In re Ford Fusion & C-Max Fuel Econ. Litig., Case No. 13-MD-2450 (KMK)

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtKENNETH M. KARAS, District Judge
PartiesIn re: FORD FUSION AND C-MAX FUEL ECONOMY LITIGATION, This Document Relates to All Actions
Docket NumberCase No. 13-MD-2450 (KMK)
Decision Date12 November 2015

In re: FORD FUSION AND C-MAX FUEL ECONOMY LITIGATION, This Document Relates to All Actions

Case No. 13-MD-2450 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

November 12, 2015


OPINION AND ORDER

Appearances:

Paul Geller, Esq., Stuart Davidson, Esq., Mark Dearman, Esq., & Sheri Coverman, Esq.
Robbins Geller Rudman & Dowd LLP
Boca Raton, FL
Co-Lead Counsel for Plaintiffs and the Class

Samuel Rudman, Esq.
Robbins Geller Rudman & Dowd LLP
Melville, NY
Co-Lead Counsel for Plaintiffs and the Class

Rachel Jensen, Esq.
Robbins Geller Rudman & Dowd LLP
San Diego, CA
Co-Lead Counsel for Plaintiffs and the Class

Eric Gibbs, Esq., Geoffrey Munroe, Esq., & David Stein, Esq.
Girard Gibbs LLP
San Francisco, CA
Co-Lead Counsel for Plaintiffs and the Class

John Yanchunis, Esq. & Rachel Soffin, Esq.
Morgan & Morgan
Tampa, FL
Counsel for Plaintiffs' Executive Committee

Peter Safirstein, Esq.
Morgan & Morgan
New York, NY
Counsel for Plaintiffs' Executive Committee

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Richard McCune, Esq. & Elaine Kusel, Esq.
McCune Wright LLP
Redlands, CA
Counsel for Plaintiffs' Executive Committee

Jonathan Shub, Esq. & Scott George, Esq.
Seeger Weiss LLP
New York, NY
Counsel for Plaintiffs' Executive Committee

Stephen Jaffe, Esq., Mark Fistos, Esq., & Seth Lehrman, Esq.
Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, P.L.
Fort Lauderdale, FL
Counsel for Plaintiffs' Executive Committee

Bruce Steckler, Esq. & Mazin Sbaiti, Esq.
Steckler Law LLP
Dallas, TX
Counsel for Plaintiffs' Executive Committee

Cory Fein, Esq.
Caddell & Chapman
Houston, TX
Counsel for Plaintiffs' Executive Committee

Joel Dewey, Esq., Jeffrey Yeatman, Esq., Matthew Goldberg, Esq., & Timothy Birnbaum, Esq.
DLA Piper LLP
New York, NY
Counsel for Defendant

KENNETH M. KARAS, District Judge:

Plaintiffs are "consumers who purchased or leased a 2013 Ford Fusion Hybrid ("Fusion") or 2013 Ford C-MAX ("C-MAX") (collectively, the "Vehicles") from dealerships licensed by Ford Motor Company ("Ford," or "Defendant"), an automobile manufacturer based in Dearborn, Michigan, allegedly in reliance on Ford's "misrepresentations and material omissions" about the Vehicles' fuel economy. (Consolidated Am. Class Action Compl. ("CAC") ¶¶ 7-9, 41 (Dkt. No. 51).) Plaintiffs bring this Consolidated Amended Class Action Complaint ("CAC"), on their

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own behalf and on behalf of members of a putative class ("Class"), alleging that they would not have otherwise purchased or leased the Vehicles, or would not have paid as much for them, had it not been for Ford's misrepresentations, and that they have otherwise been damaged because of higher fuel costs and the diminution in the Vehicles' value. (Id. ¶ 8.) Before the Court is Defendant's Motion To Dismiss the CAC. For the reasons stated herein, the Motion is denied in part and granted in part.

I. Background

A. Factual Background

1. Advertising Campaign

The following facts are drawn from the CAC, and they are assumed to be true for purposes of deciding Defendant's Motion.

Until 2012, following Ford's release of its first hybrid sedan—the Fusion—Ford's "efforts to break into the . . . market for hybrid vehicles had been largely unsuccessful." (Id. ¶¶ 2, 47.) As of mid-2012, Ford had only a 3% share of that market. (Id. ¶ 3.) Plaintiffs allege that this was due to an inability of Ford's "primary hybrid offering," the Fusion, with offered an estimated combined 39 miles per gallon ("MPG")—36 MPG city, 41 MPG highway—fuel economy, to compete with the Toyota Prius and its estimated combined 51 MPG city, 48 MPG highway. (Id. ¶¶ 2, 48.)

In 2013, Ford "launched a massive," and allegedly misleading, "advertising campaign" focusing on two of its new hybrid models—the Fusion and the C-MAX, highlighting their estimated 47 MPG. (Id. ¶ 3.) The campaign included a "Times Square '47' kick-off," which featured Ryan Seacrest and "the number '47' featured prominently and in a variety of ways,"

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including a sign held by Ford's CEO, the number "47" on "giant LED screens," and "crowds of people" wearing "47" t-shirts and holding "up signs to make a '47' montage visible from the sky." (Id. ¶¶ 3, 56.)

