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In re Duramax Diesel Litigation

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

February 20, 2018




         On May 25, 2017, the original Plaintiffs (including the first-named Plaintiff Andrei Fenner) filed a complaint against Defendant General Motors LLC (“GM”), Robert Bosch GmbH, and Robert Bosch LLC (“Bosch” and, collectively, the “Defendants”). ECF No. 1. The suit was assigned to United States District Judge George Caram Steeh. On July 25, 2017, Judge Steeh issued a stipulated proposed order which consolidated the Fenner class action with another class action (Carrie Mizell et al. v. General Motors LLC, et al., No. 17-11984) also pending before him at the time. ECF No. 16. Pursuant to that stipulated proposed order, the “caption for the Consolidated Action” was designated as “IN RE DURAMAX DIESEL LITIGATION.” Id. at 3.

         Also pursuant to that stipulated order, the Plaintiffs filed a consolidated amended complaint on August 4, 2017. ECF No. 18. On August 30, 2017, the consolidated case was reassigned because it is a companion case to Counts et al. v. General Motors, No. 1-16-cv-12541, which is currently in discovery. ECF No. 33.

         At the deadline for responsive pleadings, Defendants filed two motions to dismiss the consolidated amended complaint. ECF Nos. 44, 45.[1] Defendants advance many arguments, including that the Plaintiffs lack standing to sue, that Plaintiffs have failed to state a claim for affirmative misrepresentation, that any fraudulent concealment or omission claims should be dismissed or stayed, and that Plaintiffs have failed to state a Racketeering Influenced and Corrupt Organizations Act (RICO) claim, 18 U.S.C. § 1961 et seq. For the following reasons, the motions to dismiss will be denied.


         All well-pleaded factual allegations are assumed to be true at the pleading stage. The consolidated amended complaint names thirteen Plaintiffs residing in ten states.[2] Each Plaintiff bought a Silverado or Sierra 2500 or 3500 diesel vehicle with a model year between 2011 and 2016. Con. Am. Compl. at 1, ECF No. 18. Some Plaintiffs bought new vehicles and others bought used vehicles, but each purchased their vehicle from an authorized GM dealer. See, e.g., id. at 14. The vehicles which Plaintiffs identify all contain a “Duramax” diesel engine. Id. at 1. Plaintiffs' allegations center on the emissions reduction technology associated with that engine.


         According to Plaintiffs, GM represented the Duramax engine as providing both low emissions and high performance. Id.[3] Plaintiffs (in unsourced quotations) contend that GM boasted that the Duramax engine constituted a “‘remarkable reduction of diesel emissions'” compared to the engine previously used in its Silverado and Sierra vehicles. Id. Those representations were false. Plaintiffs allege that

scientifically valid emissions testing has revealed that the Silverado and Sierra 2500 and 3500 models emit levels of NOx many times higher than (i) their gasoline counterparts, (ii) what a reasonable consumer would expect, (iii) what GM had advertised, (iv) the Environmental Protection Agency's maximum standards, and (v) the levels set for the vehicles to obtain a certificate of compliance that allows them to be sold in the United States.


         In other words, the Duramax engine does not actually combine high power and low emissions as GM suggested: “[T]he vehicles' promised power, fuel economy, and efficiency is obtained only by turning off or turning down emissions controls when the software in these vehicles senses they are not in an emissions testing environment.” Id. at 1-2.

         The Duramax engine allegedly achieves this feat by employing “defeat devices.” Id. at 2. As Plaintiffs define that term, “[a] defeat device means an auxiliary emissions control device that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.” Id. The Duramax engine allegedly contains three such devices. Defeat Device No. 1 “reduces or derates the emissions system when temperatures are above the emissions certification test range (86°F).” Id. at 3. Similarly, Defeat Device No. 2 “operates to reduce emissions control when temperatures are below the emissions certification low temperature range (68°F).” Id. The impact of these alleged devices is significant:

Testing reveals that at temperatures below 68°F (the lower limit of the certification test temperature), stop and go emissions are 2.1 times the emissions standard at 428 mg/mile (the standard is 200 mg/mile). At temperatures above 86°F, stop and go emissions are an average of 2.4 times the standard with some emissions as high as 5.8 times the standard.


