Rieger v. Volkswagen Grp. of Am.

Decision Date04 May 2023
Docket Number1:21-cv-10546-NLH-EAP
PartiesJENI RIEGER, ALOHA DAVIS, JODIE CHAPMAN, CARRIE VASSEL, KAREN BURNAUGH, TOM GARDEN, ADA and ANGELI GOZON, HERNAN A. GONZALEZ, PATRICIA A. HENSLEY, CLYDIENE FRANCIS, PETER and GUNNEL LOWEGARD, and GRANT BRADLEY individually, and on behalf of a class of similarly situated individuals, Plaintiffs, v. VOLKSWAGEN GROUP OF AMERICA, INC., a New Jersey corporation, d/b/a AUDI OF AMERICA, INC., AUDI AG, a German corporation, and VOLKSWAGEN AG, a German corporation, Defendants.
CourtU.S. District Court — District of New Jersey


HOMER B. RAMSEY SHOOK, HARDY & BACON L.L.P., C. MICHAEL ROWAN JR. HERZFELD & RUBIN, LLC On behalf of Defendant Volkswagen Group of America, Inc.



Pending before the Court are Defendant Volkswagen Group of America Inc.'s (“VGA”) motion to dismiss the consolidated class action complaint (“CAC”), (ECF 53), and Plaintiffs' motion to appoint interim lead class counsel and members of Plaintiffs' steering committee (ECF 60). For the reasons expressed below, Plaintiffs' motion will be granted and VGA's motion will be granted in part and denied in part.

I. Background

VGA, which conducts business under the name “Audi of America, Inc.,” is a New Jersey corporation with a principal place of business in Herndon, Virginia that markets, distributes, warranties, and sells Volkswagen and Audi-branded vehicles and parts. (ECF 45 at ¶¶ 168-69).

Plaintiffs Jeni Rieger and Ada and Angeli Gozon are domiciled in Nevada. (Id. at ¶¶ 18, 97). Rieger purchased a certified pre-owned 2015 Audi A4 Allroad from an Audi dealership in San Diego, California on or about August 18, 2016, (id. at ¶ 19), while the Gozons purchased a new 2013 Audi A4 from an Audi dealership in Las Vegas, Nevada on or about April 25, 2013, (id. at ¶ 98). Plaintiff Aloha Davis is a Florida domiciliary who purchased a certified pre-owned 2017 Audi A4 on or about February 2, 2019 from an Audi dealership in Jacksonville Florida. (Id. at ¶¶ 28-29). Plaintiff Jodie Chapman is a Georgia domiciliary who purchased a used 2017 Audi Q3 from a used-car dealership in Marietta, Georgia in or around March 2021. (Id. at ¶¶ 43-44). Plaintiff Carrie Vassel is a domiciliary of Illinois who, on or about October 28, 2020, purchased a used 2012 Audi Q5 from a dealership in Orland Park, Illinois. (Id. at ¶¶ 56-57). Plaintiff Karen Burnaugh is a domiciliary of Tennessee who purchased a new 2012 Audi A4 from an Audi dealership in Metairie, Louisiana on or about May 28, 2012. (Id. at ¶¶ 69-70). Plaintiff Tom Garden is a Minnesota domiciliary who purchased a new 2014 Audi Q5 from an Audi dealership in Maplewood, Minnesota on or about April 16, 2014. (Id. at ¶¶ 83-84). Plaintiff Hernan A. Gonzalez is domiciled in New Jersey and purchased a new 2015 Audi Q5 from an Audi dealership in Englewood, New Jersey on or about November 15, 2014. (Id. at ¶¶ 108-09). Plaintiff Patricia A. Hensley is a New York domiciliary who purchase a used 2015 Audi A3 Cabriolet from a dealership in Perkasie, Pennsylvania on or about May 25, 2016. (Id. at ¶¶ 118-19).

Plaintiff Clydiene Francis is a domiciliary of Pennsylvania and, on or about August 22, 2020, she purchased a used 2012 Audi A4 from a dealership in Harrisburg, Pennsylvania. (Id. at ¶¶ 130-31). Plaintiffs Peter and Gunnel Lowegard are domiciled in Texas and purchased a new 2013 Audi Q5 from an Audi dealership in Plano, Texas on or about June 7, 2013. (Id. at ¶¶ 145-46). Finally, Plaintiff Grant Bradley is a Washington domiciliary who purchased a new 2012 Audi A4 Avant from an Audi dealership in Beaverton, Oregon on or around March 23, 2012. (Id. at ¶¶ 154-55).

