In re Takata Airbag Prods. Liab. Litig.

• Decision Date: 14 June 2016
• Docket Number: MDL No. 2599,14-24009-CV-MORENO,Master File No. 15-2599-MD-MORENO
• Parties: IN RE: TAKATA AIRBAG PRODUCTS LIABILITY LITIGATION This Document Relates to All Economic Loss Track Cases
• Court: U.S. District Court — Southern District of Florida

193 F.Supp.3d 1324

IN RE: TAKATA AIRBAG PRODUCTS LIABILITY LITIGATION

This Document Relates to All Economic Loss Track Cases

MDL No. 2599

Master File No. 15-2599-MD-MORENO

14-24009-CV-MORENO

United States District Court, S.D. Florida, Miami Division .

Signed June 14, 2016

Filed June 15, 2016

ORDER GRANTING IN PART AND DENYING IN PART MAZDA MOTOR OF AMERICA, INC. D/B/A MAZDA NORTH AMERICAN OPERATIONS' MOTION TO DISMISS

FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE

This multidistrict litigation ("MDL") consolidates allegations of economic loss and personal injury related to airbags manufactured by defendants Takata Corporation and TK Holdings (collectively, "Takata") and equipped in vehicles manufactured by defendants Honda, BMW, Ford, Mazda, Mitsubishi, Nissan, Subaru, and Toyota (collectively, the "Automotive Defendants") (collectively with Takata, the "Defendants"). This cause comes before the Court upon Mazda Motor of America, Inc. d/b/a Mazda North American Operations's ("Mazda"). Motion to Dismiss ("Motion") [D.E. 608], filed on July 17, 2015. The Court has reviewed the Motion, Plaintiffs' Omnibus Response (D.E. 658) and Mazda's Reply (D.E. 690). Additionally, the parties raised some of their briefed arguments at oral argument held on Friday, October 23, 2015. Mazda's Motion asks the Court to dismiss all counts alleged against it in the Second Amended Economic Loss Complaint ("Complaint") (D.E. 579).

I. BACKGROUND

Plaintiffs in this case are consumers of vehicles equipped with Takata airbags containing ammonium nitrate as a propellant. The Court has divided the MDL's component cases into two tracks: an economic loss track for plaintiffs alleging purely economic damages and a personal injury track for plaintiffs alleging damages to a person. This order pertains to the economic loss track cases. In the Complaint, Plaintiffs allege 11 counts against Mazda.¹

These 11 counts against Mazda consist of the following: Count 3 for violations of the Magnuson-Moss Warranty Act; Count 25 for fraudulent concealment; Count 26 for violation of the Song-Beverly Consumer Warranty Act for Breach of Implied Warranty of Merchantability; Count 27 for unjust enrichment; Count 28 for violation of California's unfair competition law; Count 29 for violation of California's Consumer Legal Remedies Act; Count 30 for violation of California's false advertising law; Count 31 for negligent failure to recall; Count 47 on behalf of a Florida sub-class alleging violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"); Count 48 on behalf of a Florida sub-class alleging breach of Florida's implied warranty of merchantability; and Count 49 on behalf of an Alabama sub-class alleging violation of Alabama's Deceptive Trade Practices Act ("ADTPA").²

These 11 counts arise out of three Named Plaintiffs' Mazda purchases. Specifically, the three Named Plaintiffs are: (1) Justin Birdsall; (2) Crystal Pardue; and (3) Mickey Vukadinovic. Birdsall purchased his Mazda, used, in Pennsylvania. Pardue purchased her Mazda, used, in Alabama. And Vukadinovic purchased his Mazda, new, in Florida. Birdsall's claims were direct-filed into the MDL, as he is a Named Plaintiff in the Complaint and his case had not previously been transferred to the Southern District of Florida. Pardue's claims were transferred to the Court from the Northern District of Alabama. Vukadinovic's claims were transferred to the Court from the Eastern District of Pennsylvania.

II. LEGAL STANDARD

"A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss, a "complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Detailed factual allegations are not required, but a pleading must offer more than "labels and conclusions" or "a formulaic recitation of the elements of the cause of action." Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

Where a cause of action sounds in fraud, however, Federal Rule of Civil Procedure 9(b) must be satisfied in addition to the more relaxed standard of Rule 8. Under Rule 9(b), "a party must state with particularity the circumstances constituting fraud or mistake," although "conditions of a person's mind," such as malice, intent, and knowledge may be alleged generally. Fed. R. Civ. P. 9(b). "The ‘particularity’ requirement serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." W. Coast Roofing & Waterproofing, Inc. v. Johns Manville, Inc. , 287 Fed.Appx. 81, 86 (11th Cir.2008) (citations omitted).

