Nuwer v. FCA US LLC

• Decision Date: 30 March 2021
• Docket Number: CASE NO. 20-60432-CIV-SINGHAL
• Citation: 552 F.Supp.3d 1344
• Parties: Jason NUWER, Mark Minkowitz, Amarillis Ginoris, Christina Vigoa, and Kevin Van Allen on behalf of themselves and all others similarly situated, Plaintiffs, v. FCA US LLC f/k/a Chrysler Group LLC, a Delaware limited liability company, Defendant.
• Court: U.S. District Court — Southern District of Florida

552 F.Supp.3d 1344

Jason NUWER, Mark Minkowitz, Amarillis Ginoris, Christina Vigoa, and Kevin Van Allen on behalf of themselves and all others similarly situated, Plaintiffs,

v.FCA US LLC f/k/a Chrysler Group LLC, a Delaware limited liability company, Defendant.

CASE NO. 20-60432-CIV-SINGHAL

United States District Court, S.D. Florida.

Signed March 30, 2021

Alissa Del Riego, John Gravante, III, Peter Prieto, Matthew Weinshall, Podhurst Orseck P.A., Benjamin Jacobs Widlanski, Kozyak Tropin Throckmorton LLP, Miami, FL, Gail Ann McQuilkin, Harley Shepard Tropin, Katherine Ann Mitchell, Meaghan E. Goldstein, Rachel Sullivan, Robert J. Neary, Kozyak, Tropin & Throckmorton, P.A., Coral Gables, FL, George Franjola, Law Office of George Franjola, Ocala, FL, Michael A. Burger, Pro Hac Vice, Santiago Burger, LLP, Rochester, NY, for Plaintiffs.

Michael Roland Holt, Scott M. Sarason, Rumberger Kirk & Caldwell, Steven Craig Jones, Wilson Elser Moskowitz Edelman & Dicker, Miami, FL, Fred J. Fresard, Pro Hac Vice, Ian K. Edwards, Pro Hac Vice, Klein, Thomas & Lee LLC, Troy, MI, Paul T. Stewart, Pro Hac Vice, Dykema Gossett PLLC, Ann Arbor, MI, for Defendant.

ORDER

RAAG SINGHAL, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court on Defendant FCA US LLC's Motion to Dismiss First Amended Complaint (DE [31]) and supplemental memorandum of law (DE [32]). The motion having been fully briefed and argued by counsel, the matter is ripe for review. For the reasons discussed below, the motion is denied.

I. BACKGROUND

Plaintiffs Jason Nuwer ("Nuwer"), Mark Minkowitz ("Minkowitz"), Amarillis Ginoris ("Ginoris"), Christina Vigoa ("Vigoa"), and Kevin Van Allen ("Van Allen") (collectively, "Plaintiffs") filed a class action complaint¹ against FCA US LLC f/k/a Chrysler Group, LLC ("Chrysler") and Grammer Industries, Inc. ("Grammer") alleging that Chrysler sold and leased automobiles equipped with defective headrests that were manufactured by Grammer.² The headrests contain an active head restraint system ("AHR") which is designed to engage in a rear-end collision and catch the occupant's head to prevent whiplash. (DE [10] ¶ 1). Plaintiffs allege that Chrysler manufactured, advertised, and sold certain classes of vehicles³ despite knowledge that the AHR contained a defective plastic bracket that is prone to break down prematurely causing the AHR to deploy without warning or external force from a collision and forcefully strike the back of the occupant's head. (Id. ¶¶ 2-3, 61).

Plaintiffs are residents of Florida, New York, and Arizona⁴ who purchased or leased Chrysler vehicles from dealerships within the United States.⁵ Minkowitz alleges that his passenger side headrest deployed during normal operations in 2018, resulting in a $700 repair bill (Id. ¶ 96). None of the remaining named Plaintiffs experienced a headrest malfunction. Nevertheless, Plaintiffs allege that the defective AHR poses a serious risk of harm because it is substantially certain to malfunction and deploy when the vehicle is in normal use. (Id. ¶ 61).

Plaintiffs allege that Chrysler advertised the AHR as a "standard and effective safety feature" despite knowledge of the AHR's defect (Id., ¶¶ 40, 68-71, 77-90). Plaintiffs claim to have been damaged by purchasing or leasing vehicles that were of a lesser standard, grade, and quality than Chrysler represented and that they did not receive vehicles that met "ordinary and reasonable consumer standards" for safety. (Id. at ¶ 104-105). As a result, Plaintiffs allege they and the proposed class members "were deprived of the benefit of their bargain" by paying more for their vehicles than they would have if Chrysler had disclosed the defective AHR. (Id. ). Plaintiffs also allege out-of-pocket damages incurred in replacing headrests damaged by the deployment of the AHR. (Id. ¶ 107).

