O'Connor v. Ford Motor Co.

• Decision Date: 07 August 2020
• Docket Number: Case No. 19-cv-5045
• Citation: 477 F.Supp.3d 705
• Parties: Justin O'CONNOR, on behalf of himself and all other similarly situated, Plaintiff, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

477 F.Supp.3d 705

Justin O'CONNOR, on behalf of himself and all other similarly situated, Plaintiff,

v.FORD MOTOR COMPANY, Defendant.

Case No. 19-cv-5045

United States District Court, N.D. Illinois, Eastern Division.

Signed August 7, 2020

Edward A. Wallace, Umar Sattar, Wexler Wallace LLP, Chicago, IL, John R. Fabry, Pro Hac Vice, The Carlson Law Firm, Round Rock, TX, Lisa Anne White, Ryan Patrick McMillan, Pro Hac Vice, Gregory F. Coleman, Rachel Lynn Soffin, Greg Coleman Law PC, Knoxville, TN, for Plaintiff.

Bradley Edward Puklin, Swanson, Martin & Bell, LLP, Mason William Kienzle, Mark Howard Boyle, Donohue Brown Mathewson & Smyth LLC, Chicago, IL, Cindy Caranella Kelly, Pro Hac Vice, Hector Torres, Pro Hac Vice, Kasowitz Benson Torres LLP, New York, NY, Constantine Z. Pamphilis, Pro Hac Vice, Kasowitz Benson Torres LLP, Houston, TX, Mary Terese Novacheck, Pro Hac Vice, Bowman and Brooke LLP, Minneapolis, MN, for Defendant.

MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

Plaintiff Justin O'Connor ("Plaintiff") brings this putative class action complaint against Defendant Ford Motor Company ("Defendant" or "Ford") for damages allegedly arising out of Defendant's sale and lease of 2017 to 2019 Model Year Ford F-150 trucks with defective 10R80 10-speed automatic transmissions. Currently before the Court is Defendant's motion to dismiss the governing first amended complaint [23].¹ For the following reasons, Defendant's motion to dismiss [23] is granted. The dismissal is without prejudice to filing a second amended complaint by September 8, 2020. With that said, as the analysis that follows indicates, the Court is skeptical that Plaintiff's warranty and negligence claims are salvageable, but less dubious about the possibility that Plaintiff's ICFA and unjust enrichment claims can be successfully replead. In an abundance of caution, however, the Court will not place any limits on Plaintiff's opportunity to take one more shot at stating his claims. If Plaintiff files a second amended complaint, Defendant will be given until October 6, 2020 to file a responsive pleading. If Plaintiff does not intend to file a second amended complaint, he should file a statement to that effect and the Court will set the matter for a telephonic status hearing.

I. Background

The following facts are taken from Plaintiff's governing first amended complaint [7]. All well-pled allegations in the complaint are assumed to be true for purposes of Defendant's motion to dismiss. See Calderon-Ramirez v. McCament , 877 F.3d 272, 275 (7th Cir. 2017). In July 2018, Plaintiff leased a 2018 Ford F-150 XLT 3.5 EcoBoost with 10R80 10-speed transmission from Fox Valley Ford (now called Gerald Ford) in North Aurora, Illinois. The vehicle was designed, manufactured, sold, distributed, advertised, marketed, and/or warranted by Defendant Ford. Plaintiff proposes to bring this lawsuit on behalf of a class ("Class") of similarly situated individuals composed of persons in Illinois who formerly owned or currently own or lease a 2017 to 2019 Model Year Ford F-150 truck with a 10R80 10-speed automatic transmission ("Vehicles").

This lawsuit concerns alleged defects in the Vehicles’ 10R80 10-speed automatic transmission ("Transmission"). Plaintiff explains that an automatic transmission is essentially an automatic gear shifter. Instead of manually shifting the gears with a clutch, the automatic transmission does it on its own. The transmission acts as a powertrain to convert the vehicle engine's force into a controlled source of power. Accordingly, drivers need a properly functioning automatic transmission in order to safely and reliably accelerate and decelerate their Vehicles. Plaintiff alleges that Defendant knew or should have known that the Vehicles contained a design and/or manufacturing defect ("Transmission Defect") that can cause the Transmissions to shift harshly, slip gears, hesitate, or surge. Plaintiff alleges that, because of the Defect, the Vehicles are likely to suffer serious damages and potentially catch fire if accidents occur, causing an unreasonable and extreme risk of serious bodily harm or death to the Vehicles’ occupants and others in the vicinity. Yet, according to Plaintiff, Defendant failed to disclose the defect to Plaintiff or the proposed class members at the time they purchased or leased their Vehicles or any time after. Plaintiff alleges that had he or the other proposed class members known about the defective Transmissions at the time of sale or lease, they would not have purchased their Vehicles or would have paid less for them. Plaintiff allegedly "paid and continues to pay a premium for a defective vehicle which poses a safety hazard to himself, his family, and others." [7] at 9.

