Amin v. Mercedes-Benz United States, LLC

• Court: U.S. District Court — Northern District of Georgia
• Writing for the Court: Amy Totenberg, United States District Judge
• Citation: Amin v. Mercedes-Benz United States, LLC, 301 F.Supp.3d 1277 (N.D. Ga. 2018)
• Decision Date: 13 March 2018
• Docket Number: CIVIL ACTION NO. 1:17–CV–1701–AT
• Parties: Sunil AMIN and Trushar Patel on behalf of themselves and all others similarly situated, Plaintiffs, v. MERCEDES–BENZ USA, LLC, and Daimler AG, Defendants.

301 F.Supp.3d 1277

Sunil AMIN and Trushar Patel on behalf of themselves and all others similarly situated, Plaintiffs,

v.MERCEDES–BENZ USA, LLC, and Daimler AG, Defendants.

CIVIL ACTION NO. 1:17–CV–1701–AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed March 13, 2018

Abbye R. Klamann, Annika K. Martin, Jonathan D. Selbin, Lieff, Cabraser, Heiman & Bernstein, LLP, New York, NY, John T. Spragens, Lieff Cabraser Heimann & Bernstein, Nashville, TN, Ketan A. Patel, Corpus Law Patel, LLC, Tyrone, GA, for Plaintiffs.

Adam Reinke, Madison Hunter Kitchens, Stephen B. Devereaux, King & Spalding LLP, Atlanta, GA, for Defendants.

ORDER

Amy Totenberg, United States District Judge

This putative class action concerns an alleged design defect in the heating, ventilation, and air conditioning systems ("HVAC Systems") in several vehicles manufactured and sold by Defendants Mercedes–Benz USA, LLC ("Mercedes") and Daimler AG ("Class Vehicles").¹ The matter is before the Court on Defendant Mercedes' Motion to Dismiss Plaintiffs' Complaint [Doc. 17]. For the following reasons, the Court GRANTS in part and DENIES in part Mercedes' Motion.²

I. BACKGROUND³

Plaintiff Amin bought a Class Vehicle in November, 2012. (Compl., Doc. 1 ¶ 14.) He "first experienced a noxious odor caused by the HVAC System in approximately January of 2014." (Id. ¶ 18.) Plaintiff Patel bought a Class Vehicle in January, 2015. (Id. ¶ 23.) He "first experienced a noxious, pungent, sour, musty odor caused by the HVAC System in approximately March or April 2015." (Id. ¶ 28.)

Plaintiffs allege that "because of the HVAC System Defect, the HVAC Systems in the Class Vehicles are predisposed to produce a moldy odor under normal use conditions that would not cause non-defective HVAC systems to produce a moldy odor ...." (Id. ¶ 61.) More specifically, Plaintiffs allege that the design of the HVAC System is such that moisture does not evaporate properly from the system via the evaporator. (Id. ¶ 64.) Because the moisture does not evaporate, "[t]he residual moisture provides a haven for the growth of mold and mildew as spores enter the system through outside vents." (Id. ) Plaintiffs allege that several mold species are present in the vehicle because of the defect. (Id. ¶ 65.) These species are "known to secrete mycotoxins ...." (Id. )

According to Plaintiffs, the defect in the HVAC Systems of the Class Vehicles is one of design, such that even with regular treatment, the mold and accompanying odor will continue to reappear. (Id. ¶¶ 77–79, 82–83.) The near-certain reoccurrence of the condensation, mold, and foul odor requires that Plaintiffs and other putative class members undergo periodic, "costly maintenance" to temporarily ameliorate the effects of the defect. (See , e.g. , id. ¶¶ 17, 27, 118, 119e.)

Plaintiffs allege that Mercedes knew about the defect before selling the Class Vehicles. (Id. ¶¶ 72–102.) They offer several different reasons that Mercedes knew or should have known about the defect, including (1) a consumer arbitration panel decision in 2008 regarding the same alleged defect; (2) Mercedes' own technical bulletins discussing the defect as early as 2007; (3) Mercedes' own system repair data from the owners of Class Vehicles; (4) a correspondingly large number of replacement parts ordered to address the problem; (5) complaints made directly to Mercedes from putative class members; (6) complaints about the defect collected by NHTSA's Office of Defect Investigations; and (7) public complaints made by consumers in online forums. (Id. ) Plaintiffs further allege that Mercedes "knowingly manufactured and sold the Class Vehicles with the HVAC System Defect, while willfully concealing the true inferior quality and sub-standard performance of the Class Vehicles' HVAC Systems." (Id. ¶ 107.) Mercedes knew of the defect in the Class Vehicles and failed to notify putative class members and other potential purchasers before they made a purchase. (Id. ¶ 110.)

