United States District Court, E.D. Michigan, Northern Division
AMY MILLER, et al., individually, and on behalf of all others similarly situated, Plaintiffs,
GENERAL MOTORS, LLC, Defendant.
Patricia T. Morris Magistrate Judge.
ORDER GRANTING MOTION TO DISMISS AND DISMISSING
COMPLAINT WITHOUT PREJUDICE
L. LUDINGTON UNITED STATES DISTRICT JUDGE.
December 14, 2017, Plaintiffs filed a 23-count complaint on
behalf of themselves and others similarly situated alleging
that they purchased or leased certain GM vehicles with
defective power liftgate struts that can unexpectedly fail,
causing the liftgate to suddenly fall on people attempting to
access the rear compartment. Compl. ¶ 1, ECF No. 1.
Plaintiffs purchased or leased their vehicles in Michigan,
Illinois, Massachusetts, Oregon, and Washington. The
complaint alleges breaches of express and implied warranties,
violations of state consumer protection laws, fraudulent
omission, and unjust enrichment. On March 5, 2018, Defendant
filed the instant Motion to Dismiss for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6), or for
a more definite statement pursuant to rule 12(e). ECF No. 19.
Plaintiffs responded on April 9, 2018, and Defendant replied
on April 30, 2018. ECF Nos. 27, 28.
adjudicating a motion to dismiss for failure to state a claim
under rule 12(b)(6), the Court construe's the complaint
in the non-movant's favor and accepts all of
Plaintiff's factual allegations as true. See Lambert
v. Hartman, 517 F.3d 433, 439 (6th Cir.
2008). The facts set forth herein are derived from the
allegations in Plaintiff's complaint.
vehicles containing the liftgate defect are: 2010-2012 GMC
Acadia, 2010-2012 Buick Enclave, 2010 Saturn Outlook,
2010-2012 Chevrolet Traverse, 2010-2012 Cadillac SRX,
2010-2012 Chevrolet Equinox, and 2010-2012 GMC Terrain
(collectively, the “Class Vehicles”). Compl.
¶ 1. “Each of the Class Vehicles shares a common
defect: power liftgate struts that prematurely wear because
the design allows dirt and debris to compromise the seals on
the pressurized cylinder, allowing pressurized gas to escape
(the ‘Power Liftgate Defect').” Id.
¶ 2. The liftgate struts “fail without warning,
causing injury to anyone in the path of the liftgate and
hindering the owner's ability to use their rear
compartment because the liftgate will not remain open.”
Id. GM had notice of the defect since at least 2010,
when it issued the first of several “Technical Service
Bulletins” (TSBs) to dealers regarding power liftgates.
Id. ¶ 6. GM “likely had notice and
knowledge” of the defects prior to that based on
recalls issued by three other auto manufacturers of power
liftgate struts from the same supplier, Stabilus, Inc.,
beginning in 2006. Id.
not disclose the defect at the time of purchase, and
Plaintiffs purchased their vehicles with the erroneous
understanding that they would be safe and reliable. Plaintiff
Miller “owns a 2010 Chevrolet Traverse with the Power
Liftgate Defect, ” which was not disclosed to her at
the time of the purchase in 2014, despite GM's knowledge
of the defect. Id. ¶ 19-20. Plaintiff Graham
“owns a 2011 Chevrolet Equinox with the Power Liftgate
Defect, ” which was not disclosed to him at the time of
the purchase, despite GM's knowledge of the defect.
Id. ¶ 22-23. Plaintiff Leonard owns a 2012
Chevrolet Traverse which she purchased in 2012. Id.
¶ 25. Within the period of GM's express warranty,
the liftgate on Plaintiff Leonard's vehicle
“struggled to open and required manual
assistance.” Id. ¶ 26. Plaintiff Luse
owns a 2011 GM Terrain which he purchased in 2013.
Id. ¶ 29. On numerous occasions within the
period of GM's express warranty, the power liftgate on
Plaintiff Luse's vehicle collapsed unexpectedly, once
striking Mr. Luse on the shoulder. Id. ¶ 30.
Plaintiff Arnadi owns a 2012 Chevrolet Equinox, which he
purchased in 2012. Id. ¶ 33. The power liftgate
on Mr. Arnadi's vehicle “suddenly collapsed from
the full-open position on multiple occasions.”
