OPINION AND ORDER
This mаtter is before the Court for consideration of Porsche Cars North America, Inc.’s Motion to Dismiss the Master Consolidated Amended Class Action Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) (ECF No. 62), Plaintiffs’ Memorandum of Law in Opposition to Defendant Porsche Cars North America, Inc.’s Motion to Dismiss the Master Consolidated Amended Class Action Complaint Pursuant to Fed. R.Civ.P. 12(b)(6) (ECF No. 77), and Porsche Cars North America, Inc.’s Reply Brief in Support of Its Motion to Dismiss the Master Consolidated Amendment Class Action Complaint Pursuant to Fed. R.Civ.P. 12(b)(6) (ECF No. 91). For the reasons that follow, the Court GRANTS IN PART and DENIES IN PART the motion to dismiss.
I. Background
The plaintiffs in this products liability action are purchasers of Porsche Cayenne, Cayenne GTS, Cayenne S, Cayenne Turbo, or Cayenne Turbo S sport utility vehicles of the model years 2003-2010 (“Cayenne”). Defendants are Porsche Cars North America, Inc. (“PCNA”) and the German company Dr. Ing. h.c. F. Porsche Aktiengellschaft (“Porsche AG”) (collectively, “Defendants”). Porsche AG manufactured the Cayenne and PCNA is the exclusive importer of Cayenne vehicles in the United States.
On May 24, 2011, the United States Judicial Panel on Multidistrict Litigation (“the Panel”) consolidated four related product liability actions involving the Cayenne (arising from California, New Jersey, New York, and Ohio) in this Court pursuant to 28 U.S.C. § 1407. (ECF No. 1.) The Panel subsequently transferred four related actions from Florida, Georgia, California, and Texas to this Court. (ECF Nos. 3, 4, 11.) On August 25, 2011, the plaintiffs in these eight actions, along with several new individual plaintiffs (collectively, “Plaintiffs”), filed a Consolidated Amended Complaint (“Complaint”) with this Court alleging defects in the Cayenne’s cooling system. (ECF No. 35.) Plaintiffs brought the Complaint on behalf of a proposed nationwide class of similarly situated Cayenne owners and lessees and proposed sub-classes of similarly situated Cayenne owners and lessees in California, Colorado, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Ohio, Texas, and Washington.
Each individual plaintiff asserts that he or she purchased a Cayenne that came equipped with plastic coolant tubes.
Plaintiffs allege that Defendants defectively designed the Cayenne by equipping it with plastic coolant tubes instead of aluminum pipes. Plaintiffs argue that the Cayenne’s coolant system is defective because coolant tubes are exposed to extreme heat and that, as a result of such exposure, coolant tubes made of plastic will crack and degrade. Plaintiffs add that “most high-end performance vehicles with powerful engines use aluminum pipes to transport the coolant” and that the “extent of wear and tear on the Cayenne’s plastic valley coolant tubes is entirely disproportionate to the age of these vehicles.” (Id. ¶ 68(b).) Plaintiffs also allege that the use of plastic coolant tubes “implicates serious safety concerns.” (Id. ¶ 70.)
Plaintiffs assert that Defendants knew, reasonably should have known, or were reckless in not knowing about the coolant tube defect but failed to disclose the defect to consumers. Defendants allegedly had or should have had this knowledge “based on, among other things, widespread customer complaints of prematurely cracking coolant tubes, dealer inquiries, repair shop inquiries, dealer-provided repair data, the high volume of replacement parts being ordered, and [National Highway Traffic Safety Administration] complaints.” (Id. ¶ 63.) Plaintiffs assert that, despite this alleged knowledge, Defendants promoted the Cayenne’s cooling system and made misrepresentations such as “ ‘[t]he entire cooling system is specifically designed for prolonged heavy-duty operation.’ ” (Id. ¶ 62(c).)
Plaintiffs also attach to their Complaint a technical bulletin that PCNA issued in February 2008 stating that “[o]n [Model Year] 2003 to [Model Year] 2006 vehicles there is a chance that the coolant pipes made from plastic may start to leak.... Both coolant pipes (lower and heater) must be replaced at the same times with new coolant pipes made from aluminum” аs evidence that Defendants acknowledged the defect. (ECF No. 35-1.) Plaintiffs note that, despite acknowledging the defect, Defendants have not reimbursed Cayenne owners for the cost of replacement parts or issued any type of recall.
Plaintiffs plead a total of thirty-two claims for relief against Defendants, including one federal statutory claim and thirty-one state statutory and common law claims. Plaintiffs seek economic damages, an order enjoining Defendants from “continuing the unfair business practices alleged in this Complaint,” and injunctive relief “in the form of a recall or free replacement program.” (ECF No. 35, at 79.) Plaintiffs do not claim any damages for bodily injury that the alleged coolant tube defect may have caused.
PCNA filed a motion to dismiss the Complaint pursuant to Rule 12(b)(6) on January 6, 2012. (ECF No. 62.) That same day, Porsche AG filed a motion to dismiss pursuant to Rule 12(b)(2) (ECF No. 63) and a second motion to dismiss adopting PCNA’s Rule 12(b)(6) arguments (ECF No. 64). The Court is holding Porsche AG’s Rule 12(b)(6) motion in abeyance until it decides the personal jurisdiction issue regarding Porsche AG. (ECF No. 67.) Thus, the Court now considers only PCNA’s motion to dismiss.
II. Rule 12(b)(6) Standard
Dismissal under Rule 12(b)(6) is proper if a complaint fails to state a claim upon
Rule 8(a)(2) governs pleading standards and requires that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although Rule 8 does not require “detailed factual allegations,” “it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Ashcroft v. Iqbal,
Considering only those well-pleaded facts, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570,
Claims of fraud are subject to heightened pleading requirements. Fed. R.Civ.P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, or other conditions of a person’s mind may be alleged generally.”). To satisfy Rule 9(b), a plaintiff must “allege the time, place, and content of the alleged misrepresentation on which he or she relied; the fraudulent scheme; the fraudulent intent of the defendants; and the injury resulting from the fraud.” Bennett v. MIS Corp.,
In interpreting federal law, a transferee court in a multidistrict case should look to the law of its own circuit rather than the law of the transferor courts’ circuits. In re Nat’l Century Fin. Enters., Inc., Inv. Litig.,
The Court must decide substantive questions of state law “in accordance with the controlling decisions of the highest court of the state.” Meridian Mut. Ins. Co. v. Kellman,
III. Facts
A. Four-Year/50,000 Mile Warranty
PCNA attached to its motion to dismiss four written “Warranty and Customer Information” packets from the years 2003-2006 (“Warranties”) that Plaintiffs did not attach to their Complaint. Each Warranty provides the following coverage:
[PCNA] will repair or replace with a new or remanufactured part distributed by [PCNA], at its sole option, any factory-installed part that is defective in material or workmanship under normal use. (Normal vehicle use is described in this Booklet.) Warranty repairs will be made free of charge for parts and labor at an authorized Porsche automobile dealer ....
(ECF No. 62-1, at 7; 62-3, at 7; 62-5, at 6; 62-7, at 7.)
Warranty coverage lasts for “four years, or 50,000 miles, whichever comes first” (“Warranty Period”). (Id.) The Warranties also state that “[a]ny implied warranties, including the implied warranties of merchantability and fitness for a particular purpose, are limited to the duration of the written warranty.” (Id.)
B. Claims
The Court begins by identifying those well-pleaded facts that are common to all twenty Plaintiffs. Iqbal,
One of Plaintiffs’ overarching allegations is that PCNA knew or was reckless in not knowing of the alleged defect and that it concealed this knowledge from consumers. To support this allegation, Plaintiffs allege that PCNA received “many complaints from Cayenne owners and lessees concerning failure of the tubes since the U.S. commercial launch of the Cayenne in 2003,” “had access to aggregate data from [their] dealers regarding the coolant tubes,” “had access to pre- and post-release testing data,” and “had access to complaints made to [them and their] dealers regarding the coolant tubes.” (ECF No. 35 ¶¶ 59, 61.) Plaintiffs also allege that “most high-end performance vehicles with powerful engines use aluminum pipes to transport the coolant,” that “[a]luminum pipes have been proven to withstand the extreme temperatures of the cooling system,” and that the “combination of (a) the tube placement relative to the engine and (b) use of plastic composite material to carry the coolant[] virtually guarantees that the plastic coolant tubes [PCNA] used in [its] Cayennes will prematurely fracture and fail.” (Id. ¶¶ 46, 53).
The Court finds that these factual allegations are sufficient to assume that PCNA had knowledge of the alleged coolant tube defect at all times relevant. PCNA argues that Plaintiffs fail to allege “which defendant knew of the supposed defect, when each learned of it, or how each responded” and “when the decision to conceal the defect was made, who made it, where it occurred, and where it was implemented.” (ECF No. 62, at 31; No. 91, at 51.) But Rule 9(b) provides that “knowledge[ ] and other conditions of a person’s mind may be alleged generally.” Fed. R.Civ.P. 9(b). Furthermore, Plaintiffs allege that both PCNA and Porsche AG
The Court next examines Plaintiffs’ allegations regarding affirmative misrepresentations. Plaintiffs provide seven specific statements that Defendants allegedly made “in [their] brochures and other marketing material” regarding the Cayenne’s cooling system. (ECF No. 35 ¶ 62.)
Against this backdrop, the Court considers Plaintiffs’ claims.
IV. Discussion
A. NATIONWIDE CLASS
Plaintiffs bring their first claim for relief on behalf of a purported nationwide class, defined as all current and former owners or lessees of a 2003-2010 model year Cayenne. On behalf of this class, Plaintiffs allege that PCNA violated the MagnusonMoss Federal Warranty Act (“MagnusonMoss” or “Act”), 15 U.S.C. § 2301 et seq., and that Plaintiffs sustained damages as a result. PCNA moves to dismiss this claim in its entirety.
Count One: Magnuson-Moss Act
Magnuson-Moss provides a civil claim for relief for consumers who are damaged by a supplier or warrantor’s failure to comply with its obligations under a written or implied warranty or under the Act in issuing such a warranty. 15 U.S.C. § 2310(d)(1). In order to state a claim under the Act, a plaintiff must demonstrate that (i) the item at issue was subject to a warranty; (ii) the item did not conform to the warranty; (iii) the seller was given reasonable opportunity to cure any defects; and (iv) the seller failed to cure the defects within a reasonable time or a reasonable number of attempts. Temple v. Fleetwood Enters., Inc.,
1. Written Warranty
Plaintiffs appear to concede that no individual plaintiff has а valid claim for breach of express warranty. PCNA asserts, and the Complaint corroborates, that “no plaintiff claims to have had any problems with his or her coolant pipes until after the applicable warranty term expired.” (ECF No. 62, at 12.) Plaintiffs do not contest this assertion. Without more, Plaintiffs fail to allege an actionable breach of express warranty claim. They therefore cannot advance a Magnuson-Moss claim premised on this theory. Temple,
Similarly unsuccessful is Plaintiffs’ attempt to “reserve their express warranty claims under Magnuson-Moss for those [currently unnamed] class members whose express warranties may have not yet expired.” (ECF No. 77, at 28.) Plaintiffs offer no authority that would allow them to “reserve” such claims and the Court is not aware of any such authority. The Sixth Circuit has stated that “[i]f it is found, prior to class certification, that the named plaintiffs’ individual claims are without merit, then dismissal is proper.” J & R Mktg., SEP v. Gen. Motors Corp.,
The Court GRANTS PCNA’s motion to dismiss Plaintiffs’ Magnuson-Moss claim to the extent that it is premised on an alleged breach of express warranty.
2. Implied Warranty
Plaintiffs note in their memorandum in opposition that only Colorado, Michigan, New Jersey, Texas, Georgia, and Ohio Plaintiffs are “raising claims” under the Act’s implied warranty provisions. (ECF No. 77, at 32.) California, Florida, New York, and Washington Plaintiffs are therefore excluded from the nationwide class’s Magnuson-Moss claim. To the extent that these Plaintiffs are asserting Magnuson
The remaining Plaintiffs allege that PCNA failed to comply with its implied warranties in violation of MagnusonMoss. The Act defines “implied warranty” as “an implied warranty arising under State law (as modified by sections 108 and 104(a) [15 U.S.C. §§ 2308 and 2304(a) ]) in connection with the sale by a supplier of a consumer product.” 15 U.S.C. § 2301(7). Courts have uniformly held that Congress intended the Act’s implied warranty provisions to be interpreted in accordance with the relevant state’s law, except as expressly modified by the Act. See Walsh v. Ford Motor Co.,
PCNA offers three arguments as to why this Court should dismiss Plaintiffs’ Magnuson-Moss claim. First, PCNA argues that the Act does not supplant state privity requirements and that Georgia and Ohio Plaintiffs’ claims fail for lack of privity. Second, PCNA argues that the Warranties effectively limit the duration of all implied warranties to the duration of the Warranty Period (four-years/50,000 miles), which had expired by the time the alleged defect manifested in each Plaintiffs vehicle. Finally, PCNA arguesThat Plaintiffs are precluded from bringing their MagnusonMoss claims because they failed to provide PCNA with an opportunity to cure the defect. The Court will consider each of these arguments in turn.
a. State Privity Requirements— Georgia and Ohio
It is well settled that Magnuson-Moss does not supplant state law privity requirements. Abraham v. Volkswagen of Am., Inc.,
For the reasons set forth in Section IV(E) of this Opinion and Order (Count Eleven), the Court finds that Georgia Plaintiff fails to meet the privity requirements that are necessary to sustain an implied warranty of merchantability claim under Georgia law. See infra Section IV(E) (Count Eleven). Georgia Plaintiff therefore fails to state an implied warranty claim under Magnuson-Moss. See Temple,
The Court similarly finds that Ohio Plaintiffs fail to satisfy Ohio’s privity requirements for a breach of implied warranty claim under Magnuson-Moss. Although Ohio courts recognize two forms of implied warranty claims — implied warranty in tort and implied warranty of merchantability (contract) — only the latter can form the basis of a Magnuson-Moss claim. See Curl v. Volkswagen of Am., Inc.,
Ohio Plaintiffs’ argument that their Magnuson-Moss claim survives based on
The Court finds that Ohio and Georgia Plaintiffs fail to state a claim for breach of implied warranty under Magnuson-Moss. These Plaintiffs are therefore excluded from the nationwide class’s MagnusonMoss claim. Accordingly, the Court GRANTS PCNA’s motion to dismiss Georgia and Ohio Plaintiffs’ Magnuson-Moss claims in their entirety.
b. Durational Limitation — Colorado, Michigan, New Jersey, and Texas
The Court now considers the remaining Plaintiffs’ allegations. Colorado, Michigan, New Jersey, and Texas have each adopted the UCC’s implied warranty provisions. In each state, a seller warrants that its goods shall be merchantable in every contract for the sale of those goods, subject to certain restrictions. UCC § 2-314 (2011).
