Wood v. Gen. Motors Corp.

Decision Date25 March 2015
Docket Number08 CV 5224 (PKC) (AKT)
PartiesTZVEE WOOD and ANDREA MALESTER, Plaintiffs, v. GENERAL MOTORS CORPORATION, et al. Defendants.
CourtU.S. District Court — Eastern District of New York
MEMORANDUM & ORDER

PAMELA K. CHEN, United States District Judge:

Currently pending before the Court is Defendants' motion to dismiss Plaintiffs' Amended Complaint for lack of subject matter jurisdiction and for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons set forth below, the Court grants Defendants' motion.

BACKGROUND

The Court presumes the parties' familiarity with the protracted history of this case, which is detailed in the Court's prior orders. (See Dkts. 50, 52, 74.) Briefly, however, pro se Plaintiffs Tzvee Wood and Andrew Malester (together, "Plaintiffs") originally commenced this action on December 29, 2008 against General Motors Corporation ("GM"), Hempstead Lincoln-Mercury Motors ("HLM") car dealership, HLM chairman or chief executive officer John Billard ("Billard"), Karp Automotive Inc. ("Karp"), Dave Nicholson, Dan Gippert, and ten John and Jane Does (collectively, "Defendants"), asserting a variety of federal and state law claims inconnection with the sale and service of an allegedly defective Saab vehicle. The initial complaint asserted claims for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq.; the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., as well as state and common law, including claims for, inter alia, breach of warranty, fraud, and false advertising.

After Karp filed an answer to the complaint on May 29, 2009 (Dkt. 15), defendants HLM, Billard, and Karp filed a motion to dismiss (Dkt. 32). Plaintiffs filed a cross-motion to amend the complaint. (Dkt. 44). On August 23, 2010, Magistrate Judge A. Kathleen Tomlinson issued a Report & Recommendation ("R&R") concluding that the motion to dismiss all federal claims should be granted, but with leave for Plaintiffs to correct deficiencies in their initial pleading. (Dkt. 50.) District Judge Joseph F. Bianco, to whom this case previously was assigned, adopted Judge Tomlinson's R&R on September 15, 2010. (Dkt. 52). Plaintiffs subsequently filed the instant Amended Complaint on January 18, 2011, which is eighty pages in length and largely alleges the same factual background as the original complaint.1 (Dkt. 59-1 & 59-2 ("Am. Compl.")) The underlying allegations of this action are set forth in Judge Tomlinson's R&R. Any new allegations in the Amended Complaint are discussed in this Memorandum and Order.

This case concerns Plaintiffs' purchase of a certified pre-owned 2003 Saab 9-5 Aero SportWagon, which was manufactured by GM, from HLM and Billard in January 2004. (Am.Compl. ¶¶ 5, 12-13, 19, 75-76). Plaintiffs allege that GM, HLM, and Billard each made fraudulent misrepresentations regarding the fitness and specifications of the vehicle, particularly with respect to the load capacity of the vehicle suspension system. (Id. ¶¶ 16-18, 30-31, 46-49, 53.) According to Plaintiffs, the Saab 9-5 model "contained a defect that causes the rear suspension to sag excessively under load and/or permanently fail under load," causing "dangerous situation[s]" such as tire or suspension failures. (Id. ¶¶ 77, 113.) Following Plaintiffs' purchase of the vehicle, GM, HLM, and Karp serviced the vehicle on numerous occasions in connection with the suspension defect and a rear tire blowout. (Id. ¶¶ 21, 24-27, 54-55.) Plaintiffs allege that Karp and GM misrepresented in their service records that there was no design defect, and failed to correct the underlying defect. (Id. ¶¶ 55-56, 66-68.)

The Amended Complaint additionally alleges that GM, HLM, Billard, and Karp deceptively refused to repair vehicle defects covered by the vehicle warranties (id. ¶¶ 33-34, 62-64), that GM and Saab entities misled consumers regarding warranty coverage (id. ¶¶ 36, 42, 65), and that GM and successors created a faulty warranty support structure (id. ¶ 50). Plaintiffs contend that GM and successors "committed fraud by offering warranties with the intention to pay as little as possible on said warranties by among other things controlling and manipulating facts and unduly burdening both its customers and dealers with the burden of diagnostic costs." (Id. ¶ 35). GM and its successors, according to Plaintiffs, wrongfully denied payment to dealerships for covered repairs, leading dealerships to deny coverage on the basis. (Id. ¶ 45.)