Id. ¶ 34. “On one such occasion, the
collapsed liftgate smashed Mr. Arnadi into the vehicles rear
bumper” and he was “forced to use his back to
raise the liftgate and free himself.” Id.
owner's manual for the Class Vehicles warns: “You
or others could be injured if caught in the path of the power
liftgate. Make sure there is no one in the way of the
liftgate as it is opening and closing.” Id.
¶ 42. The GM owner's manual for the Class Vehicles
also states: “If you power open the liftgate and the
liftgate support struts have lost pressure, the lights will
flash and a chime will sound. The liftgate will stay open
temporarily, then slowly close. See your dealer/retailer for
service before using the liftgate.” Id. ¶
43. Plaintiffs alleged that the defect in the liftgates
causes them to drop suddenly, with no lights, chimes, or any
other user warnings. Id.
2010, GM issued a TSB (technical service bulletin) notifying
dealers, but not owners, of multiple problems with the power
liftgates. Id. ¶ 44. Another TSB was issued to
GM dealers in June 2013 acknowledging that dirt and debris
were wearing the strut seals, and instructing dealers
conducting strut replacements to change the orientation of
the rod such that the rod faced downward, thereby preventing
debris accumulation. Id. ¶ 45. GM issued a
March 2014 TSB which noted customer complaints related to the
liftgates on the 2010-2014 Cadillac SRX, Chevrolet Equinox,
and GMC terrain. Id. ¶ 47.
2015, GM recalled the 2007-2012 GMC Acadia, 2008 to 2012
Buick Enclave, 2007-2010 Saturn Outlook, and 2009-2012
Chevrolet Traverse. Id. at ¶ 48. GM specified
that the “vehicles have a condition in which the gas
struts that hold the liftgate up may prematurely wear,
” because the struts “are orientated in a way
that allows dirt particles to penetrate between the piston
rod and the guiding bushing package.” Id.
¶ 48. In conjunction with the recall, GM acknowledged
that the Prop Rod Recovery system may be unable to prevent a
liftgate with prematurely worn gas struts from falling too
quickly. Id. ¶ 49.
recall was limited to the remedy of a “reflash”
(reprogramming) of the liftgate actuator motor control unit
with a new software calibration. Id. ¶ 7.
Dealers were instructed to verify that the liftgate stayed up
and, if not, to replace the struts for free within 90 days of
the software upgrade. Id. ¶ 51. If the struts
failed after 90 days, customers were required to pay for the
repair. Id. GM admitted in its recall notice to the
National Highway Traffic Safety Administration (NHTSA) that
the struts were defective because they allow dust and dirt to
collect in the strut rod seals, causing those seals to fail.
Id. ¶ 8. GM agreed to replace the struts only
if they failed at the time of the repair or within 90 days
thereafter. Id. ¶ 9. GM's recall was
limited to four models, despite GM's knowledge that other
models contained the same or similar struts and were the
subject of consumer complaints and TSBs. Id. ¶
10. The new software calibration failed to resolve the
problem. Id. ¶ 11. GM did not recall the
2010-2014 Cadillac SRX, Chevrolet Equinox, and GMC Terrain
vehicles, despite acknowledging in a TSB that those vehicles
also had struts prone to premature wear. Id. ¶
complaint details a number of recalls and NHSTA
investigations of Ford, Toyota, and Honda vehicles equipped
with struts manufactured by Stabilus, the same company that
manufactured GM's struts. Id. ¶ 58-81.
These NHSTA investigations and recalls took place as early as
2006. Following Honda's 2012 recall, NHTSA opened an
Equipment Query Investigation into Stabilus to determine
which other companies had purchased the defective struts.
Id. ¶ 77. In its response, Stabilus stated that
it supplied struts for “nearly all vehicles produced in
North America” but that no other manufacturer received
the “same” struts as those that were recalled.
Id. “NHTSA closed the investigation, in large
part based on Stabilus's claim that most struts that were
similar to the recalled struts were aftermarket parts not
manufactured by Stabilus.” Id. ¶ 81. By
the end of 2012, the NHTSA had received 28 complaints of
sudden falls of power liftgates in GM vehicles, 9 of which
were related to vehicles GM subsequently recalled.
