In re Nissan North America, Inc. Odometer Lit., MDL Docket No. 3:08-md-1921.

• Decision Date: 02 February 2009
• Docket Number: MDL Docket No. 3:08-md-1921.
• Citation: In re Nissan North America, Inc. Odometer Lit., 664 F.Supp.2d 873 (M.D. Tenn. 2009)
• Parties: In re NISSAN NORTH AMERICA, INC. ODOMETER LITIGATION.
• Court: U.S. District Court — Middle District of Tennessee

664 F.Supp.2d 873

In re NISSAN NORTH AMERICA, INC. ODOMETER LITIGATION.

MDL Docket No. 3:08-md-1921.

United States District Court, M.D. Tennessee, Nashville Division.

February 2, 2009.

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Brandon E. Bass, John A. Day, Day & Blair, P.C., Brentwood, TN, C. Donald Amamgbo, Amamgbo & Associates, Oakland, CA, Christopher G. Hill, Durrette Bradshaw PLC, Richmond, VA, David Brian Miller, Schneider & Miller, PC., Richardson, TX, James Andrew Holmes, Law Office of James A. Holmes, PC, Henderson, TX, Jay Kutchka, Jones, Jackson & Moll, PLC, Fort Smith, AR, John R. Wylie, Donaldsonguin LLC, Paul M. Weiss, William M. Sweetnam, Freed & Weiss, LLC, Chicago, IL, Lawrence Dumzo Nwajei, Law Offices of Lawrence D. Nwajei, Taras Kick, Adam S. Gauthier, Kick Law Firm, APC, Los Angeles, CA, Marc L. Newman, The Miller Law Firm, Rochester, MI, Mitchell A. Toups, Weller, Green, McGown & Toups, Richard L. Coffman, The Coffman Law Firm, Beaumont, TX, Natalie Finkelman-Bennett, Shepherd, Finkelman, Miller & Shah, LLC Media, PA, Reginald Von Terrell, Terrell Law Group, Richmond, CA, Robert Stephen Woodfin, Law Office of Stephen Woodfin, Kilgore, TX, Van Bunch, Bonnet, Fairbourn, Friedman & Balint, Signal Mountain, TN, Wyatt B. Durrette, Durrette Bradshaw PLC, Richmond, VA, Samuel Kenneth Crocker, Crocker & Niarhos, Timothy G. Niarhos, The Law Office of Timothy G. Niarhos, Nashville, TN, for Plaintiffs.

E. Paul Cauley, Jr., Katherine Williams Binns, Ryan C. Brown, Sherman Vance Wittie, Stacy Leigh Blakeley, Sedgwick, Detert, Moran & Arnold, LLP, Dallas, TX, Jacqueline M. Jauregui, James L. Nelson, Sedgwick, Detert, Moran & Arnold, LLP, Los Angeles, CA, Jessalyn H. Zeigler, Bass, Berry & Sims, Robert Dale Grimes, Nashville, TN, Maureen P. Fitzgerald, Peter J. Hoffman, Eckert, Seamans, Cherin & Mellott, LLC, Philadelphia, PA, S. Thomas Wienner, Weinner & Gould, P.C., Rochester, MI, for Defendants.

MEMORANDUM

ALETA A. TRAUGER, District Judge.

Pending before the court are motions to dismiss the plaintiffs' Consolidated Amended Class Action Complaint filed by the defendants, Nissan North America, Inc.(DocketNo. 30) and Nissan Motor Co., Ltd.(DocketNo. 34).DefendantNissan North America, Inc. filed a memorandum in support of its motion, which defendantNissan Motor Co., Ltd. joined.(DocketNo. 31.)The plaintiffs have opposed the defendants' motions (DocketNo. 42), the defendants have replied (DocketNo. 47), and the plaintiffs have sur-replied (DocketNo. 50).¹For the reasons discussed herein, the defendants' motions to dismiss will be denied.

BACKGROUND

The six named plaintiffs in this matter are residents of California, Texas, and Pennsylvania.The plaintiffs bring this action on behalf of themselves and all other similarly-situated individuals and entities against Nissan North America, Inc.("NNA"), a California corporation with its principal place of business in Nashville, Tennessee, and Nissan Motor Co., Ltd.("NML"), a Japanese corporation with its principal place of business in Tokyo, Japan.²

The defendants NNA and NML design, manufacture, market, sell, lease, and distribute motor vehicles under the brand names "Nissan" and "Infiniti."Each of the six named plaintiffs purchased or leased a Nissan or Infiniti vehicle between 2005 and 2007.As part of these transactions, the plaintiffs received from NNA and NML a number of warranties, including a basic express warranty against all manufacturing defects for a period of three years or thirty-six thousand miles, whichever expired first, component warranties of varying durations on a number of vehicle components,³ and a parts warranty expressly warranting that all genuine Nissan parts purchased from and installed by a Nissan dealer would be free of defects for one year or twelve thousand miles.