In particular, Mercedes advertised the HVAC Systems in the Class Vehicles as having HVAC Systems that clean air in the cabin (i.e., filtering " ‘dust and pollen as small as 0.0002’ from the air") and providing "individualized comfort in any season." (Id. ¶ 112.) Mercedes also stated in advertising that Certified Pre–Owned (CPO) vehicles have received a rigorous inspection which extends to the HVAC Systems. (Id. ¶ 114.) Mercedes further advertised that before a CPO vehicle is sold, " ‘[a]ny deficiencies’ " to its HVAC System are " ‘repaired, replaced or reconditioned.’ "

Plaintiffs allege that Mercedes "actively concealed" the defect in a number of ways. (Id. ¶ 119.) Mercedes "forced Class Members to bear the cost of temporary measures to address the moldy smells," but also reduced the price for vocal complainants. (Id. ¶ 119e.) When consumers brought their Class Vehicles in for service due to the defect, Mercedes treated the car with "temporary measures ... while leaving the HVAC Systems as they were." (Id. ¶ 119f.) In this way, the HVAC Systems were "never permanently corrected" and thus, Mercedes did "not prevent the recurrence" of the formation of mold. (Id. ¶¶ 119f-g.) Rather than disclose the defect when confronted by complaints of the smell, Mercedes blamed the putative class members for the smells. (Id. ¶ 122C.)

Plaintiffs "previously filed a class action complaint in the Central District of California on May 9, 2016" in which they made substantially similar allegations. (Id. ¶ 128.) See Manan Bhatt, et al. v. Mercedes–Benz USA, LLC , No. 2:16–cv–03171–TJH–RAO (C.D Cal.). Plaintiffs were dismissed without prejudice for misjoinder on March 9, 2017. Id. They filed their Complaint in this action in May 2017. (See Compl.) Plaintiffs assert the following claims in the Complaint: (1) breach of express warranty; (2) breach of express warranty under the Magnuson–Moss Act; (3) breach of implied warranty; (4) breach of implied warranty under the Magnuson–Moss Act; (5) violations of the Georgia Fair Business Practices Act, O.C.G.A. § 10–1–390, et seq. ; (6) violations of Georgia's Uniform Deceptive Trade Practices Act, O.C.G.A. § 10–1–370, et seq. ; (7) breach of implied warranty of merchatability, O.C.G.A. § 11–2–314 ; (8) fraud by concealment; and (9) unjust enrichment. (Compl., Doc. 1 ¶¶ 141–254.) Thereafter, Mercedes moved to dismiss all claims. (Motion to Dismiss, Doc. 17.)

II. LEGAL STANDARD

A complaint should be dismissed under Rule 12(b)(6) only where it appears that the facts alleged fail to state a "plausible" claim for relief. Bell Atlantic v. Twombly , 550 U.S. 544, 555–556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Fed. R. Civ. P. 12(b)(6). The plaintiff need only give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. See Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (citing Bell Atlantic v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); Fed. R. Civ. P. 8(a). In ruling on a motion to dismiss, the court must accept the facts alleged in the complaint as true and construe them in the light most favorable to the plaintiff. See Hill v. White , 321 F.3d 1334, 1335 (11th Cir. 2003).

A claim is plausible where the plaintiff alleges factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A plaintiff is not required to provide "detailed factual allegations" to survive dismissal, but the "obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The plausibility standard requires that a plaintiff allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence" that supports the plaintiff's claim. Id. at 556, 127 S.Ct. 1955. A complaint may survive a motion to dismiss for failure to state a claim even if it is "improbable" that a plaintiff would be able to prove those facts and even if the possibility of recovery is extremely "remote and unlikely." Id.

III. DISCUSSION

a. Plaintiffs' Standing as to Absent Class Members

Mercedes challenges Plaintiffs' standing to represent absent class members as to models of the Class Vehicles they did not purchase. (Doc. 17–1 at 5–6.) "[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Prado–Steiman ex rel. Prado v. Bush , 221 F.3d 1266, 1279 (11th Cir. 2000) (quoting Gen. Tel. Co. of Sw. v. Falcon , 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982) ). "Thus, it is well-settled that ... the district court must determine that at least one named class representative has Article III standing to raise each class subclaim." Prado–Steiman , 221 F.3d at 1279.

As pointed out by some of Mercedes' cited authority, there is disagreement among federal courts about when courts should analyze the standing of named plaintiffs as to the claims of absent class members. See , e.g. , Toback v. GNC Holdings, Inc. , No. 13-80526-CIV, 2013 WL 5206103, at *4–5 (S.D. Fla. Sept. 13, 2013) (collecting cases). Compare Pearson v. Target Corp. , No. 11 CV 7972, 2012 WL 7761986, at *1 (N.D. Ill. Nov. 9, 2012) (addressing standing of named plaintiffs as to claims of absent class members at the motion to dismiss stage); with McCabe v. Daimler AG , 948 F.Supp.2d 1347, 1374 (N.D. Ga. 2013) (Batten, J.) (denying defendant's pre-certification motion to strike class allegations because motion was "premature").

See also , e.g. , 1 William B. Rubenstein, Newberg on Class Actions § 2:6 (5th ed. 2017) (discussing "competing approaches" among federal courts in dealing with pre-certification challenges to standing of named plaintiffs).

However, this Court declines to prematurely address...