Sloan v. Gen. Motors LLC

287 F.Supp.3d 840

Monteville SLOAN, et al., Plaintiffs,

v.GENERAL MOTORS LLC, Defendant.

Case No. 16–cv–07244–EMC

United States District Court, N.D. California.

Signed February 7, 2018

Lori Erin Andrus, Jennie Lee Anderson, Andrus Anderson LLP, San Francisco, CA, Adam J. Levitt, Amy E. Keller, Pro Hac Vice, Daniel Richard Ferri, John Ernst Tangren, DiCello Levitt & Casey LLC, Chicago, IL, H. Clay Barnett, III, Pro Hac Vice, Wilson Daniel Miles, III, Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Andrew England Brashier, Pro Hac Vice, Archibald Irwin Grubb, II, Pro Hac Vice, Montgomery, AL, Anthony J Garcia, AG Law, P.A., Tampa, FL, Timothy J. Becker, Pro Hac Vice, Johnson Becker, PLLC, Jennell Kristine Shannon, Pro Hac Vice, St. Paul, MN, Mark A DiCello, The DiCello Law Firm, Mentor, OH, for Plaintiffs.

Joseph John Ybarra, Huang Ybarra Gelberg & May LLP, Los Angeles, CA, Gregory Richard Oxford, Isaacs Clouse Crose & Oxford LLP, Torrance, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS SECOND AMENDED COMPLAINT

EDWARD M. CHEN, United States District Judge

Plaintiffs allege that Defendant General Motors (GM) manufactured and sold a car engine that, due to several internal defects, consumes excessive amounts of oil, resulting in engine damage that presents a safety risk of sudden shutdowns or engine fires. GM moves to dismiss on several grounds which can broadly be grouped under challenges to personal jurisdiction for the out-of-state plaintiffs; failure to plead an unreasonable safety hazard or pre-sale knowledge that gives rise to a duty to disclose in support of the consumer protection and fraud claims; failure to adequately plead reliance on the omission; failure to allege the defect manifested during the implied warranty period; and various statute of limitations or pre-suit notice issues.

As explained below, Defendant's motion is GRANTED IN PART and DENIED IN PART .

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiffs allege that the Gen IV Vortec 5300 engine suffers from an "inherent" "Oil Consumption Defect." SAC ¶ 7. The engine was installed in each of the Class Vehicles: the 2010–2014 Chevrolet Avalanche; 2010–2012 Chevrolet Colorado; 2010–2013 Chevrolet Express; 2010–2013 Chevrolet Silverado; 2010–2014 Chevrolet Suburban; 2010–2014 Chevrolet Tahoe; 2010–2013 GMC Canyon; 2010–2013 GMC Savana; 2010–2013 GMC Sierra; 2010–2014 GMC Yukon; and the 2010–2014 GMC Yukon XL. Id. ¶ 2.

Plaintiffs identify five defects that "contribute" to the overall "Oil Consumption Defect." First, the "primary cause" are "piston rings ... [that] do not maintain sufficient tension to keep oil in the crankcase." SAC ¶ 8. Second, the Active Fuel Management (AFM) system "contributes" to the defect by "spraying oil directly at the piston skirts," which "overloads and fouls the defective piston rings, triggering oil migration past the rings." SAC ¶ 9. Third, the PCV system "vacuums oil from the valvetrain into the intake system, where it is ultimately burned in the combustion chambers" contributing to excessive oil combustion. SAC ¶ 10. Fourth, the defective "Oil Life Monitoring System" does not monitor oil level, but rather, engine conditions like revolutions and temperature to predict oil quality. SAC ¶ 11. Because it does not take oil level into account, the system "directs drivers to travel thousands of miles with inadequate engine lubricity levels, wearing out and damaging moving internal engine components." Id. Fifth, the oil pressure gauge "does not provide any indication as to when the oil pressure ... falls to levels low enough to damage internally lubricated parts or cause engine failure" and the oil canister symbol does not illuminate "until well past the time when the Class Vehicles are critically oil starved." SAC ¶ 13.

Plaintiffs also discuss the impact of the alleged defect on their own vehicles and on other consumers. The nature of these allegations is discussed in detail in the relevant sections below.

The chart below identifies each named plaintiff, the state of purchase, the date of purchase, and the vehicle purchased.

