Reid v. Gen. Motors LLC

491 F.Supp.3d 268

Joli REID, individually and on behalf of a class, Plaintiff,

v.GENERAL MOTORS LLC, Defendant.

Civil Case No. 19-13018

United States District Court, E.D. Michigan, Southern Division.

Signed September 30, 2020

Adam G. Taub, Adam Taub Assoc. Consumer Law Group, Southfield, MI, Cathleen M. Combs, Daniel A. Edelman, David S. Kim, Edelman, Combs, Latturner & Goodwin, Chicago, IL, for Plaintiff.

Grant A. Newman, Stephanie A. Douglas, Bush Seyferth PLLC, Troy, MI, Michael R. Williams, Bush Seyferth PLLC, Kalamazoo, MI, for Defendant.

OPINION & ORDER GRANTING GENERAL MOTORS LLC'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED CLASS ACTION COMPLAINT (ECF NO. 15)

LINDA V. PARKER, U.S. DISTRICT JUDGE

Plaintiff Joli Reid filed this putative class action lawsuit against Defendant General Motors LLC ("GM"), averring that GM's Flex Fuel vehicles—which were "supposedly designed to operate on E85 (85% ethanol fuel)"—"cannot consistently use E85 fuel without engine damage." (Am. Compl., ECF No. 8 at Pg. ID 79 ¶ 1.) Plaintiff alleges (i) breach of limited written warranty; (ii) breach of express warranty; (iii) breach of implied warranty of merchantability; (iv) fraud; and (v) deceptive trade practices. (Id. at Pg. ID 87-102.)

The matter is presently before the Court on GM's Motion to Dismiss Plaintiff's First Amended Class Action Complaint. (ECF No. 15.) The motion has been fully briefed. (ECF Nos. 17, 18.) For the reasons that follow, the Court grants the motion.

FACTUAL BACKGROUND

GM has marketed and sold millions of Flex Fuel vehicles throughout the United States. (ECF No. 8 at Pg. ID 81 ¶¶ 16, 47.) GM has publicly stated that Flex Fuel vehicles can use E85 fuel or gasoline.¹ (Id. at Pg. ID 82 ¶ 17.) Since 2006, these vehicles have been equipped with "yellow, corn-colored" filler caps, which Plaintiff alleges "signify that they take E85 fuel." (Id. at Pg. ID 85 ¶¶ 43, 52 (citing Ex. G, Pg. ID 135-37).) Also since 2006, GM "aggressively" promoted the benefits of Flex Fuel and "[a]ll purchasers of [ ] Flex Fuel vehicles necessarily receive[d] representations from GM" that Flex Fuel vehicles can be "safely," "reliably," and "regularly operated on E85 [fuel]." (Id. at Pg. ID 85 ¶¶ 42-43, 51 (citing Ex. G, Pg. ID 135-37; Ex. H, Pg. ID 138-41).) According to Plaintiff, "[t]here is substantial public demand for Flex Fuel vehicles, which are perceived as environmentally friendly." (Id. at Pg. ID 85 ¶ 44.)

Plaintiff further alleges that the following statements are typical of those in Flex Fuel owners’ manuals (id. at Pg. ID 83 ¶ 23):

• "Vehicles with fuel caps marked as ‘E85’ or FlexFuel can use either unleaded gasoline or ethanol fuel containing up to 85% ethanol (E85). All other vehicles should use only the unleaded gasoline as described in Fuel ? 189. [ ]The use of E85 or FlexFuel is encouraged when the vehicle is designed to use it. E85 or FlexFuel is made from renewable sources."

• "Because E85 or FlexFuel has less energy per liter (gallon) than gasoline, the vehicle will need to be refilled more often...."

• "The starting characteristics of E85 or FlexFuel make it unsuitable for use when temperatures fall below -18 °C (0 °F). Use gasoline or add gasoline to the E85 or FlexFuel."

(Id. at Pg. ID 82 ¶¶ 20-22 (citing Ex. B, Pg. ID 111-12).)

On or about June 29, 2019, Plaintiff purchased a used 2017 Chevrolet Equinox Flex Fuel vehicle from Feldman Chevrolet Livonia ("Feldman Chevrolet"), an authorized GM dealer. (Id. at Pg. ID 81 ¶ 11.) Plaintiff executed a retail installment contract. (Id. at Pg. ID 81 ¶ 14 (citing Ex. A, Pg. ID 105-10).) At the time, the vehicle had 18,957 miles and had been in service less than 36 months. (Id. at Pg. ID 81 ¶ 13.) Plaintiff alleges that, as a result of GM's representations, she understood prior to her purchase that the vehicle could run on E85 fuel or gasoline.² (Id. at Pg. ID 82 ¶ 18.)

