In re Chevrolet Bolt EV Battery Litig.

• Decision Date: 30 September 2022
• Docket Number: 2:20-CV-13256-TGB-CI
• Parties: IN RE CHEVROLET BOLT EV BATTERY LITIGATION[1]
• Court: U.S. District Court — Eastern District of Michigan

IN RE CHEVROLET BOLT EV BATTERY LITIGATION^[1]

No. 2:20-CV-13256-TGB-CI

United States District Court, E.D. Michigan, Southern Division

September 30, 2022

ORDER RESOLVING DEFENDANTS' MULTIPLE PRETRIAL MOTIONS

(1) TO STRIKE CLASS ALLEGATIONS;

(2) TO COMPEL ARBITRATION; AND

(3) TO DISMISS MULTIPLE CLAIMS

TERRENCE G. BERG UNITED STATES DISTRICT JUDGE

This case is a putative class action alleging a defect in the battery system of model-year 2017-2022 Chevrolet Bolt electric vehicles. Allegedly, a problem may arise if a battery has two particular manufacturing defects at the same time and is charged to or near to its full capacity. That condition is believed to cause a “thermal runaway” event-an uncontrolled feedback loop of increasing temperatures that may cause the battery to burst into flames. Fires have occurred in a small number of affected vehicles.

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In order to mitigate the risk of fire in Bolts it had already sold, General Motors issued several software updates that prevented the Bolts from being fully charged and notices to customers directing them to manually limit their charging. GM also advised customers to park outdoors and away from other vehicles after charging, not charge overnight, and avoid depleting the battery below a certain level of charge. Plaintiffs, all of whom bought or leased a Bolt, have sued Defendant GM and several companies affiliated with LG, the Korean conglomerate involved in producing components for the Bolt's battery system. Plaintiffs seek to represent a nationwide class and have sued under several theories, including fraud, breach of warranties (both express and implied), unjust enrichment, and under various states' consumer protection laws. Defendants General Motors, LG Energy Solution Michigan (“LG Michigan”), and LG Electronics United States (“LGEUS”) have moved to dismiss the Complaint, strike certain class allegations, and compel certain Plaintiffs' claims to arbitration.^[2]

To preview the Court's conclusions, Plaintiffs' affirmative fraud claims will be dismissed; Plaintiffs fraudulent concealment claims will not be dismissed for failure to state a claim in general, but most fraudulent concealment claims will be dismissed under specific states'

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laws for several different reasons; most of Plaintiffs' consumer protection claims will proceed; most of Plaintiffs' warranty claims will proceed; and Plaintiffs' unjust enrichment claims will be dismissed.^[3] As for the other motions, the Court will not strike Plaintiffs' nationwide class allegations, and several Plaintiffs' claims will be compelled to arbitration.

TABLE OF CONTENTS

I. BACKGROUND 6

A. Relevant Parties 6

B. GM develops the Bolt with the LG Entities' assistance .................. 7

C. The Battery's design 10

D. GM allegedly markets the Bolt's range .......................................... 11

E. Problems emerge with the battery ................................................. 11

i. 2016-2018: the “low-voltage condition” causes a loss of propulsion power in some Bolts 11

F. Early 2019: the fire-risk defect emerges ........................................ 12

G. GM's response to the risk-of-fire defect .......................................... 13

i. The initial recall of 2017-2019 Bolts: software updates .............. 13

ii. The second software update ......................................................... 14

H. GM expands the recall to all model years ...................................... 15

I. Currently pending motions ............................................................. 16

J. Chart summarizing counts ............................................................. 16

II. MOTIONS TO STRIKE CLASS ALLEGATIONS ............................ 20

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A. Whether Defendants have shown that Plaintiffs' proposed nationwide class claims would be fundamentally unworkable ........... 21

B. Whether Plaintiffs' standing to represent certain absent class members is more appropriately considered at the class certification stage ...................................................................................................... 27

