Butler Auto Recycling, Inc. v. Honda Motor Co. (In re Takata Airbag Prods. Liab. Litig.)
| Decision Date | 09 March 2021 |
| Docket Number | MDL No. 2599,Master File No. 15-02599-MD-MORENO,Economic Loss No. 14-24009-CV-MORENO |
| Citation | 524 F.Supp.3d 1266 |
| Parties | IN RE: TAKATA AIRBAG PRODUCTS LIABILITY LITIGATION Butler Auto Recycling, Inc., et al., individually and on behalf of all others similarly situated, Plaintiffs, v. Honda Motor Co., Ltd., et al., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
This multidistrict litigation consolidates allegations of economic loss and personal injury related to airbags manufactured by former-defendants Takata Corporation and TK Holdings (collectively, "Takata") and equipped in vehicles distributed by Defendant vehicle manufacturers.2 The allegations are that Defendants’ vehicles were equipped with Takata airbags containing the chemical ammonium nitrate, which creates a small explosion to inflate the airbags during a crash. Plaintiffs, who are automotive part recycler companies that purchased vehicles manufactured by the Automotive Defendants that were equipped with Takata airbags containing the propellant ammonium nitrate, contend that when exposed to high heat and humidity, the explosion is much more forceful and can cause significant injuries and even death.
THIS CAUSE comes before the Court upon the Automotive Defendants’ Motion to Dismiss Automotive Recycler Plaintiffs’ First Amended Complaint (D.E. 2976) ,3 as well as the supplemental Motions to Dismiss filed by Mercedes-Benz (D.E. 2984) , Volkswagen (D.E. 2985) , and FCA US LLC (D.E. 2987) . New GM separately moves to dismiss for lack of personal jurisdiction all non-Florida Plaintiffs in footnote 5 of its Motion to Dismiss the consolidated consumer complaint (D.E. 2981) . Ford also separately moved to dismiss the Sinclair complaint (D.E. 2887) , but that motion was denied as moot in light of the settlement of consumer claims. Ford later requested that the Court defer resolution of Ford's motion to dismiss as to the Recyclers until the completion of briefing and argument on any motions to dismiss filed by the other Automotive Defendants, and the Court agreed to do so. Ford's Motion to Dismiss argues that the non-Florida Plaintiffs’ claims should be dismissed for lack of personal jurisdiction. Together, the Motions seek to dismiss all claims asserted by the Automotive Recycler Plaintiffs in two separate complaints: Sinclair, et al. v. Ford Motor Company ("Sinclair ") (D.E. 2670) and Butler Auto Recycling, Inc., et al. v. Honda Motor Co., Ltd., et al. ("Butler ") (D.E. 2781) .4
THE COURT has thoroughly reviewed the Butler and Sinclair Complaints, the Automotive Defendants’ Motions to Dismiss, the Plaintiffs’ Responses in Opposition, the Defendants’ Replies, and both parties’ supplemental briefing pursuant to the Court's requests. The Court also heard oral argument from the parties on certain issues raised in the moving papers. For the reasons discussed below, the Court GRANTS IN PART AND DENIES IN PART the Automotive Defendants’ Motions to Dismiss.
The Plaintiffs are automotive part recycler companies that purchased vehicles manufactured by the Automotive Defendants that were equipped with Takata airbags containing the propellant ammonium nitrate. Like the Consumer Plaintiffs, the Recycler Plaintiffs allege ammonium nitrate is an innately volatile and unstable propellant that imposes an unreasonable risk of serious foreseeable harm or death upon drivers of the Automotive Defendants’ vehicles. The crux of the Recycler Plaintiffs’ legal claims is that the Automotive Defendants knew or should have known of these defects prior to installing the Takata airbags in their vehicles, and that the Automotive Defendants concealed from, or failed to notify, the Recycler Plaintiffs and the general public of the full and complete nature of the defect, despite being aware of problems arising during the design and testing process, and through various rupture incidents and recalls. As a result, the Recycler Plaintiffs allege they overpaid for vehicles manufactured by the Automotive Defendants, and they are now unable to sell both the airbags and the vehicles in light of the defects.
The Recyclers filed their First Amended Consolidated Class complaint against Automotive Defendants in 2018 (the Butler complaint) (D.E. 2781) . The Butler Complaint, which largely mirrors the Sinclair Complaint, levels the following 27 claims against the remaining Automotive Defendants: violations of the RICO Act (Counts 1–20); violations of the Lanham Act (Count 21); common-law fraudulent concealment and fraudulent misrepresentation (Count 22); and violations of the consumer protection statutes in Florida, Georgia, North Carolina, Tennessee, and Texas (Counts 23–27).
