Exum v. Nat'l Tire & Battery

• Decision Date: 28 January 2020
• Docket Number: Case No. 9:19-cv-80121-Matthewman
• Citation: 437 F.Supp.3d 1141
• Parties: Bruce EXUM, Jr., and Emilie Palmer, individually and on behalf of all others similarly situated, Plaintiffs, v. NATIONAL TIRE AND BATTERY, and TBC Corp., Defendants.
• Court: U.S. District Court — Southern District of Florida

437 F.Supp.3d 1141

Bruce EXUM, Jr., and Emilie Palmer, individually and on behalf of all others similarly situated, Plaintiffs,

v.NATIONAL TIRE AND BATTERY, and TBC Corp., Defendants.

Case No. 9:19-cv-80121-Matthewman

United States District Court, S.D. Florida.

Signed January 28, 2020

Brendan Thompson, Pro Hac Vice, Yifei Li, Cuneo Gilbert & LaDuca LLP, Washington, DC, Christopher C. Kessler, Pro Hac Vice, The Kessler Law Firm, PLLC, Greenville, NC, Robert K. Shelquist, Pro Hac Vice, Eric N. Linsk, Lockridge Grindal Nauen PLLP, Minneapolis, MN, J. Olin McDougall, II, Pro Hac Vice, McDougall Law Firm LLC, Beaufort, SC, Jordan Lucas Chaikin, Chaikin Law Firm PLLC, Naples, FL, for Plaintiffs.

Alexandre S Drummond, Seyfarth Shaw LLP, Atlanta, GA, Daniel M. Blouin, Pro Hac Vice, Seyfarth Shaw, LLP, Chicago, IL, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS [DE 30]

WILLIAM MATTHEWMAN, United States Magistrate Judge

THIS CAUSE is before the Court on Defendants National Tire and Battery ("NTB") and TBC Corporation's ("TBC") Motion to Dismiss Plaintiffs' Complaint. [DE 30]. The motion is fully briefed. See DEs 30-1, 36, 38. The Court held a hearing on the motion on November 14, 2019. [DE 82]. Thus, this matter is now ripe for review. For the reasons that follow, the Court grants in part and denies in part the motion. Counts III and VII of Plaintiffs' Complaint are dismissed without prejudice. The remainder of the motion is denied.

I. Introduction

This case revolves around a federal regulation, 49 C.F.R. § 574.8 (the "Regulation"), enacted by the National Highway Traffic Safety Administration ("NHTSA"). Under this Regulation, independent tire dealers are required to register with the manufacturer new tires they sell to consumers in one of three ways. See 49 C.F.R. § 574.8(a)(1)(i)-(iii) (2019).

The Regulation does not provide for a private right of action to enforce it. Moreover, the statute that authorizes the promulgation of the Regulation, the National Traffic and Motor Vehicle Safety Act, 49 U.S.C. § 30101, et seq. (the "Safety Act" or "Act"), likewise does not provide for a private right of action. See Ayres v. Gen. Motors Corp. , 234 F.3d 514, 522 (11th Cir. 2000).

Nonetheless, undeterred by the lack of a private right of action to enforce the Regulation, Plaintiffs allege that they purchased tires in Virginia from Defendant NTB and that NTB—and its parent company, Defendant TBC—failed to comply with the Regulation's tire registration requirements, thereby depriving Plaintiffs of the benefit of their bargains, subjecting them to a materially increased risk of harm, and unjustly enriching Defendants. Because of Defendants' alleged noncompliance with the Regulation, Plaintiffs seek relief in this putative class action under various legal theories. In essence, Plaintiffs claim that even though the Regulation does not provide for a private right of action, it does establish a duty on independent tire dealers to comply with the Regulation's tire registration requirements. Because Defendants allegedly violated this duty, Plaintiffs assert claims for breach of the implied warranty of merchantability under Virginia state law (Count I); violation of the Magnuson-Moss Warranty Act (Count II); violation of the Florida Deceptive and Unfair Trade Practices Act (Count III); unjust enrichment (Count IV); common law negligence (Count V); negligence per se (Count VI); and injunctive relief (Count VII).

Defendants seek to dismiss this putative class action with prejudice on four primary bases. First, Defendants assert that Plaintiffs cannot establish Article III standing because they have failed to adequately allege that they suffered an injury in fact resulting from Defendants' alleged noncompliance with the Regulation. Second, Defendants argue that neither Congress nor any agency created a private right of action to enforce the Regulation and accordingly it creates no duty on the part of independent tire dealers that Plaintiffs can enforce. Third, Defendants assert that the Complaint contains mere conclusory allegations that Defendants have not complied with the Regulation. And fourth, Defendants assert that each separate cause of action is deficient.