In addition, Plaintiffs seek to represent a class of individuals who purchased or leased a Saab 9-5 with the same suspension defect, citing to consumer complaints posted on a website created by Plaintiff Wood. (Id. ¶¶ 102, 118-19.)

The Amended Complaint asserts thirteen causes of action primarily under New York law for breach of contract, breach of warranties, fraud, false advertising, and unjust enrichment. Plaintiffs also assert a federal claim under civil RICO.

LEGAL STANDARDS

Defendants bring this motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, and Rule 12(b)(6) for failure to state a claim. A claim must be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction "when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In resolving a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, "the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). "Where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits," id. (quoting APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003)), in which case, "the party asserting subject matter jurisdiction 'has the burden of proving by a preponderance of the evidence that it exists'[,]" id. (quoting Makarova, 201 F.3d at 113).

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint for a plaintiff's failure "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must plead facts sufficient "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In evaluating a 12(b)(6) motion to dismiss, a district court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favorof the plaintiff. See Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 2014); Cleveland v. Caplaw Enter., 448 F.3d 518, 521 (2d Cir. 2006). The liberal notice pleading standard of Rule 8(a) only requires that a complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Twombly, 550 at 555. Under Rule 8(a)(2), the complaint need not set forth "detailed factual allegations," but the plaintiff must present "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. A complaint that "tenders 'naked assertion[s]' devoid of 'further factual enhancement'" will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 555 U.S. at 557). Rather, "[f]actual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 at 555. A complaint should be dismissed where a plaintiff has not "nudged [its] claims across the line from conceivable to plausible[.]" Id. at 570.

Because Plaintiffs are proceeding pro se, the Court must construe Plaintiffs' pro se Amended Complaint to raise the strongest arguments it suggests. See Sykes v. Bank of Am., 723 F.3d 399, 403 (2d Cir. 2013).

DISCUSSION

Plaintiffs' Amended Complaint invokes the Court's jurisdiction pursuant to 28 U.S.C. § 1331, which confers jurisdiction for civil actions arising under federal law, and 28 U.S.C. § 1332, for civil actions where there is a diversity of parties and the amount of controversy exceeds $75,000.00. (Am. Compl. ¶¶ 103, 105.) Plaintiffs also rely on 28 U.S.C. § 1367 for supplemental jurisdiction over their state and common law claims. (Id. ¶ 104.)

As an initial matter, Plaintiffs cannot premise jurisdiction over this action on 28 U.S.C. § 1332. Section 1332 requires complete diversity of parties such that no plaintiff is a citizen of the same state as any defendant. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553(2005). Complete diversity clearly is lacking in this action since Plaintiffs Wood and Malester and Defendants HLM, Billard, and Karp are all citizens of New York for jurisdictional purposes. (Am Compl. ¶¶ 81-82, 87-89.) Plaintiffs therefore must rely on Section 1331 to establish this Court's jurisdiction. Whether Plaintiffs may invoke Section 1331, in turn, depends on whether Plaintiffs' Amended Complaint has sufficiently pled a violation of RICO, the sole federal cause of action at issue. (See id. ¶¶ 103, 339-97.)

Based on a review of the Amended Complaint and the relevant law, the Court determines that Plaintiffs have failed to plead facts sufficient to state a claim under RICO and therefore federal question jurisdiction is lacking over this case. Plaintiffs' federal claims therefore must be dismissed with prejudice.2

I. Plaintiffs' Civil RICO Claim

RICO was enacted to "'prevent organized crime from infiltrating America's legitimate business organizations.'" Manley v. Doby, 12 CV 4835, 2012 WL 5866210, at *3 (E.D.N.Y. Nov. 19, 2012) (quoting Moccio v. Cablevision Sys. Corp., 208 F. Supp. 2d 361, 371 (E.D.N.Y.2002)). The Act contains a criminal provision, see 18 U.S.C. § 1962, and a civil...

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