It is undisputed that the Warranties purport to limit the duration of all implied warranties to a period of four-years/50,000 miles and that this period had expired by the time the alleged defect manifested in each Plaintiffs vehicle. The parties dispute whether this durational limitation is enforceable under the Act. Plaintiffs argue that the Warranties’ limitation is unenforceable because it is unconscionable and because it is not conspicuous. The Court finds that Plaintiffs have sufficiently alleged facts to suggest that the limitation is unconscionable; thus, it does not consider the parties’ arguments regarding conspicuousness.
As an initial matter, PCNA argues that the Court should refuse to consider the unconscionability arguments of Colorado, Michigan, and Texas Plaintiffs because
Second, PCNA had adequate notice that Plaintiffs were challenging the Warranties’ durational limitation on this ground. New Jersey Plaintiffs specifically alleged that any limitation or negation of the implied warranty, including any time limitation, is unconscionable and unenforceable. See In re Polyurethane Foam Antitrust Litig.,
Federal courts look to substantive state law in determining whether a durational limitation on an implied warranty is unconscionable. See, e.g., Alban v. BMW of N. Am., LLC, No 09-5398,
In New Jersey, courts look to the circumstances surrounding the formation of a contract to determine whether procedural or substantive unconscionability exists. Sitogum Holdings, Inc. v. Ropes,
The fact that a manufacturer had knowledge of a defect at the time it issued a warranty does not make a time/mileage limitation on an implied warranty unconscionable. Henderson v. Volvo Cars N. Am. LLC, No. 09-4146,
The Carlson court provided several examples of facts that would support a finding of unconscionability.
The question for this Court is not whether the Warranties’ durational limitation is unconscionable as a matter of law, but whether Plaintiffs have alleged sufficient facts to state a prima facie case of unconscionability. See, e.g., id. at 293-94.
Necessarily viewing the Complaint in its entirety and drawing all reasonable inferences in Plaintiffs’ favor, Plaintiffs (and Colorado, Michigan, Texas, and New Jersey Plaintiffs by incorporation) allege facts suggesting that PCNA knew that the Cayenne’s coolant system was inherently defective and that purchasers would bear the cost of correcting that defect. See supra Section III(B). PCNA allegedly knew that, in order to keep the vehicle in use after the Warranty Period, consumers would be required to purchase
These facts are sufficient to suggest that there existed a “substantial disparity in the parties’ relative bargaining power” in this case such that Plaintiffs were unable to receive a substantial benefit from the Warranties’ four-year/50,000 mile implied warranty coverage. See Carlson,
The Court notes that this holding does not contradict the Second Circuit’s decision in Abraham v. Volkswagen of America, Inc., on which PCNA relies throughout its motion.
Moreover, virtually all product failures discovered in automobiles after expiration of the warranty can be attributed to a “latent defect” that existed at the time of sale or during the term of the warranty. All parts will wear out sooner or later and thus have a limited effective life. Manufacturers always have knowledge regarding the effective life of particular parts and the likelihood of their failing within a particular period of time. Such knowledge is easily demonstrated by the fact that manufacturers must predict rates of failure of particular parts in order to price warranties and thus can always be said to “know” that many parts will fail after the warranty period has expired. A rule that would make failure of a part actionable based on such “knowledge” would render meaningless time/mileage limitations in warranty coverage.
Id. at 250.
The Carlson court distinguished the express warranty context in which this language arose from the implied warranty context. See
The Court finds that Colorado, Michigan, Texas, and New Jersey Plaintiffs have alleged sufficient facts to support the inference that the Warranties’ durational limitation on all implied warranties was unconscionable. Thus, for purposes of this motion, the Court assumes that the implied warranty of merchantability had not expired at the time the alleged defect manifested in Colorado, Michigan, Texas, and New Jersey Plaintiffs’ vehicles. PCNA offers no additional arguments regarding these Plaintiffs’ implied warranty claims. The Court finds that Colorado, Michigan, Texas, and New Jersey Plaintiffs state a claim for breach of the implied warranty of merchantability under the law of their respective states, as modified by MagnusonMoss.
c. Opportunity to Cure
To prevail on a Magnuson-Moss claim, a plaintiff must demonstrate not only that a product failed to live up to its written or implied warranties, but also that the seller had an “opportunity to cure” the alleged defect and failed to do so. Temple,
Section 2310(e) sets forth the Act’s opportunity to cure requirement. Under Section 2310(e):
No action (other than a class action or an action respecting a warranty to which subsection (a)(3) applies) may be brought under subsection (d) for failure to comply with any obligation under any written or implied warranty or service contract, and a class of consumers may not proceed in a class action under such subsection with respect to such a failure except to the extent the court determines necessary to establish the representative capacity of the named plaintiffs, unless the person obligated under the warranty or service contract is afforded a reasonable opportunity to cure such failure to comply. In the case of such a class action ... brought under subsection (d) for breach of any written or implied warranty or service contract, such reasonable opportunity will be afforded by the named plaintiffs and they shall at that time notify the defendant that they are acting on behalf of the class. In the case of such a class action which is brought in a district court of the United States, the representative capacity of the named plaintiffs shall be established in the application of rule 23 of the Federal Rules of Civil Procedure.
15 U.S.C. § 2310(e) (emphasis added).
The plain language of the statute imposes different requirements on individual plaintiffs and class action plaintiffs regarding the time at which they must satisfy the opportunity to cure requirement. See id. For individual plaintiffs, Section 2310(e) is a condition precedent to filing suit unless the warrantor establishes an informal dispute settlement procedure pursuant to Section 2310(a)(3). See id. In contrast, plaintiffs bringing a class action may file suit before the defendant is afforded an opportunity to cure for the limited purpose of establishing the representative capacity of the named plaintiffs. See id. Once a court makes this determination, but before the class action can proceed, the defendant must be afforded an opportunity to cure the alleged breach of warranty and the named plaintiffs must at that point inform the defendant that they are acting on behalf of a class. See id.; see also Walsh v. Ford Motor Co.,
PCNA cites cases in which courts have dismissed class action Magnuson-Moss claims because the plaintiff failed to satisfy Section 2310(e) prior to filing suit, but this result contradicts the plain language of the statute. To hold that no class action “may be brought ... unless the person obligated under the warranty or service contract is afforded a reasonable opportunity to cure” would read the “other than a class action” language out of the statute and would nullify the phrase that “a class of consumers may not proceed in a class action ... except to the extent the court determines necessary to establish the representative capacity of the named plaintiffs.” 15 U.S.C. § 2310(e). The only way to reconcile the latter clause with the rest of the statute is to read Section 2310(e) as standing for the proposition that a class action may be brought, but may not proceed once the court determines the representative capacity of the named plaintiffs, until the defendant is provided with an opportunity to cure the alleged defect. See id. If a class action may not be brought unless a defendant first is afforded an opportunity to cure the alleged breach, then the phrase “a class of consumer may not proceed in a class action” would not make sense. There would be nothing to proceed with because no case would have been brought.
The courts that interpreted Section 2310(e) to dismiss a plaintiffs class action claim at the pleadings stage failed to account for this language in the statute. In Bearden v. Honeywell, for example, the court dismissed a plaintiffs putative class action because she failed to notify the defendant that she was acting on behalf of a class prior to filing her claim.
The Court finds that Section 2310(e) does not mandate dismissal of Plaintiffs’ class action claim at this stage of the litigation. Thus, the Court does not consider the parties’ arguments regarding PCNA’s alleged knowledge of the defect as an appropriate substitute for notice under Section 2310(e). The Court DENIES PCNA’s motion to dismiss Count One of
The Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count One of Plaintiffs Complaint.
B. CALIFORNIA
California Plaintiffs Bob Conrad, David Graas, Sean Krider, and Sy Due Tran each purchased Cayennes that came equipped with plastic coolant tubes. Plaintiffs Conrad and Tran purchased their vehicles new from Porsche dealerships, and Plaintiffs Graas and Krider purchased used Cayennes from unidentified sellers. All four California Plaintiffs experienced problems with their coolant tubes, and each paid to install aluminum coolant pipes in their vehicles. California Plaintiffs do not claim that these problems began while any of their vehicles were under warranty.
California Plaintiffs bring claims under California’s Consumer Legal Remedies Act, Cal. Civil Code § 1750 et seq., California’s Unfair Competition Law, Cal. Bus. & Prof.Code § 17200 et seq., and for unjust enrichment. PCNA moves to dismiss each claim.
Count Two: California’s Consumer Legal Remedies Act
California Plaintiffs allege that PCNA violated the California Consumer Legal Remedies Act (“CLRA”) by failing to disclose and/or concealing from consumers the material fact that the Cayenne’s plastic coolant tubes were defective and would likely fail before the life of the engine. California Plaintiffs allege that these facts were material because reasonable consumers, had they known of the defect, would not have purchased the Cayenne or would have insisted on paying less for it. California Plaintiffs seek injunctive relief, actual and punitive damages, and attorney’s fees and costs under the CLRA.
The CLRA serves to “protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.” Cal. Civ.Code. § 1760. Plaintiffs invoke sections five and seven of the CLRA, which proscribe:
(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have.
(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.
Id. § 1770(a)(5) & (7).
Omissions are actionable under sections 1770(a)(5) and 1170(a)(7) of the CLRA where (1) the omission is contrary to a defendant’s express representation or (2) the defendant failed to disclose or concealed a fact that it had a duty to disclose. See Daugherty v. Am. Honda Motor Co.,
Courts have since cited Daugherty for the proposition that a manufacturer has no duty to inform consumers of defects that will manifest outside the warranty period unless the manufacturer has affirmatively misrepresented the defective nature of the product or the defect poses a safety risk to consumers. See Wilson v. Hewlett-Packard Co.,
A defect that poses an objéctive, identifiable safety risk to consumers will trigger a duty to disclose under the CLRA. See, e.g., Cholakyan v. Mercedes-Benz USA, LLC,
Importantly, the Cholakyan court found that the plaintiffs had sufficiently alleged a safety risk despite the fact that the water leak defect had not actually caused sudden engine failure in their vehicles.
Here, Plaintiffs allege that the use of plastic coolant tubes in the Cayenne put consumers at risk of engine failure while operating the vehicle. Necessarily taking all facts alleged in the Complaint as true, Plaintiffs (and California Plaintiffs by incorporation) allege that “[a]s a result of continuous exposure to extreme heat, plastic coolant tubes crack and leak” (ECF No. 35 ¶ 52); cracked coolant tubes result in “coolant seeping directly into the vehicle’s starter, transmission seals, and other components causing possible engine damage and engine failure” (id. ¶ 3); that coolant tube failure renders the vehicle “inoperable” (id. ¶ 54) or can “disabl[e] the vehicle” (id. ¶ 70); and that “acute failure of the [coolant tubes] can and sometimes does occur while traveling at high speeds on public roadways” (id.). These allegations are sufficient to support the inference that the alleged defect can cause engine failure and render the vehicle inoperable while driving, which is sufficient to allege a safety concern under California law. See, e.g., Smith,
PCNA’s arguments to the contrary are not persuasive. PCNA contests Plaintiffs’ factual assertions and argues that coolant loss “does not impair a vehicle’s operability during the first few minutes after it occurs,” pointing specifically to one named plaintiff who drove his vehicle for four miles “without any adverse effect on vehicle operability.” (ECF No. 62, at 42.) These arguments are not appropriate at the motion to dismiss stage. Here, the Court must accept that coolant tube failure “renders the vehicle inoperable,” possibly while “traveling at high speeds.” (ECF No. 35 ¶¶ 9, 70). The fact that one of the named plaintiffs did not experience this result does not alter this conclusion. See, e.g., Cholakyan,
PCNA’s argument that Plaintiffs fail to establish a sufficient nexus between the alleged defect and the purported safety risk is similarly unpersuasive. Plaintiffs describe the layout of the Cayenne’s engine and explain how this layout “virtually guarantees” that plastic coolant tubes will fracture. (ECF No. 35 II53.) Plaintiffs also explain how the cracked coolant tubes cause coolant to leak into specific engine components and allege that such a leak disables the vehicle. (Id. ¶¶ 3, 70.) These allegations are sufficient to demonstrate a causal connection at this stage of the litigation. See, e.g., Cholakyan,
As a final note, the Court agrees with PCNA’s argument that the risk of being stranded is too speculative to establish a safety concern as a matter of law. Smith,
Count Three: California’s Unfair Business Practices Act
California’s Unfair Competition Law (“UCL”) proscribes “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof.Code § 17200; Cel-Tech Commc’ns v. L.A. Cellular Tel. Co.,
The case law suggests, and PCNA does not dispute, that allegations suggesting that a defendant knew of and failed to disclose safety risks posed by its defective product are sufficient to establish UCL liability under all three prongs of the statute. Based on its finding above, the Court therefore finds that California Plaintiffs state a claim for relief under the unlawful, unfair, and fraudulent prongs of the UCL. See supra Section IV(B) (Count Two). The Court addresses the parties’ arguments regarding each prong.
