Leon v. Cont'l AG

301 F.Supp.3d 1203

Lourdes LEON, et al., Plaintiffs

v.CONTINENTAL AG, et al., Defendants.

Case No. 16–20572–CIV–WILLIAMS

United States District Court, S.D. Florida.

Signed March 17, 2017

Entered March 20, 2017

E. Powell Miller, Pro Hac Vice, Sharon S. Almonrode, Pro Hac Vice, The Miller Law Firm, P.C., Rochester, MI, Linda P. Nussbaum, Pro Hac Vice, Nussbaum Law Group, P.C., New York, NY, Robert Cecil Gilbert, Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Miami, FL, Avi Robert Kaufman, Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Coral Gables, FL, Jason Henry Alperstein, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Lindsey Caryn Grossman, Criden and Love PA, South Miami, FL, Scott Adam Edelsberg, Kopelowitz Ostrow, Ft. Lauderdale, FL, for Plaintiffs.

Dara D. Mann, Pro Hac Vice, Sada J. Baby, Pro Hac Vice, Uchenna Ekuma–Nkama, Dentons US LLP, Atlanta, GA, Monica Liliana Irel, Dentons US LLP, Iain Leslie Cooper Kennedy, Shook, Hardy & Bacon L.L.P., Miami, FL, Tami Lyn Azorsky, Pro Hac Vice, Dentons US LLP, Washington, DC, Timothy Ray, Dentons US LLP, Chicago, IL, for Defendants.

ORDER

KATHLEEN M. WILLIAMS, UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court on four pending motions to dismiss: (1) Defendant Mercedes–Benz USA, LLC's ("MBUSA['s]" and, collectively with Defendant Daimler AG,¹ "Mercedes Benz['s]") FRCP 12(b)(1) and 12(b)(6) motions to dismiss (DE 78; Response DE 97; Reply DE 104); (2) Defendant American Honda Motor Co., Inc.'s ("Honda['s]" and, collectively with MBUSA, "Automobile Manufacturer Defendants[']") motion to dismiss under Rules 12(b)(1), 12(b)(2), and 12(b)(6) (DE 82; Response DE 98; Reply DE 106); (3) Defendant Atmel Corporation's ("Atmel['s]") motion to dismiss Plaintiffs' claims under FRCP 12(b)(1), 12(b)(2), 12(b)(6), and 12(b)(7) (DE 83; Response DE 99; Reply DE 105); and (4) Defendant Continental Automotive Systems, Inc.'s ("Continental['s]" and, collectively with Atmel, "Airbag Manufacturer Defendants[']") motion to dismiss (DE 87; Response DE 100; Reply DE 108). The Court heard argument on all four motions at a hearing held on September 9, 2016. For the reasons discussed below, the motions to dismiss (DE 78; DE 82; DE 83; DE 87) are GRANTED.

I. BACKGROUND

This case is about defective airbag control units ("ACUs") that are featured in an unascertained number of vehicles across the United States. As of September 8, 2016, 630,004 vehicles in the United States were subject to a "warning or recall" related to the defective ACUs. (DE 50 ¶ 1; see also DE 121 at 1). According to the National Highway Traffic Safety Administration ("NHTSA"), which initiated a preliminary investigation into the defective ACUs in August 2015, up to five million vehicles in the United States may eventually be subject to such warning or recall. (DE 50 ¶¶ 12, 19).

A properly functioning ACU "controls the airbag and other safety systems, including seatbelt pre-tensioners" within a vehicle, and causes these systems "to deploy rapidly during an automobile collision." (DE 50 ¶ 3). But a faulty electrical connection within the power supply component ("ASIC")² of the defective ACUs at issue in this case causes the "airbags and other safety systems not to deploy during crashes" (DE 50 ¶ 11) as well as "unexpected deployments" of the airbags and other safety systems (DE 50 ¶ 9). Honda and Mercedes Benz manufacture vehicles containing the defective ACUs, including the 2008, 2009, and 2010 model Honda Accord and the 2008 and 2009 model Mercedes Benz C Class. (DE 50 ¶ 1). Continental manufactures the defective ACUs (DE 50 ¶¶ 15, 77) and Atmel supplies Continental with the ASIC that is allegedly the source of the defect (DE 50 ¶¶ 6, 78). Plaintiffs are thirteen individuals who purchased vehicles containing the defective ACUs.³ Three purchased vehicles manufactured by Mercedes Benz, six purchased vehicles manufactured by Honda, and four purchased vehicles manufactured by non-party FCA US LLC.