         The third defeat device “reduces the level of emissions controls after 200-500 seconds of steady speed operation in all temperature windows, causing emissions to increase on average of a factor of 4.5.” Id. Plaintiffs estimate that “due to just the temperature-triggered defeat devices, the vehicles operate at 65-70% of their miles driven with emissions that are 2.1 to 5.8 times the standard.” Id.[5]

         Plaintiffs provide a technical explanation for how GM was able to leverage these devices to “obtain and market higher power and fuel efficiency from its engines while still passing the cold-start emissions certification tests.” Id. at 4. Essentially, GM placed the “Selective Analytic Reduction (SCR) in front of the Diesel Particulate Filter (DPF).”[6] Id. In doing so, GM increased the engine's power production and fuel efficiency. However, placing the SCR in front of the DPF also dramatically increased potential emissions, thus requiring the engine to “employ Active Regeneration (burning off collected soot at a high temperature) and other power- and efficiency-sapping exhaust treatment measures.” Id. Thus, the power and fuel-efficiency gains were lost because of the increased need for emissions reduction technology. GM's solution, according to the Plaintiffs, was the three defeat devices identified above.



         Plaintiffs allege that, in developing this solution, “GM did not act alone.” Id. at 10. Rather, Robert Bosch GmbH and Robert Bosch LLC “were active and knowing participants in the scheme to evade U.S. emissions requirements” and to develop, manufacture, and test the “electronic diesel control (EDC) that allowed GM to implement the defeat device.” Id. The EDC in question, Bosch's EDC17, “is a good enabler for manufacturers to employ ‘defeat devices' as it enables the software to detect conditions when emissions controls can be derated--i.e., conditions outside of the emissions test cycle.” Id. Importantly, “[a]lmost all of the vehicles found or alleged to have been manipulating emissions in the United States (Mercedes, FCA, Volkswagen, Audi, Porsche, Chevy Cruze) use a Bosch EDC17 device.” Id.

         According to a Bosch press release quoted by Plaintiffs, the EDC17 device controls “‘the precise timing and quantity of injection, exhaust gas recirculation, and manifold pressure regulation.'” Id. at 93. The device also “‘offers a large number of options such as the control of particulate filters or systems for reducing nitrogen oxides.'” Id. EDC17 is “run on complex, highly proprietary engine management software over which Bosch exerts near-total control.” Id. at 94. Because the software “is typically locked to prevent customers, like GM, from making significant changes on their own, ” vehicle manufacturers must work closely with Bosch to implement EDC17 in a vehicle. Id.

         According to Plaintiffs, “Bosch participated not just in the development of the defeat device, but also in the scheme to prevent U.S. regulators from uncovering the device's true functionality.” Id. at 39. Additionally, “Bosch GmbH and Bosch LLC marketed ‘clean diesel' in the United States and lobbied U.S. regulators to approve ‘clean diesel, ' another highly unusual activity for a mere supplier.” Id. In short, Plaintiffs believe that “Bosch was a knowing and active participant in a massive, decade-long conspiracy with Volkswagen, Audi, Mercedes, GM, and others to defraud U.S. consumers, regulators, and diesel car purchasers or lessees.” Id. at 40.


         In their complaint, Plaintiffs repeatedly reference allegedly similar conduct by other automobile manufacturers. Plaintiffs explain that, in recent years, “almost all of the major automobile manufacturers rushed to develop ‘clean diesel' and promoted new diesel vehicles as environmentally friendly and clean.” Id. at 5. Due in part to that marketing, a significant market for “clean diesel” vehicles developed: “[O]ver a million diesel vehicles were purchased between 2007 and 2016 in the United States and over ten million in Europe.” Id. at 6. A number of those diesel vehicle manufacturers, however, have now been accused of installing “defeat devices” in their diesel vehicles. Id. For example, Volkswagen has pleaded guilty to criminal charges (and has settled civil class action claims) arising out of allegations that it purposefully evaded emission standards. Id. Fiat Chrysler Automobiles has also been accused of similar conduct. On January 12, 2017, the EPA “issued a Notice of Violation to FCA because it had cheated on its emissions certificates with respect to its Dodge Ram and Jeep Grand Cherokee vehicles, and on May 23, 2017, the United States filed a civil suit in the Eastern District of Michigan alleging violations of the Clean Air Act.” Id. at 6-7.