1. Unlawful Conduct
By proscribing any “unlawful” business practice, the UCL “borrows violations of other laws” and makes them “independently actionable” under the UCL. Cel-Tech Commc’ns,
California Plaintiffs state a claim under the CLRA and therefore sufficiently state a claim under the UCL. See, e.g., Cel-Tech Commc’ns,
2. Unfair Conduct
To state a claim under the “unfairness” prong of the UCL, a plaintiff must demonstrate (1) a substantial injury to consumers, (2) that the injury is not counterbalanced by an equivalent or greater benefit to consumers or to competition, and (3) that consumers could not themselves have avoided the injury. Daugherty,
In general, California courts have found that a defendant’s failure to disclose defects that will manifest post-warranty is not “unfair” under the UCL unless the defendant failed to inform consumers of a fact that it had a duty to disclose under Daugherty. See Bardin,
3. Fraudulent Conduct
The fraudulent conduct prong of the UCL applies to acts that are either akin to common law fraud or likely to deceive the public. In re Tobacco II Cases,
PCNA cites Clemens v. DaimlerChrysler Corp. for the proposition that the public is not likely to be deceived where the only expectation consumers could have had about a particular engine component is that it would function properly for the duration of the express warranty.
California Plaintiffs state a claim for relief under the unlawful, unfair, and fraudulent prongs of the UCL. Accordingly, the Court DENIES PCNA’s motion to dismiss Count Three of Plaintiffs’ Complaint.
Count Four: Unjust Enrichment (California)
California courts do not recognize unjust enrichment as an independent
Here, Plaintiffs seek restitution in their statutory claims for relief. (ECF No. 35 ¶ 267 (“Pursuant to §§ 17203 and 17204 of the Business & Professions Code, California Plaintiffs and the other California SubClass members are entitled to: ... full restitution of all monies paid to Porsche as a result of its deceptive practices .... ” (emphasis added)).) If Plaintiffs cannot recover under the CLRA, the purpose of which is to “protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection,” Cal. Civ. Code § 1760, or the UCL, which addresses any “unlawful, unfair or fraudulent business act or practice,” Cal. Bus. & Prof. Code § 17200, Plaintiffs may not pursue an independent theory of restitution based on unjust enrichment. See Falk,
Plaintiffs’ suggestion that there exists a split of authority in California regarding unjust enrichment as an independent claim for relief is not persuasive. The state cases that Plaintiffs cite involve a restitution theory as the sole claim. See Lectrodryer v. Seoulbank,
The Court finds that California Plaintiffs have failed to state a claim for relief under an independent theory of unjust enrichment. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Four of Plaintiffs’ Complaint.
C. COLORADO
Colorado Plaintiff Kevin Starkey purсhased a model-year 2006 Cayenne from an unidentified seller in 2010. Colorado Plaintiffs coolant tubes cracked in 2011, and the resulting coolant leak damaged his transmission seals and caused the vehicle to cease operating. Colorado Plaintiff paid to replace his coolant tubes with aluminum pipes and repair the other damage to his vehicle. He now brings claims for violations of the Colorado Consumer Protection Act (“CCPA”), Col.Rev.Stat. § 6-1-101 et seq., strict product liability, and breach of implied warranty of merchantability under Colorado law. PCNA moves to dismiss each claim.
The CCPA provides a claim for relief for consumers who are injured by certain “deceptive trade practices.” Col.Rev.Stat. § 6-1-113(l)(a) (consumers have a claim for relief); § 6-1-105 (identifying specific deceptive trade practices). Deceptive trade practices under the CCPA include affirmative misrepresentations, such as “[representing] that goods, food, services, or property are of a particular standard, quality, or grade, or that goods are of a particular style or model, if [the person] knows or should know that they are of another.” Id. § 6-l-105(l)(g); see also id. §§ 6-l-105(l)(e), (i), and (r) (proscribing various types of affirmative misrepresentations such as false advertising). The CCPA also proscribes “[failing] to disclose material information concerning goods, services, or property which information was known at the time of an advertisement or sale if such failure to disclose such information was intended to induce the consumer to enter into a transaction.” Id. § 6-l-105(l)(u).
Colorado Plaintiff invokes each of these sections and alleges that PCNA violated the CCPA by knowingly misrepresenting the quality and characteristics of the Cayenne and by falsely advertising the Cayenne. Colorado Plaintiff also alleges that PCNA committed an unlawful omission under the CCPA by failing to disclose material information to consumers. The Court finds that Colorado Plaintiff states a claim under the CCPA on the latter allegation only.
To state a CCPA claim, a plaintiff must allege: (1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of the defendant’s business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant’s goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiffs injury. Crowe v. Tull,
Colorado Plaintiff essentially concedes that his allegations cannot support an inference that PCNA’s affirmative representations proximately caused his injuries. Instead, he argues that he incurred damages because his vehicle contained plastic coolant tubes “while [PCNA], at the same time, represented that the coolant system was ‘extremely robust.’ ” (ECF No. 77, at 166.) Without alleging that he heard or had access to PCNA’s affirmative statements, or identifying the specific statements on which he allegedly relied, Colorado Plaintiff cannot demonstrate proximate cause under the CCPA. See, e.g., Gen. Steel Domestic Sales, LLC,
The Court now considers whether PCNA’s alleged failure to disclose the alleged coolant tube defect to consumers is actionable under the CCPA. One Colorado district court has held that a plaintiff cannot state an actionable omission under the CCPA unless he or she identifies some form of communication that took place between the parties. See Baca v. Clark, No. 06-cv00714,
In contrast, Warner v. Ford Motor Co. and a case on which it relies suggest that the act of distributing and selling a product constitutes a “statement” to consumers that the product is reasonably safe for its intended use.
In Warner, for example, the plaintiffs alleged that the defendant-manufacturer failed to disclose the fact that the subject vehicle was defectively designed and that the defect posed a known safety risk to consumers.
Although the plaintiffs in both Warner and Connick had received some form of communication from the defendant, the Court finds that the lack of direct communication between the parties in this case does not mandate dismissal of Colorado Plaintiff’s claim. The Colorado Supreme Court has indicated that the CCPA is to be construed broadly and that “it should ordinarily be assumed that the CCPA applies to the conduct^ t]hat assumption is appro
Here, Plaintiffs (and Colorado Plaintiff by incorporation) have alleged facts sufficient to support an inference that the alleged coolant tube defect presents a safety risk to consumers and that PCNA had knowledge of but failed to disclose this defect to consumers. See supra Section III(B); IV(B) (Count Two). Colorado Plaintiff alleges that he would not have pm-chased his Cayenne had the alleged coolant tube defect been disclosed. The Court predicts that the Colorado Supreme Court would find that these allegations are sufficient to state a claim under the CCPA. The Court DENIES PCNA’s motion to dismiss these allegations.
Accordingly, the Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Five of Plaintiffs’ Complaint.
Count Six: Strict Product Liability (Colorado)
Colorado Plaintiff brings a claim for strict product liability and alleges that PCNA designed and sold the Cayenne in a defective condition that was unreasonably dangerous to consumers and/or their property. PCNA argues, and the Court agrees, that the economic loss doctrine bars any such claim.
Colorado has adopted the Restatement (Second) of Torts § 402A, which provides the standard for strict product liability claims. In relevant part, Section 402A states:
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
Restatement (Second) of Torts § 402A (1965); Hiigel v. Gen. Motors Corp.,
The Colorado Supreme Court initially adopted the view that “property” under Section 402A includes the product itself, such that “damage to the product sold is covered under the doctrine of strict liability.” Hiigel,
Santor has since received substantial criticism and represents the minority view among courts. See E. River S.S. Corp. v. Transamerica Delaval, Inc.,
Twenty-five years after Hiigel, the Colorado Supreme Court joined the majority of jurisdictions and officially adopted the economic loss rule for cases brought by all plaintiffs, including individual purchasers. See Town of Alma v. Azco Const., Inc.,
[W]e now expressly adopt the economic loss rule. We hold that a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law. [ ] Economic loss is defined generally as damages other than physical harm to persons or property.
Id. at 1264.
The Town of Alma court illustrated the rule using a manufacturer’s warranty as an example. When a product fails outside its warranty and only the product itself is damaged, the buyer has suffered only economic loss. The buyer could have addressed his or her economic expectations in contract by “demanding] additional warranties on a product while agreeing to pay a higher price, or the same buyer may choose to assume a higher level of risk that a product will not perform properly by accepting a more limited warranty in exchange for a lower product price.” Id. at 1262. If the buyer fails to protect adequately those economic expectations in contract, he or she cannot then attempt to recover solely economic loss in tort. See id. at 1262-64; cf. Camacho v. Honda Motor Co.,
In its analysis, the Town of Alma court noted that application of the economic loss doctrine turns on the source of the duty owed and not the nature of the injury suffered.
This language does not alter the conclusion that “[d]amage to a product is most naturally understood as a warranty claim” that could have been insured or otherwise addressed in contract. E. River,
Here, is it undisputed that Colorado Plaintiff suffered only economic loss when his vehicle’s coolant tubes failed. Colorado Plaintiff does not allege that coolant tube failure caused him to suffer personal injury or injury to property other than his Cayenne;
Colorado Plaintiff attempts to confuse the issue by suggesting that PCNA breached a duty to act reasonably in the design, manufacture, and sale of the Cayenne. (ECF No. 77, at 169 (citing Loughridge v. Goodyear Tire and Rubber Co.,
Colorado Plaintiffs final argument is that Hiigel has never been overruled and precludes application of the economic loss doctrine in this case. Colorado Plaintiff does not explain how Hiigel would support a tort action on these facts that would not contradict the theory of and purposes underlying the economic loss rule that the Town of Alma court espoused. See Carter,
The Court finds that the economic loss rule bars Colorado Plaintiffs tort claim for strict product liability. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Six of Plaintiffs’ Complaint.
Count Seven: Implied Warranty of Merchantability (Colorado)
Colorado Plaintiff brings a claim for breach of implied warranty of merchantability under Colorado law. Like his co-plaintiffs, Colorado Plaintiff asserts that
PCNA does not offer any arguments specific to Colorado Plaintiffs implied warranty claim and adopts only those arguments that it advanced in connection with Plaintiffs’ Magnuson-Moss claim. Specifically, PCNA argues that all implied warranties had expirеd by the time the alleged defect manifested in Colorado Plaintiffs vehicle. The Court rejected these arguments in Section IV(A)(2)(b) of this Opinion and Order (Count One) and found that Plaintiffs had sufficiently alleged facts to suggest that the durational limitation on all implied warranties was unconscionable and unenforceable, such that the Court cannot assume for purposes of this motion that the implied warranty of merchantability had expired. See supra Section IV(A)(2)(b) (Count One). The Court therefore finds that Colorado Plaintiff states a claim for breach of the implied warranty of merchantability. The Court DENIES PCNA’s motion to dismiss Count Seven of Plaintiffs’ Complaint.
D. FLORIDA
Florida Plaintiff Joseph Dudley purchased a 2004 Cayenne from an unidentified seller sometime in 2010. That same year, Florida Plaintiff became aware that the plastic coolant tubes in his vehicle “faced defective coolant tube issues” and paid to replace the plastic tubes in order to avoid having the defect manifest in his vehicle. (ECF No. 35, at 20.) Florida Plaintiff now brings claims for violations of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 501.201 et seq., negligence, and unjust enrichment. PCNA moves to dismiss each of these claims.
Count Eight: Florida’s Deceptive and Unfair Trade Practices Act
Under the FDUTPA, “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” Fla. Stat. § 501.204(1). A person who has suffered a loss as a result of an FDÜTPA violation may recover “actual damages, plus attorney’s fees and court costs.” Id. § 501.211. There are three elements to an FDUTPA claim: (1) a deceptive or unfair practice, (2) causation, and (3) actual damages. Rollins, Inc. v. Butland,
Here, the parties dispute whether Florida Plaintiff has alleged causation and actual damages as required to state a claim under the FDUTPA. Florida courts have defined “actual damages” as “the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.” Butland,
The Court agrees with PCNA that Florida Plaintiff cannot recover under the FDUTPA the cost of repairing and replacing the allegedly defective coolant tubes in his vehicle. Florida courts have suggested that the cost of repairing and replacing a defective part are “consequential” damages that are not recoverable under the FDUTPA and that the FDUTPA permits a consumer to recover “only the diminished value” of the goods or services received. Orkin Exterminating Co. v. Petsch,
Here, Florida Plaintiff alleges actual damages under the FDUTPA on a “diminished value” theory of recovery. A district court in Florida recently found that a plaintiff pleaded the elements of an FDUTPA claim on facts similar to those that Florida Plaintiff alleges in this case. In Matthews v. American Honda Motor Co., Inc., the plaintiff alleged that the defendant manufactured and sold vehicles with a latent defect and brought a FDUTPA claim on behalf of herself and all Florida owners and lessees of the subject vehicles. No. 12-60630-CIV,
Florida case law supports the Matthews court’s holding that a consumer can recover under the FDUTPA when a defendant’s deceptive conduct allegedly diminishes the value of the product sold. See Siegle v. Progressive Consumers Ins. Co.,
Importantly, the Collins court allowed the plaintiffs claim to proceed despite the fact that the alleged seat belt defect had never manifested itself by failing to operate in an emergency or otherwise causing injury. Id. at 990-91. The court noted that the case was unique in that seat belts present safety and reliability concerns such that the plaintiff had alleged a concrete injury even though the defect had never manifested in her vehicle. Id.
