Rodriguez v. Ford Motor Co.

596 F.Supp.3d 1050

Enrique RODRIGUEZ, on behalf of himself and others similarly situated, Plaintiff,

v.FORD MOTOR COMPANY, Defendant.

No. 21 C 2553

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

Signed March 31, 2022

Andrew W. Ferich, Pro Hac Vice, Ahdoot & Wolfson, PC, Radnor, PA, Anthony L. Parkhill, Ben Barnow, Barnow and Associates, P.C., Chicago, IL, Christopher E. Stiner, Pro Hac Vice, Robert Ahdoot, Ahdoot & Wolfson, PC, Burbank, CA, for Plaintiff.

Tammy L. Adkins, McGuireWoods LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Thomas M. Durkin, United States District Judge

Plaintiff Enrique Rodriguez brought this putative class action claim against Ford Motor Company, asserting a claim under the Illinois Consumer Fraud Act ("ICFA"), as well as claims for breach of implied warranty of merchantability and fraudulent omission. Currently before the Court is Ford's motion to dismiss for failure to state a claim, R. 11. That motion is granted.

Background

This case arises out of an alleged defect in the trunk lid wiring harness of the 2015-2017 Ford Mustang vehicles ("the vehicles"). Rodriguez purchased a 2015 Ford Mustang EcoBoost from Hopkins Ford of Elgin, an authorized Ford dealership in Elgin, Illinois. Rodriguez alleges that in November 2019, the trunk wiring defect caused his backup camera to malfunction. According to Rodriguez, the defect causes "intermittent backup camera malfunction and failure." R. 1 at 3. The backup camera malfunction—which occurred regularly after November 2019—caused Rodriguez concern about the safety of his vehicle.

Rodriguez filed a complaint on May 5, 2021, alleging he would not have purchased the vehicle had Ford disclosed the defect, which it had a duty to do. He alleges Ford breached its implied warranty of merchantability, violated the ICFA, and fraudulently omitted the nature of the defect from consumers. Ford filed its motion to dismiss on July 13, 2021, arguing Rodriguez has failed to state a claim under Federal Rule of Civil Procedure 12(b)(6).

Legal Standard

A Rule 12(b)(6) motion challenges "the sufficiency of the complaint." Berger v. Nat'l Collegiate Athletic Assoc. , 843 F.3d 285, 289 (7th Cir. 2016). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (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." Boucher v. Fin. Sys. of Green Bay, Inc. , 880 F.3d 362, 366 (7th Cir. 2018) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Tobey v. Chibucos , 890 F.3d 634, 646 (7th Cir. 2018).

Analysis

Rodriguez alleges Ford breached its implied warranty of merchantability when it sold vehicles it knew were not merchantable at the time of sale and that he suffered damage in the form of a less safe, less valuable car than he anticipated owning. He then alleges Ford violated the ICFA when it failed to disclose the wiring harness defect and that he would not have purchased the car had he known about it. Finally, he alleges Ford fraudulently omitted or concealed the defect even though it had a duty to disclose it to Rodriguez and the putative class. Ford argues Rodriguez has not sufficiently stated a claim for any of his counts.

I. Count I: Breach of Implied Warranty

To state a claim for breach of the implied warranty of merchantability in Illinois, a plaintiff must allege that "(1) the defendant sold goods that were not merchantable at the time of sale; (2) the plaintiff suffered damages as a result of the defective goods; and (3) the plaintiff gave the defendant notice of the defect." Indus. Hard Chrome, Ltd., v. Hetran, Inc. , 64 F. Supp. 2d 741, 748 (N.D. Ill. 1999) (citing 810 ILCS 5/2-314 ). Additionally, "privity of contract is a prerequisite to recover economic damages for breach of implied warranty." Voelker v. Porsche Cars N. Am., Inc. , 353 F.3d 516, 525 (7th Cir. 2003) (citing Rothe v. Maloney Cadillac, Inc. , 119 Ill.2d 288, 116 Ill.Dec. 207, 518 N.E.2d 1028, 1029-30 (1988) ).

Ford argues Rodriguez has failed to provide pre-suit notice to Ford and failed to plead that he was in privity with Ford. Rodriguez argues he satisfied the direct-dealing exception to the privity rule, and that Ford's actual knowledge of the defect prior to the lawsuit negates the need for pre-suit notice.

