McCabe v. Daimler AG & Mercedes-Benz United States, LLC

Decision Date07 June 2013
Docket NumberCivil Action No. 1:12–cv–2494–TCB.
PartiesRonan McCABE, et al., Plaintiffs, v. DAIMLER AG and Mercedes–Benz USA, LLC, Defendants.
CourtU.S. District Court — Northern District of Georgia

OPINION TEXT STARTS HERE

Cale Howard Conley, Ranse M. Partin, Conley Griggs Partin LLP, Matthew Q. Wetherington, Matthew Q. Wetherington, Atlanta, GA, Joseph M. Dunn, Neil A. Goro, Wigington Rumley Dunn & Ritch, L.L.P., San Antonio, TX, for Plaintiffs.

Andrew Thomas Bayman, Franklin P. Brannen, Jr., Stephen B. Devereaux, King & Spalding, LLP, Atlanta, GA, for Defendants.

ORDER

TIMOTHY C. BATTEN, SR., District Judge.

This case comes before the Court on Defendants' motions to dismiss [16 & 31] and motions to strike the class allegations from the first amended complaint [17 & 32].

I. Background

This is a putative class action brought by residents of Georgia, Texas, Virginia, Florida, Illinois and California based on alleged defects in the fuel systems of 20032009 model year W211 E–Class Mercedes–Benz vehicles. Defendant Daimler AG, a German corporation, manufactured the vehicles. Defendant Mercedes–Benz USA (MBUSA), a New Jersey limited liability company and a subsidiary of Daimler, distributed the vehicles within the United States.

Plaintiffs filed their original complaint on July 18, 2012. On August 28, they filed their first amended complaint, which is the operative pleading in this case. On September 24, MBUSA filed its motion to dismiss [16] and its motion to strike the class allegations in the amended complaint [17]. On November 7, Daimler filed its own motions to dismiss [31] and to strike the class allegations in the amended complaint [32]. In those motions, Daimler joins the arguments made by MBUSA and adds arguments that are specific to Daimler. In the discussion below, the Court will address Defendants' arguments together except where it is necessary to address Daimler's arguments separately.

The facts below are taken from Plaintiffs' amended complaint and those exhibits to the original complaint that Plaintiffs have incorporated into their amended complaint.1 These facts are accepted as true for purposes of Defendants' motions to dismiss.

A. General Allegations

The vehicles in question were accompanied by MBUSA's new vehicle limited warranty (“NVLW”), which provides as follows:

DEFECTS: Mercedes–Benz USA, LLC (MBUSA) warrants to the original and each subsequent owner of a new Mercedes–Benz vehicle that any authorized Mercedes–Benz Center will make any repairs or replacements necessary, to correct defects in material or workmanship arising during the warranty period.2

It further provides that the warranty period begins when the vehicle is delivered to the first retail purchaser or put into service as a demonstrator vehicle by an authorized dealer, and the warranty period ends after four years or 50,000 miles, whichever occurs first.

The vehicles in question have defects in or around the evaporation tubes in their gasoline tanks, making them prone to leak gasoline that pools on top of their fuel sending units. As a result, owners have experienced the emission of gasoline fumes into their vehicle cabins, the pooling of gasoline underneath their vehicles, and the soaking of their rear seats with gasoline.

Uncontained gasoline poses serious health risks. For example, the Illinois Department of Public Health has published the following advisory on its website:

Breathing small amounts of gasoline vapors can lead to nose and throat irritation, headaches, dizziness, nausea, vomiting, confusion and breathing difficulties. Symptoms from swallowing small amounts of gasoline include mouth, throat and stomach irritation, nausea, vomiting, dizziness and headaches. Some effects of skin contact with gasoline include rashes, redness and swelling. Being exposed to large amounts of gasoline can lead to coma or death.

Uncontained gasoline also poses serious safety risks due to the danger of fire or explosion. The risks are enhanced by the fact that cigarettes are a potential ignition source, and the vehicles in question were designed with cigarette lighters and ashtrays.

In 2008, MBUSA initiated a voluntary recall campaign to fix the issue of leaking gasoline in its 20032006 model year E–Class vehicles. Pursuant to the recall, MBUSA's authorized dealers inspected and replaced fuel filter modules in those vehicles. However, Defendants either misdiagnosed the source of the leaks or chose to conceal the actual source in order to avoid more expensive repairs, and owners have continued to experience leaks after having their fuel filters replaced.

Despite customer complaints, Defendants refused to perform additional repairs on vehicles subject to the recall unless those vehicles were still under warranty. Moreover, MBUSA never issued a pertinent recall for the other model years at issue in this case.