Ford also launched a "'47 Challenges, 47 Days' multi-media campaign" designed to "target all hybrid [buyers] on the fence" about purchasing a hybrid vehicle. (Id. ¶¶ 3, 57 (brackets and internal quotation marks omitted).) The campaign included commercials aired "thousands of times, in all major media markets, on major networks, and at all times of day touting the fuel economy of the Vehicles," magazine advertisements in "numerous and varied magazines . . . with collective national circulations in the tens of millions," newspaper advertisements, a social media campaign on "Facebook, Twitter, and other social media" which included the "47 Day Photo Challenge," in which "consumers were asked to submit photos that 'captured the spirit of the Hybrid Fusion's 47 [MPG]'," promotional brochures "touting . . . 47 MPG," on-line profiles on Ford's website, and "a number of national press releases boasting about the Vehicles' improved fuel economy and the success of [Ford's] 47 MPG advertising." (Id. ¶¶ 3, 58.) Ultimately, the campaign was a "tremendous success" and contributed to "record hybrid sales," allegedly attributable to the increase in fuel economy. (Id. ¶ 4.) By the end of 2012, Ford had increased its share of the hybrid market to 16% and by April 2013 was the "second-leading auto company in the hybrid market," with record hybrid sales continuing through August 2013. (Id. ¶¶ 4, 52-53.)

The problem, Plaintiffs contend, is that Ford's advertising was "highly misleading." (Id. ¶ 5.) Plaintiffs allege that while the campaign "emphasized that the '47 MPG' was something the Vehicles would actually deliver," (Id. ¶ 59), designed to convey "real vehicle[] performance"

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and "truly reflect the vehicle," (id. ¶ 60 (internal quotation marks omitted), "under real-world driving conditions, consumers . . . [were] consistently unable to get anywhere near the advertised 47 MPG," (id. ¶ 5). Plaintiffs further aver that only "[s]ome of Ford's advertisements include[d] small type at the bottom that read[] 'EPA-estimated 47 city/47 hwy [sic]/47 combined [MPG]. Actual mileage may vary,'" and that, even so, this "standard boilerplate language . . . did not alter the campaign's overall impression on consumers," (id. ¶ 62), in part because "nowhere in the [advertising] campaign did [Ford] make a distinction between real-world performance and the EPA-estimated rating," (id. ¶ 63.)1

Plaintiffs maintain that the offending representations included:

• "The . . . Fusion delivers a remarkable 47 mpg city and highway[.]"
• "The . . . Fusion delivers a U.S. EPA-certified 47 mpg city, 47 mpg highway[,] and 47 mpg combined in its hybrid model!"
• "47 mpg in the city and on the highway? Yes, it's true. The all new Fusion . . . achieves 47 combined mpg—doubling the fuel economy of the average vehicle."
• "Fusion . . . gets 47 MPG in the city, on the highway[,] and combined."
• "C-MAX . . . is Ford's first hybrid vehicle to offer 47 mpg across the board."
• "C-MAX Hybrid delivers EPA-certified 47 mpg city, 47 mpg highway ratings—7 mpg better than the Toyota Prius [V] on the highway—for a 47 mpg combined rating."
• "47 mpg hybrid for me."

(Id. (emphasis and internal quotation marks omitted).) Plaintiffs further allege that Ford made two misleading posts on the C-MAX official Facebook page: (1) On August 7, 2012, a post noting that "[i]f someone asks what MPG the C-MAX Hybrid gets, you can tell them 47[,] [and] [t]hat's because the all-new . . . C-MAX . . . delivers EPA-certified 47 mpg city and 47 mpg

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highway ratings for a 47-mph combined rating"; (2) On August 21, 2012, a post indicating that "the C-MAX . . . can more than keep up [with the 2013 Ford Escape] and achieve an estimated 570 miles on a single tank of gas." (Id. ¶ 67.) Additionally, Plaintiffs allege that on February 6, 2013, during a "Ford Fusion Lunch Date," Gil Portalatin, the Chief Programming Engineer for Electrified Programs and Integration at Ford, "told a consumer asking about the ability to get the advertised fuel economy of the . . . Fusion . . . that, 'You can get it. It is there." (Id. ¶ 64). Finally, Plaintiffs allege that, in a press release, Ford stated that the "C-MAX . . . returns the same fuel economy whether driving cross-county or across the city—stemming mostly from a growing list of Ford innovations that have helped the vehicle to deliver an impressive list of metrics, such as its 570-mile overall range, taking customers from Los Angeles to Las Vegas and back on one tank of gas," a range Ford referred to as "real car range" which "beat[s] Toyota Prius [V] by 120 miles."2 (Id. ¶¶ 65-66 (internal quotation marks omitted).)

Plaintiffs also allege that several other advertisements compared the Fusion and C-MAX to other hybrid cars available for sale. These advertisements include the following:

• An advertisement indicating that the Fusion "tops the Toyota Camry Hybrid by 8 mpg highway and 4 mpg city, and delivers the highest-ever fuel economy numbers in city and highway driving for a midsize sedan." (Id. ¶ 70 (internal quotation marks omitted).)
• An advertisement entitled "Wrong Direction" in which the narrator indicated that the Fusion was "the most fuel efficient midsize sedan in America." (Id. ¶ 71 (internal quotation marks omitted).)
• An advertisement entitled "New Idea" which claimed that the "Fusion doubles the fuel economy of the average vehicle." (Id. ¶ 72.)
• An advertisement indicating that the C-MAX "beats Prius V with better mpg" and is "Miles Per Gallon Ahead of the Competition." (Id. ¶ 73 (internal quotation marks omitted).)

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As indicated above, the advertising campaign targeted the Toyota Prius V in particular, which "provided space comparable to Ford's 2012 Fusion Hybrid, but was advertised as achieving 44 MPG city, 40 MPG highway, for a combined 42 MPG." (Id. ¶¶ 51, 74.) Plaintiffs allege that, in its advertisements, Ford "regularly...

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