Plaintiff further alleges that all 2016 and newer Chevrolet vehicles come with a 5-year/60,000-mile (whichever comes first) transferable "Limited Powertrain Warranty" ("LP Warranty"), as well as a 36,000 mile/3-year (whichever comes first) transferable "New Vehicle Limited Warranty" ("NVL Warranty").³ (Id. at Pg. ID 83 ¶ 24 (citing Ex. C, 113-17).) According to Plaintiff, the warranty covers repairs to correct any vehicle defect (other than slight noise, vibrations, or other normal characteristics of the vehicle) due to materials or workmanship occurring during the warranty period. (Id. at Pg. ID 83 ¶ 25.) Plaintiff claims that this warranty is "typical" of GM warranties. (Id. at Pg. ID 83 ¶ 26.) GM contracts with GM dealers to perform warranty repairs and directs consumers to bring their vehicle to a GM dealer if they require service or repairs under the warranty. (Id. at Pg. ID 84 ¶¶ 33-34.)

In August 2019, after filling up her vehicle with E85 fuel at the only gas station Plaintiff used and "making normal use of the vehicle" presumably thereafter, check engine and warning lights came on. (Id. at Pg. ID 83 ¶¶ 28-29.) At this time, the temperature was well in excess of -18 °C (0 °F). (Id. at Pg. ID 84 ¶ 30.) On August 28, 2019, with 24,096 miles on the odometer, Plaintiff brought the vehicle to Feldman Chevrolet. (Id. at Pg. ID 84 ¶ 31.) The service department found that the "plunger for the high pressure fuel pump is sticking due to the use of E-85." (Id. (citing Ex. D, Pg. ID 118-20).) The service department further found that contaminated fuel needed to be removed from the tank and charged Plaintiff $ 915.03 for the repairs. (Id. at Pg. ID 84 ¶ 35.) On September 3, the State of Michigan collected a sample of the E85 fuel sold at the gas station where Plaintiff filled up her vehicle. (Id. at Pg. ID 84 ¶ 37 (citing Ex. E, Pg. ID 121-28).) After analyzing it, the State found that the fuel sample "met [the] sample acceptability requirements" for E85 fuel. (Id. )

Plaintiff alleges that "internal GM documents state that ‘excessive use of E85’ [fuel] may ‘caus[e] a plunger internal to the fuel pump to stick.’ "⁴ (Id. at Pg. ID 79 ¶ 3, 85 at ¶ 38 (citing Ex. F, Pg. ID 129-34).) This issue, Plaintiff alleges, can result in costly damage and was not disclosed to consumers. (Id. at Pg. ID 79 ¶ 4, 85 at ¶ 39.) Rather, consumers learned of it only after incurring engine damage. (Id. at Pg. ID 79-80 ¶ 4.) Moreover, since prior to the time Plaintiff's vehicle was manufactured or sold to her, GM knew of the "[p]roblems with Flex Fuel vehicles malfunctioning while using E85 fuel." (Id. at Pg. ID 86 ¶ 48 (citing Ex. I, Pg. ID 142-44).) In fact, "[t]he problems were sufficiently widespread that GM issued Exhibit I [("Repeat P228C Setting On High Feature V6 Engines While Using E85 Fuel")] and Exhibit F [("Reduced Engine Power, Reduced Engine Power Displayed on Drive Information Center [ ], Malfunction Indicator Lamp [ ] Illuminated")]⁵ to inform all GM dealers of the problems." (Id. at Pg. ID 86 ¶ 49 (citing Ex. I, Pg. ID 142-44; Ex. F, Pg. ID 129-34).) Notwithstanding this knowledge, "GM continued promoting and selling Flex Fuel vehicles as capable of safely and reliably operating on E85 fuel as long as the outside temperature was not below -18 °C (0 °F)." (Id. at Pg. ID 86 ¶ 50.) "GM could readily have notified Flex Fuel vehicle owners that they should fill their vehicles with gasoline at periodic intervals. However, doing so would have diminished the public desire for Flex Fuel vehicles." (Id. at Pg. ID 87 ¶ 55.) Instead, per Plaintiff's information and belief, GM instructed GM dealers to blame Flex Fuel problems on contaminated fuel. (Id. at Pg. ID 84 ¶ 36.)

Plaintiff avers that, had she known of this problem, Plaintiff would not have purchased a Flex Fuel vehicle and would not have paid as much for it. (Id. at Pg. ID 87 ¶ 54.)

STANDARD OF REVIEW

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp. , 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." To survive a motion to dismiss, a complaint need not contain "detailed factual allegations," but it must contain more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action ...." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A complaint does not "suffice if it tenders ‘naked assertions’ devoid of ‘further factual enhancement.’ "

Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ).

As the Supreme Court provided in Iqbal and Twombly , "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Id. (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). The plausibility standard "does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct]." Twombly , 550 U.S. at 556, 127 S.Ct. 1955.

In deciding whether the plaintiff has set forth a "plausible" claim, the court must accept the factual allegations in the complaint as true. Erickson v. Pardus , 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). This presumption is not applicable to legal conclusions, however. Iqbal , 556 U.S. at 668, 129 S.Ct. 1937. Therefore, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

Ordinarily, the court may not...