Because Defendants have failed to fix the problem through a recall campaign, many owners whose vehicles are no longer under warranty have been forced to purchase replacement gasoline tanks and other fuel system components. However, even those replacement parts have failed to fix the problem. Similarly, owners who have had fuel system components replaced pursuant to their factory warranties have continued to experience fuel leaks with those replacement parts.

Defendants were aware of the defect at least as early as 2008, when they issued the recall, but they failed to re-engineer the parts at issue and continued to sell vehicles with the defect through the 2009 model year. In addition, Defendants did not disclose the defect to their consumers.

B. Named Plaintiffs' Allegations

Plaintiff Ronan McCabe is a resident of Georgia who purchased a 2006 Mercedes–Benz E55 AMG on January 24, 2012. The day after his purchase, McCabe noticed a strong gasoline odor emanating from the right side rear of his vehicle. When he contacted MBUSA about the issue, he was told that the vehicle was not eligible for repairs under the recall campaign and that he should take it to a Mercedes–Benz service center for diagnosis. On January 26, 2012, he took the vehicle to a service center, where service technicians determined that the fuel leak was coming from the fuel sending unit on the left side of his gasoline tank. McCabe paid $302.87 to have the fuel sending unit replaced, but about a week later, he noticed that the odor was still there. On February 6, 2012, he returned to the service center and explained that he was still experiencing a strong fuel odor whenever the gas tank was filled. After diagnosis, he paid $1,632.25 to have the gas tank, fuel-sending units, fuel pump, rings and seals replaced. Despite all of these repairs, McCabe continues to experience a strong fuel odor in his vehicle cabin when the gas tank is completely filled.

Plaintiff Randa Herring is a resident of Georgia who purchased a 2006 Mercedes–Benz E500 on April 9, 2009. On July 29, 2012, she noticed a strong gasoline odor inside her vehicle. The next day, she took the vehicle to a Mercedes–Benz service center, where service technicians determined that the fuel leak was coming from the gas tank or its related components. The service center offered to replace the necessary components at a cost of $2,896.64 or to allow Herring to trade in her vehicle at a reduced value to reflect the problem with her fuel system. Herring elected to trade in her vehicle, and the service center deducted $3,937 from the trade-in value to reflect the problem.

Plaintiff Jon Dustin Stone is a resident of Texas who purchased a 2007 Mercedes–Benz E63 AMG on July 7, 2011. On January 18, 2012, Stone took his vehicle to a Mercedes–Benz service center, complaining of a fuel odor and fuel leak. After diagnosis, service technicians replaced his left-side fuel sending unit and installed a new seal on his right-side fuel sending unit. But just two days later, Stone returned to the service center, still complaining of a strong fuel odor in the cabin of his vehicle. At that point, service technicians determined that his new fuel sending unit was defective and replaced it with another one. However, on February 3, 2012, Stone returned to the service center after seeing a liquid fuel leak underneath his vehicle. This time, service technicians replaced his entire gas tank. However, Stone continues to experience a strong fuel odor in the cabin of his vehicle if the gas tank is completely filled.

Plaintiff Adam Deuel is a resident of Texas who purchased a 2004 Mercedes–Benz E500 on June 11, 2004. In August 2012, Deuel noticed a strong gasoline odor inside his vehicle. He took the vehicle to a Mercedes–Benz service center and paid $1,042.12 to have the left-side fuel sending unit replaced. He also had to pay $289 to replace the rear seat, which had been soaked with gasoline and stained. Despite having his fuel sending unit replaced, Deuel continues to experience a strong fuel odor when his gas tank is completely filled.

Plaintiff Minh Vo is a resident of Virginia who purchased a 2006 Mercedes–Benz E500 on December 15, 2008. He also purchased a 2005 Mercedes–Benz E55 AMG on December 23, 2010. Prior to Vo's ownership, the E55 AMG had parts replaced under MBUSA's recall campaign. But on March 14, 2011, Vo took the vehicle to a Mercedes–Benz service center because he was experiencing a gasoline odor both inside and outside the vehicle. The service center refused to perform additional work under the recall but replaced one of the vehicle's fuel sending units and two of its seal rings at a cost of $945.28 to Vo. Despite these repairs, Vo continues to experience a strong fuel odor in the cabin of his E55 AMG whenever the gas tank is completely filled. He has also experienced similar issues with his E500, but no repairs have been performed on that vehicle yet.

Plaintiff Omar Mattadeen is a resident of Florida who purchased a new 2004 E55 AMG on April 9, 2004. On March 27, 2008, he took the vehicle to a Mercedes–Benz service...

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