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Persad v. Ford Motor Co.

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

July 16, 2018

SURESH PERSAD, DANIEL WRIGHT, and ROBERT DRUMMOND, individually and on behalf of all others similarly situated, Plaintiffs,
v.
FORD MOTOR COMPANY, Defendant.

          OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS (DKT. 15)

          TERRENCE G. BERG UNITED STATES DISTRICT JUDGE

         I. Introduction

         This is a putative class action, concerning 2016 and 2017 model year Ford Explorers. The crux of Plaintiffs' Complaint is that these vehicles have an “exhaust fume defect.” In other words, that when they are driven these cars allow dangerous gases - including carbon monoxide - to enter the passenger compartment, sickening the driver and passengers. Defendant Ford Motor Company filed a motion to dismiss (Dkt. 15).[1] Plaintiffs filed a response (Dkt. 17), and Defendant filed a reply (Dkt. 18). Defendant's motion raises a number of arguments as to why Plaintiffs' various claims fail to state a claim upon which relief can be granted. The parties agree that the claims of Plaintiff Persad are governed by Georgia law while those of Plaintiffs Wright and Drummond are governed by Pennsylvania law.

         For the reasons set forth below, Defendant's motion is DENIED.

         II. Background

         Plaintiffs seek to certify a nationwide class (or state subclasses) of persons who purchased, leased, or own model year 2016 and 2017 Ford Explorers (Dkt. 14, Amended Compl. at ¶¶ 2, 74). One of the individual Plaintiffs, Suresh Persad, is a Georgia resident who allegedly purchased a new 2016 Explorer from a Georgia-based dealership (Id. at ¶ 16). The other two Plaintiffs, Daniel Wright and Robert Drummond, are Pennsylvania citizens and residents (Id. at ¶¶ 18, 20). Plaintiff Wright claims to have purchased a used 2016 Explorer, while Plaintiff Drummond claims to have purchased a new 2017 Explorer, both from Pennsylvania-based dealerships (Id.).

         Plaintiffs' allege that an “exhaust fume defect” exists in the putative class vehicles, which allows noxious gases, including carbon monoxide, to enter the vehicles' passenger compartments (Id. at ¶¶ 6, 16-21). Plaintiff Persad claims that after he detected exhaust fumes in his passenger compartment, he took the vehicle to a Ford dealership (Id. at ¶ 17). The dealer conducted a road test, identified no exhaust fumes, and allegedly “declined to repair the vehicle” (Id.). Plaintiffs Wright and Drummond also purportedly detected exhaust fumes in their passenger compartments, however neither alleges that they presented their vehicles to a Ford dealership for examination or repair (Id. ¶¶ 18-21).

         Plaintiffs contend that the alleged defect, which they assert also existed in earlier model years of Explorers[2], constitutes a “clear safety hazard” (Id. at ¶¶ 5-6, 27). They claim Ford knowingly, actively, affirmatively, and fraudulently concealed the defect from consumers (Id. ¶ 8). Plaintiffs specific legal claims are: fraudulent concealment (Count I), negligent misrepresentation (Count II), breach of express warranty (Count III), breach of implied warranty (Count IV), violations of the Magnuson-Moss Warranty Act (Count V), unjust enrichment (Count VI), violations of the Georgia Fair Business Practices Act (Count VII), and violations of the Pennsylvania Unfair Trade Practices and Consumer Protections Act (Count VIII).

         III. Standard of Review

         A party may move to dismiss under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief can be granted.” Rule 12(b)(6) is read in conjunction with the pleading standard set forth in Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8(a)(2); see Ashcroft v. Iqbal, 556 U.S. 662, 677-68 (2009). This standard does not require detailed factual allegations. Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). However, a party's “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.” Twombly, 550 U.S. at 555 (internal citations omitted). To survive a Rule 12(b)(6) motion, the complaint and any other matters properly considered 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 (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows the court, drawing upon its “judicial experience and common sense, ” to reasonably infer that the defendant is liable for the misconduct alleged. Id. at 678 (citing Twombly, 550 U.S. at 556), 679. “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Rule 8(a)(2)).

         IV. Analysis

         As noted above, Plaintiffs raise a variety of claims, under Georgia and Pennsylvania law. Defendant argues that each type claim is legally deficient. Each claim is considered below.

         a. Fraudulent Concealment

         First, Plaintiffs bring claims of common-law fraudulent concealment under the laws of Pennsylvania and Georgia. Defendant contends that these claims should be dismissed because: (1) Plaintiffs have not pled the circumstances of the fraud with particularity pursuant to Federal Rule of Civil Procedure 9(b); and (2) Plaintiffs have not plausibly alleged that Defendant had a duty to disclose the alleged defect. The crux of Defendant's second argument is that Plaintiffs have not adequately alleged that Defendant had knowledge of the alleged defect that was superior to that of the Plaintiffs. Defendant says it was essentially common knowledge that Ford Explorers suffered from “exhaust fume defects, ” because prior model years were the subject of widely publicized class action litigation and National Highway Transportation and Safety Board (NHTSB) investigations. Defendant's arguments are not well-taken.

         As to Defendant's first argument, that Plaintiffs' claims are not plead with sufficient particularity, it is true that under Rule 9(b), a complaint alleging fraud “must state with particularity the circumstances constituting fraud.” However, Rule 9(b) also provides that “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Thus, it “does not require a plaintiff to allege specific facts related to the defendant's state of mind when the allegedly fraudulent statements [or omissions] were made.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir. 2008). Instead, it is sufficient to plead “the who, what, when, where, and how” of the allegedly fraudulent statements or omissions and then allege generally that those statements or omissions were made with the requisite intent. Id. To the extent Defendant contend that Plaintiffs have failed to plead Defendant's knowledge of the defect with particularity, the argument is not well-taken. Plaintiffs have generally alleged such knowledge, and that is all that is required by Rule 9(b). The Court also finds that Plaintiffs have pled the circumstances of the alleged fraud with sufficient particularity.

         As to Defendant's alleged superior knowledge, both Pennsylvania and Georgia recognize a duty to disclose where a defendant has exclusive and superior knowledge. See In re MyFord Touch Consumer Litig., 46 F.Supp.3d 936, 960 (N.D. Cal. 2014) (finding manufacturer had duty to disclose based on exclusive knowledge of a defect under, inter alia, Pennsylvania common law and consumer protection statutes); McCabe v. Daimler AG, 948 F.Supp.2d 1347, 1368 (N.D.Ga. 2013) (“McCabe I”) (sustaining fraud by omission claim under Georgia law upon consideration of a motion to dismiss and imposing a duty to disclose where the defect “could not have been discovered through the exercise of ordinary prudence and caution [by plaintiffs]”). Exclusive knowledge can be established where, for example, the ...


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