Kiriacopoulos v. Gen. Motors

• Decision Date: 05 April 2023
• Docket Number: CIVIL 22-10785
• Citation: Kiriacopoulos v. Gen. Motors, CIVIL 22-10785 (E.D. Mich. Apr 05, 2023)
• Parties: MELISSA KIRIACOPOULOS, et al., Plaintiffs, v. GENERAL MOTORS LLC, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

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MELISSA KIRIACOPOULOS, et al., Plaintiffs, v. GENERAL MOTORS LLC, Defendant.

CIVIL No. 22-10785

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

April 5, 2023

OPINION & ORDER (1) GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS (Dkt. 30) AND (2) GRANTING DEFENDANT'S MOTION TO FILE NOTICE OF SUPPLEMENTAL AUTHORITY (DKT. 38)

MARK A. GOLDSMITH, UNITED STATES DISTRICT JUDGE

Before the Court is Defendant General Motors LLC's (GM's) motion to dismiss Plaintiffs'putative class action. For the reasons that follow, the Court grants GM's motion in part and denies GM's motion in part.^[1]

I. BACKGROUND

Plaintiffs purport to bring this class action under federal law and the laws of six states asserting a defect in the engines of certain GM vehicles. Their claims spring from GM's alleged knowledge of this defect, and its omissions and misrepresentations regarding the same.

A. Alleged Defect

Plaintiffs allege that the 2.4L internal combustion engine of certain GM vehicles contains a defective positive crank ventilation (PCV) system. Am. Compl. ¶ 1 (Dkt. 22).^[2] The PCV system plays a role in regulating the amount of air and gas that is pumped through the engine. Id. The PCV system contains a fixed orifice that can become plugged with ice, sludge, and water during operation of the vehicle in cold weather. Id. ¶ 114. Plaintiffs submit that the plugging may increase pressure in the crankshaft, causing the engine's rear main seal to rupture. Id. ¶¶ 1, 115. In Plaintiffs' view, this rupture may lead to oil loss, power loss, and permanent damage to the engine. Id.

B. Plaintiffs

Plaintiffs consist of nine individuals who purchased vehicles allegedly affected by the defect in the states of Massachusetts, Minnesota, Michigan, New York, Wisconsin, and Illinois. Id. ¶ 7. Plaintiffs allege that they purchased the GM vehicles at issue “because they reasonably relied upon GM's claims touting the Class Vehicles as free of defect and as durable and reliable, with no reference to the PCV defect,” through “media marketing campaigns and other forms of advertisement.” Id. ¶ 106.

Six Plaintiffs allege that they purchased vehicles from GM-authorized dealerships. Id. ¶¶ 8, 24, 36, 61, 77, 91. Alleging that they purchased vehicles from non-GM-affiliated dealerships are Sarah Burns, the only New York Plaintiff, see id. ¶ 50; Wisconsin resident Steve Fiene, who purchased his vehicle in Michigan, id. ¶ 69; and Minnesota Plaintiff Thomas Graham, id. ¶ 85.

C. GM Statements in Relation to Alleged Defect

GM regularly issues technical service bulletins (TSBs) to dealerships with information on GM vehicles, and Plaintiffs identify a series of GM bulletins which, in Plaintiffs' view, “acknowledg[e]” that the PCV system was “vulnerable to cold weather.” Id. ¶ 118. Plaintiffs assert that these TSBs “demonstrate that GM knew about the defect, but did not make any substantive changes to the PCV system,” and instead “continued to sell and manufacture vehicles with the defective system up through model year 2017.” Id. In particular, Plaintiffs point to:

• a February 2013 bulletin titled “PIP5093” identifying complaints of an “‘oil leak . . . coming from the rear main oil seal of the engine'” in certain class vehicles that “‘may be the result of a frozen PCV system and excessive crankcase pressure,'” and in response to which, technicians could clean out the PCV system, and “‘the customer may . . . consider changing their engine oil right before winter starts,'” id. ¶¶ 119-121 (quoting Feb. 2013 Bulletin (Dkt. 22-14));

• a January 2014 bulletin superseding the PIP5093 bulletin and expanding the vehicles impacted, also recommending that customers consider changing their oil before winter and advising that technicians clean out the PCV system using a 1/16 inch drill bit, id. ¶¶ 122124 (citing Jan. 2014 Bulletin (Dkt. 22-15));

• a January 2016 update to the PIP5093 bulletin again expanding the list of vehicles affected, id. ¶¶ 125-126 (citing Jan. 2016 Bulletin (Dkt. 22-18));

• a January 2019 update to the PIP5093 bulletin, also expanding the vehicles affected, id. ¶¶ 127-128 (citing Jan. 2019 Bulletin (Dkt. 22-19)); and

• a February 2019 update to the PIP5093 bulletin, identified as a “diagnostic tip,” continuing to recommend the use of a drill bit to clear the PCV orifice, id. ¶¶ 3, 129 (citing Feb. 2019 Bulletin (Dkt. 22-23)).

Plaintiffs emphasize that these bulletins failed to identify the risk of loss of motor power, recommended only a stop-gap solution, and communicated the issue only to dealers rather than directly to customers. See id. ¶¶ 118, 121-129. GM submits that only the February 2019 update identifies and applies to all proposed class vehicles, Br. in Supp. Mot. at 4-6, though each of the bulletins covers at least some of the vehicles Plaintiffs allege are affected by the PCV defect.