Id. ¶ 85. These consumer complaints included
reports of head injuries and a broken wrist. Id.
extensively advertised the benefits of their power liftgate.
Id. ¶ 93. Numerous advertising materials for
the Class Vehicles advertised the power liftgate for easy
loading and unloading of the rear compartment. Id.
¶ 95-100. The brochure for the GMC Terrain reads:
“Programmable Power Liftgate Helping you take advantage
of its easy cargo access, Terrain offers an available
programmable power liftgate. It opens and closes with the
touch of a button to the height you select. Electronic
obstacle detection can stop and reverse liftgate motion to
prevent damage.” Id. ¶ 99.
complaint contains 23 counts leading to five categories of
claims for relief. First, Plaintiffs allege that GM breached
its Express Limited Warranty that it would repair or replace
defects in material or workmanship free of charge if they
became apparent during the warranty period. Plaintiffs seek
redress for the breach of the express warranty pursuant to:
1) the Magnuson-Moss Warranty Act, 15 U.S.C. §§
2301, et seq.; 2) Mich. Comp. Laws § 440.2313; 3) 810
Ill. Comp. Stat. 5/2-313 and 5/2A-210; 4) Mass. Gen. Laws ch.
106, §§ 2-313 and 2A-210; 5) Or. Rev. Stat.
§§ 72.3130 and 72a.2100; and 6) Wash. Rev. Code
§ 62A.2-313 and 62A.2A-210 (count 1, 3, 8, 12, 17, and
Plaintiff alleges that GM breached the Implied Warranty of
Merchantability because, at the time of sale and at all times
thereafter, the vehicles were not in merchantable condition,
would not pass without objection in the trade, and were not
fit for the ordinary purpose for which vehicles were used.
Plaintiffs seek redress for the breach of the Implied
Warranty of Merchantability pursuant to: 1) the Magnuson-Moss
Warranty Act, 15 U.S.C. §§ 2301, et seq.;
2) Mich. Comp. Laws §§ 440.2314, 440.2862; and 3)
Mass. Gen. Laws ch. 106, §§ 2-314 and 2A-212 (count
4 and 13).
Plaintiffs allege that GM violated state consumer protection
laws by intentionally and knowingly omitting information
regarding the liftgate defect, that would be material to a
reasonable person considering whether to purchase the
vehicles and how much to pay for them. Plaintiffs allege that
they justifiably relied on these omissions and that, had they
been aware of the defect, they would have not purchased the
vehicles at all or would have paid less for the vehicles.
Plaintiffs also allege that GM knowingly sold vehicles with a
defective liftgate that was essentially unusable for the
purposes for which it was sold. Plaintiffs seek to recover
under the Michigan Consumer Protection Act, Mich. Comp. Laws
§§ 445.901-445.922 (count 2), the Illinois Consumer
Fraud and Deceptive Business Practices Act, 815 Ill. Comp.
Stat. 505/1, et seq. (count 7), the Massachusetts
Regulation of Business Practices for Consumer Protection Act,
Mass. Gen. Laws ch. 93A, §§ 1, et seq.
(count 11), the Oregon Unlawful Trade Practices Law, Or. Rev.
Stat. §§ 646.605, et seq. (count 16), and
the Washington Consumer Protection Act, Wash. Rev. Code
§§ 19.86.010, et seq. (Count 20).
Plaintiffs assert five counts of common law fraudulent
omission on behalf of the Michigan, Illinois, Massachusetts,
Oregon, and Washington classes (count 5, 9, 14, 18, and 22).
The factual allegations giving rise to the fraudulent
omission claims are essentially identical to the allegations
giving rise to the claims for violations of the state
consumer protection statutes.
Plaintiffs assert five counts of unjust enrichment on behalf
of the Michigan, Illinois, Massachusetts, Oregon, and
Washington classes (count 6, 10, 15, 19, and 23). In each of
these counts Plaintiffs allege that GM has wrongfully
benefitted from knowingly selling and leasing defective
vehicles at inflated prices due to GM's concealment of
the liftgate defect, that it is inequitable and
unconscionable for GM to retain these benefits, and that the
amount of the unjust enrichment should be disgorged and
returned to Plaintiffs.