         Unlike gasoline engines, diesel engines “compress a mist of liquid fuel and air to very high temperatures and pressures, which causes the diesel to spontaneously combust.” Id. at 46. When compared to gasoline engines, diesel engines produce greater amounts of “oxides of nitrogen (NOx), which includes a variety of nitrogen and oxygen chemical compounds that only form at high temperatures.” Id. See also Id. at 47. According to Plaintiffs,

NOx pollution contributes to nitrogen dioxide, particulate matter in the air, and reacts with sunlight in the atmosphere to form ozone. Exposure to these pollutants has been linked with serious health dangers, including asthma attacks and other respiratory illnesses serious enough to send people to the hospital. Ozone and particulate matter exposure have been associated with premature death due to respiratory-related or cardiovascular-related effects. Children, the elderly, and people with pre-existing respiratory illness are at acute risk of health effects from these pollutants. As a ground level pollutant, NO2, a common byproduct of NOx reduction systems using an oxidation catalyst, is highly toxic in comparison to nitric oxide (NO). If overall NOx levels are not sufficiently controlled, then concentrations of NO2 levels at ground level can be quite high, where they have adverse acute health effects.


         Plaintiffs further allege that the EPA believes that NOx contributes to increases in the amount of acid rain, water quality deterioration, toxic chemicals, smog, nitric acid vapor, and global warming. Id. at 113-114.


         In the consolidated amended complaint, Plaintiffs repeatedly reference the pollution standards promulgated by the EPA and other entities. They allege that GM and Bosch conspired to conceal the defeat devices in the Duramax engine from the EPA and allege that, because of the defeat devices, the vehicles in question do not comply with emission pollution standards, despite being certified as conforming to those requirements. See, e.g., Id. at 97-99. But Plaintiffs also allege that “[t]his case is not based on these laws but on deception aimed at consumers.” Id. at 5. Plaintiffs contend that “a vehicle's pollution footprint is a factor in a reasonable consumer's decision to purchase a vehicle” and that GM's actions demonstrate their understanding of that fact. As Plaintiffs explain, GM crafted a marketing campaign, “intended to reach the eyes of consumers, [which] promoted the Duramax engine as delivering ‘low emissions' or having ‘reduced NOx emissions.' GM was acutely aware of this due to the public perception that diesels are ‘dirty.'” Id. at 60.

         In the consolidated amended complaint, Plaintiffs quote, summarize, or reproduce approximately ten pages of GM advertising, press releases, and publications related to the emissions production and fuel economy of its diesel engines. See Id. at 61-70. These advertisements and publications repeatedly emphasize that the Duramax engine “‘run[s] clean, '” delivers “‘low emissions, '” and is “‘friendlier to the environment.'” Notably, not one of the advertisements or publications which Plaintiffs reproduce in this section of the consolidated amended complaint references EPA standards or represents that the vehicle in question has been certified by the EPA.

         Plaintiffs allege that the disparity between the way the Duramax engine was characterized as operating and the way in which its emissions reductions systems were actually configured has resulted in financial harm to them and other consumers. See Id. at 116 (“As a result of GM's unfair, deceptive, and/or fraudulent business practices, and its failure to disclose that under normal operating conditions the Polluting Vehicles are not “clean” diesels, emit more pollutants than do gasoline-powered vehicles, and emit more pollutants than permitted under federal and state laws, owners and/or lessees of the Polluting Vehicles have suffered losses.”).

         First, Plaintiffs allege that they “paid a premium of nearly $9, 000 [because] GM charged more for its Duramax engine than a comparable gas car.” Id. at 115. Because the Duramax engine did not reduce emissions to the level a reasonable consumer would have expected, Plaintiffs allege that they overpaid for the vehicle at the time of purchase. Id. at 117. Plaintiffs also identify other damages they have suffered:

Had Plaintiffs and Class members known of the higher emissions at the time they purchased or leased their Polluting Vehicles, they would not have purchased or leased those vehicles, or would have paid substantially less for the vehicles than they did. Moreover, when and if GM recalls the Polluting Vehicles and degrades the GM Clean Diesel engine performance and fuel efficiency in order to make the Polluting Vehicles compliant with EPA standards, Plaintiffs and Class members will be required to spend additional sums on fuel and will not obtain the performance characteristics of their vehicles when purchased. Moreover, Polluting Vehicles will necessarily be worth less in the marketplace because of their decrease in performance and efficiency and increased wear on their cars' engines.

Id. at 117.


         The consolidated amended complaint includes fifty-four counts. The first count alleges that the Defendants violated the RICO statute. The remaining fifty-three counts are state law claims predicated on the fraudulent concealment and consumer protection laws of forty-three different states. Thirty-three of the state law claims originate from states where no named Plaintiff resides.


