Briehl v. General Motors Corp.

• Decision Date: 14 April 1999
• Docket Number: No. 97-3506,97-3506
• Citation: 172 F.3d 623
• Parties: Prod.Liab.Rep. (CCH) P 15,526 Frederick R. BRIEHL; Gary Endres; Stephanie Endres; Stephen L. Hubbard; Sylvia M. Malon; Alex H. Opal; David Roberts; Renee Roberts; Paul D. Hillman; Barbara Green; Bruce Laird; Stephen D. Farrington; Patricia Farrington; Eric D. Icenogle; Stacy L. Larsen; Vickie Holzer; Marcia Wilson; Lawrence E. Wilson; Vernon Young; Elizabeth Young; George Werthwein; Gerald Bradberry; Camille B. Klamecki; Tommie D. Ervin; Sharon N. Naylor; Mary Gill; Juanita Wells; Barry Ross, Plaintiffs/Appellants, v. GENERAL MOTORS CORPORATION; Kelsey-Hayes Company, Defendants/Appellees. Product Liability Advisory Council, Inc., Amicus Curiae.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 623

172 F.3d 623

Prod.Liab.Rep. (CCH) P 15,526

Frederick R. BRIEHL; Gary Endres; Stephanie Endres;

Stephen L. Hubbard; Sylvia M. Malon; Alex H. Opal; David

Roberts; Renee Roberts; Paul D. Hillman; Barbara Green;

Bruce Laird; Stephen D. Farrington; Patricia Farrington;

Eric D. Icenogle; Stacy L. Larsen; Vickie Holzer; Marcia

Wilson; Lawrence E. Wilson; Vernon Young; Elizabeth

Young; George Werthwein; Gerald Bradberry; Camille B.

Klamecki; Tommie D. Ervin; Sharon N. Naylor; Mary Gill;

Juanita Wells; Barry Ross, Plaintiffs/Appellants, v. GENERAL MOTORS CORPORATION; Kelsey-Hayes Company,

Defendants/Appellees.

Product Liability Advisory Council, Inc., Amicus Curiae.

No. 97-3506.

United States Court of Appeals,

Eighth Circuit.

Submitted May 11, 1998.

Decided April 14, 1999.

Melvyn I. Weiss, New York, NY, argued (David O. Danis, St. Louis, MO, John M. Deakle, Hattiesburg, MS, Melvyn I. Weiss, Robert A. Wallner, New York, NY, Jeffrey J. Lowe, St. Louis, MO, John J. Carey, Joseph P. Danis, St. Louis, MO, Joseph W. Phebus, Urbana, IL, Joe Holzer, Houston, TX, J.L. Chestnut, Henry "Hank" Sanders, Selma, AL, Stanley M. Grossman, Brian D. Hufford, New York, NY, D. Michael Campbell, Miami, FL and John Michael Sims, Heidelberg, MS, on the brief), for Plaintiffs/Appellants.

James H. Schink, Chicago, IL and Edward M. Kronk, Detroit, MI, argued (J. Andrew Langan, Robert B. Ellis, Geoffrey J. Moul and David M. Harris, on the brief), for Defendants/Appellees.

Before BEAM and MURPHY, Circuit Judges, and MELLOY, ¹ Chief District Judge.

MELLOY, Chief District Judge.

The Plaintiffs, a purported class of General Motors car, truck, and sport utility vehicle (SUV) owners, brought a class action against General Motors (GM) and Kelsey Hayes (KH). GM manufactures the vehicles and KH manufactures one of the vehicles' component parts, the anti-lock braking systems (ABS). The Plaintiffs advanced six claims in the District Court, five against both GM and KH, and one solely against GM. The Plaintiffs raised claims against both GM and KH for (1) fraudulent misrepresentation, (2) fraudulent concealment, (3) breach of implied warranty, (4) violation of state consumer protection statutes, and on behalf of a subclass, ² (5) breach of implied warranty. The Plaintiffs also raised claims for breach of express warranty and/or breach of contract solely against GM. The District Court ³ granted GM's and KH's motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). In re Gen. Motors Anti-Lock Brake Prod. Liab. Litig., 966 F.Supp. 1525, 1537 (E.D.Mo.1997). Following the dismissal, the Plaintiffs filed a motion to amend the judgment under Rule 59 along with an amended complaint designed to address the deficiencies identified by the District Court. The District Court denied the Rule 59 motion. In re Gen. Motors Anti-Lock Brake Prod. Liab. Litig., 174 F.R.D. 444, 448 (E.D.Mo.1997). Both rulings were appealed. We affirm.

I. BACKGROUND

On October 8, 1996, the Judicial Panel on Multidistrict Litigation (MDL Panel) transferred six actions ⁴ to the Eastern District of Missouri for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407 (1998). ⁵ Several "tag-along" actions followed the initial six. After the MDL Panel transferred the cases to Missouri, the Plaintiffs filed a Consolidated and Amended Class Action Complaint ("Original Complaint") ⁶ which alleged that GM and KH jointly designed a dangerously defective ABS system, knew that the brakes were defective, concealed this information from the public, and promoted the ABS as a highly effective safety device.

The Plaintiffs maintain that the ABS system is defective because it "performs in a manner completely counter-intuitive to how an average driver is conditioned to respond when a hard braking maneuver is attempted." The Plaintiffs assert that when the driver applies pressure on the brakes in an effort to slow or stop the vehicle during an emergency, the brake pedal will "fall rapidly and without warning to the floor of the vehicle." The Plaintiffs have labeled this occurrence "the pedal-to-the-floor" phenomenon.

