Sloan v. Gen. Motors LLC, Case No. 16-cv-07244-EMC
| Decision Date | 01 August 2017 |
| Docket Number | Case No. 16-cv-07244-EMC |
| Parties | MONTEVILLE SLOAN, et al., Plaintiffs, v. GENERAL MOTORS LLC, Defendant. |
| Court | U.S. District Court — Northern District of California |
Plaintiffs have filed a class action against Defendant General Motors LLC ("GM") asserting that GM's Generation IV Vortec 5300 Engine used in GM's 2010-2013 vehicles is defective and that GM knew the engine was defective at the time it sold the vehicles to Plaintiffs but failed to disclose the alleged defect to consumers. Based on those allegations, Plaintiffs assert claims under various state consumer protection and fraud statutes, including California's Consumer Legal Remedies Act ("CLRA") and Unfair Competition Law ("UCL"). Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS GM's motion to dismiss with leave to amend.
As a preliminary matter, the Court provides below a chart, which lists the name of each named Plaintiff, the state where Plaintiff purchased his or her car, the state of Plaintiff's residence, the car that was purchased and the date of purchase. Name
State of
Purchase Car Date of Purchase Raul Siqueiros California 2011 Chevrolet Silverado N/A Joseph Brannan Alabama 2010 GMC Yukon 2011
Larry Goodwin Arkansas 2011 Chevrolet Silverado 2010
Ted Edgecomb Colorado 2011 Chevrolet Silverado 2011
Marc Perkins Delaware 2011 Chevrolet Avalanche 2011
Donald Ludington Florida 2010 Chevrolet Tahoe 2012
Thomas Shorter Florida 2011 Chevrolet Silverado N/A Derick Bradford Georgia 2010 Chevrolet Silverado 2014
Gabriel Del Valle Idaho 2013 Chevrolet Avalanche 2/2016
Kevin Hanneken Illinois 2011 GMC Sierra 1500 2011
Gail B. Lannom
Indiana 2012 Chevrolet Tahoe 01/2015
Bradley K. Zierke
Iowa 2012 Chevrolet Avalanche 2011
Dan Madson Kansas 2013 Chevrolet Silverado 12/2013
James Faulkner Kentucky 2011 GMC Sierra 2015
Joseph Olivier Louisiana 2013 GMC Sierra N/A Scott Smith Massachusetts 2011 GMC Yukon 2012
Ross Dahl Minnesota 2010 Chevrolet Silverado 2010
Drew Peterson Minnesota 2013 Chevrolet Silverado 12/2012
Michael Ware Mississippi 2013 Chevrolet Silverado 2016
Steve Kitchen Missouri 2013 Chevrolet Silverado 07/2013
John Neubauer Nebraska 2011 Chevrolet Silverado 2012
Barbara Molina
New Mexico 2012 Chevrolet Avalanche N/A Steven Ehrke
North Carolina 2013 Chevrolet Silverado 2/2016
Bill Mauch
North Dakota 2011 Chevrolet Silverado 2013
Thomas Gulling Ohio 2013 Chevrolet Silverado N/A Ronald Jones Ohio 2013 Chevrolet Silverado N/A Mike Warpinski Oklahoma 2012 Chevrolet Express 2014
John Graziano Pennsylvania 2012 Chevrolet Silverado 12/2011
Monteville Sloan South Carolina 2013 Chevrolet Silverado 08/2014
Joshua Byrge Tennessee 2012 Chevrolet Silverado 2016
Rudy Sanchez Texas 2013 Chevrolet Silverado 07/2013
Christopher Thacker Virginia 2010 Chevrolet Silverado 06/2014
Randy Clausen Washington 2012 Chevrolet Suburban 2013
James Robertson
West Virginia 2010 GMC Sierra 2010
Jonas Bednarek Wisconsin 2010 Chevrolet Suburban 2010
Each Plaintiff purchased one of the following vehicles, which all have a Generation IVVortec 5300 Engine (the "Class Vehicles"): 2010-2013 Chevrolet Avalanche; 2010-2012 Chevrolet Colorado; 2010-2013 Chevrolet Express 1500; 2010-2013 Chevrolet Silverado 1500; 2010-2013 Chevrolet Suburban; 2010-2013 Chevrolet Tahoe; 2010-2013 GMC Canyon; 2010-2013 GMC Savana 1500; 2010-2013 GMC Sierra 1500; 2010-2013 GMC Yukon; and 2010-2013 GMC Yukon XL.
In their complaint, Plaintiffs allege that the Generation IV Vortec 5300 Engine consumes an FAC ¶ 5. The alleged cause of this excessive consumption is defective low-tension oil control rings that GM installed within those engines (the "Low-Tension Oil Rings"). FAC ¶ 7. The Low-Tension Oil Rings were originally designed to reduce friction between the oil rings and cylinder walls in order to improve fuel economy, horsepower and torque. FAC ¶ 7. However, this oil ring design "improperly allows engine oil to travel past the pistons and enter the engine's combustion chambers, where it is either consumed in the combustion process, or it hardens and accumulates therein" (the "Low-Tension Oil Ring Defect"). FAC ¶ 7.