Plaintiffs also allege that GM made affirmative misrepresentations when it touted the reliability, safety, and high quality of its vehicles in advertisements, public statements, and other media. See, e.g., Am. Compl. ¶¶ 157-165, 205, 214.

D. Basis for GM's Earlier Knowledge of Alleged Defect

Plaintiffs further allege that “GM has known since at least 1985 of the PCV system's vulnerability to cold weather and clogging, as it has repeatedly advised dealers (but not customers) on how to attempt to address the problem.” Id. ¶ 4. According to Plaintiffs, GM has “continue[d] to conceal this defect from consumers at the point of sale” and to sell vehicles containing the PCV defect. Id. Plaintiffs refer to another series of older bulletins:

• a June 1985 bulletin advising Chevrolet dealers of accumulated oil in the PCV systems of newly imported vehicles caused by condensation in cold, damp climates, id. ¶ 131 (citing June 1985 Bulletin (Dkt. 22-10));

• a January 1994 bulletin noting that PCV system hoses could “‘freeze-up'” in cold weather and result in oil leaks, id. ¶ 132 (quoting Jan. 1994 Bulletin (Dkt. 22-11));

• a March 2003 bulletin noting a freezing issue in the PCV system that could occur in “‘extreme cold weather'” and result in oil leaks, Id. ¶¶ 133 (quoting Mar. 2003 Bulletin (Dkt. 22-12));

• a February 2005 bulletin covering certain Chevrolet vehicles and stating that oil leaks could be caused by “‘the engine PCV system'” being “‘frozen or restricted with ice,'” id. ¶¶ 134135 (quoting Feb. 2004 Bulletin (Dkt. 22-13));

• a March 2014 bulletin expanding the vehicles impacted by the PCV system's propensity to suffer oil leaks in cold weather, id. ¶ 136 (citing Mar. 2014 Bulletin (Dkt. 22-16)); and

• a March 2015 bulletin identifying an issue in certain models equipped with a 2.4L Ecotec engine that concerned “‘a frozen and/or plugged PCV . . . during cold weather operation'” that increased pressure and presented a risk of oil seal leaks and engine damage, id. ¶¶ 137140 (quoting Mar. 2015 Bulletin (Dkt. 22-2)).

Plaintiffs further allege that GM “must have known” about the alleged defect based on prerelease testing and post-release monitoring data; dealership repair records and warranty claims; consumer complaints made to the National Highway Traffic Safety Administration (NHTSA), several of which Plaintiffs excerpt to demonstrate consumers' issues with loss of power following oil leaks from frozen PCV systems; and other public complaints. Id. ¶¶ 116-117, 141, 143-150.

II. ANALYSIS^[3]

Plaintiffs assert claims based in (i) fraud, including fraudulent concealment and violations of state consumer protection acts; (ii) breach of the implied warranty of merchantability and violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. (MMWA); (iii) breach of contract; and (iv) unjust enrichment. Am. Compl. ¶¶ 184-524.

Plaintiffs purport to bring this suit as a class action, representing (i) a nationwide class consisting of all persons who purchased or leased a class vehicle from a GM dealer, on whose behalf Plaintiffs assert MMWA and breach of contract claims; and (ii) six state-specific classes- consisting of residents of Illinois, Massachusetts, Michigan, Minnesota, New York, or Wisconsin who purchased or leased a class vehicle in that state-on whose behalf Plaintiffs assert statespecific common law and statutory claims. Id. ¶¶ 172, 184-524.

The Court proceeds by addressing each category of claims.

A. Common Law and Statutory Fraud-Based Claims

Based on GM's alleged omissions and misrepresentations regarding the alleged defect, Plaintiffs assert (i) common law fraudulent concealment claims under Massachusetts, Michigan, Minnesota, New York, and Wisconsin law, id. ¶¶ 210, 247, 279, 352, 426, 485; and (ii) claims under the consumer protection laws of Illinois, Minnesota, New York, and Wisconsin, id. ¶¶ 209 228, 317-350, 390-424, 465-483.

The Court first considers whether these claims survive the Federal Rule of Civil Procedure 9(b) pleading standard, and it then turns to GM's claim-specific arguments.

i. Alleged Omissions Under Rule 9

“In federal court, allegations of fraud must be pleaded with particularity pursuant to Rule 9(b), whether under common law or consumer-protection statutes.” Elliott v. Gen. Motors LLC, 605 F.Supp.3d 937, 944 (E.D. Mich. 2022).^[4] Under this standard, Plaintiffs alleging fraudulent omission must specify “the who, what, when, where, and how” of the alleged omission. Republic Bank & Tr. Co. v. Bear Stearns & Co., 683 F.3d 239, 255-256 (6th Cir. 2012) (punctuation modified). Specifically, Plaintiffs must allege: “(1) precisely what was omitted; (2) who should have made a representation; (3) the content of the alleged omission and the manner in which the omission was misleading; and (4) what [GM] obtained as a consequence of the alleged fraud.” Id. at 256.

The parties...