It is not necessary to disassemble the ABS in order to ascertain the nature of the alleged defect. A reasonable inspection of the driving characteristics of an ABS-equipped vehicle will reveal the tendencies of ABS braking. The Plaintiffs insist that the "pedal-to-the-floor" phenomenon causes the average driver to perceive an actual brake failure and misapply the brakes during emergencies where braking is required. The Plaintiffs do not allege that the ABS is incapable of stopping the vehicles or that ABS has violated any national safety standards. The Plaintiffs claim that the "pedal-to-the-floor" phenomenon constitutes a defect because the performance of the brakes causes drivers to react a certain way, and since GM and KH failed to inform GM vehicle owners of the allegedly unsafe condition, GM and KH have damaged the Plaintiffs.

The Original Complaint explicitly disclaimed any intent to seek recovery for personal injuries or property damage suffered, or which may be suffered, by any class member. The Original Complaint alleged that because the ABS was defective, the Plaintiffs' vehicles experienced decreased resale value and were worth less than the Plaintiffs had paid. Thus, the Plaintiffs claim damages solely for (1) lost resale value and (2) overpayment for the vehicles at the time of purchase.

GM and KH each moved to dismiss the Original Complaint. On June 11, 1997, the District Court dismissed the Original Complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to allege manifestation of a defect and for failure to adequately allege damages. In the Order, the District Court also described additional reasons why each claim was legally deficient.

On June 25, 1997, the Plaintiffs filed a timely motion to amend the judgment and sought leave to file an amended complaint under Fed .R.Civ.P. 59. ⁷ The Plaintiffs argued that the proposed amended Second Complaint ("Second Complaint") adequately addressed the deficiencies of the Original Complaint. GM and KH objected to the Plaintiffs' motion and argued that the Plaintiffs failed to show that the judgment should be altered. GM and KH also argued that the Second Complaint was futile because it still contained the fundamental flaws of the Original Complaint. The District Court agreed with GM and KH, and on August 1, 1997, the District Court denied the motion to amend.

The District Court stated that since the Plaintiffs failed to show manifest errors of law or fact and failed to present newly discovered evidence, the Rule 59 motion was without merit. Nonetheless, the District Court examined the substantive changes in the Second Complaint. The District Court found that the Plaintiffs' Rule 59 motion was moot because the Second Complaint failed to cure the deficiencies of the Original Complaint. Finally, the District Court noted that the Plaintiffs failed to proffer any good reason for delaying their request to amend the pleadings until after the dismissal. The Plaintiffs have appealed the District Court's Order on all points to this Court.

II. ANALYSIS

The Court of Appeals reviews de novo the District Court's dismissal of an action for failure to state a claim under Rule 12(b)(6). Four T's, Inc. v. Little Rock Mun. Airport Comm'n, 108 F.3d 909, 912 (8th Cir.1997). Allegations should be construed in favor of the pleader. County of St. Charles, Mo. v. Mo. Family Health Council, 107 F.3d 682, 684 (8th Cir.1997). A court may dismiss a complaint for failure to state a claim only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations of the complaint. Hishon v. King & Spalding, 467 U.S. 69, 71, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). At the very least, however, the complaint must contain facts which state a claim as a matter of law and must not be conclusory. Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir.1995).

A. Failure to Plead Damages

The District Court dismissed the Plaintiffs' Original Complaint because the Plaintiffs did not adequately plead damages. Since the Plaintiffs failed to allege that any defect had actually manifested itself in their vehicles, the Plaintiffs' allegations of damages failed to meet the pleading requirements for defective products. The District Court concluded that the Plaintiffs' statement that their vehicles "suffer from defects" constituted an insufficient allegation of damages. The Court held that the defect must manifest itself in the Plaintiffs' vehicles before the Plaintiffs could recover from GM or KH.

Courts have been particularly vigilant in requiring allegations of injury or damages in products liability cases. Lee v. General Motors Corp., 950 F.Supp. 170, 171-74 (S.D.Miss.1996) (dismissing plaintiffs claims of inherently defective detachable fiberglass roofs for failure to plead sufficient damages); Yost v. General Motors Corp., 651 F.Supp. 656, 657-58 (D.N.J.1986) (holding that complaint alleging design defect "likely to cause" damage failed to state a claim); Feinstein v. Firestone Tire & Rubber Co., 535 F.Supp. 595, 603 (S.D.N.Y.1982) (holding no cause of action for defect which never manifests itself); Pfizer v. Farsian, 682 So.2d 405, 407 (Ala.1996) (holding that a plaintiff's belief that a product could fail in the future is not, without more, a legal injury sufficient to support plaintiff's claim); Khan v. Shiley Inc., 217 Cal.App.3d 848, 857, 266 Cal.Rptr. 106 (1990) (holding plaintiff with inherently defective heart valve failed to state a claim unless the valve malfunctioned); Zamora v. Shell Oil Co., 55 Cal.App.4th 204, 208, 63 Cal.Rptr.2d 762 (1997) (holding that, in the absence of a product malfunction, a plaintiff cannot establish that a defendant breached any duty owed); Verb v. Motorola, Inc., 284 Ill.App.3d 460, 220 Ill.Dec. 275, 672 N.E.2d 1287, 1295 (1996) (d...