Pantel v. Gen. Motors, LLC

TAYLOR PANTEL, et al., Plaintiffs, v. GENERAL MOTORS, LLC, et al. Defendants.

Case No. 19-13219

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN NORTHERN DIVISION

July 9, 2020

Honorable Thomas L. Ludington

OPINION AND ORDER DIRECTING SUPPLEMENTAL BRIEFING REGARDING PLAINTIFFS' MOTION FOR REMAND

On July 17, 2019 Plaintiff Pantel and co-plaintiffs filed a complaint in Los Angeles Superior Court alleging that General Motors (GM) "committed fraud by installing and calibrating emission control devices" in diesel powered vehicles. ECF No. 1-1 at PageID.200. Plaintiffs are either residents of California or residents of other states who purchased their GM vehicle in California. There are 92 plaintiffs in the instant case. Plaintiffs allege breach of express warranty and breach of implied warranty under California Civil Code § 1790, violations of the California Unfair Competition Law and the California False Advertising Law, and common law claims of fraudulent concealment, negligent misrepresentation, civil conspiracy, and joint venture as a result of alleged defeat devices in GM Silverado and Sierra vehicles against Defendants. ECF No. 1.

Specifically, Plaintiffs allege a breach of express warranty (Count I) because "GM, the Dealer Defendants and/or GM's authorized repair facilities failed to repair the defects and/or nonconformities to match the written warranty after a reasonable number of attempts and, as such, have failed to comply with and have breached all applicable warranty requirements." ECF No. 1-1 at PageID.192. Second, Plaintiffs allege a breach of implied warranty (Count II) because "GM and the Dealer Defendants impliedly warranted to Plaintiffs that the Fraudulent Vehicles were 'merchantable' within the meaning of Cal. Civ. Code §§ 1791.1(a) & 1792; however, the Fraudulent Vehicles do not have the quality that a buyer or lessee would reasonably expect." Id. at PageID.193. Third, Plaintiffs allege GM violated the California Unfair Competition Law (Count III). Specifically, Plaintiffs allege "GM intentionally and knowingly misrepresented material facts regarding the Fraudulent Vehicles with an intent to mislead Plaintiffs." Id. at PageID.196. Fourth, Plaintiffs allege GM violated the California False Advertising Law "because the misrepresentations and omissions regarding the functionality, reliability, environmental-friendliness, and emissions of the Fraudulent Vehicles as set forth in this Complaint were material and likely to deceive a reasonable consumer." Id. at PageID.199. Fifth, Plaintiffs allege GM "committed fraud by installing and calibrating emission control devices in the Fraudulent Vehicles, which were unlawfully concealed from consumers." Id. at PageID.200. Sixth, Plaintiffs allege all "Defendants made material misrepresentations of fact to Plaintiffs concerning the quality and condition of the Fraudulent Vehicles including, but not limited to, their emissions, their power and their fuel efficiency." Id. at PageID.206. Seventh, Plaintiffs allege GM, Bosch GmbH, and Bosch LLC "engaged in civil conspiracy with each other and with person(s) unknown to Plaintiffs to conceal the defects in the Fraudulent Vehicles" which lead to "the unlawful objective of profiting from the sale of the Fraudulent Vehicles." Id. at PageID.207. Finally, Plaintiffs allege GM, Bosch GmbH, and Bosch LLC "acted in concert and for a common purpose for monetary gain as joint venture partners with an agreement to share the profits, if any, of their unlawful acts." Id. at PageID.208.

There are three categories of Defendants. First, "Dealer Defendants" of Rally Auto Group, Inc. and Merle Stone Chevrolet, both California corporations. It is unclear from the complaintwhere the Dealer Defendants are located, but Rally Auto Group's registered agent is in Palmdale California and Merle Stone Chevrolet's registered agent is in Hanford, California. Second, the "Manufacturer Defendants," General Motors, Robert Bosch GmbH, Robert Bosch LLC. Third, "Doe Defendants" who "are presently unknown to Plaintiffs who will seek to amend this Complaint to include these Doe Defendants when they are identified." ECF No. 1-14 at PageID.115-122.

On November 1, 2019, the case was removed from the Superior Court of the State of California, County of Los Angeles to the Central District of California by GM. ECF No. 1; ECF No. 40 in 19-07350 (C.D. Cal.). GM represented that "All defendants who have been properly served have consented to the removal of this action pursuant to 28 U.S.C. § 1446(b)(2)(A)." ECF No. 1 at PageID.27. No additional information was provided documenting the other defendants' approval.

