly suffice to show that the alleged defect “manifested” for those plaintiffs. Four other plaintiffs allege that they have had problems shifting the car into an intended gear: Hartt, Lynd, Weber, Vos-burgh. FACMC ¶¶ 36, 38, 56, 75, 79. Those allegations also suffice to suggest that their cars “manifested” the alleged defect of unreliable gear selection. The' plaintiffs also assert that all of their cars are from model years 2014 and later, which it is undisputed were not sold earlier than the second half of 2013, and the first complaint was filed in this litigation in June 2016, which means that all of the alleged problems encountered by the plaintiffs necessarily must have occurred in cars that were bought and owned within the three-year limited warranty period, and the occurrence of problems therefore must have happened while the warranty was in effect.
With the exception of California plaintiff Pietri, all of the plaintiffs who pleaded implied warranty claims adequately have asserted that the alleged defect manifested for them during the limited warranty period. Nebraska plaintiff Walker’s claims are subject to dismissal for separate reasons (see below). All of the other plaintiffs who pleaded implied warranty claims adequately have asserted that the alleged defect manifested for them during the limited warranty period, and their claims are not subject to dismissal on that basis. Plaintiff Pietri’.s claims in Count XII will be dismissed because he did not allege any manifestation of the alleged defect.
3. Privity
The defendant argues that the implied warranty claims by California plaintiffs Goldsmith, Nathan, and Pietri are defective as a matter of law because the plaintiffs allege that they bought their vehicles from third-party dealers, and California law bars any implied warranty claim where the plaintiff is not in privity with the defendant. The defendant correctly states the law as held by the published authorities on point in California with respect to the claim under Cal. Civ. Code § 2314: “‘Under California Commercial Code section 2314 ... a plaintiff asserting breach of warranty claims must stand in vertical contractual privity with the defendant. A buyer and seller stand in privity if they are in adjoining links of the distribution chain.’” Mega RV Corp. v. HWH Corp.,
The defendant argues that the implied warranty claims are subject to dismissal based on the same notice provision (U.C.C. § 2-607) that it relies upon with respect to the express warranty claims. For the same reasons discussed above, its arguments are unavailing as to the implied warranty claims as well.
E. Magnuson-Moss Warranty Act
The defendant contends that, because all of the express and implied warranty claims under state law are defective, the Magnu-son-Moss Warranty Act claim likewise must be dismissed, because liability under the Act is derivative of those state law rights.
“The Magnuson-Moss Warranty Act provides a federal cause of action for a ‘consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation ... under a written warranty [or] implied warranty.’ ” Bennett v. CMH Homes, Inc.,
With the exceptions noted above, the plaintiffs adequately have made out their claims for breaches of express and implied warranties under state law, and their claims under the Magnuson-Moss Warranty Act, which “stand or fall” with the state law claims, therefore also are viable.
F. Statute of Limitations
The defendant argues that Pennsylvania plaintiff Weber’s fraudulent concealment claim is barred under the applicable statute of limitations, which is two years. See 42 Pa. Stat. § 5524(7). Weber alleged that he bought his car on September 9, 2013, and he did not file his complaint until July 8, 2016. The plaintiffs argue that the statute of limitations bar is an affirmative defense not amenable to adjudication under Rule 12(b)(6), and the discovery rule tolled the statute.
Under Pennsylvania law, if “through fraud or concealment the defendant causes the plaintiff to relax his or her vigilance or deviate from his or her right of inquiry, the defendant is estopped from invoking the bar of the statute of limitations.” Deek Inv., L.P. v. Murray,
Moreover, as the plaintiffs point out, the statute of limitations is an affirmative defense that must be pleaded and proven by the defendant, not the plaintiff. Therefore, unless that defense is apparent from the complaint’s allegations, it is not properly the subject of a motion to dismiss under Rule 12(b)(6), where the Court is confined to considering the facts alleged within the 'four corners of the complaint. This is particularly true where there are
[C]ourts should not dismiss complaints on statute-of-limitations grounds when there are disputed factual questions relating to the accrual date. Examples of such disputed factual questions include claims that the defendant fraudulently concealed facts, thereby preventing the plaintiff from learning of its injury, and complex issues about whether information in the plaintiffs -possession sufficed to alert it of the claim. But where one can determine from the face of the complaint that the statute of limitations has run, dismissal is appropriate.