         Defendants have moved for dismissal pursuant to Federal Rules of Civil Procedure 8(a), 9(b), 12(b)(1) and 12(b)(6). Rule 8(a)(2) mandates that pleadings, including complaints, must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Id. Rule 9(b) requires a party allege fraud or mistake to “state with particularity the circumstances constituting fraud or mistake.” Id. Rule 9(b) also provides, however, that “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Id.

         Rule 12(b)(1) provides the means by which a party may assert lack of subject-matter jurisdiction as a defense. “A Rule 12(b)(1) motion for lack of subject matter jurisdiction can challenge the sufficiency of the pleading itself (facial attack) or the factual existence of subject matter jurisdiction (factual attack).” Cartwright v. Garner, 751 F.3d 752, 759 (6th Cir. 2014) (citing United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994)). “A facial attack goes to the question of whether the plaintiff has alleged a basis for subject matter jurisdiction, and the court takes the allegations of the complaint as true for purposes of Rule 12(b)(1) analysis.” Id. However, a “factual attack challenges the factual existence of subject matter jurisdiction.” Id. In that case, “the district court has broad discretion over what evidence to consider and may look outside the pleadings to determine whether subject-matter jurisdiction exists.” Adkisson v. Jacobs Eng'g Grp., Inc., 790 F.3d 641, 647 (6th Cir. 2015). Regardless, “the plaintiff bears the burden of proving that jurisdiction exists.” DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004).

         A pleading fails to state a claim under Rule 12(b)(6) if it does not contain allegations that support recovery under any recognizable legal theory. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In considering a Rule 12(b)(6) motion, the Court construes the pleading in the non-movant's favor and accepts the allegations of facts therein as true. See Lambert v. Hartman, 517 F.3d 433, 439 (6th Cir. 2008). The pleader need not provide “detailed factual allegations” to survive dismissal, but the “obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). In essence, the pleading “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face” and “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678-79 (quotations and citation omitted).


         In the present motions to dismiss, Defendants argue that Plaintiffs lack standing to bring suit, that the consolidated amended complaint is impermissibly vague, that all of Plaintiffs' claims are preempted, that any surviving claims should be stayed, and that Plaintiffs have failed to state a cognizable RICO claim. Those arguments will be addressed in roughly that order. Before proceeding further, the Court must confirm its jurisdiction. After analyzing jurisdictional issues, the next question is whether the complaint is sufficiently clear and specific to comply with federal pleading requirements. The cognizability of Plaintiffs' claims involving the alleged misrepresentation, concealment, or omission of material facts is inextricably intertwined with the question of whether those claims are preempted and the related question of whether this suit should be stayed in favor of an EPA investigation. Accordingly, those questions will be considered together. Next, Defendants' arguments for dismissal of the RICO claim will be considered. Finally, the dispute over whether Plaintiffs lack standing to assert claims premised on the laws of states where no named Plaintiff resides will be addressed.

         Both GM and Bosch have filed separate motions to dismiss. While the two motions travel similar ground (and refer to and rely upon each other), they also contain distinct arguments. An effort will be made to specifically identify which Defendant's arguments are being addressed and the impact of each conclusion on each Defendant. However, one of the disputes is whether the complaint is adequately specific in its allegations about which Defendant took what action. For that reason, some generalization will be inevitable.


         Federal courts have a duty to confirm subject matter jurisdiction in every case pending before them. Valinski v. Detroit Edison, 197 F. App'x 403, 405 (6th Cir. 2006). Article III, § 2 of the U.S. Constitution limits federal court jurisdiction to “Cases” and “Controversies.” The doctrine derived from Art. III, § 2 imposes the requirement of standing: federal jurisdiction exists only if the dispute is one “which [is] appropriately resolved through the judicial process.” Whitmore v. Arkansas, 495 U.S. 149, 155 (1990). For standing to exist, three elements must be satisfied: injury in fact, causation, and redressability. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61(1992). Injury in fact exists when the plaintiff has suffered “an invasion of a legally protected interest” that is both “concrete and particularized” and “actual or imminent, ” not “conjectural or hypothetical.” Id. at 560 (citations omitted). Causation exists if the injury is one “that fairly can be traced to the challenged action of the defendant.” Simon v. E. Kentucky Welfare Rights Org., 426 U.S. 26, 41 (1976). The redressability requirement is satisfied if the plaintiff's injury is “likely to be redressed by a favorable decision.” Id. at 38. Standing can exist even if the alleged injury “may be difficult to prove or measure.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1549 (2016).