III. MOTION TO COMPEL CERTAIN PLAINTIFFS TO ARBITRATION ....................................................................................... 30

IV. MOTIONS TO DISMISS ................................................................... 38

A. Standard of Review ......................................................................... 38

B. Whether Plaintiffs have standing to bring claims against LG Michigan ............................................................................................... 39

C. Whether Plaintiffs' fraud-based claims must be dismissed ........... 44

i. Whether Plaintiffs have sufficiently alleged that Defendants knew about the fire-risk defect .......................................................... 44

ii. Whether Plaintiffs have stated fraud claims .............................. 53

iii. Whether Plaintiffs have alleged a duty to disclose for purposes of their fraudulent concealment claims ................................................ 61

iv. Whether Plaintiffs' fraudulent concealment claims are barred by the “economic loss doctrine” .............................................................. 69

v. Whether certain Plaintiffs may bring claims under both the laws of the states where they live and the laws of the states where they purchased or leased their vehicles .................................................... 72

vi. Whether certain Plaintiffs have sufficiently alleged that a defect “manifested” in their vehicles ............................................................ 73

vii. Summary of fraudulent concealment claims ............................ 74

D. Whether Plaintiffs have sufficiently alleged consumer protection claims under the laws of certain states ............................................... 75

i. Whether certain states' consumer protection statutes cover vehicle sales ....................................................................................... 75

ii. Whether Plaintiffs have sufficiently alleged causation and reliance as required by all states' consumer protection statutes ..... 79

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iii. Whether Plaintiffs may seek equitable relief .............................. 80

iv. Whether Plaintiffs have standing to seek injunctive relief under certain states' consumer protection statutes .................................... 82

v. Whether certain states' products liability statutes allow class actions ................................................................................................ 84

vi. Whether claims under the consumer protection laws of Virginia and Texas may be maintained against an upstream manufacturer 85

vii. Summary of consumer protection claims .................................. 85

E. Whether Plaintiffs can maintain state-law warranty claims ........ 86

i. Whether defendants created a representation-based express warranty ............................................................................................. 86

ii. Whether Plaintiffs' warranty claims must be dismissed for failure to allege their vehicles' mileage ............................................. 87

iii. Whether the claims of Plaintiffs who did not bring their vehicles in for repair must be dismissed ......................................................... 88

iv. Whether Plaintiffs have adequately alleged that the Limited Warranty failed its essential purpose ............................................... 91

v. Whether Plaintiffs have adequately alleged pre-suit notice as required by certain states' laws ......................................................... 92

vi. Whether certain Plaintiffs may bring breach of warranty claims under the laws of the states where they live and where they purchased their vehicles .................................................................... 95

vii. Whether Plaintiffs have sufficiently alleged that their vehicles were unmerchantable at the time of sale .......................................... 96

viii. Whether Plaintiffs' implied warranty claims must be dismissed for failure to plead their vehicles' mileage ........................................ 98

ix. Whether Plaintiffs' warranty claims must be dismissed for failure to allege privity with GM ....................................................... 98

x. Summary of warranty claims .................................................... 102

F. Whether Plaintiffs' Magnuson-Moss Warranty Act (“MMWA”) claims must be dismissed ................................................................... 103

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G. Whether Plaintiffs may maintain unjust enrichment claims ...... 104

H. Whether Plaintiffs' claims are prudentially moot ........................ 105

V. CONCLUSION ................................................................................. 107

I. BACKGROUND

A. Relevant Parties

The thirty-six Plaintiffs in this matter purchased or leased their vehicles (or lived) in Arizona, California, Florida, Georgia, Illinois, Kansas, Massachusetts, Michigan, New York, Oregon, Texas, Virginia, Washington, or Wisconsin. All Plaintiffs purchased or leased model-year (“MY”) 2017-2022 Chevrolet Bolt electric vehicles.^[4]

Plaintiffs sue General Motors LLC (“GM”), the...