For the reasons set forth in Section IV(B) (Count Two) of this Opinion and Order, the Court assumes for purposes of this motion to dismiss that the alleged coolant tube defect presents a safety risk to consumers. Thus, in light of Collins, PCNA’s argument that Florida Plaintiff alleges only speculative damage because he replaced his coolant tubes before the alleged defect manifested in his vehicle is not persuasive.
Similarly unpersuasive is any attempt to distinguish the Collins court’s holding from the facts of this case on the ground that Florida Plaintiff did not rely on PCNA’s affirmative representations in purchasing his vehicle. The Court acknowledges the fact that the FDUTPA’s actual damages inquiry is premised on the “contract of the parties,” Butland,
Given the above analysis, PCNA’s argument that Florida Plaintiff fails to allege causation is not compelling. Florida Plaintiff alleges that, had he known of the alleged coolant tube defect, he would not have purchased a Cayenne or would have insisted on paying less for it. (ECF No. 35 ¶ 113.) These allegations are sufficient to demonstrate cause under the FDUTPA. See; e.g., Davis,
The Court finds that Florida Plaintiff states a claim for relief under the FDUTPA. Accordingly, the Court DENIES PCNA’s motion to dismiss Count Eight of Plaintiffs’ Complaint.
Count Nine: Negligence (Florida)
Florida Plaintiff alleges that PCNA “owed a duty to [Florida Plaintiff] with regard to the plastic coolant tubes installed in the subject Porsche Cayenne vehicles.” (ECF No. 35 ¶ 309.) Florida Plaintiff asserts that PCNA breached this duty by negligently designing the Cayenne’s cooling system in such a way as to cause injury to Florida Plaintiff.
In Florida, as in Colorado, the economic loss rule prevents plaintiffs from recovering under a negligence claim “when there is a defect in a product that causes damage to the product but causes no personal injury or damage to other property.” Indem. Ins. Co. v. Am. Aviation, Inc.,
Florida Plaintiff does not dispute this contention but instead argues that the rule does not bar tort claims based on fraudulent inducement and negligent misrepresentation. Even if true, Florida Plaintiff does not explain how this fact is relevant to his claim that PCNA negligently designed the Cayenne. Florida Plaintiff was free to plead a claim for fraudulent inducement or negligent misrepresentation if the facts supported such a claim for relief. He failed to do so, and cannot amend his claim in his memorandum in opposition. See, e.g., Pa. ex rel. Zimmerman v. PepsiCo, Inc.,
As for the negligent design claim, Florida Plaintiff does not dispute the fact that the alleged coolant defect caused damage to the Cayenne and not personal injury or damage to other property. Thus, the Court finds that the economic loss doctrine, as recognized by Florida courts, bars Florida Plaintiffs negligent design claim. The Court GRANTS PCNA’s motion to dismiss Count Nine of Plaintiffs’ Complaint.
Count Ten: Unjust Enrichment (Florida)
Florida Plaintiff brings a claim for unjust enrichment and alleges that “[PCNA] charged [Florida Plaintiff] and other Florida Sub-Class members more than a fair market price for their vehicles” such that it would be “inequitable” for PCNA to retain the benefit without paying the value of the benefit conferred. (ECF No. 35 ¶¶ 314, 316.) Florida Plaintiff alleges that he conferred a benefit on PCNA, “which it appreciated when it received the monetary compensation for the Cayennes and other benefits conferred.” (Id. ¶ 313.) The Court finds that Florida Plaintiff fails to state a claim for unjust enrichment.
Unjust enrichment is an “equitable claim based on a legal fiction which implies a contract as a matter of law.” 14th & Heinberg, LLC v. Terhaar & Cronley Gen. Contractors, Inc.,
Here, Florida Plaintiff alleges that he purchased a 2004 vehicle in 2010 and that he replaced the plastic coolant tubes in his vehicle. Florida Plaintiff alleges only that he “bought and/or leased a Porsche Cayenne manufactured by Porsche” and that PCNA “received the monetary compensation for the Cayеnnes and other benefits conferred by Plaintiff[ ] Dudley ... and the other Florida SubClass members.” (ECF No. 35 ¶ 313.) Without establishing a link between the unidentified seller of his vehicle and PCNA, Florida Plaintiff fails to allege that he conferred a direct benefit on PCNA as Florida law requires. See Doll,
As an alternative rationale for dismissing Florida Plaintiffs unjust enrichment claim, the Court notes that several district courts in Florida have held that a plaintiff cannot advance an unjust enrichment claim that is predicated on the same wrongful conduct as that which the FDUTPA is designed to prevent. See Matthews,
The Court finds that Florida Plaintiff fails to state a claim for unjust enrichment. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Ten of Plaintiffs’ Complaint.
E. GEORGIA
Georgia Plaintiff Anthony Gardner purchased a 2005 Cayenne in 2008 from an unidentified seller. Georgia Plaintiff does not disclose the amount that he paid for his Cayenne or any other circumstances surrounding the purchase. Georgia Plaintiff alleges that, in March 2011, the plastic coolant tubes in his vehicle cracked and rendered his vehicle disabled. Georgia Plaintiff paid to repair his vehicle and now brings claims for breach of implied warranty under the UCC, violations of Georgia’s Uniform Deceptive Trade Practices Act, Ga.Code Ann. § 10-1-370 et seq., and unjust enrichment. PCNA moves to dismiss these claims.
Count Eleven: Implied Warranty of Merchantability Under UCC (Georgia)
In Georgia, a warranty that 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. Ga.Code Ann. § 11-2-314 (adopting UCC § 2-314 as Georgia law). A plaintiff seeking to assert a claim for breach of the implied warranty of merchantability under Georgia law must be in privity with the party against whom the plaintiff seeks to assert his or her claim. Keaton v. A.B.C. Drug Co.,
Georgia Plaintiff does not argue that he is in privity with PCNA but argues that Georgia courts recognize an exception to this rule where a manufacturer extends a warranty to a remote purchaser. The Court disagrees and finds that Georgia Plaintiff fails to state a claim for breach of the implied warranty of merchantability.
Georgia Plaintiffs argument relies on language from a case in which a Georgia appellate court stated:
While ordinarily under [Georgia law] there is no implied warranty existing between a manufacturer and an ultimate consumer, this is due to the fact that no privity of contract exists between the two. However, where an automobile manufacturer, through its authorized dealer issues to a purchaser of one of its automobiles from such dealer admittedly as a part of the sale a warranty by the manufacturer running to the purchaser, privity exists ....
Chrysler Corp. v. Wilson Plumbing Co., Inc.,
The Court accepts Chrysler Corp. as good law but finds that the “exception” does not apply to the facts of this case. The Chrysler Corp. court stated that a warranty supplants privity in certain circumstances — specifically, when a manufacturer issues a warranty to remote purchasers through an authorized dealer and when the warranty is part of the remote consumer’s purchase.
Georgia Plaintiff does not allege any facts suggesting that his purchase transaction was effectively a sale between himself and PCNA. Georgia Plaintiff does not allege that he purchased his vehicle new (instead, he purchased a 2005 vehicle in 2008) from a Porsche authorized dealer (he does not identify the seller) or that the unidentified seller incorporated the Warranty into his purchase of the vehicle. Even assuming all facts alleged in the Complaint as true, the Court cannot conclude that PCNA effectively bridged the privity gap between itself and Georgia Plaintiff. See Twombly,
The Court GRANTS PCNA’s motion to dismiss Count Eleven of Plaintiffs’ Complaint.
Count Twelve: Georgia’s Uniform Deceptive Trade Practices Act
Georgia’s Uniform Deceptive Trade Practices Act (“GUDTPA”) provides
Georgia Plaintiff has already repaired the alleged coolant tube defect in his vehicle and does not suggest that he will experience future wrongful conduct. Instead, without citing any authority, Georgia Plaintiff argues that currently unnamed class members could suffer harm absent injunctive relief. This argument fails. An individual that has only suffered past harm, even when he brings his claim on behalf of a putative class of plaintiffs, fails to state a claim under the GUDTPA. See Bolinger v. First Multiple Listing Serv., Inc.,
Because Georgia Plaintiff does not allege any future harm that he will likely experience, an injunction is not warranted and Georgia Plaintiff fails to state a claim under the GUDTPA. The Court GRANTS PCNA’s motion to dismiss Count Twelve of Plaintiffs’ Complaint.
Count Thirteen: Unjust Enrichment (Georgia)
In Georgia, unjust enrichment is an equitable concept that applies when, in the absence of a legal contract, one party has conferred a benefit on the opposing party for which it should be compensated. Wachovia Ins. Servs., Inc. v. Fallon,
Georgia Plaintiffs Cayenne is subject to the terms of the 2005 Warranty. The 2005 Warranty defines PCNA’s obligation to reimburse consumers for parts that are defective in material or workmanship. (ECF No. 62-5, at 6 (“[PCNA] will repair or replace with a new or remanufactured part ... any factory-installed part that is defective in material or workmanship under normal use ... Warranty repairs will be made free of charge for parts and labor at an authorized Porsche dealership.”).) Georgia Plaintiff argues that, because his vehicle contained a part that is defective in material, he is entitled to recoup some of the cost that he paid for his vehicle or obtain reimbursement for the cost of repairing and replacing the defective part. Alowing such recovery would effectively expand the duration and scope of the 2005 Warranty, which is not an appropriate use of an unjust enrichment claim. See Terrill,
Georgia Plaintiffs sole argument regarding the 2005 Warranty’s application to this case is that he is entitled to plead his unjust enrichment claim in the alterna
Even if the 2005 Warranty did not cover the subject matter of Georgia Plaintiffs unjust enrichment claim, his claim is fatally flawed. In Georgia, a plaintiff bringing a claim for unjust enrichment must have acted “with the expectation that the other will be responsible for the cost.” Morris v. Britt,
The Court finds that Georgia Plaintiff fails to state a claim for unjust enrichment. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Thirteen of Plaintiffs’ Complaint.
F. ILLINOIS
Illinois Plaintiff Scott Florez purchased a 2004 Cayenne in 2009 from an unidentified seller. In 2011, the plastic coolant tubes in Illinois Plaintiffs vehicle failed and rendered his vehicle disabled. Illinois Plaintiff paid to repair his vehicle and now brings claims for violations of the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/1 et seq., and for unjust enrichment under Illinois law. PCNA moves to dismiss both claims.
Count Fourteen: Illinois Consumer Fraud and Deceptive Practices Act
The ICFA proscribes “[ujnfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact.” 815 Ill. Comp. Stat. 505/2. The Illinois Supreme Court has held that a plaintiff may recover under the ICFA for unfair as well as deceptive conduct. Robinson v. Toyota Motor Credit Corp.,
Illinois Plaintiff purports to bring claims for both unfair conduct and deceptive practices under the ICFA. This distinction is important because claims for “unfairness” need only meet the notice pleading standard of Rule 8(a), while claims for “deceptive practices” must meet the heightened pleading standard of Rule 9(b). Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., 536
The Court finds that Illinois Plaintiff has asserted a claim for deceptive practices only. Other courts have recognized that a plaintiff cannot rely on the same allegations to plead both deceptive and unfair practices. See, e.g., Pirelli Armstrong Tire Corp. v. Walgreen Co., No. 09 C 2046,
Here, Illinois Plaintiffs allegations are grounded in fraud, and he does not advance any allegations of unfair conduct that are distinct from his allegations of fraudulent misrepresentations and omissions. See EOF No. 35 ¶ 5 (“[PCNA’s] uniform failure to disclose this defect constitutes both an actionable misrepresentation and an unfair, unlawful, fraudulent and deceptive business practice .... ”). Compare Pirelli,
The Court turns to Illinois Plaintiffs allegations of deceptive acts. To plead an ICFA claim based on deceptive acts, a plaintiff must allege: (1) a deceptive act or practice by the defendant, (2) the defendant’s intent that the plaintiff rely on the deception, (3) occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damages to the plaintiff (5) proximately caused by the deception. Oliveira v. Amoco Oil Co.,
The Illinois Supreme Court has unequivocally stated that a plaintiff cannot demonstrate proximate cause under the ICFA where there has been no communication between the plaintiff and the defendant. De Bouse v. Bayer,
[W]e have repeatedly emphasized that in a consumer fraud action, the plaintiff must actually be deceived by a statement or omission. If there has been no communication with the plaintiff, there have been no statements and no omissions. In such a situation, a plaintiff cannot prove proximate cause.
Id.
Because Rule 9(b) applies to claims of deceptive acts, courts interpreting De Bouse have dismissed ICFA claims in which the plaintiff failed to identify the specific communication that took place be
The issue for this Court is whether, after De Bouse, PCNA’s act in distributing the Cayenne for sale constitutes a “statement” for purposes of the ICFA that the vehicle is safe for its ordinary intended use. The Court finds that it does. The Illinois Supreme Court appeared to accept essentially the same argument in Connick v. Suzuki Motor Co., in which the defendant allegedly withheld from consumers the fact that its vehicles contained a design defect that made them susceptible to rollover.