         Bosch argues that the Plaintiffs lack Article III standing because they have not identified an injury in fact which is traceable to the actions of Bosch. GM has not briefed the question of Article III standing, but has incorporated by reference Bosch's brief on the issue. See GM Mot. Dismiss at 16-17 n.18, ECF No. 45.[7] Bosch identifies “two types of injuries (1) alleged overpayment for their vehicles . . . and (2) potential future injuries arising from potential diminished performance.” Bosh Mot. Dismiss at 11. As regards the overpayment theory, Bosch argues that the injury cannot be fairly traced to Bosch's actions because Bosch did not advertise the vehicles to consumers, did not establish the price for the vehicles, and was not a party to any vehicle-purchase contracts. As regards the potential for diminished future performance, Bosch argues that this theory is unduly hypothetical and speculative.


         Plaintiffs' overpayment theory suffices to provide standing to sue GM, which manufactured the vehicles and authorized their sale. Accepting Plaintiffs' allegations as true, they paid a premium for a “clean diesel” vehicle which actually polluted at levels dramatically higher than a reasonable consumer would expect. In other words, they paid for a product which did not operate in the way they believed it did. Claims of overpayment, wherein a plaintiff paid a premium but did not receive the anticipated consideration, are cognizable injuries in fact. See Wuliger v. Manufacturers Life Ins. Co., 567 F.3d 787, 794 (6th Cir. 2009). See also Danvers Motor Co. v. Ford Motor Co., 432 F.3d 286, 293 (3d Cir. 2005) (“Monetary harm is a classic form of injury-in-fact.”). That injury is traceable to GM's actions: GM developed the Duramax engine (including the alleged defeat devices), marketed its diesel vehicles as environmentally friendly, and set the MSRP for its diesel vehicles. There is, accordingly, a “‘traceable connection between the plaintiff's injury and the complained-of conduct of the defendant.'” Id. at 796 (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103 (1998)). And financial damages are, of course, fully redressable by a favorable decision. Plaintiffs have standing to sue GM.

         Bosch's connection to the alleged overpayment, however, is more attenuated. Bosch did not manufacture the Duramax engine, advertise vehicles containing that engine, or establish the MSRP. Accordingly, Bosch argues that any overpayment by Plaintiffs is attributable solely to GM's actions. That assertion mischaracterizes the allegations in the consolidated amended complaint. Plaintiffs allege that

Bosch participated not just in the development of the defeat device, but also in the scheme to prevent U.S. regulators from uncovering the device's true functionality. Moreover, Bosch's participation was not limited to engineering the defeat device (in a collaboration described as unusually close). Rather, Bosch GmbH and Bosch LLC marketed “clean diesel” in the United States and lobbied U.S. regulators to approve “clean diesel, ” another highly unusual activity for a mere supplier.

Con. Am. Compl. at 39.

         In other words, “Bosch GmbH and Bosch LLC have enabled over 1.3 million vehicles to be on the road in the United States polluting at levels that exceed emissions standards and which use software that manipulate emissions controls in a manner not expected by a reasonable consumer.” Id. at 40.

         Bosch admits that it supplied components to the diesel vehicles in question, but argues that it did not market those vehicles or enter into any contractual relationships with any of the Plaintiffs. As stated, however, that is not entirely true. Plaintiffs allege that Bosch “marketed ‘clean diesel' in the United States.” Id. at 39. While the exact nature of that marketing is unclear, it is plausible that Bosch's efforts contributed to the market demand for “clean diesel” vehicles, generally, in the United States. See Id. at 5-6. The premiums which Plaintiffs paid for vehicles with Duramax engines were a natural consequence of that market demand. Similarly, Plaintiffs allege that Bosch enabled GM to deceive consumers and thus contributed to the overpayment. Plaintiffs emphasize the close relationship between GM and Bosch, including the joint efforts to calibrate EDC17 for the Duramax engine. The allegations in the consolidated amended complaint, if true, clearly establish that Bosch developed the vehicle component which has caused Plaintiffs' injury, that Bosch was aware of the deception that component would inevitably contribute to, and that Bosch was aware that consumers would pay a premium for vehicle capabilities that the component would not deliver. In other words, Plaintiffs overpaid for their vehicles because Bosch worked closely with GM to install working defeat devices in the Duramax vehicles.