The threshold issue for the Court to resolve is whether Plaintiffs have standing under Article III to even bring this suit at all. Resolution of this issue requires the Court to analyze this lawsuit under the Supreme Court's opinion in Spokeo v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016), the Eleventh Circuit's opinions in Nicklaw v. Citimortgage, Inc. , 839 F.3d 998 (11th Cir. 2016), and Ayres , 234 F.3d at 522, and other applicable law. Complicating the resolution of the standing issue is the fact that one of the primary Eleventh Circuit opinions that Plaintiffs rely on, Muransky v. Godiva Chocolatier, Inc. , 922 F.3d 1175 (11th Cir. 2019) —which found Article III standing in a case brought under the Fair and Accurate Credit Transactions Act—was recently vacated and is currently pending en banc review by the Eleventh Circuit. Further complicating resolution of the Article III standing issue is the dearth of case law specifically addressing the Regulation at issue. The parties' research, and this Court's own independent research, found only one case, Thorne v. Pep Boys–Manny, Moe & Jack Inc. , 397 F. Supp. 3d 657 (E.D. Penn. 2019), which addresses Article III standing in relation to the Regulation. In Thorne , the court dismissed the plaintiff's complaint without prejudice, finding that, under the allegations of the complaint filed in that case, Article III standing was lacking. Id. at 667. Clearly, the Article III standing inquiry in this case raises difficult and complex issues.

The Court must also determine whether the lack of a private cause of action in both the Safety Act and the Regulation necessarily precludes Plaintiffs' claims. And then finally, the Court must address whether Plaintiffs' Complaint is adequately pleaded both as a pleading matter under the Iqbal-Twombly pleading standard and as a matter of law as to the legal sufficiency of each of the asserted claims.

As set forth more fully below, after very carefully reviewing the applicable case law and the facts alleged in the Complaint, the Court finds that (1) Plaintiffs have standing under Article III to bring this suit; (2) the lack of a private right of action in the Safety Act and the Regulation does not necessarily preclude Plaintiffs' claims; (3) Plaintiffs have alleged sufficient facts to support their claims; and (4) Plaintiffs have adequately pleaded Counts I, II, IV, V, and VI. Counts III and VII, however, must be dismissed.

With this preface in mind, the Court now turns to specifically address Defendants' motion to dismiss.

II. Background

In 1966, Congress passed the Safety Act "to prescribe motor vehicle safety standards for motor vehicles and motor vehicle equipment in interstate commerce[.]" 49 U.S.C. § 30101(1). Under the Act, the Secretary of Transportation and, through the Secretary, the NHSTA, are authorized to promulgate the regulations necessary to carry out and enforce the Act. See 49 U.S.C. §§ 105(d), 322(a) ; 49 C.F.R. §§ 1.81(a)(3), 1.95(a) (2019).

The Regulation at issue in this case, 49 C.F.R. § 574.8, requires independent tire dealers to register with the manufacturer new tires sold to consumers by (1) physically giving the purchaser a paper copy of the tire registration form; or (2) electronically transmitting the registration form to the purchaser within 30 days of the date of sale; or (3) providing the manufacturer with the paper tire registration form and the purchaser's contact information. See 49 C.F.R. § 574.8(a)(1)(i)-(iii).

The Safety Act provides "its own extensive array of administrative remedies for a violation of its notification obligations." Ayres , 234 F.3d at 522. For example, the Secretary may determine that a motor vehicle or a piece of a motor vehicle (such as a tire) is defective and either order the manufacturer to notify the owners of the defect or "take specified action." 49 U.S.C. §§ 30118(b), (e). Either the Secretary or "any interested person" may request a hearing to determine whether a "manufacturer has reasonably met the notification requirements under this section." Id. at § 30118(e). Finally, the Attorney General is authorized to bring civil actions against dealers that violate the Safety Act's notification requirements with violations punishable by fines of up to $1,000 per violation and up to $800,000 for a series of related violations. 49 U.S.C. §§ 30163(a), 30165(a).

Defendant NTB is an independent tire dealer incorporated in Delaware with its principal place of business in Florida. NTB is a wholly-owned subsidiary of Defendant TBC. [DE 1 ¶¶ 12-14]. TBC is an independent tire dealer incorporated in Delaware with its principal place of business in Florida. [DE 1 ¶ 15]. NTB allegedly "maintains and operates more than 1200 locations in 41 states," the District of Columbia, and Canada. Id.

Plaintiffs Bruce Exum, Jr., and Emilie Palmer, both of Virginia, allegedly purchased tires from NTB in January 2019. [DE 1 ¶¶ 42, 43]. But, according to the Complaint, NTB failed to provide either of them with a tire registration form or transmit their registration forms to the tire manufacturers, as required under 49 C.F.R. § 574.8. Id.

Shortly thereafter, on January 29, 2019, Plaintiffs filed their Complaint against Defendants, asserting seven causes of action, all related to Defendants' alleged failure to comply with 49 C.F.R. § 574.8's tire registration requirement. [DE 1]. Plaintiffs also seek certification of a class of similarly situated plaintiffs who all purchased allegedly unregistered tires from Defendants. See DE 49. Defendants have moved to dismiss the Complaint with prejudice.

III. Analysis and Discussion

A. Legal Standard

Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain " ‘only a...