In re FCA US LLC Monostable Elec. Gearshift Litig.
Citation | 355 F.Supp.3d 582 |
Decision Date | 28 November 2018 |
Docket Number | Case Number 16-md-02744,MDL No. 2744 |
Parties | IN RE: FCA US LLC MONOSTABLE ELECTRONIC GEARSHIFT LITIGATION |
Court | U.S. District Court — Eastern District of Michigan |
Defendant FCA US LLC has filed a fourth motion to dismiss under Federal Rule of Civil Procedure 12(b). This one is aimed at the second amended consolidated master class action complaint (SACMC) in this multidistrict litigation proceeding, and it is based on Rule 12(b)(6). The parties agreed to submit this motion on the papers a waive oral argument. The parties are familiar with the facts and proceedings to date in this multidistrict litigation matter involving certain alleged defects in the transmissions of approximately 850,000 vehicles manufactured by FCA. They are summarized in the Court's earlier opinion adjudicating FCA's last motion to dismiss the first amended consolidated master class action complaint (FACMC). See In re FCA US LLC Monostable Elec. Gearshift Litig. , 280 F.Supp.3d 975, 982-90 (E.D. Mich. 2017).
On November 15, 2017, the Court issued its opinion rejecting the defendant's principal challenges to the FACMC and dismissing several claims based on other minor defects. On December 8, 2017, the plaintiffs filed their SACMC omitting the claims and plaintiffs that had been dismissed and consolidating parties and claims from individual actions that had been transferred into the MDL after the FACMC was filed and while the defendant's previous motion was pending.
The SACMC contains 120 counts brought on behalf of 43 plaintiffs from 26 states:
After the SACMC was filed, Pennsylvania plaintiff Timothy Weber was dismissed from the case based on his notice of voluntary dismissal. Weber's dismissal does not affect the resolution of this motion since FCA does not challenge any counts raised by the Pennsylvania plaintiffs, and Weber was not the only plaintiff from that state.
Oklahoma plaintiff Carol Clark also filed a notice of voluntary dismissal of her claims. In addition, at the status conference on November 21, 2108, Lead Counsel for the plaintiffs moved to dismiss the case of Justine Andollo from Florida. Clark was the only economic loss plaintiff from Oklahoma, and Andollo was the only economic loss plaintiff from Florida; the class claims from those states vanished with the dismissal of those underlying cases. However, the defendant did not challenge any of the counts asserting claims under Oklahoma law. Nevertheless, it appears that all of the claims under Oklahoma law must be dismissed due to the withdrawal of the only named plaintiff from that state. Those counts are: LXXXIII (consumer fraud), LXXXIV (fraudulent concealment), LXXXV (express warranty), LXXXVI (implied warranty), and LXXXVII (unjust enrichment). The following Florida counts likewise will be dismissed: XVIII (Florida Fair Trade Practices Act), XIX (fraudulent concealment), XX (express warranty), and XXI (unjust enrichment).
As the case now stands with the dismissals of those counts, the SACMC consists of live class claims by 41 plaintiffs from 24 states, pleaded in 111 counts.
FCA's present motion to dismiss is based on Federal Rule of Civil Procedure 12(b)(6). The governing standards under Rule 12(b)(6) are well known to the parties: the purpose of the motion is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief if all the factual allegations in the complaint are taken as true. Rippy ex rel. Rippy v. Hattaway , 270 F.3d 416, 419 (6th Cir. 2001) (citing Mayer v. Mylod , 988 F.2d 635, 638 (6th Cir. 1993) ). The complaint is viewed in the light most favorable to the plaintiff, the factual allegations in the complaint are accepted as true, and all reasonable inferences are drawn in favor of the plaintiff. Bassett v. Nat'l Collegiate Athletic Ass'n , 528 F.3d 426, 430 (6th Cir. 2008). To survive the motion, the plaintiff Fabian v. Fulmer Helmets, Inc. , 628 F.3d 278, 280 (6th Cir. 2010).