         There can be no dispute that, compared to GM, Bosch has a more indirect relationship with United States consumers. But “[p]roximate causation is not a requirement of Article III standing.” Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S.Ct. 1377, 1391 n.6 (2014). Indeed, “the causation requirement in standing is not focused on whether the defendant ‘caused' the plaintiff's injury in the liability sense; the plaintiff need only allege ‘injury that fairly can be traced to the challenged action of the defendant, and not injury that results from the independent action of some third party not before the court.'” Wuliger, 567 F.3d at 796 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). Bosch may ultimately prevail in its argument that it should not be held liable for Plaintiffs' overpayment, but Plaintiffs' allegation that Bosch was intimately involved in the creation of the component which caused the overpayment suffices to establish Article III standing.

         None of the (noncontrolling) cases which Bosch cites in support of its argument compel a different result because each is legally or factually distinguishable. Bosch cites In re Schering Plough Corp. Intron/Temodar Consumer Class Action for the proposition that overpayment damages provide standing only if traceable to the actions of the defendant. 678 F.3d 235, 245 (3d Cir. 2012). In holding that the plaintiffs had not identified a causal relationship between the alleged misconduct (unlawful marketing practices) and the alleged injury (payment for ineffective drugs), the Third Circuit noted that the plaintiffs did not actually allege that they “ever paid for a Temodar or Intron-A prescription.” Id. at 247. The plaintiffs did allege that they paid for Rebetol, but the Third Circuit explained that “[i]t is pure conjecture to conclude that because Schering's misconduct caused other doctors to write prescriptions for ineffective off-label uses for other products, Local 331 ended up paying for two prescriptions for Rebetol due to the same kind of misconduct.” Id. at 248. Here, the causal connection is much clearer: Bosch worked with GM to develop the vehicle component which was the source of the overpayment by Plaintiffs. In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab. Litig. is similarly inapplicable. 826 F.Supp.2d 1180, 1191 (C.D. Cal. 2011) (dismissing claims against North American divisions of Toyota Motor Corporation because the complaint did not allege that the American advertisements were aired in other countries and thus did not identify a link between the defendants responsible for U.S. marketing and “the buying decisions of Toyota customers worldwide”). Bosch's involvement in the creation of a vehicle component which has caused financial harm to Plaintiffs has been clearly alleged.[8] Between that involvement and Bosch's alleged marketing for “clean diesel, ” Plaintiffs have adequately alleged that their overpayment can be fairly traced to Bosch.


         Plaintiffs' allegations of overpayment are sufficient to enable them to advance their state law consumer protection and fraudulent concealment claims. Plaintiffs' other alleged damages (essentially that, if the existence of a defeat device is proven, the value of their vehicles will decrease) need not be considered for standing purposes. Defendants separately challenge Plaintiffs' standing to bring a RICO claim. That argument is based upon a statutory standing requirement, not Article III standards, and thus will be considered below.


         Defendants next challenge the form of the consolidated amended complaint. GM argues, first, that the entire complaint should be dismissed because it does not contain a “short and plain statement of the claim showing that the pleader is entitled to relief, ” as required by Federal Rule of Civil Procedure 8(a). Second, GM (joined by Bosch) argues that all of Plaintiffs' state law claims which sound in fraud do not meet Federal Rule of Civil Procedure 9(b) specificity standards. Third, Bosch argues that Plaintiffs have engaged in impermissible group pleading. Each argument will be addressed in turn.


         Rule 8(a)(2) mandates that pleadings, including complaints, must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Id. However, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., 135 S.Ct. 346, 346 (2014). The consolidated amended complaint spans 229 pages and contains 900 pages of exhibits. Defendants are correct that this complaint is lengthy, but this is not one of the extraordinarily rare scenarios where a complaint should be dismissed because of its length. Defendants fault the consolidated amended complaint for including “scores of paragraphs [related] to alleged misconduct involving Volkswagen, Audi, Porsche, Mercedes, and Fiat Chrysler.” GM Mot. Dismiss at 12. These allegations are of limited relevance, but do provide context for Plaintiffs' remaining allegations. The undergirding purpose of Rule 8(a) is to ensure that the complaint provides notice. If the length and unnecessary complexity of the complaint obscures the true nature of the allegations and claims, dismissal may be appropriate. This is not such a case.


         Defendants also argue that Plaintiffs have failed to meet the heightened pleading standards of Rule 9(b) with respect to their allegations of fraud. The adequacy of Plaintiffs' fraud allegations are best resolved in conjunction with the analysis of whether Plaintiffs have stated a claim. However, one general point will be taken up separately.