Chart of Named Plaintiffs in SAC

Name State of Car Date of
Purchase Purchase
Raul Siqueiros             California         2011 Chevrolet Silverado     N/A
Joseph Brannan             Alabama            2010 GMC Yukon               2011
Larry Goodwin              Arkansas           2011 Chevrolet Silverado     2010
Marc Perkins               Delaware           2011 Chevrolet Avalanche     2011
Donald Ludington           Florida            2010 Chevrolet Tahoe         2012
Thomas Shorter             Florida            2011 Chevrolet Silverado     N/A
Derick Bradford            Georgia            2010 Chevrolet Silverado     2014
Gabriel Del Valle          Idaho              2013 Chevrolet Avalanche     2/2016
Kevin Hanneken             Illinois           2011 GMC Sierra 1500         2011
Dan Madson                 Kansas             2013 Chevrolet Silverado     12/2013
James Faulkner             Kentucky           2011 GMC Sierra              2015
Joseph Olivier             Louisiana          2013 GMC Sierra              N/A
Scott Smith                Massachusetts      2011 GMC Yukon               2012
Ross Dahl                  Minnesota          2010 Chevrolet Silverado     2010
Drew Peterson              Minnesota          2013 Chevrolet Silverado     12/2012
Michael Ware               Mississippi        2013 Chevrolet Silverado     2016
Steve Kitchen              Missouri           2013 Chevrolet Silverado     07/2013
Barbara Molina             New Mexico         2012 Chevrolet Avalanche     N/A
Steven Ehrke               North Carolina     2013 Chevrolet Silverado     2/2016
Thomas Gulling             Ohio               2013 Chevrolet Silverado     N/A
Ronald Jones               Ohio               2013 Chevrolet Silverado     N/A
Mike Warpinski             Oklahoma           2012 Chevrolet Express       2014
John Graziano              Pennsylvania       2012 Chevrolet Silverado     12/2011
Monteville Sloan           California         2013 Chevrolet Silverado     08/2014
Joshua Byrge               Tennessee          2012 Chevrolet Silverado     2016
Rudy Sanchez               Texas              2013 Chevrolet Silverado     07/2013
Christopher Thacker        Virginia           2010 Chevrolet Silverado     06/2014
Randy Clausen              Washington         2012 Chevrolet Suburban      2013
James Robertson            West Virginia      2010 GMC Sierra 1500         2010
Jonas Bednarek             Wisconsin          2010 Chevrolet Suburban      2010
Todd & Jill Cralley        California         2010 Chevrolet Suburban      N/A
Edwin & Katelyn Doepel     Illinois           2013 GMC Yukon               N/A
Dennis Vita                New York           2013 GMC Sierra              N/A
William Martel             Oregon             2011 Chevrolet Silverado     2011
Kelly Harris               N/A (Received      2012 Chevrolet Silverado     2012
                           from employer)

II. LEGAL STANDARD

In considering a Rule 12(b)(6) motion to dismiss, a court must take all allegations of fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). While "a complaint need not contain detailed factual allegations ... it must plead 'enough facts to state a claim to relief that is plausible on its face.' " Id. "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." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than sheer possibility that a defendant acted unlawfully." Id.

Claims sounding in fraud or mistake are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a plaintiff alleging fraud "state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b) ; see Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (holding that nondisclosure claims sound in fraud and are subject to Rule 9(b) ). To satisfy the heightened standard under Rule 9(b), the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). The plaintiff must set forth "what is false or misleading about a statement, and why it is false." In re Glenfed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.1994) (en banc), superseded by statute on other grounds as stated in Ronconi v. Larkin, 253 F.3d 423, 429 n. 6 (9th Cir. 2001).

III. DISCUSSION

Defendant raises numerous challenges to Plaintiffs' Second Amended Complaint ("SAC"), including whether:

• there is personal jurisdiction for the out-of-state plaintiffs;

• the fraud and consumer protection claims have been adequately pleaded;

• the implied warranty claims fail for failure to allege the vehicles were unfit for use; and

• various statute of limitations or pre-suit notice procedural challenges bar Plaintiffs' implied warranty, unjust enrichment, and consumer protection claims.

Each challenge is analyzed below.

A. Personal Jurisdiction

Defendant argues that Bristol–Myers Squibb Co. v. Sup. Ct. of Cal. , ––– U.S. ––––, 137 S.Ct. 1773, 198 L.Ed.2d 395 (2017), requires dismissal for lack of personal jurisdiction of all claims by non-California named plaintiffs who did not purchase their cars in California. Plainti...