The De Bouse court later clarified this holding, stating that the Connick plaintiffs sаtisfied the direct communication requirement under the statute because they received communications from the defendant that contained “both misleading statements and material omissions.” De Bouse,
Given the Illinois Supreme Court’s holding in Connick and the fact that vehicles can be manufactured in a condition that is reasonably safe for all consumers, the Court finds that PCNA’s distribution of the Cayenne constitutes a statement under the ICFÁ that the vehicles were safe for their ordinary, intended use. See Connick,
Because the Connick court affirmed the reinstatement of the plaintiffs’ class action claim on behalf of all “residents of Illinois” who purchased the subject vehicle, see id.,
The Court finds that Illinois Plaintiff states a claim under the ICFA premised on PCNA’s alleged failure to disclose a safety risk to consumers. Accordingly, the Court DENIES PCNA’s motion to dismiss these allegations. The Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Fourteen of Plaintiffs’ Complaint.
Count Fifteen: Unjust Enrichment (Illinois)
Illinois Plaintiff brings a claim for unjust enrichment in the alternative to Plaintiffs’ breach of express warranty claim (Count One). Illinois Plaintiff offers the same theory regarding unjust enrichment that his co-plaintiffs offer — specifically, that PCNA was unjustly enriched by overcharging Illinois Plaintiff for his vehicle and obtaining revenues from the replacement parts that Illinois Plaintiff purchased. The Court finds that Illinois Plaintiff fails to state a claim for unjust enrichment.
Illinois courts adhere to the general rule that, where. a valid contract covers the subject matter in dispute, an unjust enrichment claim is not appropriate. Prima Tek II, LLC v. Klerk’s Plastic Indus.,
In determining whether a contract precludes an unjust enrichment claim, courts consider the subject matter of the contract and not the specific terms or provisions of that contract. Duffy v. Ticketreserve, Inc.,
Here, Illinois Plaintiff argues that he is entitled to recover a portion of the price that he paid for his vehicle and/or the cost of repairing his vehicle because the vehicle contained a part — allegedly defective in material — that failed outside of the Warranty Period. The 2004 Warranty defines PCNA’s obligation to consumers regarding parts that are “defective in material or workmanship.” (ECF No. 62-3, at 7.) Allowing Illinois Plaintiffs claim to proceed would effectively expand the scope and/or duration of the 2004 Warranty, which is not an appropriate purpose of an unjust enrichment claim. See Ramirez,
Illinois Plaintiff does not dispute the fact that the 2004 Warranty covers the subject matter of his unjust enrichment claim. Instead, Illinois Plaintiff argues that he may bring an unjust enrichment claim “despite any seemingly inconsistent allegations concerning PCNA’s written warranty.” (ECF No. 77, at 97.) As discussed in conjunction with Georgia Plaintiffs claim, this argument would only be relevant if the validity or existence of the 2004 Warranty (and not Georgia Plaintiffs likelihood of recovering under that Warranty) were in dispute. See, e.g., Lilly v. Ford Motor Co., No. 00 C 7372,
There also exists an alternative ground for dismissing Illinois Plaintiffs unjust enrichment claim. Illinois Plaintiff agrees with PCNA that he cannot advance an unjust enrichment claim on the same allegations that underlie his ICFA claim; he argues that he has “pleaded his unjust enrichment claim without incorporating the allegations of fraudulent conduct from his [I]CFA claim ... and it should be evaluated on its own merits.” (ECF No. 77, at 97.) But without these allegations of
The Court finds that Illinois Plaintiff fails to state a claim for unjust enrichment. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Fifteen of Plaintiffs’ Complaint.
G. MICHIGAN
Michigan Plaintiff Kyle Hoffecker purchased a 2006 Cayenne from an unidentified seller. The coolant tubes in Michigan Plaintiffs vehicle cracked in 2011, and his vehicle was rendered disabled. Michigan Plaintiff paid to repair his vehicle and now brings claims for strict product liability, breach of implied warranty under the UCC, violations of Michigan’s Consumer Protection Act, Mich. Comp. Laws § 445.901 et seq., and negligence. PCNA moves to dismiss all claims.
Count Sixteen: Strict Product Liability (Michigan)
Michigan Plaintiff seeks to recover damages under a theory of strict product liability. PCNA argues, and the Court agrees, that the economic loss doctrine bars Michigan Plaintiffs strict liability claim.
Michigan’s highest court has recognized the economic loss doctrine. See Neibarger v. Universal Coops., Inc.,
Michigan Plaintiff highlights the Neibarger court’s “commercial purposes” language and argues that his status as an individual consumer precludes application of the economic loss doctrine in this case. This argument fails. Although some courts initially interpreted Neibarger as standing for the proposition that the economic loss doctrine bars tort claims of commercial — and not individual — purchasers, Michigan courts now recognize that the doctrine applies with equal force to individual purchasers. See Sherman v. Sea Ray Boats,
The Court finds that Sherman mandates dismissal of Michigan Plaintiffs strict liability claim. Sherman is well reasoned and addresses the exact issue that is currently before this court; thus, it is datum for ascertaining state law absent persuasive evidence to the contrary. See West,
Michigan Plaintiff does not offer any persuasive authority to the contrary. Michigan Plaintiff points to Blackward v. Simplex Products Division for the proposition that the economic loss doctrine does not apply to individual consumers. No. 221066,
The Court finds that the economic loss doctrine bars Michigan Plaintiffs strict product liability claim. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Sixteen of Plaintiffs’ Complaint.
Count Seventeen: Implied Warranty Under the UCC (Michigan)
Michigan Plaintiff, like many of his co-plaintiffs, brings a claim for breach of the implied warranty of merchantability under the UCC. PCNA does not offer any arguments specific to Michigan Plaintiffs claim and adopts only those arguments that it advanced in connection with Plaintiffs’ Magnuson-Moss claim — specifically, that all implied warranties had expired by the time the alleged defect manifested in Michigan Plaintiffs vehicle. The Court rejected these arguments in Section IV(A)(2)(b) of this Opinion and Order (Count One) and found that Plaintiffs had sufficiently alleged facts to suggest that the durational limitation on all implied warranties was unconscionable. See supra Section IV(A)(2)(b) (Count One).
The Court finds that Michigan Plaintiff states a claim for breach of the implied warranty of merchantability. Accordingly, the Court DENIES PCNA’s motion to dismiss Count Seventeen of Plaintiffs’ Complaint.
Count Eighteen: Michigan’s Consumer Protection Act
The Michigan Consumer Protection Act (“MCPA”) proscribes certain “[ujnfair, unconscionable, or deсeptive methods, acts or practices in the conduct of trade or commerce.” Mich. Comp. Laws § 445.903(1). Affirmative misrepresentations, such as misrepresenting the quality or characteristics of a product, and material omissions, such as failing to reveal a material fact in such a way as to mislead or deceive a consumer, are included within the definition of “unfair, unconscionable, or deceptive” acts under the MCPA. Id. §§ 445.903(l)(d) & (s). One party’s failure to provide the promised benefits of a transaction also constitutes an unlawful act under the MCPA. Id. § 445.903(l)(y).
Michigan courts allow consumers to bring MCPA claims premised on theories of fraud and/or breach of implied warranty. See Mikos v. Chrysler Corp.,
Michigan Plaintiff alleges that PCNA violated the MCPA by breaching the implied warranty of merchantability under the UCC and by making deceptive representations and omissions regarding the quality of the Cayenne. The Court finds that Michigan Plaintiff states an MCPA claim on theories of breach of implied warranty and failure to disclose material facts to consumers. Michigan Plaintiffs allegations regarding affirmative representations are not actionable under the MCPA.
The Court first addresses Michigan Plaintiffs allegations regarding affirmative representations. Plaintiffs bringing MCPA claims must establish that they relied on the defendant’s deceptive conduct to their detriment. See In re OnStar Contract Litig.,
Michigan Plaintiff incorrectly cites Dix v. American Bankers Life Assurance Co. of Florida,
The Court next address Michigan Plaintiffs claim for breach of implied warranty under the MCPA. For the reasons set forth in Section IV(G) of this Opinion and Order (Count Seventeen), the Court finds that Michigan Plaintiff states a claim for breach of implied warranty under Michigan law. See supra Section IV(G) (Count Seventeen). Michigan Plaintiff therefore states a claim for breach of implied warranty under the MCPA. See Zanger,
The Court similarly finds that Michigan Plaintiffs allegations regarding PCNA’s failure to disclose material facts are actionable under the MCPA. The MCPA proscribes “[flailing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer.” Mich. Comp. Laws § 445.903(l)(s). This language mirrors the test that California courts employ in interpreting California’s consumer protection statute. Compare Mich. Comp. Laws § 445.903(l)(s) with Daugherty,
Similarly, PCNA cites no Michigan authority to negate the conclusion that Mich
PCNA’s final argument is that Michigan Plaintiff fails to establish that PCNA acted with the requisite intent under the MCPA. The Court disagrees. For the reasons set forth in Section III(B) of this Opinion and Order, the Court finds that Plaintiffs have pleaded facts suggesting that PCNA had knowledge of the alleged defect at all times relevant and failed to disclose the defect to consumers. See supra Section III(B). These pleaded facts support an inference that PCNA acted with the requisite intent to deceive. Cf. Rodriguez v. Berrybrook Farms, Inc., No. K86-161,
The Court finds that Michigan Plaintiff states a claim for violations of the MCPA based on theories of breach of implied warranty and failure to disclose material facts to consumers but not affirmative misrepresentations. Accordingly, the Court DENIES PCNA’s motion to dismiss these allegations. The Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Eighteen of Plaintiffs’ Complaint.
Count Nineteen: Negligence (Michigan)
Michigan Plaintiff argues that PCNA negligently designed and/or manufactured the Cayenne in such a way as to cause harm to Michigan Plaintiff. The parties do not offer any arguments in addition to those that they advanced in connection with Michigan Plaintiffs strict liability claim.
For the reasons set forth in Section IV(G) of this Opinion and Order, the Court finds that the economic loss doctrine precludes Michigan Plaintiff from advancing a tort claim in this case. See supra Section IV(G) (Count Sixteen). The economic loss doctrine therefore bars Michigan Plaintiffs negligence claim, and the Court GRANTS PCNA’s motion to dismiss Count Nineteen of Plaintiffs’ Complaint.
H. NEW JERSEY
New Jersey Plaintiffs Daniel Delgado, Richard Gorospe, and Nicholas Spagnoletti purchased Cayennes that came equipped with plastic coolant tubes. Plaintiffs Delgado and Gorospe purchased their vehicles (Delgado purchased a 2004 model and Gorospe a 2005 model) from used car dealerships in 2009, and both experienced problems with their coolant tubes in 2010. Both Delgado’s and Gorospe’s Cayennes were leaking coolant but had not actually failed at the time they replaced the plastic coolant tubes with aluminum pipes. Plaintiff Spagnoletti purchased a certified preowned Cayenne (model year 2004) from an authorized Porsche dealership in 2010 and preemptively replaced the plastic coolant tubes with aluminum pipes at the suggestion of his mechanic. New Jersey Plaintiffs now bring claims for violations of the New Jersey Consumer Fraud Act (“NJCFA”), N.J. Stat. Ann. § 56:8-1 et seq., and for breach of the implied warranty of merchantability. PCNA moves to dismiss both claims.
Count Twenty: New Jersey’s Consumer Fraud Act
Under the NJCFA, it is unlawful for any person to knowingly conceal, suppress, or omit material facts in connection with the sale or advertisement of merchan
PCNA argues that New Jersey Plaintiffs’ fail to demonstrate “ascertainable loss” under the NJCFA. The Court agrees and finds that New Jersey Plaintiffs fail to state a claim for violations of the NJCFA.
New Jersey courts have held that a plaintiff cannot demonstrate “ascertainable loss” under the NJCFA where the allegedly defective vehicle component outperforms its warranty period. Perkins v. DaimlerChrysler Corp.,
New Jersey Plaintiffs argue that the Perkins rule does not apply where the defendant concealed defects or where the defect presents a safety concern. This argument is against the weight of authority. Although the Perkins court “offered no view” regarding a safety concerns exception,
Similarly, the defendant’s knowledge of a defect may be relevant in determining whether that defendant committed an unlawful act, but not whether the plaintiff suffered ascertainable loss. See, e.g., Nobile,
In arguing that Perkins does not apply where a defendant concealed defects or failed to disclose safety concerns, New Jersey Plaintiffs improperly conflate the NJCFA’s ascertainable loss requirement with its unlawful act requirement. The gist of New Jersey Plaintiffs’ argument is that PCNA had a duty to disclose the alleged defect and that its failure to do so is actionable conduct. See ECF No. 77, at 37-38 (citing In re Philips/Magnavox TV Litig., No. 09-3072,
The Court finds that New Jersey Plaintiffs fail to state a claim under the NJCFA. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Twenty of Plaintiffs’ Complaint.
Count Twenty-One: Implied Warranty of Merchantability (New Jersey)
New Jersey Plaintiffs bring a claim for breach of the implied warranty of merchantability under the UCC. PCNA does not offer any arguments regarding New Jersey Plaintiffs’ implied warranty claim in addition to those that it advanced in connection with Plaintiffs’ Magnuson-Moss claim. Specifically, PCNA argues that all implied warranties had expired by the time the alleged defect manifested in New Jersey Plaintiffs’ vehicles. The Court rejected these arguments in Section IV(A)(2)(b) of this Opinion and Order (Count One) and fоund that Plaintiffs had sufficiently alleged facts to suggest that the durational limitation on all implied warranties was unconscionable. See supra Section IV(A)(2)(b) (Count One). The Court therefore finds that New Jersey Plaintiffs state a claim for breach of the implied warranty of merchantability. The Court DENIES PCNA’s motion to dismiss Count Twenty-One of Plaintiffs’ Complaint.
