Harris v. Gen. Motors LLC

• Decision Date: 02 September 2020
• Docket Number: C20-257 TSZ
• Court: U.S. District Court — Western District of Washington
• Parties: KELLY HARRIS, individually and on behalf of all others similarly situated, Plaintiff, v. GENERAL MOTORS LLC, a Delaware limited liability company, Defendant.

KELLY HARRIS, individually and on behalf of all others similarly situated, Plaintiff, v. GENERAL MOTORS LLC, a Delaware limited liability company, Defendant.

C20-257 TSZ

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

September 2, 2020

ORDER

THIS MATTER comes before the Court on Defendant General Motors' ("GM") Motion to Dismiss Class Action Complaint and to Strike Class Allegations, docket no. 12. Having reviewed all papers filed in support of and in opposition to the motion, the Court enters the following order.

Background

Plaintiff Kelly Harris owned a used 2012 Chevrolet Silverado, which he received in 2012 from his former employer as part of a separation agreement. Complaint, docket no. 1 at ¶ 25. Harris' vehicle was equipped with a Generation IV 5.3 liter V8 Vortec 5300 LC9 engine (the "defective engine"). Id. Harris' vehicle soon began to experience engine problems like fouled spark plugs which caused engine misfiring, and as a result, in 2014, Harris' vehicle needed a spark plug replacement. Id. at ¶¶ 27-28. In 2015, Harris became aware that oil consumption issues were the cause of the spark plug problems with his vehicle. Id. at ¶ 28. On an unspecified date, Harris took his vehicle into a Chevrolet dealership to fix the issues with his vehicle's spark plug. Id. at ¶ 29. Harris was informed that the vehicle was low on oil, had fouled spark plugs, and that the cause of the fouled spark plugs was excessive oil consumption due to an issue with the piston rings. Id. The dealership also told Harris that he would need to have his engine replaced. Id.

Harris alleges that the primary cause of the alleged excessive oil consumption (the "Oil Consumption Defect") is that the piston rings in the defective engines do not maintain sufficient tension to prevent oil from being consumed in the combustion chamber, which then fouls spark plugs and creates harmful carbon buildup in the pistons and cylinders. Id. at ¶¶ 7, 41. Harris further alleges that GM has been aware of the Oil Consumption Defect but failed to publicly disclose it. Id. at ¶¶ 75-81. In support of this allegation, Harris cites GM's subsequent redesign of the defective engine (id. at ¶ 75), public consumer complaints regarding oil consumption problems in the defective engines (id. at ¶ 76), Old¹ GM's knowledge (id. at ¶ 77), and technical service bulletins addressing the oil consumption problem (id. at ¶¶ 79-80).

Harris alleges that the Oil Consumption Defect presents an unreasonable safety risk "to the driver, other passengers of the Class Vehicles, and the public" because theDefect could cause the engine to catch fire and because it could cause an accident or leave drivers and passengers stranded in a variety of unsafe situations. Id. at ¶¶ 70-74. Harris alleges that he "would not have purchased" his vehicle or "would have paid less" for it had the alleged oil consumption defect been disclosed. Id. at ¶ 180.

On behalf of a nationwide class,² Harris brings claims for violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. ("Count 1"). Id. at ¶¶ 153-167. On behalf of a Washington class,³ Harris brings claims for violations of the Washington Consumer Protection Act ("CPA"), RCW § 19.86.010, et seq. ("Count 2"), breach of express warranty, RCW § 62A.2-313 and 62A.2A-210 ("Count 3"), fraudulent omission ("Count 4"), and unjust enrichment ("Count 5"). Id. at ¶¶ 168-210. Harris seeks injunctive relief, as well as costs, restitution, pre and post-judgment interest, and damages, including punitive damages. Id. at 67 (Request for Relief).⁴

Discussion

I. Legal Standards

Although a complaint challenged by a Rule 12(b)(6) motion to dismiss need not provide detailed factual allegations, it must offer "more than labels and conclusions" andcontain more than a "formulaic recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint must indicate more than mere speculation of a right to relief. Id. When a complaint fails to adequately state a claim, such deficiency should be "exposed at the point of minimum expenditure of time and money by the parties and the court." Id. at 558. A complaint may be lacking for one of two reasons: (i) absence of a cognizable legal theory, or (ii) insufficient facts under a cognizable legal claim. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). In ruling on a motion to dismiss, the Court must assume the truth of the plaintiff's allegations and draw all reasonable inferences in the plaintiff's favor. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). The question for the Court is whether the facts in the complaint sufficiently state a "plausible" ground for relief. Twombly, 550 U.S. at 570. If the Court considers matters outside the complaint, it must convert the motion into one for summary judgment. Fed. R. Civ. P. 12(d). If the Court dismisses the complaint or portions thereof, it must consider whether to grant leave to amend. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000).

