Szep v. Gen. Motors LLC

• Decision Date: 30 September 2020
• Docket Number: Case No. 1:19 CV 2858
• Citation: 491 F.Supp.3d 280
• Parties: Thomas SZEP, individually and on behalf of all others similarly situated, Plaintiff v. GENERAL MOTORS LLC, Defendant
• Court: U.S. District Court — Northern District of Ohio

491 F.Supp.3d 280

Thomas SZEP, individually and on behalf of all others similarly situated, Plaintiff

v.GENERAL MOTORS LLC, Defendant

Case No. 1:19 CV 2858

United States District Court, N.D. Ohio, Eastern Division.

Signed September 30, 2020

H. Clay Barnett, III, J. Mitch Williams, Wilson Daniel Miles, III, Leslie L. Pescia, Beasley, Allen Crow, Methvin Protis & Miles, Montgomery, AL, John E. Tangren, DiCello Levitt Gutzler, Chicago, IL, Justin J. Hawal, Mark A. DiCello, DiCello Levitt & Gutzler, Mentor, OH, for Plaintiff.

April N. Ross, Crowell & Moring - Washington, Kathleen Taylor Sooy, Crowell & Moring LLP, Washington, DC, Denise A. Dickerson, Sutter O'Connell, Cleveland, OH, for Defendant.

ORDER

SOLOMON OLIVER, JR., UNITED STATES DISTRICT JUDGE

Currently pending before the court in the above-captioned case is Defendant General Motors LLC's ("Defendant" or "GM") Motion to Dismiss Class Action Complaint ("Motion")(ECF No. 7) wherein Defendant asserts that Plaintiff's claims fail on multiple grounds. Specifically, Defendant contends that the Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1) because: (1) Plaintiff lacks standing on all claims because he does not allege a concrete injury; (2) Plaintiff lacks standing to seek injunctive relief under the Ohio Consumer Sales Practices Act ("OCSPA") ("Count Two"); (3) Plaintiff lacks standing to assert a claim under the Magnuson-Moss Warranty Act ("MMWA") ("Count One") on behalf of a nationwide class.

In addition, Defendant argues that Plaintiff's MMWA (Count One), OCSPA (Count Two), breach of express warranty ("Count Three"), breach of implied warranty ("Count Four"), fraudulent omission ("Count Five"), and unjust enrichment ("Count Six") claims should be dismissed for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (" Rule 12"). Finally, Defendant also assert that Plaintiff's fraudulent omission (Count Five) claim should be dismissed pursuant to Federal Rule of Civil Procedure (9)(b) ("Rule 9"). For the reasons that follow, the court grants Defendant's Motion.

I. BACKGROUND

A. Factual Background

Plaintiff Thomas Szep ("Plaintiff" or "Szep") is a resident of Ohio, and the owner of a 2011 Chevrolet Silverado, which is equipped with a Generation IV 5.3 Liter V8 Vortec 5300 Engine ("Gen IV Engine"). (Compl. ¶¶ 24–25, ECF No. 1.) Plaintiff alleges that GM designed the Gen IV Engine that is installed in his vehicle and other model year 2010 through 2014 General Motors Corporation ("GMC") and Chevrolet vehicles. (Id. ¶¶ 2, 4.) The court collectively refers to these vehicles as the "Class Vehicles."

Plaintiff alleges that Gen IV Engines consume an "abnormally and improperly high" quantity of oil (the "oil consumption defect"), which far exceeds industry standards for reasonable oil consumption. (Id. ¶ 5.) This excessive oil consumption results in low oil levels, insufficient lubricity levels, and corresponding internal engine component damage. (Id. ) According to Plaintiff, the primary cause of the oil consumption defect is that the piston rings that GM installed within the Gen IV Engines do not maintain sufficient tension to keep the oil in the crankcase. (Id. ¶ 8.) He also contends that the Gen IV Engines’ Active Fuel Management ("AFM") Systems, Positive Crankcase Ventilation ("PCV") Systems, and Oil Life Monitoring Systems contribute to and/or exacerbate the oil consumption defect. (Id. ¶¶ 9–13.) Plaintiff maintains that the oil consumption defect results in engine failure and engine damage. (Id. ¶¶ 18–19.) However, Szep does not allege that his vehicle actually experienced any excessive oil consumption problems. He also does not allege that his vehicle experienced any damage due to excessive oil consumption.