I. NEW YORK
New York Plaintiffs Gregory Cadman, Eeliff Jackman, and Dane McIntosh purchased Cayennes that came equipped with
New York Plaintiffs now bring claims for violations of New York’s General Business Law (“NYGBL”) § 349 and unjust enrichment. PCNA moves to dismiss both claims.
Count Twenty-Two: New York’s General Business Law
Section 349(a) of the NYGBL provides that “[djeceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.” N.Y. Gen. Bus. Law § 349(a). The act provides a private claim for relief to “any person who has been injured by reason of any violation of this section.” N.Y. Gen. Bus. Law § 349(h). The New York Court of Appeals has stated that Section 349 is based on “broad consumer protection concerns” and “contemplates actionable conduct that does not necessarily rise to the level of fraud.” Gaidon v. Guardian Life. Ins. Co. of Am.,
PCNA argues that New York Plaintiffs fail to satisfy the substantive requirements of Section 349 and, alternatively, that Plaintiffs Cadman and McIntosh lack standing to pursue a Section 349 claim. The Court finds that New York Plaintiffs state a claim for relief under Section 349.
A. Substantive Arguments
To state a claim under Section 349, a plaintiff must allege that the challenged act or practice was consumer-oriented, that it was deceptive or misleading in a material way, and that the plaintiff suffered injury as a result of the deceptive act. Oswego Laborers’ Local 211 Pension Fund v. Marine Midland Bank,
Deceptive acts under Section 349 can take the form of misrepresentations or omissions. Id.,
In the case of omissions in particular ... the statute surely does not require businesses to ascertain consumers’ individual needs and guarantee that each consumer has all relevant information specific to its situation. The scenario is quite different, however, where the business alone possesses material information that is relevant to the consumer and fails to provide this information.
Id.,
Notwithstanding this “reasonable consumer” standard, plaintiffs bringing Section 349 claims must demonstrate that
Here, New York Plaintiffs allege that PCNA committed deceptive acts by (1) failing to disclose material information from consumers regarding the defective nature of the Cayenne’s cooling system and (2) affirmatively misrepresenting the quality of the Cayenne. The Court finds that the former allegations are sufficient to state a Section 349 claim but that the latter allegations cannot survive PCNA’s motion to dismiss.
The Court first disposes of New York Plaintiffs’ allegations regarding affirmative misrepresentations. Similar to their co-plaintiffs, New York Plaintiffs do not plead any facts suggesting that they saw, heard, or were aware of PCNA’s alleged misrepresentations at any relevant time. See supra Section III(B). New York Plaintiffs therefore cannot claim that these statements caused their injuries. See, e.g., Szymczak,
The Court reaches the opposite conclusion regarding PCNA’s alleged failure to disclose. New York’s highest court has suggested that a defendant-manufacturer’s failure to disclose material information to consumers is actionable conduct under Section 349. See Oswego,
The Court recognizes that a New York appellate court’s holding in Against Gravity Apparel, Inc. v. Quarterdeck Corp. lends support to PCNA’s position.
First, the Against Gravity court did not cite Oswego and thus did not distinguish the New York Court of Appeals’ language from the facts it confronted. See Against Gravity,
Second, the Against Gravity court did not confront the issue of safety risks. See
The Court next finds that New York Plaintiffs have sufficiently alleged causation. New York Plaintiffs allege that the coolant tube defect was material and that knowledge of the defect would have altered their individual buying decisions. New York Plaintiffs also allege that they were not aware of the alleged defect at the time they purchased . their vehicles and that, due to the design and placement of the coolant tubes, they could not have reasonably discovered the defect before they purchased their vehicles. The Court finds that such allegations are sufficient to support an inference that PCNA’s omission caused New York Plaintiffs to suffer injuries in this case.
B. Standing — Cadman and McIntosh
The Court next confronts PCNA’s argument that New York Plaintiffs Cadman and McIntosh do not have standing to bring a Section 349 claim. PCNA argues that, because Plaintiffs Cadman and McIntosh purchased their vehicles outside of the state (Connecticut and New Jersey, respectively), they fail to satisfy Section 349’s geographic nexus requirement. The Court rejects these arguments and finds that New York Plaintiffs may pursue a claim for relief under Section 349.
Plaintiffs bringing a Section 349 claim must demonstrate that the allegedly deceptive act or practice has a sufficient geographic nexus to the state. N.Y. Gen. Bus. Law § 349(a); Goshen,
New York courts have suggested that Section 349’s geographic nexus requirement may be satisfied in one of three ways. First, a plaintiff has standing under Section 349 if the transaction in which he or she was deceived took place in New York. See, e.g., Oswego,
The Court finds that Plaintiffs Cadman and McIntosh satisfy the geographic nexus requirement under the second scenario. New York Plaintiffs allege that PCNA violated a general duty to disclose informa
The Court finds that New York Plaintiffs state a Section 349 claim premised on deceptive omissions but not on affirmative misrepresentations. Accordingly, the Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Twenty-Two of Plaintiffs’ Complaint.
Count Twenty-Three: Unjust Enrichment (New York)
In New York, as in Georgia аnd Illinois, it is well settled that “[t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter.” Clark-Fitzpatrick, Inc. v. Long Island R.R. Co.,
Similar to their co-plaintiffs, New York Plaintiffs argue that they are entitled to recover a portion of the price that they paid for their vehicles and/or the cost of repairing their vehicles because their vehicles contained a part that was defective in material. New York Plaintiffs’ vehicles are subject to the terms of the 2004 Warranty (Cadman and McIntosh) and the 2005 Warranty (Jackman), which define PCNA’s obligation to reimburse consumers regarding “any factory-installed part that is defective in material or workmanship under normal use.” (ECF No. 62-3, at 7; 62-5, at 6.) The Warranties therefore cover the subject matter of New York Plaintiffs’ unjust enrichment claim. See Wiseberg,
New York Plaintiffs are not arguing that the Warranties do not cover the subject matter of their claim. Instead, New York Plaintiffs cite Waldman v. Englishtown Sportswear, Ltd. for the proposition that “[wjhere the express contract has been rescinded, is unenforceable or abrogated, a recovery may be had on an implied promise to pay for benefits conferred thereunder.”
The Waldman court’s statement is even further removed from the facts of this case because New York Plaintiffs cannot demonstrate that any “recovery may be had on an implied promise to pay for benefits conferred.”
The Court finds that New York Plaintiffs fail to state a claim for unjust enrichment. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Twenty-Three of Plaintiffs’ Complaint.
J. OHIO
Ohio Plaintiffs Lance Bredefeld and Deana Crawford purchased Cayennes that came equipped with plastic coolant tubes. Plaintiff Bredefeld purchased a 2006 vehicle in 2010 from a Suzuki dealership and Plaintiff Crawford purchased a 2004 Cayenne in 2005 from an unidentified seller. The coolant tubes in Ohio Plaintiffs’ vehicles failed (Bredefeld’s in 2010 and Crawford’s in 2011) and rendered the vehicles disabled. Ohio Plaintiffs both paid to repair and install aluminum pipes in their vehicles and now bring claims for breach of implied warranty in tort, violations of Ohio’s Consumer Sales Practices Act, Ohio Rev.Code § 1345.01 et seq., negligence, and violations of Ohio’s Deceptive Trade Practices Act, Ohio Rev.Code § 4165.01 et seq. PCNA moves to dismiss all claims.
Count Twenty-Four: Breach of Implied Warranty in Tort (Ohio)
In Ohio, every manufacturer or distributor impliedly warrants that its products are of good and merchantable quality, fit and safe for the ordinary purposes for which they are intended. See Ohio Rev. Code § 1302.27 (adopting UCC § 2-314 as Ohio law); Lonzrick v. Republic Steel Corp.,
Purchasers that are in privity with the seller may pursue a claim for breach of implied warranty of merchantability under the UCC. See Ohio Rev.Code § 1302.27(A); Curl, 114 Ohio St.3d ¶26 (Ohio 2007).
Instead, Ohio Plaintiffs bring a claim for breach of the implied warranty in tort. This claim for relief is only available to remote purchasers of goods and can be used to recover purely economic loss. Lonzrick,
PCNA argues that Ohio Plaintiffs’ implied warranty in tort claim is time-barred. PCNA acknowledges that implied warranty of merchantability claims are subject to a different statute of limitations than implied warranty in tort claims and that, under current Ohio jurisprudence, Ohio Plaintiffs’ implied warranty in tort claim is not time-barred. PCNA argues that the statute of limitations for implied warranty of merchantability claims has expired and asks this Court to similarly limit the statute of limitations for Ohio Plaintiffs implied warranty in tort claim. PCNA bases its argument on the following analysis.
Implied warranty of merchantability claims are subject to the four-year statute of limitations set forth in the UCC. See Ohio Rev.Code § 1302.98(A)-(B) (adopting UCC § 2-725(1)-(2) as Ohio law); Val Decker Packing Co. v. Corn Prods. Sales Co.,
In contrast, implied warranty in tort claims are subject to a two-year statute of limitations that begins running when “the injury or loss to person or property occurs.” Ohio Rev.Code § 2305.10(A)-(B); U.S. Fid. & Guar. Co. v. Truck & Concrete Equip. Co.,
Where, as here, the alleged defect manifests outside of the UCC’s four-year period, PCNA argues that this system creates a discrepancy because the secondhand purchaser is essentially afforded a longer warranty period than the original purchaser. Although the original purchaser would be barred from bringing an implied warranty claim four years after his or her purchase, the remote purchaser may bring one at any point, so long as he or she brings the action within two years after the defect manifests. PCNA argues that Ohio Plaintiffs should not be permitted to pursue damages that are not available to firsthand purchasers in privity with PCNA.
The Court recognizes the oddity of a remote purchaser having a longer period in which to file suit for a defective product than an original purchaser. But courts in some jurisdictions disallow purchasers from recovering economic loss in tort for precisely this reason — to prevent those purchasers from avoiding the UCC’s provisions and restrictions — while Ohio courts have consistently allowed individual consumers to recover economic loss in tort. Compare Chemtrol,
Finding that Ohio Plaintiffs’ claims are not time-barred, the Court turns to the substance of their implied warranty claim. Plaintiffs bringing implied warranty in tort claims must allege that (1) a defect existed in a defendant’s product that made it unfit for its ordinary, intended use; (2) the defect existed at the time the product left the defendant’s possession; and (3) the defect was the proximate cause of the plaintiffs injuries. White v. DePuy, Inc.,
PCNA argues that no reasonable consumer could conclude that the alleged coolant tube defect rendered Ohio Plaintiffs’ vehicles unfit for their ordinary, intended use when the Cayennes outlived their warranties. PCNA does not cite any Ohio authority in support of its position but instead cites Daugherty v. American Honda Motor Co. and Clemens v. Daimler-Chrysler Carp, for the proposition that reasonable consumers understand that the ordinary useful life of a product is limited by its express warranty. PCNA argues that the Ohio doctrine of implied warranty in tort is similar to California’s Consumer Legal Remedies Act in that both causes of action “assign liability when a defendant withholds information that is ‘likely to mislead a reasonable consumer.’ ” (ECF No. 91, at 85 (citing Wilson,
Assuming arguendo that PCNA’s comparison of Ohio and California law is accurate in this context, PCNA’s argument fails. The Court found in Section IV(B) of this Opinion and Order (Count Two) that California Plaintiffs had sufficiently pleaded facts to suggest that PCNA withheld information regarding safety risks and therefore violated a duty to disclose under Daugherty. See supra Section IV(B) (Count Two); cf. Clemens v. DaimlerChrysler Corp.,
The Court finds that Ohio Plaintiffs state a claim for breach of implied warranty in tort. Accordingly, the Court DENIES PCNA’s motion to dismiss Count Twenty-Four of Plaintiffs’ Complaint.
Count Twenty-Five: Ohio’s Consumer Sales Practices Act
The Ohio Consumer Sales Practices Act (“OCSPA”) provides that “[n]o
Plaintiffs bringing class actions under the OCSPA are subject to the statute’s class action notice requirement. Under the OCSPA, consumers may seek relief in a class action only if the defendant was sufficiently on notice that its conduct was deceptive or unconscionable under the statute at the time it committed the alleged acts. Ohio. Rev.Code § 1345.09(B);
To bring a claim on behalf of a putative class, a plaintiff must identify in his or her complаint the rule or case that satisfies Section 1345.09(B)’s notice requirement. See Johnson v. Microsoft Corp.,
If a plaintiff fails to identify a rule or case in his or her complaint that satisfies Section 1345.09(B), dismissal of the claim as a class action is proper and the plaintiff may proceed in his or her individual capacity alone. See Volbers-Klarich v. Middletown Mgmt., Inc.,
The Court will therefore examine Ohio Plaintiffs’ allegations of prior notice to determine whether they may pursue their claim on behalf of a class. Ohio Plaintiffs allege that two court cases — Lilly v. Hewlett-Packard Co., No. 1:05-CV-465,
Ohio Plaintiffs are therefore left with Mason v. Mercedes Benz, in which the defendant allegedly placed a vehicle in the stream of commerce that was afflicted with a “multitude of different problems” that “required [the plaintiff] to have the car in for repairs twenty times over a two-year period.”
Because Ohio Plaintiffs fail to satisfy Section 1345.09(B), they are precluded from advancing an OCSPA claim on behalf of a class. The Court GRANTS PCNA’s motion to dismiss Ohio Plaintiffs’ OCSPA class action allegations.
The Court next examines the substance of Ohio Plaintiffs’ OCSPA claim to determine whether they, in their individual capacities, have stated claims for relief. Ohio Plaintiffs allege that PCNA violated the OCSPA by breaching the implied warranty in tort, failing to disclose the alleged coolant tube defect to consumers and affirmatively misrepresenting the quality of the Cayenne. The Court finds that Ohio Plaintiffs state an OCSPA claim premised on PCNA’s alleged failure to disclose material facts but fail to state an OCSPA claim based on affirmative representations.