Plaintiffs allege that the FAC ¶ 143. Potential consequences include overheating, the engine catching on fire, and the engine shutting down unexpectedly. FAC ¶¶ 148-150. To prevent damage from critically low oil levels, GM implemented an Oil Life Monitoring System but Plaintiffs allege the system fails to advise drivers of insufficient oil levels in their vehicles. FAC ¶¶ 9, 141-142. However, none of the Plaintiffs allege that their vehicles actually experienced any excessive oil consumption. Further, not a single Plaintiff alleges that his or her vehicle experienced any damage due to excessive oil consumption from the Low-Tension Oil Rings.
Plaintiffs also allege that GM knew about the excessive oil consumption problem caused by the Low-Tension Oil Ring Defect in the Generation IV Vortec 5300 Engines. FAC ¶ 13. First,Plaintiffs allege GM knew of the defect because GM abandoned the Low-Tension Oil Ring design in its redesign of the Generation V Vortex 5300 Engines, which began as early as May 2011. FAC ¶ 152. Second, Plaintiffs allege many consumers complained about excessive oil consumption, referencing 68 complaints made on carcomplaints.com and explicitly citing thirteen complaints made to such online forums and the National Highway Traffic Safety Administration ("NHTSA"). FAC ¶¶ 159-165. Third, Plaintiffs allege GM knew of the defect because GM issued one Technical Service Bulletin ("TSB") addressing the oil loss in vehicles with Generation IV Vortec 5300 engines. The TSB stated oil loss "could be caused by two conditions: (a) oil pulled through the Positive Crankcase Ventilation (PCV) system; or (b) oil spray that is discharged from the Advanced Fuel Management (AFM) system's pressure relief valve within the crankcase." FAC ¶ 157. GM suggested fixes for these issues but stated that if those fixes did not work, "[i]t may be necessary to replace all of the piston assemblies (pistons and rings) with new parts." TSB No. 10-06-01-008G: Engine Oil Consumption on Aluminum Block/Iron Block Engines with Active Fuel Management.
Despite this alleged knowledge, GM has never disclosed the Low-Tension Oil Ring Defect to consumers and "has allowed drivers of the Class Vehicles to continue driving those vehicles, despite knowing that they are consuming oil at an abnormally high rate." FAC ¶ 13. Therefore Plaintiffs seek relief from their injury, which they identify as the fact that "they paid more for their Class Vehicles than they would have paid had they known about the defect that GM failed to disclose, or they would not have purchased or leased their Class Vehicles at all." FAC ¶ 14. Moreover Plaintiffs allege GM "trumpeted the performance of the Generation IV Vortec 5300 Engines and continuously proclaimed that the class vehicles were dependable and of the highest quality, concealing and omitting the low-tension oil ring defect." FAC ¶ 166. Specifically Plaintiffs allege GM advertised the performance benefits of the Class Vehicles. FAC ¶¶ 168-187. GM told consumers that the class Vehicles were "dependable, long-lasting and of the highest quality", leading consumers to "believe that the Class Vehicles would be free from defects that result in excessive oil loss and engine damage." FAC ¶¶ 167. Plaintiffs seek relief under the following statutes: (1) Magnuson-Moss Warranty Act; (2) 32 state consumer protection and fraud-based statutes such as the California Consumer Legal Remedies Act ("CLRA") and California Unfair Competition Law ("UCL"); and (3) 32 breach of implied and express warranty state statutes.
Plaintiffs first filed a class action complaint for declaratory and injunctive relief on December 19, 2016. Docket No. 2 ("Complaint"). On February 27, 2017 Plaintiffs filed a First Amended Complaint. Docket No. 29 ("FAC"). On April 10, 2017, GM filed the instant motion to dismiss the First Amended Complaint, arguing that Plaintiffs lack constitutional standing, have failed to adequately plead consumer protection and fraud claims, breach of express and implied warranty claims, and unjust enrichment, and that Plaintiffs' claims are barred by applicable statutes of limitation. Docket No. 47 ("GM Motion"). In response, Plaintiffs filed an Opposition to the Motion to Dismiss on May 25, 2017. Docket No. 57 ("Opp."). Then, on June 15, 2017 GM filed a Reply to Plaintiff's Opposition. Docket No. 58 ("GM Reply").
GM moves for dismissal for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Standing is "a threshold matter" that is necessary to establish subject matter jurisdiction. Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). In order to establish standing, the Plaintiffs must show (1) an injury in fact; (2) a "causal connection between the injury and the conduct complained of;" and (3) redressability of the injury. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may...
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