Plaintiffs filed their initial complaint on April 30, 2021, (ECF 1), and thereafter filed amendments, (ECF 11; ECF 36), before filing the CAC on October 12, 2021, (ECF 45). The CAC asserts thirty-six counts,[1] consisting of causes of action under theories of express and implied warranties and state fraud and consumer-protection statutes applicable to states in which Plaintiffs purchased their vehicles or are domiciled. (Id.). Plaintiffs bring this action on behalf of themselves and a nationwide class of individuals who purchased or leased a class vehicle - defined as 2012-2017 Audi vehicles equipped with 2.0 liter turbocharged engines - pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(3). (Id. at ¶¶ 1, 275-76). The CAC also presents fourteen total sub-classes for class members who purchased or leased class vehicles in California, Florida, Georgia, Illinois, Louisiana, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, Texas, and Washington. (Id. at ¶ 276).

The central allegations described in the CAC are that class vehicles suffer from one or more design, manufacturing, or workmanship defects resulting in piston rings failing to seat properly and piston components being unable to withstand engine heat and pressure, resulting in these parts cracking, fracturing, or splintering. (ECF 45 at ¶ 188). This damage results in excessive oil consumption, component fragments circulating through the engine, engine damage, engine knock, loss of compression, preignition, and potential safety risks due to loss of engine power. (Id. at ¶¶ 6-10, 188, 191). These issues arise before the class vehicles reach 75,000 miles, according to Plaintiffs, and the replacement of piston parts or components may cost several thousands of dollars while replacement of an entire 2.0-liter turbocharged engine may cost more than $10,000. (Id. at ¶¶ 6, 10). Plaintiffs allege that VGA was aware of the defect through sources unavailable to consumers and concealed such information. (Id. at ¶¶ 6, 189).

VGA moved to dismiss, (ECF 53), and Plaintiffs filed an opposition, (ECF 55), to which VGA replied, (ECF 59). During this time, Plaintiffs filed a notice of voluntary dismissal without prejudice as to the two other Defendants named in the CAC, Audi AG and Volkswagen AG. (ECF 58).[2] Plaintiffs' motion to appoint interim lead class counsel and members of its steering committee followed on September 21, 2022. (ECF 60).

II. Discussion
A. Jurisdiction

The Court possesses jurisdiction over this matter pursuant to the Class Action Fairness Act of 2005, which provides district courts with original jurisdiction over class actions in which the matter in controversy exceeds $5 million exclusive of interest and costs and any class member is a citizen of a different state than any defendant. See 28 U.S.C. § 1332(d)(2).

B. Motions to Dismiss

In advance or in lieu of an answer to a complaint, a defendant may move to dismiss for lack of subject-matter jurisdiction or failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(1), (6). To survive dismissal under Rule 12(b)(6), “a complaint must provide ‘a short and plain statement of the claim showing that the pleader is entitled to relief,' Doe v. Princeton Univ., 30 F.4th 335, 341-42 (3d Cir. 2022) (quoting Fed.R.Civ.P. 8(a)(2)), and -accepting the plaintiff's factual assertions, but not legal conclusions, as true - ‘plausibly suggest[]' facts sufficient to ‘draw the reasonable inference that the defendant is liable for the misconduct alleged,' id. at 342 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Courts further evaluate the sufficiency of a complaint by (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged.” Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

A motion to dismiss pursuant to Rule 12(b)(1) may attack subject-matter jurisdiction facially or factually. Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A facial attack does not dispute the facts as alleged in the complaint, id., and therefore essentially applies the same standard as Rule 12(b)(6), see Severa v. Solvay Specialty Polymers USA, LLC, 524 F.Supp.3d 381, 389 (D.N.J. Mar. 10, 2021) (citing In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012)). A factual attack, on the other hand, challenges the allegations by which jurisdiction is asserted, permitting the court to weigh evidence outside the pleadings and placing a burden of proof on the plaintiff to demonstrate that jurisdiction indeed exists. See Davis, 824 F.3d at 346.

Finally as is the case here, when a plaintiff alleges fraud, they “must state with particularity the circumstances constituting fraud,” though conditions of the mind such as knowledge may be pled generally. Fed.R.Civ.P. 9(b). “In order to satisfy Rule 9(b), a complaint must provide ‘all of the essential factual background that would accompany “the first paragraph of any newspaper story” - that is, the “who, what, when, where and how” of the events at issue.' United States v. Eastwick Coll., 657 Fed.Appx. 89, 93 (3d Cir. 2016) (quoting In re Rockefeller Ctr. Props., Inc. Secs. Litig., 311 F.3d 198, 217 (3d Cir. 2002)). This standard is relaxed slightly for fraudulent omission claims where pleading specific times and places may not be practicable and, instead, Rule 9(b) may be satisfied by “alleg[ing] what the omissions were, the person responsible for failing to disclose the information, the context of the omission and the manner in which it misled plaintiff and what defendant obtained through the fraud.” See Johansson v. Cent. Garden & Pet Co., 804 F.Supp.2d 257, 264 (D.N.J. May 26, 2011) (quoting Luppino v. Mercedes-Benz USA, LLC, No....

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