The Sinclair Complaint asserts the following 9 claims against Ford: violations of the Racketeer Influenced and Corrupt Organizations ("RICO") Act (Counts 1–2); violations of consumer protection statutes in Florida, Georgia, North Carolina, Tennessee, and Texas (Counts 35–39); violations of the Lanham Act (Count 40); and common-law fraudulent concealment and fraudulent misrepresentation (Count 41).
While those complaints and concomitant motions to dismiss were pending, this Court entered several orders pertaining to the Consumer Track complaints against FCA, the Mercedes defendants, the VW defendants, the Audi defendants, and New GM. Those orders dismissed all RICO claims against those defendants, dismissed some state law statutory fraud claims, sustained most common law fraud claims, and dismissed all direct file actions for lack of personal jurisdiction over the above Defendants in the Southern District of Florida. The Court also entirely dismissed Audi AG, Daimler AG, and Volkswagen AG due to a lack of personal jurisdiction in the Southern District of Florida.
The Court will now begin by addressing the personal jurisdiction challenges, and then proceed to addressing the substantive claims.
The personal jurisdiction issues here are complicated. Both transferor and directly-filed plaintiffs are at issue, as are post-transfer amended complaints which add both new claims and new defendants. There are also potential waivers of personal jurisdiction defenses. It is useful to begin with a brief history of the litigation.
In 2015 and 2016, various Automotive Recyclers filed complaints in district courts around the country including N.D. Fla., W.D. Va., W.D. Mo., M.D. Ga., W.D. Tex., E.D. Tenn., and S.D. Fla. The Defendants, at that time, included Honda, BMW, Mazda, Nissan, Subaru, Toyota, and Ford entities ("Legacy Defendants"). Those complaints were then transferred to this Court via the Joint Panel on Multidistrict Litigation.5
On March 14, 2018, however, Plaintiffs filed new complaints on the MDL docket—the Puhalla , Boyd , and Whitaker complaints—as well as new complaints on behalf of six of the seven transferor Plaintiffs. The March 14, 2018 "new complaints" or "amendments" (the parties dispute the terminology) added the "New Defendants"—i.e., FCA, New GM, Mercedes (both domestic and foreign entities), and Volkswagen (both domestic and foreign entities). They also added Racketeer Influenced and Corrupt Organization Act claims, which, if adequately pleaded, would give nationwide jurisdiction.
Then, on April 26, 2018, the Court ordered the Recycler Plaintiffs to "combin[e] all claims brought by all automotive recycler plaintiffs against all defendants except Ford Motor Company," and amend the Direct-File Complaints to exclude claims brought by Recycler Plaintiffs. (D.E. 2651.) In accordance with the Court's instructions, the Recycler Plaintiffs filed the Automotive Recyclers’ First Amended Consolidated Class Action Complaint on the MDL docket on May 18, 2018. That day, the Plaintiffs also filed a complaint on behalf of Automotive Recycler Young's Auto Center and Salvage.6 There is no question that Young's complaint was directly filed in the MDL, and thus the Defendants must be subject to personal jurisdiction in the state of Florida, as this Court has previously ruled. In Re Takata Prod. Liab. Litig. , 396 F. Supp. 3d 1101, 1168-69 (S.D. Fla. 2019).
Now, Defendants argue that all Defendants who were added after the complaints were transferred to the Southern District of Florida, i.e. the New Defendants, are also "direct-file" Defendants because they were added once the complaints had already been transferred to the MDL Court. Defendants correctly point out that the Court has previously ruled direct-file defendants must be subject to personal jurisdiction in this District, and they argue the Court must dismiss those New Defendants because they are directly filed and are not subject to personal jurisdiction here. Plaintiffs respond that the New Defendants should be assessed according to the jurisdictional reach of the transferor courts, which is they argue is standard MDL practice.
Thus, the Court must decide how it will categorize these "New Defendants." There are two options. First, as added by amendment to the transferor complaints, and thus personal jurisdiction is evaluated under the rules of the transferor court. Or second, as defendants added by new complaints that were directly filed in the MDL, and thus personal jurisdiction is evaluated under the rules of this Court. This Court's prior orders are instructive here.
In a May 2019 Order on the Consumer track7 , the Court held that the "directly-filed" complaint was the legally operative one, but also held that, within the directly-filed consolidated complaint, the Transferor Plaintiffs and the Direct-File Plaintiffs retain their separate legal identities . Accordingly, the Court held that it was appropriate to sever the actions when pre-trial proceedings end and transfer the transferor actions back to the Court from which they came. In Re Takata Prod. Liab. Litig. , 379 F. Supp. 3d. 1333, 1343 (S.D. Fla. 2019). Clearly,...
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