A. Pre-Suit Notice

A plaintiff pursuing a breach of warranty claim must give the seller notice of the claimed breach or be barred from recovery. U.C.C. 2-607. This notice requirement is intended to encourage pre-suit settlement negotiations. Id . at cmt. 4; Reyes v. McDonald's Corp. , 2006 WL 3253579, at *3 (N.D. Ill. Nov. 8, 2006). Notice is subject to two exceptions and is not required when: (1) the seller has actual knowledge of the defect of the particular product; or (2) a consumer plaintiff suffers a personal injury, in which case the notice requirement could be satisfied by filing a lawsuit. Allstate Ins. Co. v. Daimler Chrysler , 2004 WL 442679, *2 (N.D. Ill. Mar. 9, 2004) (citing Connick v. Suzuki Motor Co. Ltd. , 174 Ill.2d 482, 492, 221 Ill.Dec. 389, 675 N.E.2d 584 (1996) ).

Rodriguez has not suffered any injury, so the filing of this lawsuit does not free him of the pre-suit notice requirement. Instead, he alleges that pre-suit notice was not required because Ford had actual knowledge of the defect through its "ten years" of testing door use in "tens of thousands of load cycles," and because Ford received numerous negative consumer reviews regarding the back-up camera malfunctioning. R. 23 at 8.

First, Rodriguez's argument that Ford should have known of the defect because it tested the product line and became aware of the trunk-wiring issue in its line of vehicles is too general to satisfy the exception. Rodriguez needs to allege Ford was "somehow apprised of the trouble with the particular product purchased by a particular buyer." O'Connor v. Ford Motor Co. , 477 F. Supp. 3d 705, 717 (N.D. Ill. 2020) (rejecting the argument that notice was not required because the plaintiff alleged Ford had actual knowledge of the defect in the product line). In making his argument that knowledge of the defect in the product line is sufficient, Rodriguez relies on Stella v. LVMH Perfumes & Cosmetics USA, Inc. , 564 F. Supp. 2d 833 (N.D. Ill. 2008) and Hedges v. Earth, Inc. , 2015 WL 1843029 (N.D. Ill. Apr. 21, 2015). The courts in both of these cases held that pre-suit notice was not required where defendants had knowledge of defects in entire product lines. See Stella , 564 F. Supp. 2d at 837 ; Hedges , 2015 WL 1843029, at *7. But numerous courts have declined to follow these decisions, finding them either inconsistent with or completely contrary to Illinois law.

In Block v. Lifeway Foods, Inc. , 2017 WL 3895565 (N.D. Ill. Sept. 6, 2017), a district court found the defendant did not have actual knowledge of a product defect where it conducted a study that revealed its product contained 4% lactose and it had been advertising that its product was "99% lactose free." Block , 2017 WL 3895565 at *6. The court held that the plaintiff needed to allege more than "simply [the defendant] was generally aware of problems with the particular product line," and explained, respectfully, that "[ Stella ] runs contrary to the principles outlined in [ Connick ]," which require a defendant to have had knowledge of the defect in the particular product and as to the particular plaintiff. Id. ; see also Muir v. NBTY, Inc. , 2016 WL 5234596, at *9 (N.D. Ill. Sept. 22, 2016) (declining to follow Stella as contrary to Illinois law). This Court agrees with the Block and Muir courts—Illinois law requires more than Rodriguez's general allegations that Ford had knowledge of the defect in the vehicle product line.

Second, Rodriguez's argument that other consumers have complained about the defect to Ford is similar to the argument the court rejected in O'Connor . There, the plaintiff argued the actual knowledge exception to the pre-suit notice requirement was satisfied because, by the time plaintiff leased his vehicle from an authorized Ford dealership, many other consumers had complained of the same issues and the defendant had already issued bulletins acknowledging the complaints. O'Connor , 477 F. Supp. 3d at 715. The court found such allegations were insufficient, explaining the Illinois Supreme Court had expressly rejected that theory of notice in Connick . Id. at 715-16 (citing Connick , 221 Ill.Dec. 389, 675 N.E.2d at 588 ("[The defendant's] generalized knowledge about the safety concerns of third parties is insufficient to fulfill plaintiff's UCC notice requirement.")). The same is true here. The fact that Ford had knowledge of the complaints of others (assuming for the sake of the motion to dismiss that Ford did in fact know of the complaints), is not sufficient to evade the notice requirement.

Because Rodriguez does not allege more than Ford's general knowledge of a...