When deciding a motion under Rule 12(b)(6), the Court looks only to the pleadings. Jones v. City of Cincinnati , 521 F.3d 555, 562 (6th Cir. 2008). But the Court also may consider the documents attached to them, Commercial Money Ctr., Inc. v. Illinois Union Ins. Co. , 508 F.3d 327, 335 (6th Cir. 2007) (citing Fed. R. Civ. P. 10(c) ), documents referenced in the pleadings that are "integral to the claims," id. at 335-36, documents that are not mentioned specifically but which govern the plaintiff's rights and are necessarily incorporated by reference, Weiner v. Klais & Co., Inc. , 108 F.3d 86, 89 (6th Cir. 1997), abrogated on other grounds by Swierkiewicz v. Sorema, N.A. , 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), and matters of public record, Northville Downs v. Granholm , 622 F.3d 579, 586 (6th Cir. 2010). However, beyond that, assessment of the facial sufficiency of the complaint ordinarily must be undertaken without resort to matters outside the pleadings. Wysocki v. Int'l Bus. Mach. Corp. , 607 F.3d 1102, 1104 (6th Cir. 2010).
In its second motion under Rule 12(b)(6), FCA asks the Court to dismiss in their entirety Counts III, XIII, XIV, XIX, XXII, XXIII, XXX, XXXII, XXXVI, XXXVIII, XLV, XLIX, LI, LXI, LXIV, LXXIII, LXXIV, LXXVI, LXXXI, CI, CIII, CX and CXVI of the SACMC. The defendant also asks the Court to dismiss in part Count I (the Magnuson-Moss Warranty Act claim) to the extent that it is premised on the above challenged state law claims, and Count XXVIII (for consumer fraud under Illinois state law). The challenges to each of those counts are addressed below in turn.
The defendant argues that the economic loss doctrine of the respective states bars the claims for common law fraudulent concealment raised in Counts XIV (Colorado), XXXVIII (Maryland), XLV (Michigan), LI (Minnesota), LXIV (New Jersey), LXXIV (North Carolina), and CIII (Utah), as well as the statutory fraud claim in Count LXXIII (North Carolina). The plaintiffs offer several state-specific arguments in opposition.
The defendant is correct as a general matter that Colorado's economic loss rule bars claims sounding in tort for losses arising exclusively from the failure of a contractual obligation. See Spring Creek Exploration & Production Co., LLC v. Hess Bakken Investment, II, LLC , 887 F.3d 1003, 1020 (10th Cir. 2018) (quoting Town of Alma v. AZCO Construction, Inc. , 10 P.3d 1256, 1264 (Colo. 2000) ). Nonetheless, " ‘[t]o survive a motion to dismiss based on the economic loss rule, [a plaintiff] merely has to allege sufficient facts, taken in the light most favorable to him, that would amount to the violation of a tort duty that is independent of the contract.’ " Ibid. (quoting Van Rees v. Unleaded Software, Inc. , 373 P.3d 603, 608 (Colo. 2016) ). "The question is not ... whether the tort claims relate to a contract ... but rather whether they stem from a tort duty independent of the contract." Van Rees , 373 P.3d at 605 ( ).
In this case, the plaintiffs allege that the defendant induced them to pay more than they otherwise would have to acquire the class vehicles by concealing known dangerous defects in the cars gear shift designs. Those allegations of pre-purchase concealments are sufficient under the controlling case law to state a claim for fraudulent concealment premised on a breach of a duty that arises separately from any bill of sale or warranty. Ibid. () .
The Colorado economic loss rule does not bar the claim in Count XIV.
Similarly, Maryland courts generally recognize the limitation on recoveries in tort for damages arising from breach of a contractual obligation. Landaverde v. Navarro , 2018 WL 2727907, at *15 n.6 (Md. Ct. Spec. App. June 6, 2018) . But they have recognized an exception where the plaintiff alleges the concealment or failure to warn of a defect giving rise to a "serious risk of...
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