The plaintiffs allege that, in connection with these transactions, NNA and NML represented that the vehicles' odometers would accurately record the number of miles traveled by the vehicles.However, according to the plaintiffs, the vehicles' odometers actually over-register the actual number of miles traveled by the vehicles.Specifically, the plaintiffs assert that NNA and NML intentionally designed, manufactured, calibrated, installed, altered, or set the odometers to inflate the mileage traveled by the vehicles by a factor of not less than two percent.The plaintiffs allege that NNA and NML accomplished this over-registration through the installation of either a computer software device or an electronic or mechanical device that altered the odometers' performance by an amount exceeding the odometer manufacturer's design tolerance.The plaintiffs further allege that NNA and NML adopted a uniform, biased odometer performance standard such that the odometers installed in all of the vehicles sold by the defendants in the United States over-registered the mileage traveled by those vehicles.As a result, the plaintiffs assert that the warranties that they purchased as part of the transactions were actually worth less than represented.The plaintiffs further assert that they, and the members of the proposed class, have been deprived of the benefit of their bargains by the installation of odometers that over-register, the diminished number of miles that a leased vehicle may be driven without penalty, and the diminished resale value of their vehicles.Finally, they assert that the defendants have reaped financial benefits from the manufacturing cost of odometers that accurately record the mileage driven, warranty repair savings, and excess mileage charges on leased vehicles.

ANALYSIS

Initially, the six named plaintiffs in this matter filed six cases in various federal district courts.Those cases were transferred to this court for coordinated pretrial proceedings by the Judicial Panel for Multi-District Litigation, and the plaintiffs have filed a Consolidated Amended Class Action Complaint ("Complaint") alleging a variety of claims on behalf of the named plaintiffs, a nationwide class, and a number of subclasses.First, on behalf of the nationwide class, the Complaint alleges violations of the Federal Odometer Act.On behalf of two California subclasses, the Complaint alleges violations of California's unfair competition law, false advertising law, Consumer Legal Remedies Act, as well as common law claims of fraud, negligent misrepresentation, unjust enrichment, and money had and received.On behalf of a Texas subclass, the Complaint alleges unjust enrichment and breach of the implied warranty of merchantability, and on behalf of a Pennsylvania subclass, the Complaint alleges unjust enrichment.

I.Applicable Legal Standards

In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court will "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff."DirecTV, Inc. v. Treesh,487 F.3d 471, 476(6th Cir.2007);Inge v. Rock Fin. Corp.,281 F.3d 613, 619(6th Cir.2002).The Federal Rules of Civil Procedure require only that a plaintiff provide "`a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests."Conley v. Gibson,355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80(1957).The court must determine only whether "the claimant is entitled to offer evidence to support the claims," not whether the plaintiff can ultimately prove the facts alleged.Swierkiewicz v. Sorema N.A.,534 U.S. 506, 511, 122 S.Ct. 992, 152 L.Ed.2d 1(2002)(quotingScheuer v. Rhodes,416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90(1974))."Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test."Scheuer,416 U.S. at 236, 94 S.Ct. 1683.Rather, challenges to the merits of a plaintiff's claim should be "dealt with through summary judgment under Rule 56."Swierkiewicz,534 U.S. at 514, 122 S.Ct. 992.

In Bell Atlantic Corp. v. Twombly,550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929(2007), the Supreme Court readdressed the pleading requirements under the federal rules.The Court stressed that, although a complaint need not plead "detailed factual allegations," those allegations "must be enough to raise a right to relief above the speculative level."Id. at 1964-65."The factual allegations, assumed to be true, must do more than create speculation or suspicion of a legally cognizable cause of action; they must show entitlement to relief."League of United Latin Am. Citizens v. Bredesen,500 F.3d 523, 527(6th Cir.2007)(citingTwombly,127 S.Ct. at 1965).Further, the Court observed that Federal Rule of Civil Procedure 8(a)(2) does require a "showing" that the plaintiff is entitled to relief and that this substantive threshold is not achieved by "blanket assertion[s]."Twombly,127 S.Ct. at 1965 n. 3.

Although Federal Rule of Civil Procedure 8 establishes a "liberal system of notice pleading,"seeE.E.O.C. v. J.H. Routh Packing Co.,246 F.3d 850, 851(6th Cir.2001), "a plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."Twombly,127 S.Ct. at 1964-65(citingPapasan v. Allain,478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209(1986)).Accordingly, to survive a motion to dismiss, "[f]actual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)."Id. at 1965;see alsoSwierkiewicz,534 U.S. at 508 n. 1, 122 S.Ct. 992;Neitzke v. Williams,490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338(1989)("Rule 12(b)(6) does not countenance . . . dismissals...