Gamboa v. Ford Motor Co.

• Decision Date: 30 November 2020
• Docket Number: CASE NO. 18-10106
• Parties: LEN GAMBOA, et al., Plaintiffs, v. FORD MOTOR COMPANY, ROBERT BOSCH GMBH, ROBERT BOSCH LLC, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

LEN GAMBOA, et al., Plaintiffs, v. FORD MOTOR COMPANY, ROBERT BOSCH GMBH, ROBERT BOSCH LLC, Defendants.

CASE NO. 18-10106

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

November 30, 2020

HONORABLE DENISE PAGE HOOD

ORDER DENYING DEFENDANT'S MOTION TO DISMISS[#153]

I.BACKGROUND

A.Procedural Background

On January 10, 2018, PlaintiffsLen Gamboa, Jeff Retmier, Nikiah Nudell, David Bates, Pete Petersen, and William Sparks, individually, and on behalf of all other similarly situated individuals (collectively, "Plaintiffs" or the "Gamboa Plaintiffs"), commenced this action (the "Gamboa Action") against DefendantsFord Motor Company("Ford"), Robert Bosch GmbH("Bosch GmbH"), and Robert Bosch LLC("Bosch LLC")(collectively, "Defendants").[ECF No. 1]Plaintiffs allege that Defendants unlawfully manufactured and sold defective vehicles that had defective emissions controls in violation of: the Racketeer Influenced and Corrupt Organizations Act("RICO"), 18 U.S.C. § 1962(c), (d)(Count 1); and various state consumer protection statutes(Counts 2-57).[Id.]

On April 6, 2018, PlaintiffsJames Ruston, Vic Sparano, Andreas Alsdorf, Jeffrey Martin, Ken Ryan, Christopher Dieterick, Johnny Tolly, Kohen Marzolf, and Bruce Szepelak, individually, and on behalf of all other similarly situated individuals filed a Complaint (the "Ruston Action")¹ against all Defendants from the Gamboa Action.These plaintiffs are represented by the same attorneys who represented the Gamboa Plaintiffs.The same attorneys who represented Defendants in the Gamboa Action are representing Defendants in the Ruston Action.In the Ruston Action, Plaintiffs allege that in connection with Ford's vehicles, Defendants were in violation of: RICO(Count 1); and various state consumer protection statutes(Counts 2-63).

On April 20, 2018, PlaintiffsGlenn Goodroad, Jr., Richard Castro, Alan Flanders, Edward Hatten, Michael King, William McKnight, Luther "Ed" Palmer, Don Recker, Ivan Tellez, Brian Urban, Christina Bouyea, Value Additives LLC, and Michael Wilson, individually, and on behalf of all other similarly situated individuals filed a Complaint (the "Goodroad Action")² against all Defendants from the Gamboa Action as well as James Hackett("Hackett"), Mark Fields("Fields"),and Volkmar Denner in the United States District Court, Northern District of California.Attorneys Elizabeth J. Cabraser, David Stellings, Gretchen Freeman Cappio, Jason Henry Alperstein, Lynn L. Sarko, and Paul Jeffrey Geller represent the plaintiffs.Ford is represented by Attorneys Jeffrey M. Yeatman, Joel A. Dewey("Dewey"), Stephanie A. Douglas, and Susan M. McKeever.Attorney Dewey represents Hackett and Fields.Attorney Matthew D. Slater represents Bosch GmbH and Bosch LLC in the Goodroad Action.In the Goodroad Action, Plaintiffs allege that in connection with Ford's vehicles, Defendants were in violation of: RICO(Count 1); and fraud by concealment (Count 2).

On June 14, 2018, the plaintiffs and defendants in the Goodroad Action agreed to stipulate to a transfer of the case to the Eastern District of Michigan.When the parties agreed to this stipulation, they both expressed that once their case was transferred, they would work with the plaintiffs from the Gamboa and Ruston Actions to file a consolidated amended complaint in the Eastern District of Michigan.[ECFNo. 39-2] On June 14, 2018, the Honorable Beth Labson Freeman signed a Stipulation and Order to Transfer the Class Action Complaint Pursuant to 28 U.S.C. § 1404(a).On June 15, 2018, the Goodroad case was transferred from the Northern District of California to the Eastern District of Michigan.³

On July 31, 2018, Dina Badagliacco("Badagliacco") individually, and on behalf of all other similarly situated individuals filed a Complaint (the "Badagliacco Action")⁴ against all Defendants from the Gamboa Action.Attorneys Sharon S. Almonrode, Melvin B. Hollowell, and E. Powell Miller represent Badagliacco.The same attorneys who represented Defendants in the Gamboa Action are representing Defendants in the Badagliacco Action.In the Badagliacco Action, Badagliacco alleges that in connection with Ford's vehicles, Defendants were in violation of: RICO(Count 1);New Jersey's Consumer Fraud Act(Count 2); and fraud by concealment under New Jersey common law (Count 3).