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 have
provided “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).
argues that Plaintiffs' express warranty claim fails
because the GM Limited Warranty is not an “Express
Warranty” under the UCC. Mot. at 7, ECF No. 19. Rather,
Defendant argues that the GM Limited Warranty is a
“repair or replace” warranty which “covers
repairs to correct any vehicle defect . . . due to materials
or workmanship occurring during the warranty period.”
Id. Defendant also contends that Plaintiffs have not
pled a breach of the Limited Warranty because they do not
allege that: “(i) they experienced the alleged liftgate
defect during the warranty period; (ii) they presented their
vehicles to GM for repair during the warranty period; and
(iii) GM refused or failed to repair their vehicles.”
Id. at 8.
argues that the GM Limited Warranty can be read as either a
contractual promise to repair, or as an express warranty, and
that it should be construed against the drafter. Resp. at 4,
ECF No. 27. Plaintiffs also argue that the existence of an
express warranty is typically a jury question, which cannot
be summarily decided on the pleadings. Id.
Plaintiffs also contend that they were excused from availing
themselves of the Limited Warranty's exclusive remedy
provision because doing so would have been futile.
Id. at 5.
the Michigan Uniform Commercial Code (UCC), express
warranties by the seller are created as follows:
(a) An affirmation of fact or promise made by the seller to
the buyer which relates to the goods and becomes part of the
basis of the bargain creates an express warranty that the
goods shall conform to the affirmation or promise.
(b) A description of the goods which is made part of the
basis of the bargain creates an express warranty that the
goods shall conform to the description.
(c) A sample or model which is made part of the basis of the
bargain creates an express warranty that the whole of the
goods shall conform to the sample or model
Comp. Laws Ann. § 440.2313 (emphasis added).
“repair-or-replace” provision in a vehicle sales
contract that does not “explicitly state that [the]
plaintiff's vehicle will be free from defects, but rather
states that the manufacturer will repair or replace any
defects that arise during the specified period, ” does
not constitute an “express warranty” within the
meaning of the Michigan UCC, MCL § 440.2313. Grosse
Pointe Law Firm, PC v. Jaguar Land Rover N. Am., LLC,
317 Mich.App. 395, 404 (2016), appeal denied, 500
Mich. 1017 (2017). Although the repair-or-replace provision
is a “promise made by the seller to the buyer which
relates to the goods and becomes a part of the basis of the
bargain, ” it does not create an express warranty
“that the goods shall conform to the affirmation or
promise.” Id. (emphasis added).
court noted in Grosse Pointe, “goods cannot
‘conform to a promise to repair or replace because such
a promise says nothing about the character or quality of the
goods, but rather identifies a remedy if the buyer determines
that the goods are defective.” Id.; see
also Garvin, Uncertainty and Error in the Law of Sales: The
Article Two Statute of Limitations, 83 B. U. L. Rev.
345, 379 (2003) (“All [express and implied warranties]
go to the quality of the goods at tender. None goes to the
remedies, which come about only if a warranty is
breached.”); DeWitt, Action Accrual Date for
Written Warranties to Repair: Date of Delivery or Date of
Failure to Repair? 17 U. Mich. J.L. Reform 713, 722 n.35
(1984) (“A repair provision relates not to the goods
and their quality, but to the manufacturer and its obligation
to the purchaser.”).
under the identical provision in the Illinois UCC, a
“limited repair warranty” promising “only
that the manufacturer will repair or replace defective parts
during the warranty period”-without any promise that
the product will “conform to some affirmation, promise,
description, sample or model” does not constitute an
“express warranty” within the meaning of the
Illinois UCC, 810 Ill. Comp. Stat. 5/2-313. Darne v. Ford
Motor Co., 2017 WL 3836586, at *5 (N.D. Ill. Sept. 1,
2017) (quoting Mydlach v. DaimlerChrysler Corp., 875
N.E.2d 1047 (Ill. 2007)).
rely on one case from the Supreme Court of Pennsylvania which
reached the opposite conclusion when interpreting an
identical provision under Pennsylvania law. Resp. at 5
(citing). However, even that court recognized that a limited
“repair-or-replace” warranty “does not
create a classic warranty that fits neatly within the UCC
view of warranties” because it does not
“warran[t] that ...