Plaintiff alleges that since the 10R80 Transmission was introduced, "drivers have repeatedly complained about difficulty shifting and vehicle lunging and/or jerking to Ford." [7] at 9; see also id. at 7-16 (providing numerous examples of complaints submitted to the National Highway Transportation Safety Administration's ("NHTSA") website). As a result of these complaints, Defendant allegedly knew or should have known by 2018 through sufficient product testing or other methods that the Vehicles contained the Transmission Defect. Upon information and belief, Defendant issued multiple Technical Service Bulletins ("TSBs") addressing the shifting problems. The TSBs stated that 2017 and 2018 F-150 vehicles "may exhibit harsh/bumpy upshift, downshift and/or engagement concerns" and suggested reprogramming the powertrain control module ("PCM"). [7] at 10, ¶ 45. The TSBs further stated that the Class Vehicles were "equipped with an adaptive transmission shift strategy which allows the vehicle's computer to learn the transmission's unique parameters and improve shift quality." Id. They advised that "[w]hen the adaptive strategy is reset, the computer will begin a re-learning process," which "may result in firmer than normal upshifts and downshifts for several days." Id. However, Plaintiff alleges on information and belief, Defendant's "adaptive transmission shift strategy" fails to remedy the shifting problems reported in Class Vehicles. Id. at 10, ¶ 46. Despite knowing this, Defendant allegedly took no further steps to remedy the issue, leaving Plaintiff and the other Class Members with knowingly defective Class Vehicles. Defendant has not recalled the Class Vehicles to repair the Transmission Defect and has not offered to reimburse Class Vehicle owners and lessees who incurred costs relating to the transmission problems.

Plaintiff alleges that the Transmissions are covered by express and/or implied warranties. In particular, Defendant offers a "New Vehicle Limited Warranty" for three years or 36,000 miles, whichever occurs first. [7] at 6. Defendant also offers extended warranty coverage for Powertrain components for five years or 60,000 miles, whichever occurs first. This extended warranty coverage includes the transmission and all internal parts, clutch cover, seals and gaskets, torque converter, transfer case (including all internal parts), transmission case, and transmission mounts. Nonetheless, Plaintiff alleges on information and belief, "Ford refuses to replace or repair the Transmissions and merely states that the abrupt and harsh shifting is normal." Id. at 2, ¶ 7; see also id. at 7, ¶ 31.

Based on these allegations, Plaintiff brings a federal claim for violation of the Magnuson-Moss Warranty Act and Illinois state law claims for breach of express warranty, breach of implied warranty, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), negligence, and unjust enrichment. Plaintiff requests that the Court certify the action as a class and seeks actual, punitive, and statutory damages, injunctive relief, attorneys’ fees, costs, and pre- and post-judgment interest.

More specifically, in his first claim, for breach of express warranty, Plaintiff alleges that Ford expressly warranted in writing that the vehicles were covered by certain warranties in Ford's "New Vehicle Limited Warranty." [7] at 22. The warranty states that "authorized Ford Motor Company dealers will, without charge, repair, replace, or adjust all parts on your vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in the factory-supplied materials or factory workmanship." Id. Plaintiff alleges that "Ford breached its express warranties to repair defects in materials and workmanship of any part supplied by Ford" and that "Ford has not repaired, and has been unwilling to reasonably repair, the Transmission Defect." Id. Plaintiff further claims that "the express warranties to repair defective parts fail in their essential purpose because the contractual remedy is insufficient to make Plaintiff and Class Members whole and because Ford has failed and/or has refused to adequately provide the promised remedies within a reasonable time." Id. Accordingly, Plaintiff submits, recovery by Plaintiff and the Class is not limited to the express warranties of repair to parts defective in materials or workmanship.

In his second claim, for breach of implied warranty, Plaintiff alleges that Defendant had actual knowledge of and received timely notice regarding the Transmission Defect, yet failed and refused to offer an effective remedy even after receiving numerous consumer complaints. Plaintiff asserts that this constitutes a breach of the implied warranty of merchantability and caused economic damage to Plaintiff and the Class, including "loss attributable to the diminished value of their Class Vehicles, loss of use of their Class Vehicles and other tangible property, as well as the monies spent and to be spent to repair and/or replace their Transmissions." [7] at 25, ¶ 99.

Plaintiff's third claim is for violation of the Magnuson-Moss Warranty Act, a federal statute "designed to protect...