Claims sounding in fraud, including fraudulent omission and statutory consumer protection claims, must also meet Rule 9(b)'s heightened pleading standard. The circumstances constituting fraud must be pleaded with particularity, but state of mind, e.g., malice, intent, knowledge, may be alleged in general terms. Fed. R. Civ. P. 9(b).

II. Express Warranty Claim (Count 3)

Harris pleads a design defect inherent in the defective engines. See Complaint, docket no. 1 at ¶ 75 (alleging that "design flaws caus[e] excessive oil consumption in theClass Vehicles."); ¶ 163 (alleging that the Generation IV Vortec 5300 Engines "are designed so as to prematurely consume an abnormally large amount of oil"); ¶ 164 (alleging GM's failure to "disclose the defective design"). Harris alleges that GM breached its express warranty that it would cover repairs to correct any vehicle defect "related to materials or workmanship during the warranty period." Id. at ¶ 184.

Courts interpreting language in similar warranties find that it only covers manufacturing warranties. See Sloan v. Gen. Motors LLC, 2017 WL 3283998, at *8 & n.5 (N.D. Cal. Aug. 1, 2017) (citing cases from courts in the 3rd, 6th, 7th, 8th and 9th Circuits analyzing similar warranty language and concluding that "the overwhelming weight of state law authority holds that design defects are not covered under [GM's Limited Warranty]"). The Court concludes that GM's limited warranty does not cover the alleged design defect.

Harris also does not allege that his issues with the defective engine occurred during the limited warranty period. Complaint, docket no. 1 at ¶ 29. Harris fails to respond to this deficiency in his Opposition, and therefore appears to have waived it. Robinson v. WMC Mortg. Corp., 649 Fed. Appx. 636, 638 (9th Cir. 2016) (waiver of argument by failing to raise it in response to motion to dismiss). Harris' express warranty claim is therefore DISMISSED with prejudice.⁵

III. Magnuson-Moss Warranty Act ("MMWA") Claim (Count 1)

Harris bases his MMWA claim on the same theory as his express warranty claim. Compl., docket no. 1 at ¶¶ 153-67. Because Harris does not plead a viable express warranty claim, his MMWA claim also fails. Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) ("[C]laims under the Magnuson-Moss Act stand or fall with . . . express and implied warranty claims under state law."). Harris' Magnuson-Moss Warranty Act claim is therefore DISMISSED with prejudice.

IV. Fraudulent Omission Claim (Count 4) and Washington Product Liability Act ("WPLA") Preemption

GM contends that Harris' fraudulent concealment claim is preempted by the WPLA, RCW 7.72 et seq. In response, Harris contends that his fraudulent concealment claim is not preempted by the WPLA because it is based on a fraud theory and because he alleges economic damages based on contract. See Complaint, docket no. 1 at ¶¶ 200-02 (alleging that Harris and class members "overpaid" for the Class Vehicles and "would have paid less for the Class Vehicles" if they had known about the Oil Consumption Defect).

The WPLA provides the "exclusive" cause of action for a broad scope of "product-related harms" and "supplants previously existing common law remedies." Macias v. Saberhagen Holdings, Inc., 175 Wn.2d 402, 409 (2012); Wash. Water Power Co. v. Graybar Elec. Co., 112 Wn.2d 847, 854, 860 (1989). The WPLA includes claims related to "concealment" but excludes claims based on fraud or those seeking economic damages. RCW § 7.72.010(4), (6).

Harris' fraudulent concealment claim attempts to force a square peg into a round hole. While Harris characterizes GM's concealment of the Oil Consumption Defect as fraud, the heart of Harris' claims arises out of tort,⁶ not contract. Harris' claims relate to exposure to a dangerous product condition that poses an unreasonable risk of harm.⁷ Touchet Valley Grain Growers, Inc. v. Opp & Seibold Gen. Constr., Inc., 119 Wn.2d 334, 354 (1992). See, e.g., Complaint, docket no. 1 at ¶ 14 (alleging that the defect puts occupants "at risk" and may strand vehicles in "hazardous" and "dangerous" conditions and locations); ¶ 64 (alleging that warnings regarding defect "would do nothing to prevent the full scope of the harms caused by the Oil consumption defect" including "hazardous engine misfire and engine shutdown events"); ¶ 70 (alleging that defect may "present dangerous safety hazards to the driver, other passengers of the Class Vehicles, and the public"); ¶ 71 (alleging that the defect will cause engines to overheat, potentially catch fire, and "[s]omeone could be burned"); ¶ 74 (alleging that low oil conditions caused by defect present an unreasonable safety risk).

Harris' claim is essentially that GM knew about the Oil Consumption Defect, concealed that information from Harris and other putative class members, and that they suffered damages as a result.⁸ WPLA provides the exclusive...