III. ANALYSIS

A. Choice of Law Analysis

Plaintiffs assert three counts against Mazda arising only under California law.³ Specifically, Counts 28-30 allege violations of: California's (1) Unfair Competition Law, (2) Consumer Legal Remedies Act, and (3) False Advertising Law, respectively. Mazda argues that the counts asserting California law should be dismissed because "[a]pplication of the proper choice of law rules dictates that the consumer plaintiffs' ... claims are governed by the law of the states where they purchased their respective vehicles," not California law. (D.E. 608, at 4). The Court agrees.

While Plaintiffs argue a choice of law inquiry is premature, the issue has been briefed and, at least with regard to the claims against Mazda, can be decided by the Court without further factual development.

Generally, a federal court hearing state law claims applies the choice of law rules of the forum state.

Grupo Televisa, S.A. v. Telemundo Commc'ns Grp., Inc. , 485 F.3d 1233, 1240 (11th Cir.2007). However, "[i]n cases transferred pursuant to 28 U.S.C. § 1407, the transferee district court must apply the state law, including its choice of law rules, that would have been applied had there been no change of venue." In re Managed Care Litig. , 298 F.Supp.2d 1259, 1296 (S.D.Fla.2003) ; Van Dusen v. Barrack , 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) ; In re Toyota Motor Corp. Unintended Acceleration , 785 F.Supp.2d 925, 931 (C.D.Cal.2011). Accordingly, "all states in which the transferor court of an individual action sits are considered forum states, and an independent choice of law determination is necessary for the states of all transferor courts." In re Conagra Peanut Butter Prods. Liab. Litig. , 251 F.R.D. 689, 693 (N.D.Ga.2008).

This choice of law framework is not altered by the use of a consolidated complaint as a procedural device to streamline the litigation, unless the parties so consent. See id. ("[U]sing a master complaint as the operative pleading for choice of law purposes is not unprecedented in multidistrict litigation. However, it is generally used as a substantive pleading only when the parties have consented to such an arrangement." (citations omitted)); see also In re Toyota Motor Corp. Unintended Acceleration , 785 F.Supp.2d at 931 (stating that "[n]either the general authorization of the coordination and consolidation under the MDL statute nor the more specific use of consolidated complaints, as the Court has required here, is intended to alter the substantive rights of the parties" and adding, "[t]he use of a consolidated complaint has been described as ‘a procedural device rather than a substantive pleading with the power to alter the choice of law[ ] rules applicable to the plaintiffs' claims.’ " (citing In re Mercedes – Benz Tele Aid Contract Litig. , 257 F.R.D. 46, 56 (D.N.J.2009) ).

Plaintiffs rely in part on Gelboim v. Bank of Am. Corp. , –––U.S. ––––, 135 S.Ct. 897, 904 n. 3, 190 L.Ed.2d 789 (2015), to support the proposition that the filing of a consolidated complaint allows the Court to ignore the transferor courts' choice of law rules and apply Florida's choice of law rules. However, Gelboim does not address the choice of law inquiry. The issue in Gelboim was whether, as part of a larger MDL, a group of plaintiffs could appeal the dismissal of the only claim brought by that group. Id. at 903. Holding that such dismissal is appealable, the Court stated, "[c]ases consolidated for MDL pretrial proceedings ordinarily retain their separate identities, so an order disposing of one of the discrete cases in its entirety should qualify under § 1291 as an appealable final decision." Id. at 905. The Court further explained, " Section 1407 refers to individual ‘actions' which may be transferred to a single district court, not to any monolithic multidistrict ‘action’ created by transfer." Id. Quoting Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach , 523 U.S. 26, 37, 118 S.Ct. 956, 140 L.Ed.2d 62, the Court parenthetically added, " § 1407 does not ‘imbu[e] transferred actions with some new and distinctive ... character.’ " In footnote 3, the Court stated, "parties may elect to file a ‘master complaint’ and a corresponding ‘consolidated answer,’ which supersede prior individual pleadings. In such a case, the transferee court may treat the master pleadings as merging the discrete actions for the duration of the MDL pretrial proceedings." Gelboim , 135 S.Ct. at 904 n. 3. The Court clarified that "[n]o merger occurs, however, when ‘the master complaint is not meant to be a pleading with legal effect but only an administrative summary of the claims brought by all the plaintiffs.’ " Id.

The precise parameters of the Court's dicta in footnote 3 are unclear. However, given the Court's analysis regarding the "separate identities" of cases consolidated in MDL proceedings, it would be improper to ignore the transferor courts' conflict of law rules and apply only Florida's choice of law rules. Cases not resolved...