Further, Plaintiff alleges that GM was aware of the oil consumption defect in the Gen IV Engines and failed to disclose it to consumers prior to the purchase or lease of their Class Vehicles. (Compl. ¶¶ 15–18.) In support of his allegation that GM knew about the oil consumption defect, Plaintiff highlights the following facts: (1) GM abandoned the Gen IV Engines and replaced them with its redesigned Generation V Vortec 5300 Engine ("Gen V Engine"); (2) many consumers complained about excessive oil consumption to the National Highway Traffic Safety Administration ("NHTSA") and on online websites such as carcomplaints.com; and (3) GM issued multiple Technical Service Bulletins ("TSBs") addressing oil loss in vehicles with Gen IV Engines. (Id. ¶¶ 16–17, 70–102.) The TSBs stated that oil loss issues in vehicles with Gen IV Engines "could be caused by two conditions: (a) oil pulled through the PCV [S]ystem; or (b) oil spray that is discharged from the AFM [S]ystem's pressure relief valve within the crankcase." (Id. ¶ 75.) The TSBs also suggested fixes for these issues, but noted that the ultimate fix would require replacement of the piston assemblies. (Id. )

Despite this alleged knowledge, Szep maintains that GM never disclosed the oil consumption defect to consumers. (Compl. ¶ 19.) Instead, GM "extensively advertised the performance benefits" of the Gen IV Engines and told consumers that the Class Vehicles "were dependable, long-lasting, and of the highest quality." (Id. ¶¶ 103–04.) As a result, Plaintiff contends that he and the putative class members suffered "damages in that they paid more for their [c]lass [v]ehicles than they would have paid had they known about the [oil consumption] defect that GM failed to disclose, or they would not have purchased or leased their [c]lass [v]ehicles at all." (Id. ¶ 20.)

B. Procedural History

On December 10, 2019, Plaintiff filed a Class Action Complaint in this court seeking damages and equitable relief individually and on behalf of all others who purchased or leased model year 2010 through 2013 GM vehicles equipped with a Gen IV Engine. (Compl. ¶ 1, ECF No. 1.) Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiff seeks to represent a nationwide class consisting of current and former owners or lessees of a Class Vehicle that was purchased or leased in the United States, and a statewide class consisting of current and former owners or lessees of a Class Vehicle that was purchased or leased in Ohio. (Id. ¶¶ 138–40.) Plaintiff brings the following claims: violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (Count One); violation of the Ohio Consumer Sales Practices Act, Ohio Rev. Code §§ 1345.01, et seq. (Count Two); breach of express warranty, Ohio Rev. Code §§ 1302.26 and 1310.17 (Count Three); breach of implied warranty in tort (Count Four); fraudulent omission (Count Five); and unjust enrichment (Count Six). (Compl. ¶¶ 148–210, ECF No. 1.)

Thereafter, on February 10, 2020, GM filed the Motion considered herein, requesting the court dismiss Szep's Class Action Complaint. (ECF No. 7.) On June 15, 2020, Plaintiff filed his Opposition. (ECF No. 16.) On July 29, 2020, GM filed its Reply. (ECF No. 27.)

II. LEGAL STANDARD

A. Federal Rule of Civil Procedure 12(b)(1) and Standing

A defendant may challenge the court's subject matter jurisdiction with a motion to dismiss pursuant for lack of standing. Article III "standing is a question of subject matter jurisdiction properly decided under Rule 12(b)(1). Am. BioCare Inc. v. Howard Attorneys PLLC , 702 F. App'x 416, 419 (6th Cir. 2017). To establish standing, the plaintiff must allege that: (1) he has suffered an injury in fact that is concrete and particularized and actual or imminent, not conjectural or hypothetical; (2) his injury is fairly traceable to the challenged action; and (3) it is likely as opposed to merely speculative, that the injury will be redressed by a favorable decision. McGlone v. Bell , 681 F.3d 718, 729 (6th Cir. 2012) (internal citations and quotation marks omitted). The party seeking federal court jurisdiction bears the burden of establishing standing.

Rosen v. Tenn. Comm'r of Fin. & Admin. , 288 F.3d 918, 927 (6th Cir. 2002) (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 561–62, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). The court will grant a Rule 12(b)(1) motion to dismiss "only if, taking as true all facts alleged by the plaintiff, the court is without subject matter jurisdiction to hear the claim." 84 Video/Newsstand, Inc. v. Sartini , No. 1:07-CV-3190, 2008 WL 11287170, at *5 (N.D. Ohio May 13, 2008) (quotation omitted).

B. Federal Rule of Civil Procedure 12(b)(6)

The court examines the legal sufficiency of a plaintiff's claims under Rule 12(b)(6). The United States Supreme Court clarified the law regarding what a plaintiff must plead in order to survive a motion made pursuant to Rule 12(b)(6) in Bell Atl. Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). When determining whether the plaintiff has stated a claim upon which relief can be granted, the court must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the complaint contains "enough facts to state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. The plaintiff's obligation "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555, 127 S.Ct. 1955. Even though a complaint need not contain "detailed" factual allegations, its "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the Complaint are true." Id. A court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).

The Court, in Iqbal , further explained the "plausibility" requirement, stating that "[a] claim has facial plausibility when the plaintiff pleads factual content...