Plaintiffs purport to be the class representatives for a nationwide class (DE 50 ¶ 96), a Florida sub-class (DE 50 ¶ 97), a New Jersey sub-class (DE 50 ¶ 98), a Michigan sub-class (DE 50 ¶ 99), and a Louisiana sub-class (DE 50 ¶¶ 100). Their Complaint alleges that Defendants knew about the defective ACUs well before they disclosed this knowledge to NHTSA in late 2015 and early 2016. (DE 50 ¶¶ 6–18). Specifically, it alleges that Continental manufactured the defective ACUs from at least 2006 through the end of 2010, and that Continental, Atmel, and MBUSA became aware of the defective ACUs in January 2008 after "Continental ... received an air bag control unit that Mercedes Benz ... removed from a vehicle whose owner complained of an illuminated airbag warning light." (DE 50 ¶ 6). After Continental examined this unit and determined the ASIC to be the source of the defect, it sent the ACU to Atmel, which determined that "corrosion in the ASIC's semiconductor material could cause interruptions in electrical connections in the ASIC, leading to failure of the ASIC component." (DE 50 ¶ 6). Continental and Atmel then "allegedly implemented countermeasures to prevent the defect from continuing" but "these countermeasures failed, if they were implemented at all." (DE 50 ¶ 7).

The Complaint also alleges several other events in the years between 2008 and 2015 which suggest that Defendants had knowledge of the defective ACUs before disclosing the defects to NHTSA (DE 50 ¶¶ 13–14):

• In early 2011, Continental, Atmel, Mercedes Benz, and non-party FCA US LLC "became aware of two unexpected deployments of airbags and other safety systems" in vehicles featuring the defective ACU. (DE 50 ¶ 9).

• In March 2013, Mercedes Benz, "based on its actual knowledge" of the defective ACUs, "initiated a campaign outside the U.S. to address" the defective ACUs but "failed to take similar action" in the United States. (DE 50 ¶ 10) (emphasis in original).

• In early 2014, Continental "was named as a defendant in a suit relating to the recall of millions of General Motors-manufactured vehicles as a result of a defect that potentially caused Continental-manufactured airbags in those vehicles not to deploy." (DE 50 ¶ 15).

• In late 2014, "Audi recalled approximately 850,000 vehicles as a result of a different defect in Continental-manufactured airbags that also potentially caused the Continental-manufactured airbags not to deploy." (DE 50 ¶ 15).

• In early 2015, Continental, Atmel, and Honda "became aware of additional cars" with defective ACUs that "caused airbags and other safety systems not to deploy during crashes," including one Honda vehicle "involved in an accident in 2013" that was the subject of a lawsuit against Honda and another Honda vehicle "involved in an accident in 2015" that was "the subject of a complaint" to NHTSA. (DE 50 ¶ 11).

• Finally, in August 2015, NHTSA began its investigation into the "scope, frequency, and consequence" of the defective ACUs in Honda-manufactured vehicles. (DE 50 ¶ 12).

Accordingly, Plaintiffs contend that even though Continental, Atmel, and Mercedes Benz knew about the defective ACUs "by 2008, at the latest" (DE 50 ¶¶ 17, 87) and that Honda knew about the defective ACUs "by early 2015, at the latest" (DE 50 ¶¶ 18, 87), Defendants "concealed their knowledge of the nature and extent of the defects from the public" (DE 50 ¶ 25).

On these facts, the Complaint advances—on behalf of various classes and sub-classes—four causes of action against MBUSA, five causes of action against Honda, ten causes of action against Continental, and thirteen causes of action against Atmel:

• Count 1 on behalf of a nationwide class against all Defendants for violations of the Magnuson–Moss Warranty Act ("MMWA");

• Count 2 on behalf of a nationwide class against all Defendants for fraudulent concealment;

• Count 3 on behalf of a nationwide class against the Airbag Manufacturer Defendants for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO");

• Count 4 on behalf of a Florida sub-class against all Defendants for violations of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA");

• Count 5 on behalf of a Florida sub-class against all Defendants for fraudulent concealment;

• Count 6 on behalf of a New Jersey sub-class against Continental, Atmel, and Honda for violation of the New Jersey Consumer Fraud Act ("NJCFA");

• Count 7 on behalf of a Michigan sub-class against Continental and Atmel for violation of the Michigan Consumer Protection Act ("MCPA");

• Count 8 on behalf of a Michigan sub-class against Continental and Atmel for silent fraud;

• Count 9 on behalf of a Michigan sub-class against Continental and Atmel for fraud;

• Count 10 on behalf of a nationwide class against Atmel for violations of the California Unfair Competition Law ("CUCL");

• Count 11 on behalf of a nationwide class against Atmel for violations of the California False Advertising Law ("CFAL");

• Count 12 on behalf of a nationwide class against Atmel for violations of the California Consumers Legal Remedies Act ("CLRA"); and

• Count 13 on behalf of a Louisiana sub-class against Continental and Atmel for fraudulent concealment.

Based on these causes of action, Plaintiffs request myriad relief, including: (1) certification of all proposed classes and subclasses; (2) a declaration that the defective ACUs were in fact defective; (3) a declaration that Defendants are financially responsible for notifying all class members about the defective nature of the vehicles containing the defective ACUs; (4) an injunction preventing Defendants from "further deceptive distribution, sales, and lease practices" with regards to vehicles containing the defective ACUs and requiring Defendants to "permanently, expeditiously, and completely repair" vehicles containing the defective ACUs and eliminate the defective ACUs; (5) compensatory, exemplary, and statutory damages; (6) damages for the return of the purchase prices of all vehicles containing the defective ACUs and the...