The Court first disposes of Ohio Plaintiffs’ allegations regarding affirmative representations. To bring an OCSPA claim premised on affirmative conduct, a plaintiff must allege that he “saw or was ... aware of the alleged misrepresentations at any time before or during the purchase of the [allegedly defective product].” Lilly,
Ohio Plaintiffs’ remaining allegations are based on PCNA’s alleged failure to disclose material facts to consumers.
The Court finds that Ohio Plaintiffs state a claim in their individual capacities for violations of the OCSPA premised on PCNA’s alleged failure to disclose material facts. The Court therefore DENIES PCNA’s motion to dismiss these allegations. The Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Twenty-Five of Plaintiffs’ Complaint.
Count Tioenty-Six: Negligence (Ohio)
Ohio Plaintiffs assert that PCNA breached its duty to design and manufaeture the Cayenne in such a way as to ensure that it would not leak coolant and require substantial repair costs unreasonably early in its usable life. The Court finds that Ohio Plaintiffs state a claim for negligence.
The parties agree that Ohio courts recognize the economic loss doctrine as it relates to commercial plaintiffs in privity with the defendant — in other words, such plaintiffs cannot recover damages in tort for purely economic loss. See Chemtrol,
In discussing the theories underlying the economic loss doctrine, the Chemtrol court distinguished parties in privity from those not in privity, stating, “[f]or an ordinary consumer, i.e., one not in privity of contract with the seller or manufacturer against whom recovery is sought, an action in negligence may be an appropriate remedy to protect the consumer’s property interests.” Id. at 45-46,
Allowing Ohio Plaintiffs’ negligence claim to proceed would represent the minority view among courts in other jurisdictions. ' See, e.g., supra Sections IV(C)
District courts in Ohio, relying on Chemtrol, have permitted individual consumers to bring negligence claims for purely economic loss against a manufacturer with whom they are not in privity of contract. See In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig.,
In allowing the individual plaintiffs’ negligence claim to proceed, the Whirlpool court rejected the case of Lee v. Chrysler Corp. as “one summary misapplication of Chemtrol [that] cannot override the otherwise consistent holdings of Ohio courts that absent privity, consumer plaintiffs may bring a negligence action for economic losses.” In re Whirlpool,
PCNA’s remaining arguments are equally unpersuasive. PCNA does not offer any authority in which Ohio courts applied the economic loss doctrine to bar an individual purchaser’s tort claim against a remote manufacturer. Instead, PCNA argues that Chemtrol necessitates a “nuanced analysis” in determining whether a remote purchaser may bring a tort claim to recover economic loss. (ECF No. 91, at 99.) PCNA argues that Ohio law extends
As a final argument, PCNA cites Potts v. Safeco Insurance Co. for the proposition that “in the absence of privity of contract between two disputing parties the general rule is there is no ... duty to exercise reasonable care to avoid intangible economic loss or losses to others that do not arise from tangible physical harm to persons and tangible things.” 5th Dist. No. 2009CA0083,
Here, Ohio Plaintiffs suffered property damage in that they purchased a product that damaged itself. Courts in most jurisdictions would preclude Ohio Plaintiffs from recovering this loss in tort; however, Ohio courts permit consumers to advance tort theories seeking recovery of these damages. PCNA fails to meet its burden on this motion to dismiss.
The Court finds that Ohio Plaintiffs state a claim for negligence and DENIES PCNA’s motion to dismiss Count Twenty-Six of Plaintiffs’ Complaint.
Count Twenty-Seven: Deceptive Trade Practices (Ohio)
Ohio Plaintiffs allege that PCNA violated the Ohio Deceptive Trade Practices Act (“ODTPA”) by misrepresenting the quality and characteristics of the Cayenne in such a way as to cause harm to Ohio Plaintiffs. The Court predicts that the Ohio Supreme Court would dismiss Ohio Plaintiffs’ ODT-PA claim for lack of standing.
The ODTPA proscribes certain “deceptive trade practices” such as passing off goods or services as those of another and causing, likelihood of confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services. Ohio Rev.Code. § 4165.02(A)(1) & (2). Section 4165.03 of the ODTPA confers standing on a “person who is likely to be damaged by a person who commits a deceptive trade practice” or a “person who is injured by a person who commits a deceptive trade practice.” Id. § 4165.03(A)(1) & (2).. The ODTPA defines “person” as an “individual, corporation, government ... or any other legal or commercial entity.” Id. § 4165.01(D).
Despite this language, an Ohio court of appeals has held that consumers do not have standing to bring a ODTPA claim. Dawson v. Blockbuster, Inc., 8th Dist. No. 86451,
Similar to the ODTPA, Section 43(a) of the Lanham Act confers standing on “any person who believes that he or she is likely to be damaged” by prohibited conduct under the Act. 15 U.S.C.A. § 1125(a). Despite this language, federal courts have consistently held that individual consumers do not have standing under this section because they are not within the class of persons that the Lanham Act was designed to protect. See, e.g., Colligan v. Activities Club of N.Y., Ltd.,
The Court finds that Dawson mandates dismissal of Ohio Plaintiffs’ ODTPA claim. In so holding, the Court declines Ohio Plaintiffs’ invitation to ignore Dawson and instead follow Bower v. International Business Machines, Inc., in which the court held that individual consumers have standing under the ODTPA.
First, Dawson is well reasoned and therefore is datum for ascertaining state law, not to be disregarded unless this Court is persuaded that the Ohio Supreme Court would decide otherwise. West,
Second, the Bower court did not cite or mention Dawson and referenced only two cases, both from the Northern District of Ohio, for the proposition that consumers do not have standing under the ODTPA. Bower,
Third, the Bower court’s (as well as Ohio Plaintiffs’) reliance on the ODTPA’s plain language ignores the fact that numerous federal courts have interpreted the Lan
Finally, at least one Ohio state court and another district court in Ohio have expressly declined to follow Bower and have followed Dawson instead. See, e.g., Blankenship v. CFMOTO Powersports, Inc.,
The Court predicts that the Ohio Supreme Court would adopt the reasoning of Dawson and conclude that individual consumers lack standing under the ODTPA. The Court finds that Ohio Plaintiffs, as individual consumers, fail to state a claim under the ODTPA. Accordingly, the Court GRANTS PCNA’s motion to dismiss Count Twenty-Seven of Plaintiffs’ Complaint.
K. TEXAS
Texas Plaintiffs Randall Stuewe and Sven Wust purchased Cayennes from unidentified sellers in 2006 (Stuewe) and 2003 (Wust). The coolant tubes in Plaintiff Stuewe’s vehicle failed in 2011, and the tubes in Plaintiff Wust’s vehicle failed in 2010. Both Texas Plaintiffs’ vehicles were allegedly rendered disabled following the coolant tube failure, and both Texas Plaintiffs paid to repair their vehicles. Neither Texas Plaintiff alleges any facts surrounding the purchase of his Cayenne such as the price paid for the vehicle or the identity of the seller.
Texas Plaintiffs now brings claims for breach of implied warranty under the UCC, negligence, violations of Texas’ Deceptive Trade Practices Act, Tex. Bus. & CormCode § 17.41 et seq., and unjust enrichment. PCNA moves to dismiss all claims.
Count Twenty-Eight: Breach of Implied Warranty (Texas)
Texas Plaintiffs, similar to many of their co-plaintiffs, bring a claim for breach of implied warranty under the UCC. PCNA does not offer any arguments specific to Texas Plaintiffs’ claim and adopts only those arguments that it advanced in connection with Plaintiffs’ Magnuson-Moss claim. Specifically, PCNA argues that аny implied warranties had expired by the time the alleged defect manifested in Texas Plaintiffs’ vehicles. The Court rejected these arguments in Section IV(A)(2)(b) of this Opinion and Order (Count One) and found that Plaintiffs had alleged sufficient facts to suggest that the durational limitation was unconscionable. See supra Section IV(A)(2)(b) (Count One). Thus, the Court finds that Texas Plaintiffs state a claim for breach of implied warranty. The Court DENIES PCNA’s motion to dismiss Count Twenty-Eight of Plaintiffs’ Complaint.
Count Twenty-Nine: Negligence (Texas)
Texas Plaintiffs allege that PCNA negligently designed the cooling system in its Cayennes and that Texas Plaintiffs sustained damages as a result. The Court finds that the economic loss doctrine bars Texas Plaintiffs’ claims.
Texas Plaintiffs do not allege that the alleged defect injured anything other than the Cayenne itself. Accordingly, the Court finds that the economic loss doctrine bars Texas Plaintiffs’ negligence claim. The. Court GRANTS PCNA’s motion to dismiss Count Twenty-Nine of Plaintiffs’ Complaint.
Count Thirty: Deceptive Trade Practices (Texas)
Texas Plaintiffs allege that PCNA violated the Texas Deceptive Trade Practices — Consumer Protection Act (“TDTPA”) by misrepresenting the quality of the Cayenne and failing to disclose information about the Cayenne to consumers. The Court finds that Texas Plaintiffs state a claim under the TDTPA.
The TDTPA proscribes “false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.” Tex. Bus. & Com.Code § 17.46(a). Under the TDTPA, a consumer may bring a claim for relief where, inter alia, (1) the consumer relied on a false, misleading, or deceptive act or practice to his or her detriment, (2) the defendant breached an express or implied warranty, or (3) the defendant engaged in any unconscionable action or course of action. Id. § 17.50. Texas Plaintiffs allege that PCNA is liable under each of these three prongs.
' The Court first addresses Texas Plaintiffs’ allegations’ of deceptive acts or practices. TDTPA claims that are predicated on allegations of fraud are subject to the heightened pleading requirements of Rule 9(b). Luna v. Nationwide Prop. & Cas. Ins. Co.,
Texas Plaintiffs base their claim for deceptive practices on PCNA’s failure to disclose the alleged coolant tube defect to consumers. Section 17.46(b)(24) of the TDTPA proscribes “failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.” Id.
Instead, the issue before this Court is whether PCNA’s alleged nondisclosure occurred in connection with the transactions in which Texas Plaintiffs purchased their vehicles. The Texas Supreme Court has held that the TDTPA only reaches conduct that occurs in connection with specific consumer transactions. Amstadt v. U.S. Brass Corp.,
The in-connection-with requirement imposes a limitation on liability that is consistent with the underlying purposes of the [T]DTPA. Without this limitation, we would merely substitute the defendant’s introduction of a particular product into the stream of commerce for the conduct that was found to have violated the [T]DTPA. We find no authority for shifting the focus of a [T]DTPA claim from whether the defendant committed a deceptive act to whether a product that was sold caused an injury.
Id. The court reasoned that the TDTPA was not intended to reach upstream manufacturers and suppliers when their misrepresentations are not communicated to the consumer. Id. at 649. Because the Amstadt defendants were “upstream suppliers” of the parts used in a plumbing system and because their alleged misrepresentations were not communicated to consumers, the court found that the plaintiffs could not satisfy the “in-connection-with” requirement under the TDTPA. Id. at 647, 650-51; see also Church & Dwight Co. v. Huey,
In contrast to the Amstadt plaintiffs, Texas Plaintiffs allege that, at the time PCNA distributed its vehicles, it concealed the defective nature of the Cayenne’s cooling system in violation of Section 17.46(b)(24). Texas Plaintiffs assert that PCNA’s deceptive omission was incorporated into the transactions in which they purchased their vehicles because the defect remained undisclosed and they had no way to discover it. Texas Plaintiffs allege that they relied to their detriment on this nondisclosure in the course of their individual transactions because, had the alleged defect been disclosed, they would not have purchased their vehicles or would have insisted on paying less for them.
The Court declines to dismiss Texas Plaintiffs’ TDTPA claim at this stage of the litigation. Texas Plaintiffs’ claim is dependent on PCNA’s allegedly deceptive conduct — on which Texas Plaintiffs allegedly relied — and not on the injury that the allegedly defective coolant tubes may have caused. Cf. Amstadt,
The Court finds that Texas Plaintiffs may also advance their TDTPA claim on theories of breach of implied warranty and unconscionability. The Court found in Section IV(K) of this Opinion and Order (Count Twenty-Eight) that Texas Plaintiffs had sufficiently alleged facts to support an inference that the durational limitation on all implied warranties was unconscionable and unenforceable, such that the Court cannot assume for purposes of this motion that the implied warranty of merchantability had expired by the time the alleged defect manifested in Texas Plaintiffs’ vehicles. PCNA notes that a plaintiff seeking to advance a claim for unconscionable practices under the TDTPA must establish that the defendant “took advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree,” Tex. Bus. & Com.Code § 17.45(5) (emphasis added), but PCNA fails to persuade the Court that this standard is more narrow than the unconscionability standard that the Fourth Circuit espoused in Carlson. Compare Daugherty v. Jacobs,
The Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Count Thirty of Plaintiffs’ claim.
Count Thirty-One: Unjust Enrichment (Texas)
In Texas, a claim for unjust enrichment is appropriate where “one party has obtained a benefit from another by fraud, duress or the taking of an undue advantage.” Heldenfels Bros., Inc. v. City of Corpus Christy
Texas Plaintiffs’ vehicles are subject to the terms of the Warranties. The Warranties define PCNA’s obligation to reimburse consumers for the cost of repairing and replacing parts that are defective in material. (ECF No. 62-1, at 7; 62-3, at 7; 62-5, at 6; 62-7, at 7.) Allowing Texas Plaintiffs to recover the damages that they seek from PCNA under a theory of unjust enrichment would improperly expand the duration and scope of these Warranties. See, e.g., In re Gen. Motors Corp.,
Instead, Texas Plaintiffs cite Southwestern Electric Power Co. v. Burlington Northern Railroad Co. for the proposition that “in some circumstances, overpayments under a valid contract may give rise to a claim for restitution or unjust enrichment.”