Am. Premier Underwriters, Inc. v. Nat’l R.R. Passenger Corp.,
G. Injury and Damages
The defendant contends that all of the claims raised in the FACMC require.some proof of “injury” or “damages” if the plaintiffs are to prevail, but “no Plaintiff plausibly alleges that they suffered any injury or damage,” the claims all are “based upon mere theoretical possibilities of injury and/or ■ damages,” and the “allegations of benefit-of-the-bargain- damages are facially implausible because Plaintiffs admit that their vehicles were fixed for free, thereby giving them the exact bargain to which they claim to be entitled." Def.’s Mot. at 50. .
As to most of the plaintiffs whose claims presently are pending in the FACMC, this argument is a .dead letter. It is based on the same false premises discussed at length above, which are no more viable in support of this argument than they are under any of the other variations on that theme presented in this motion. All of the plаintiffs adequately have alleged that they were damaged as a result of buying cars with a dangerously unreliable gear shift design, which resulted in, inter alia, a loss of economic value of the cars at the time of purchase, along with other incidental and consequential losses based on the defendant’s failed attempts tó repair the defect. See In re Toyota Motor Corp.,
However, the allegations of one of the plaintiffs — Walker, from Nebraska — are conspicuously lacking in any plausible factual basis to show that she has any- live, cognizable claim under any of the various theories pleaded in the FACMC. Walker specifically alleged that she never owned a class vehicle, and the 2014 Charger that she leased was returned at the end of the lease term when she decided not to buy it; she does say, though, that she “had it repaired” at the dealership while it was under lease. FACMC ¶¶ 60-61. Nothing in those allegations suffices to suggest that Walker experienced any problems due to the alleged defect while she owned the car, or that she suffered any loss as a result of simply leasing a class vehicle and “having it repaired.” Since she no longer owns or leases the vehicle, she also has no present interest in obtaining any repair or replacement. The Court will dismiss all of plaintiff Walker’s claims raised in Counts XXXIV-XXXVIII of the FACMC. Since Walker is the only surviving plaintiff with any live claims under those counts, they may be dismissed in their entirety.
For the reasons discussed above, the following counts and claims in the FACMC must be dismissed: (1) the statutory and common law fraud claims by California plaintiff Pietri under Counts VI-VIII, X, and XII; (2) the statutory and common law fraud claims by Missouri plaintiff Brooks (Counts XXIX and XXX, in their entirety); (3) the California plaintiffs’ implied warranty claim under the U.C.C. (Cal, Civ. Code § 2314) (Count IX) (in its entirety); and (4) all of Nebraska plaintiff Walker’s claims in Counts XXXIV-XXXVIII (in their entirety). Otherwise, the rest of the defendant’s arguments for dismissal of the .complaint are without merit.
Accordingly, it is ORDERED that the defendant’s motion to dismiss for failure to state a claim [dkt. # 50, 96] is GRANTED IN PART AND DENIED IN PART.
It is further ORDERED that the statutory and common law fraud claims and the implied warranty claim by California plaintiff Pietri ONLY under Counts VI-VIII, X, and XII are DISMISSED WITH PREJUDICE.
It is further ORDERED that the statutory and common law fraud claims by Missouri plaintiff Brooks are DISMISSED, and Counts XXIX and XXX are DISMISSED WITH PREJUDICE in their entirety.
It is further ORDERED that the California plaintiffs’ implied warranty claim under the U.C.C. (Cal. Civ. Code § 2314) (Count IX) are DISMISSED WITH PREJUDICE in their entirety.
It is further ORDERED that all of Nebraska plaintiff Walker’s claims are DISMISSED and Counts XXXIV-XXXVIII are DISMISSED WITH PREJUDICE in their entirety.
It is further ORDERED that the defendant’s motion is DENIED in all other respects.