         The specificity required for allegations of affirmative misrepresentations is necessarily different than the specificity required for allegations of fraudulent omissions.[9] The purpose of Rule 9(b) is to put defendants on notice of the nature of the claim. See Williams v. Duke Energy Int'l, Inc., 681 F.3d 788, 803 (6th Cir. 2012) (“[I]t is a principle of basic fairness that a plaintiff should have an opportunity to flesh out her claim through evidence unturned in discovery. Rule 9(b) does not require omniscience; rather the Rule requires that the circumstances of the fraud be pled with enough specificity to put defendants on notice as to the nature of the claim.” (internal citations omitted)). “When it comes to claims of fraud by omission or fraudulent concealment, the plaintiff faces a slightly more relaxed pleading burden; the claim ‘can succeed without the same level of specificity required by a normal fraud claim.'” Beck v. FCA U.S. LLC, No. 17-CV-10267, 2017 WL 3448016, at *9 (E.D. Mich. Aug. 11, 2017) (quoting Baggett v. Hewlett-Packard Co., 582 F.Supp.2d 1261, 1267 (C.D. Cal. 2007)). The reasons for the disparate burden are straightforward. Fraudulent acts occur at a specific time, fraudulent omissions occur over a period of time. Fraudulent acts can be specifically described, but omissions are, by very definition, more amorphous.

         As this Court explained in Counts, the Sixth Circuit has rejected the argument that it has the authority to “relax” the Rule 9(b) particularity requirement. See Counts v. General Motors, LLC, 237 F.Supp.3d (E.D. Mich. 2017) (citing United States v. Walgreen Co., 846 F.3d 879, 880- 81 (6th Cir. 2017)). That said, the Sixth Circuit has recognized that “‘particular' allegations of fraud may demand different things in different contexts.” Walgreen, 846 F.3d at 881. Plaintiffs must allege their theory of fraudulent omissions with enough specificity to provide Defendants with fair notice of the claims. At the same time, in reviewing the consolidated amended complaint, “the difficulty of obtaining proprietary . . . information or pinpointing the point in time when a fraudulent omission occurred will be taken into account.” Counts, 237 F.Supp.3d at 595.


         Bosch further argues that the Plaintiffs have engaged in impermissible group pleading. This argument is primarily focused on Plaintiffs' RICO claim. As discussed below, Plaintiffs have adequately alleged the prima facie elements of a RICO claim with sufficient specificity to put Defendants on notice of their alleged involvement in the enterprise. Bosch further objects to Plaintiffs' decision to define “Bosch” as including both Bosch LLC and Bosch Gmbh. Bosch contends that Plaintiffs' failure to distinguish between these two entities precludes Bosch from understanding exactly what its constituent entities are accused of.

         When asserting claims of fraud, plaintiffs are not permitted to “generally assert all claims against all defendants.” State Farm Mut. Auto. Ins. Co. v. Universal Health Grp., Inc., No. 14-CV-10266, 2014 WL 5427170, at *3 (E.D. Mich. Oct. 24, 2014) (citing Hoover v. Langston Equip. Assocs., Inc., 958 F.2d 742, 745 (6th Cir. 1992)). But, at the same time, the Federal Rules of Civil Procedure are premised on the idea that pleadings should be simple and focused on providing notice. See Llewellyn-Jones v. Metro Prop. Grp., LLC, 22 F.Supp.3d 760, 780 (E.D. Mich. 2014). As discussed above, allegations of fraudulent concealment will inevitably be less specific than allegations of affirmative misrepresentation.

         Plaintiffs allege that “[b]oth Bosch GmbH and Bosch LLC . . . operate under the umbrella of the Bosch Group.” Con. Am. Compl. at 41. Members of both Bosch GmbH and Bosch LLC were involved in the alleged conspiracy here. Plaintiffs indicate that the “acts of individuals described in this Complaint have been associated with Bosch GmbH and Bosch LLC whenever possible.” Id. But Plaintiffs further contend that those employees “often hold themselves out as working for ‘Bosch.'” Id. at 42. In other words, identifying “which Bosch defendant” was involved in which particular actions cannot always be “ascertained with certainty.” Id. Plaintiffs believe that discovery will alleviate this confusion. Id.