Plaintiffs filed a motion to remand the case to state court and GM filed a motion to transfer the case to the Eastern District of Michigan. ECF Nos. 28, 29 in 19-07350 (C.D. Cal.). First, United States District Judge Michael Fitzgerald from the Central District of California explained that "the Court will exercise its discretion to decide the Transfer Motion without ruling on the first [remand motion], considering the complexity of the Remand Motion, the number of cases with similar, if not exact, issues pending in the Eastern District of Michigan, and the cases in the Ninth Circuit clearly stating that the Court can exercise its discretion to rule on the Transfer Motion first." ECF No. 40 in 19-07350 (C.D. Cal.). Second, Judge Fitzgerald concluded that "many issues raised by the Remand Motion are already being considered, or will be considered, by the Eastern District of Michigan, including preemption and the validity of some of Plaintiffs' claims" in Counts v. General Motors, LLC and In re Duramax Diesel Litigation, the complexity of the remand motionwhich "deals with diversity jurisdiction issues (including fraudulent joinder), federal question jurisdiction issues (under the doctrine of preemption), and CAFA jurisdiction issues, which collectively raise complex issues." ECF No. 40 at PageID.1008-1010. He also concluded that the fact that 6th Circuit caselaw "could benefit GM's opposition to the Remand Motion, as Freeman¹ becomes binding precedent as opposed to persuasive authority," is insufficient to deny transfer. Id. As such, the case was transferred from the Central District of California to the Eastern District of Michigan.

The case was docketed in the Eastern District of Michigan on November 1, 2019. ECF No. 1. On November 6, 2019, Plaintiffs filed a motion to remand to California state court. ECF No. 4. On November 8, 2019, the case was reassigned by District Judge Tarnow to this Court because it was identified as a companion case to In re Duramax Diesel Litigation, a case presently before this Court. ECF No. 5. The time period for the Defendants to answer the complaint has been extended to 30 days after the Court addresses the instant motion. ECF No. 13.

I.

Some background information on the companion case, In re Duramax Diesel Litigation, is instructive. On May 25, 2017, Andrei Fenner and Joshua Herman filed a complaint against Defendants, General Motors, Bosch LLC, and Bosch GmbH. ECF No. 1 in 17-11661. On June 21, 2017, Plaintiffs Carrie Mizell, Matt Henderson, George Stanley, Michael Reichert, Gregory Williams, Phillip Burns, Kurt Roberts, and Keith Ash filed a complaint against the same Defendants. ECF No. 1 in 17-11984. The cases were consolidated on July 25, 2017 and given the case caption: In re Duramax Diesel Litigation. ECF No. 16 in 17-11661. The parties in both cases stipulated to the consolidation "because the cases involve common questions of law and fact, andbecause consolidation would advance the interests of judicial economy." ECF No. 16 in 17-11661. On August 4, 2017, an amended complaint was filed in the consolidated case by the plaintiffs identified above, with the addition of Anthony Gadecki, Cody McAvoy, and James Crunkleton. ECF No. 18. The amended complaint in In re Duramax Diesel Litigation "assert[ed] claims under RICO and various state laws regarding the emissions performance of Model Years 2011-2016 Chevrolet Silverado and GMC Sierra diesel vehicles equipped with the Duramax engine." ECF No. 16 at PageID.876 in 17-11661.

The amended complaint survived a motion to dismiss. ECF Nos. 44, 45, 61. This Court found that the alleged overpayment by Plaintiffs when paying for vehicles they believed to be 'clean diesel' was sufficient to establish standing against GM and the Bosch Defendants. ECF No. 61. It also found that the complaint was pled with sufficient specificity (PageID.3492); that the state law claims are not preempted because Plaintiffs are not alleging Defendants defrauded the Environmental Protection Agency ("EPA") and Congress did not intend the EPA to fully "regulate the scope of vehicle manufacturer's disclosure obligations to consumers" (PageID.3498-3505); that Plaintiffs have alleged sufficient damages (overpayment of the vehicle) and proximate cause for the RICO claim for a motion to dismiss (PageID.3517-3520); and that Plaintiffs have standing to bring a Racketeer Influenced and Corrupt Organizations ("RICO") claim because Plaintiffs alleged GM and Bosch worked together to create the alleged "defeat device." (PageID.3528).

Between May 6, 2019 and May 10, 2019, Mr. Charles Wade Miller, Plaintiffs' counsel in the instant case, filed 26 complaints on behalf of a total of more than 2700 plaintiffs. Unlike In re Duramax, these Plaintiffs sought to advance individual claims and not seek class action certification. All 26 complaints were filed in the Southern Division of the Eastern District of Michigan (hereinafter "Anderton Cases"). Between May 6, 2019 and July 26, 2019, the AndertonCases were transferred to the Northern Division of the Eastern District of Michigan as companion cases to In re Duramax. See e.g., ECF No. 5 of 19-11306. The complaints in each of the cases allege violations of RICO and a multitude of state law fraud claims against GM and Bosch regarding fuel emissions for the GM...