On April 9, 2018, Gamboa Plaintiffs filed a Motion for the Appointment of Interim Class Counsel.[ECF No. 27]Defendants filed their Response to that Motion on April 23, 2018.[ECF No. 31] On April 27, 2018, Gamboa Plaintiffs filed their Reply.[ECF No. 33]

On April 9, 2018, both Ford and Bosch LLC filed a Motion to Dismiss Gamboa Plaintiffs' Complaint.[ECF No. 28]; [ECF No. 29] On July 9, 2018, Defendants filed a Motion to Consolidate Cases.[ECF No. 39]

On March 31, 2019, the Court granted Plaintiffs' Motion for the Appointment of Interim Class Counsel, granted Defendants' Motion to Consolidate, and deniedDefendants' Motions to Dismiss.[ECF No. 69] On May 1, 2019, Plaintiffs filed their Amended Complaint ("Complaint").[ECF No. 73]

In August 2019, Plaintiffs moved to authorize service on Bosch GmbH by hand delivery to its U.S. counsel, Cleary Gottlieb, and by email to kontakt@bosch.de.[ECF No. 100] Alternatively, Plaintiffs requested 90 days to attempt service under the Hague Convention.[Id.]On October 25, 2019, Magistrate Judge Elizabeth A. Stafford granted Plaintiffs' Motion Authorizing Service on Bosch GmbH via email and hand delivery through Cleary Gottlieb.[ECF No. 127] On November 8, 2019, Bosch GmbH filed a Motion to Reconsider[ECF No 132] Magistrate Judge Stafford's Order authorizing service on Bosch GmbH.On November 15, 2019, Magistrate Judge Stafford's Order[ECF No. 135]granted in part and denied in partBosch GmbH's Motion for Reconsideration.The November 15, 2019 Order granted Bosch GmbH's request to be served through their U.S. attorney in this matter, Cleary Gottlieb.[ECF No. 135].

On November 27, 2020, Bosch GmbH filed an Objection[ECF No. 146] to Magistrate Judge Stafford's Order issued on November 15, 2019.⁵Plaintiffs filed a Response to Bosch GmbH's Objection on December 18, 2019, [ECF No. 152] andBosch GmbH filed its Reply on January 8, 2020.[ECF No. 156] On November 30, 2020, the Court denied Bosch GmbH's Objection to Magistrate Judge Stafford's November 15, 2019 Order.[ECF No. 214]

Because Bosch GmbH did not join the instant suit until December 2019, it filed the instant Motion to Dismiss on December 18, 2019.[ECF No. 153] On January 22, 2020, Plaintiffs filed their Response,[ECF No. 162] and Bosch GmbH filed its Reply on February 5, 2020.[ECF No. 163]

B.Factual Background

Plaintiffs are suing Ford, Bosch GmbH, and Bosch LLC for allegedly selling vehicles that were not sold to consumers as advertised.[ECF No. 73] According to Plaintiffs, Ford made several claims to consumers regarding its Ford F-250, F-350, and F-450 "Super Duty" vehicles ("Subject Vehicles") that were untrue, including that its: (1) 6.7-liter Power Stroke Diesel is the "Cleanest Super Diesel Ever"; (2) proven technology and innovative strategies were used to meet the latest federal emissions standards; (3) vehicles reduced nitrogen oxide ("NOx") by 80% over previous models; and (4) vehicles were "best-in-class" with respect to fuel economy and that they were the most tested Power Stroke diesel engines ever.[Id. at 2434]Plaintiffs contend that scientifically valid emissions testing revealed that Ford's Super Duty vehicles emit levels of NOx that are many times higher than: (1) its gasoline counterparts; (2) what a reasonable consumer would expect; (3) what Fordhad advertised; (4) the Environmental Protection Agency's ("EPA") maximum standards; and (5) the levels set for the vehicles to obtain a certificate of compliance, which allows them to be sold in the United States.[Id. at 2435-35]Plaintiffs state in their Complaint that exposure to the pollutants from NOx has been linked with "serious respiratory illnesses and premature death due to respiratory-related or cardiovascular-related effects."[Id. at 2438]

Plaintiffs' claims are based on the fact that they believe that "Ford's top selling Super Duty vehicles often emit far more pollution on the road than in the emissions-certification testing environment."[Id. at 2436]Plaintiffs argue that Ford's vehicles employ "defeat devices" to turn down emissions controls when the vehicles sense that they are not in the certification test cycle.[Id.]According to Plaintiffs, Ford benefits by using defeat devices because they allow Ford to reverse the traditional order of the exhaust treatment components and put the selective catalytic reduction in front of the diesel particulate filter.[Id. at 2436]Plaintiffs state that in modern vehicles with electronic engine controls, defeat devices are almost always activated by illegal software in each vehicle's engine control module.[Id.]Plaintiffs contend that these defeat devices give Ford the ability to obtain and market higher power and fuel efficiency from its engines while still passing cold-start emissions certifications tests.[Id.]

Plaintiffs argue that Ford's representations are "deceptive and false" and should cause Ford to be held legally responsible for selling their vehicles while omitting information that would be material to a reasonable consumer.[Id. at 2441] It is Plaintiffs' contention that Ford had a duty to disclose that in real-world driving conditions, Ford's vehicles could "only achieve high fuel economy, power, and durability by reducing emission controls in order to spew NOx into the air."[Id. at 2443]Plaintiffs further contend that Ford was responsible for disclosing to consumers that their vehicles may be "clean" diesels in certain circumstances but are "dirty" diesels under common driving conditions.[Id.]

Plaintiffs bring their present lawsuit forward against the named Defendants because they believe...