         Given Plaintiffs' allegation that Bosch employees and constituent entities often blur the legal boundaries between Bosch subsidiaries, the allegations against the Bosch Defendants are sufficiently specific. Plaintiffs are proceeding primarily on a theory of fraudulent omissions, and Bosch's alleged role within that fraudulent scheme is clear. “Rule 9(b) is not to be read in isolation, but is to be interpreted in conjunction with Federal Rule of Civil Procedure 8.” U.S. ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 503 (6th Cir. 2007). “In a complex case, involving multiple actors and spanning a significant period of time, where there has been no opportunity for discovery, ‘the specificity requirements of Rule 9(b) [should] be applied less stringently. . . . It is a principle of basic fairness that a plaintiff should have an opportunity to flesh out her claim through evidence unturned in discovery.'” State Farm Mut. Auto. Ins. Co. v. Pointe Physical Therapy, LLC, 107 F.Supp.3d 772, 788 (E.D. Mich. 2015) (quoting JAC Holding Enterprises, Inc. v. Atrium Capital Partners, LLC, 997 F.Supp.2d 710, 727 (E.D. Mich. 2014)). This is one such case.

         In other words, the Rule 9(b) requirements are not meant to be an insurmountable barrier. Although the precise identity of the subsidiary and/or employee which may have taken certain actions is unclear, that level of detail is unnecessary to put the Bosch Defendants on notice of the claims made against them. The consolidated amended complaint will not be dismissed without prejudice for engaging in group pleading.


         Defendants seek dismissal of the state law claims. First, they argue that Plaintiffs have failed to state claims for affirmative misrepresentation. Second, Defendants argue that Plaintiffs' fraudulent omission claims should be dismissed or stayed. Specifically, Defendants assert that Plaintiffs' concealment or omission claims are preempted, have not been plausibly pled, and should be stayed under the primary jurisdiction doctrine. In response, Plaintiffs deny that they are advancing any fraud claims premised on affirmative misrepresentations. See Pl. Resp. GM Mot. Dismiss at 9-10 (“But Plaintiffs do not sue for common law fraud under state law for affirmative misrepresentations.”). Rather, “Plaintiffs sue for omissions of material fact, fraudulent concealment, violation of state law consumer protection statutes, and violation of RICO.” Id. at 10. Plaintiffs further challenge the assertion that the state consumer protection laws on which it relies incorporate only claims of “common law fraud”: “The consumer protection statutes bar not only fraud but also deceptive, unfair, and unlawful conduct.” Id. For similar reasons, Plaintiffs contend that GM's argument that Plaintiffs have failed to plead reliance on affirmative misrepresentations is irrelevant.

         Plaintiffs acknowledge that the consolidated amended complaint includes an extended discussion of various advertisements and press releases which GM issued regarding vehicles equipped with the Duramax engine. Those allegations, Plaintiffs explain, are not meant to buttress affirmative misrepresentation claims. They are meant “to show that Defendants' omissions were material for purposes of claims under consumer protection statutes and RICO.” Id. at 11. To repeat: “The relevance of those promises is GM's acknowledgement that low emissions are material . . . to a reasonable consumer.” Id. at 12.

         Given Plaintiffs' decision to disavow any affirmative misrepresentation claims, the remaining issues are whether Plaintiffs' state law claims are preempted by the Clean Air Act (CAA), whether Plaintiffs have plausibly pleaded fraudulent omission claims, and whether any plausibly pleaded fraudulent omission claims should be stayed pursuant to the primary jurisdiction doctrine. Each question will be addressed in turn.


         “Pre-emption may be either expressed or implied, and ‘is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.'” Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977)). In all preemption cases, and especially where “Congress has ‘legislated . . . in a field in which the States have traditionally occupied, ' . . . [courts] ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.'” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). “Environmental regulation is a field that the states have traditionally occupied.” Merrick v. Diageo Americas Supply, Inc., 805 F.3d 685, 694 (6th Cir. 2015). The same is true of consumer protection and advertising regulations. See In re Ford Fusion & C-Max Fuel Econ. Litig., No. 13-MD-2450 KMK, 2015 WL 7018369, at *28 (S.D.N.Y. Nov. 12, 2015); Gilles v. Ford Motor Co., 24 F.Supp.3d 1039, 1047 (D. Colo. 2014). Where the statute does not expressly preempt state law, preemption may be implied. The Supreme Court has recognized

two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it, and conflict pre-emption, where compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

Gade, 112 S.Ct. at 98 (internal citations omitted).

         Defendants' preemption arguments arise out of Section 209 of the CAA. That section, codified at 42 ...

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