The First Amended Complaint seeks relief under Florida, Arizona, and New York law. The Florida Plaintiffs allege violation of Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. § 501.201, et seq. (Count I). Minkowitz alleges violation of Arizona Consumer Fraud Act, Ariz. Rev. Stat. Ann. § 44-1522 (Count II). Van Allen alleges violation of New York General Business Law, N.Y. Gen. Bus. Law. § 350 (Count III). Count IV alleges fraud by concealment on behalf of the New York and Arizona Plaintiffs and subclass. And on behalf of all Plaintiffs and class members, the First Amended Complaint alleges violations of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. (Count VI) and unjust enrichment (Count VIII).⁶

II. MOTION TO DISMISS

Chrysler moves to dismiss the First Amended Complaint on the grounds of (1) lack of standing, (2) failure to state a claim under state law upon which relief can be granted, (3) failure to plead fraud with particularity, (4) failure to state a claim under Magnuson-Moss, and (5) statute of limitations. Each of these grounds is set forth in more detail below.

A. Lack of Standing

To establish standing, a plaintiff must show "(1) an injury in fact; (2) a causal connection between the injury and the alleged misconduct; and (3) a likelihood that the injury will be redressed by a favorable decision." L.M.P. on behalf of E.P. v. Sch. Bd. of Broward Cty., Fla. , 879 F.3d 1274, 1281 (11th Cir. 2018) (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). "At the pleading stage, the plaintiff must clearly allege facts demonstrating each of these elements." Gesten v. Burger King Corp. , 2017 WL 4326101, at *1 (S.D. Fla. Sept. 27, 2017) (citing Spokeo, Inc. v. Robins , 578 U.S. 330, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016), as revised (May 24, 2016)).

"Injury in fact is a constitutional requirement." Spokeo, Inc., 136 S. Ct. at 1547–48 (quotations omitted). "To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Id. at 1548 (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ). "For an injury to be particularized, it must affect the plaintiff in a personal and individual way." Spokeo, Inc., 136 S. Ct. at 1548 (internal quotations and citations omitted). To be concrete, "the injury must be ‘de facto’; that is, it must actually exist." Id. at 1549. " ‘Concrete’ is not, however, necessarily synonymous with ‘tangible.’ " Id. at 1549. Finally, "to satisfy the injury prong of Article III standing, a plaintiff must present specific, concrete facts showing that the challenged conduct will result in a demonstrable, particularized injury to the plaintiff." Miccosukee Tribe of Indians of Fla. v. Fla. State Athletic Comm'n, 226 F.3d 1226, 1228–29 (11th Cir. 2000) (cleaned up and internal quotations omitted). "An allegation of an abstract injury will not suffice." Id.

A defendant may make a facial or a factual attack on standing. Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008). "A facial attack on the complaint requires the court to merely look and see if the plaintiff has sufficiently alleged a basis for subject matter jurisdiction, and the allegations in his complaint are taken as true for purposes of the motion." Id. A factual attack uses materials extrinsic from the complaint, such as affidavits or testimony. Id. Chrysler has made a facial attack on Plaintiffs’ standing.

Chrysler argues all Plaintiffs except Minkowitz lack standing because they do not show an injury in fact. Only Minkowitz's vehicle experienced a malfunction of the AHR. Chrysler, therefore, argues that the remaining Plaintiffs’ injuries are merely hypothetical and insufficient to establish standing. Further, Chrysler maintains that the threat of a malfunction is not an imminent harm sufficient to establish standing. The Court disagrees.

The First Amended Complaint alleges that the AHRs installed in Plaintiffs’ vehicles contain a bracket made of a substandard plastic that is prone to breaking and cracking over time, thus allowing the AHR to be spontaneously deployed. (DE [10], ¶¶ 58-62). Plaintiffs argue that even if their AHRs did not deploy, they nevertheless suffered economic injury because the existence of a latent defect in the head restraint system deprived them of the "benefit of the bargain" at the point of sale. As the Eleventh Circuit has noted, "economic injury qualifies as a concrete injury." Debernardis v. IQ Formulations, LLC, 942 F.3d 1076, 1084 (11th Cir. 2019) (loss of benefit of the bargain constitutes a concrete injury-in-fact to establish standing).

The injury alleged in this case is not the deployment of the AHR; it is the purchase of a vehicle with a latent defect. The alleged injury occurred at the time of purchase. See In re Aqua Dots Prod. Liab. Litig., 654 F.3d 748, 751 (7th Cir. 2011) (parents whose children did not swallow toy containing adulterated adhesive had standing to sue because they paid more for the toys than they would have, had they known the latent risk of the toy); Melton v. Century Arms, Inc., 243 F. Supp. 3d 1290, 1299 (S.D. Fla. 2017) (plaintiffs had standing to sue for unmanifested defect in rifles manufactured by defendant because loss of benefit of the bargain occurred at point of sale).

Chrysler argues that the four Plaintiffs whose headrests did not deploy allege only hypothetical injury and, therefore, these Plaintiffs cannot establish standing. They cite Clapper v. Amnesty Intern. USA, 568 U.S. 398, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013), and Hall v. Omega Flex, Inc., 2014 WL 12496551 (S.D. Fla. Jan. 17, 2014), for the proposition that a risk of harm that is not certain to occur cannot support standing. In Clapper , attorneys and human rights organizations sought a declaration that Section 702 of the Foreign Intelligence Surveillance Act of 1978 (FISA), 50 U.S.C. § 1881a, which permitted government surveillance of telephone calls with foreign nationals,...