L. WASHINGTON
In 2007, Washington Plaintiff Ghassan Daher purchased a used 2003 Cayenne from a Ferrari dealer in Arizona. The plastic coolant tubes in Washington Plaintiffs vehicle cracked in 2011 and rendered his vehicle disabled. Washington Plaintiff paid to replace the coolant tubes in his vehicle and now seeks injunctive relief and monetary damages under Washington’s Consumer Protection Act (“WCPA”), Wash. Rev.Code § 19.86.010 et seq. PCNA moves to dismiss this claim.
Count Thirty-Two: Washington’s Consumer Protection Act
The WCPA proscribes any “[u]n-fair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Wash. Rev. Code § 19.86.020. To state a claim under the WCPA, a plaintiff must allege (1) a deceptive act or practice, (2) occurring in trade or commerce, (3) a public interest impact, (4) an injury to plaintiff in his or her business or property, and (5) causation. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co.,
To demonstrate unfair or deceptive conduct under the WCPA, a plaintiff must allege that a defendant’s conduct had the capacity to deceive a substantial portion of the public or that it was per se unfair. Id. The Washington Supreme Court has stated that “[k]nowing failure to reveal something of material importance is deceptive within the [W]CPA.” Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc.,
In Zwicker v. Gen. Motors Corp., a Washington district court upheld a WCPA claim based on allegations that are very similar to the allegations in this case. No. C07-0291,
The Court finds that the Zwicker court’s analysis is consistent with the Washington Supreme Court’s statement that “[k]nowing failure to reveal something of material importance is deceptive within the [W]CPA.” See Indoor Billboard, Inc.,
The Court DENIES PCNA’s motion to dismiss Count Thirty-Two of Plaintiffs’ Complaint.
V. Leave to Amend
As a final matter, the Court addresses Plaintiffs’ general request for “leave to amend” in the alternative to their request that this Court deny PCNA’s motion. (ECF No. 77, at 180.) The Court denies Plaintiffs’ request for leave to amend their Complaint.
Courts in this circuit “[do] not look favorably upon bare requests for leavе to amend in a response to a motion
Had plaintiffs filed a motion to amend the complaint prior to th[e] Court’s consideration of the motions to dismiss and accompanied that motion with a memorandum identifying the proposed amendments, the Court would have considered the motions to dismiss in light of the proposed amendments to the complaint .... Absent such a motion, however, Defendant was entitled to a review of the complaint as filed pursuant to Rule 12(b)(6). Plaintiffs were not entitled to an advisory opinion from the Court informing them of the deficiencies of the complaint and then an opportunity to cure those deficiencies.
PR Diamonds, Inc. v. Chandler,
Plaintiffs’ general request for leave to amend their Complaint, in the alternative to their request that this Court deny PCNA’s motion, is nothing more than an attempt to use the Court’s decision as an advisory opinion enabling them to cure any deficiencies in their Complaint. See id. Plaintiffs have failed to follow the proper procedure for submitting a motion to amend their Complaint; thus, this Court “will not accept [Plaintiffs] alternative argument contained in a response to a motion to dismiss as a proper motion to amend.” Techdisposal.com, Inc.,
VI. Conclusion
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART PCNA’s motion to dismiss Plaintiffs’ Complaint pursuant to Rule 12(b)(6). (ECF No. 62.) The Court takes the following action with respect to each count:
Count One — Magnuson-Moss—GRANT as to the nationwide class’ express warranty claim under MagnusonMoss; DENY as to the nationwide class’ implied warranty claim under Magnuson-Moss. California, Florida, New York, Washington, Ohio and Georgia Plaintiffs are excluded from the nationwide class.
Count Two — California’s Consumer Legal Remedies Act — DENY
Count Three — California’s Unfair Business Practices Act — DENY
Count Four — Unjust Enrichment (California) — GRANT
Count Five — Colorado Consumer Protection Act — GRANT IN PART and DENY IN PART
Count Six — Strict Product Liability (Colorado) — GRANT
Count Seven — Implied Warranty of Merchantability (Colorado) — DENY
Count Eight — Florida’s Deceptive and Unfair Trade Practices Act — DENY
Count Nine — Negligence (Florida)— GRANT
Count Ten — Unjust Enrichment (Florida) — GRANT
Count Eleven — Implied Warranty of Merchantability (Georgia) — GRANT
Count Twelve — Georgia’s Uniform Deceptive Trade Practices Act — GRANT
Count Thirteen — Unjust Enrichment (Georgia) — GRANT
Count Fourteen — Illinois Consumer Fraud and Deceptive Practices Act—GRANT IN PART and DENY IN PART
Count Fifteen — Unjust Enrichment (Illinois) — GRANT
Count Sixteen — Strict Product Liability (Michigan) — GRANT
Count Seventeen — Implied Warranty Under the UCC (Michigan) — DENY
Count Eighteen — Michigan Consumer Protection Act — GRANT IN PART and DENY IN PART
Count Nineteen — Negligence (Michigan) — GRANT
Count Twenty — New Jersey’s Consumer Fraud Act — GRANT
Count Twenty-One — Implied Warranty of Merchantability (New Jersey)— DENY
Count Twenty-Two — New York General Business Law — GRANT IN PART and DENY IN PART
Count Twenty-Three — Unjust Enrichment (New York) — GRANT
Count Twenty-Four — Breach of Implied Warranty in Tort (Ohio) — DENY
Count Twenty-Five — Ohio’s Consumer Sales Protection Act — GRANT as to class action allegations; GRANT IN PART and DENY IN PART as to Ohio Plaintiffs’ individual claims
Count Twenty-Six — Negligence (Ohio) — DENY
Count Twenty-Seven — Deceptive Trade Practices (Ohio) — GRANT
Count Twenty-Eight — Breach of Implied Warranty of Merchantability (Texas) — DENY
Count Twenty-Nine — Negligence (Texas) — GRANT
Count Thirty — Deceptive Trade Practices (Texas) — GRANT IN PART and DENY IN PART
Count Thirty-One — Unjust Enrichment (Texas) — GRANT
Count Thirty-Two — Washington Consumer Protection Act — DENY
IT IS SO ORDERED.
Notes
. The circumstances in which each individual plaintiff purchased his/her Cayenne vary. Plaintiffs Graas, Krider, Starkey, Dudley, Gardner, Florez, Hoffecker, Crawford, Stuewe, and Wust plead only that they "purchased” or "owned” a Cayenne at all times relevant. Plaintiffs Delgado and Gorospe purchased their Cayennes from a "used car .dealer”; McIntosh purchased a "previously-owned” Cayenne from an undisclosed seller; Bredefeld and Daher purchased their Cayennes from a Suzuki and Ferrari dealer, respectively; and Spanoletti, Cadman, and Jackman purchased certified pre-owned Cayennes from authorized Porsche dealers. Only Plaintiffs Conrad and Tran purchased their vehicles new. (ECF No. 35 ¶¶ 72-232.)
. PCNA allegedly misrepresented that:
(a) The Cayenne includes “a cooling system perfected in the deserts of Dubai;”
(b) "In the V8 on the Cayenne Turbo and Cayenne S, we’ve used a special coolant management system offering effective control of operating temperatures throughout every part of the engine;”
(c) "The entire cooling system is specifically designed for prolonged heavy-duty operation;”
(d) "Every technical detail has been examined and optimized to ensure that the Cayenne Turbo reaches benchmark levels of SUV performance;”
(e) "The cooling system is extremely robust;”
(f) "The Cayenne Turbo engine is among the most advanced internal combustion engines ever produced by Porsche [and that] this mechanical symphony integrates a list of technical features that is a culmination of everything our engineers have learned about watercooled V8 engines and turbo technology over the past four decades;”
(g) “The Cayenne V8 engine's cooling system helps to maximize performance in every respect [and that] the strategy for achieving these objectives is nothing if not thorough.”
(ECF No. 35 ¶ 62.)
. Section 2-314 of the UCC states (in relevant part): “Unless excluded or modified (Section 2-316), 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.” UCC § 2-314. See Col.Rev.Stat. § 4-2-314 (adopting UCC § 2-314 as Colorado law); Mich. Comp. Laws § 440.2314 (adopting UCC § 2-314 as Michigan law); N.J. Stat. Ann. § 12A:2-314 (adopting UCC § 2-314 as New Jersey law); Tex. Bus. & Com.Code Ann. § 2.314 (adopting UCC § 2-314 as Texas law).
. Each state's plaintiffs asserted independent claims in the context of one omnibus Complaint; Plaintiffs expressly incorporated the preceding paragraphs of the Complaint into each independent claim for relief. (ECF No. 35.) The Complaint also includes a section that sets forth the factual allegations common to all Plaintiffs.
. The Court notes that Carlson is still good law despite the fact that it preceded Twombly and Iqbal. In Alban II, the court questioned Carlson’s persuasive value because the Carlson court stated, in denying the defendant's motion to dismiss, that " ‘unconscionability should but rarely be determined on the bare bones pleadings."’
. The UCC expressly requires that courts not make substantive findings of unconscionability at the motion to dismiss stage. See UCC § 2-302(2) ("When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.”). Parties must, however, allege sufficient facts to invoke this provision. See Carlson,
. Given the court’s finding in Eisen and the plethora of cases on point, Plaintiffs’ reliance on Cabral v. Ralphs Grocery Co.,
. See also Daugherty,
. The Court notes that the Falk court incorrectly found that a manufacturer has a duty under California law to disclose defects that are material and would have altered consumers buying decisions, regardless of whether those defects presented a safety risk. Falk,
. This argument applies to each of Colorado Plaintiff's CCPA allegations. Colorado Plaintiff's argument that PCNA did not challenge certain allegations because it only cited three examples of deceptive practices under the statute is without merit.
. The product at issue in this case is the Cayenne and not the individual coolant tubes. To the extent that Plaintiffs are suggesting otherwise, this suggestion goes against the great weight of authority. See, e.g., Progressive Ins. Co. v. Sacramentо Cnty. Coach Showcase, No. 2:07-CV-10187,
. The court found that the plaintiff had adequately pleaded the elements of a FDUTPA claim but ultimately dismissed the claim without prejudice on statute of limitations grounds. See id. at *3-5. PCNA does not make a statute of limitations argument under the FDUTPA in this case.
. PCNA indicates that district courts in Georgia are split over this issue. Although there exist some post-Chrysler Corp. cases in which courts did not allow a warranty to supplant privity requirements, see Monticello v. Winnebago Indus., Inc.,
. See also Murphy v. Proctor & Gamble Co.,
. In response to PCNA’s argument that New York Plaintiffs failed to allege a connection between themselves and PCNA, New York Plaintiffs cite Cox v. Microsoft Corp.,
. New York Plaintiffs also cite Szymczak v. Nissan Motor Co., Ltd.., in which the court declined to dismiss two New York plaintiffs' unjust enrichment claims at the pleading stage because they brought their claim in the alternative to a breach of warranty claim.
. See also Section IV(A)(2) of this Opinion and Order (Count One) (discussing implied warranty of merchantability claims in the context of the federal Magnuson-Moss Act).
. Section 1345.09(B) provides:
Where the violation was an act or practice declared to be deceptive or unconscionable by rule adopted under division (B)(2) of section 1345.05 of the Revised Code before the consumer transaction on which the action is based, or an act or practice determined by a court of this state to violate section 1345.02, 1345.03, or 1345.031 of the Revised Code and committed after the decision containing the determination has been made available for public inspection under division (A)(3) of section 1345.05 of the Revised Code, the consumer may rescind the transaction or recover, but not in a class action, three times the amount of the consumer's actual economic damages or two hundred dollars, whichever is greater, plus an amount not exceeding five thousand dollars in noneconomic damages or recover damages or other appropriate relief in a class action under Civil Rule 23, as amended.
Ohio Rev.Code § 1345.09(B). See Amato v. Gen. Motors Corp.,
. See also Kline v. Mortgage Elec. Sec. Sys., No. 08-408,
. Ohio Plaintiffs assert that their claim also rests on PCNA's breach of the implied warranty in tort but do not differentiate this allegation from their allegation that PCNA failed
. To support the claim that "in some circumstances, overpayments under a valid contract may give rise to a claim for restitution or unjust enrichment,” the Texas Supreme Court offered the following authority:
See, e.g., Staats v. Miller,150 Tex. 581 ,243 S.W.2d 686 , 687-88 (1951) (allowing restitution for excess money held by defendant after selling plaintiffs’ cotton harvester pursuant to oral contract); Bowers v. Missouri, Kan. & Tex. Ry. Co.,241 S.W. 509 , 510-11 (Tex.Civ.App.-Texarkana 1922, no writ) (allowing restitution for freight charges paid in excess of rates specified in shipping contract); see also Gulf Oil Corp. v. Lone Star Producing Co.,322 F.2d 28 , 31-33 (5th Cir.1963) (holding that plaintiff could recover money mistakenly paid in excess of contract price); Natural Gas Pipeline Co. v. Harrington,246 F.2d 915 , 921 (5th Cir.1957) (holding that gas company was entitled to restitution of difference between contract rate and price paid under invalid rate order set by regulatory board).
Sw. Elec. Power Co.,
. Washington Plaintiff does not appear to incorporate Plaintiffs’ allegations of affirmative misrepresentations into his claim.
. PCNA's argument that the Zwicker court relied on Falk v. General Motors Corp., which the Ninth Circuit has since limited, is irrelevant. The Falk court found that a defendant has a duty to disclose under the CLRA any defects that are ''material.”