UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
February 4, 2009
JOHN PAIKAI, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
GENERAL MOTORS CORPORATION, DEFENDANT.
DAVID B. SIDNER, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
GENERAL MOTORS CORPORATION, DEFENDANT.
MEMORANDUM AND ORDER
This matter is before the court on General Motors Corporation's ("defendant" or "GM") motions to dismiss*fn1 John Paikai's ("Florida plaintiff" or "Paikai") second amended complaint and David B. Sidner's ("Ohio plaintiff" or "Sidner") complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn2
Defendant asserts that both complaints fail to state a claim upon which relief can be granted under the relevant State's laws. Specifically, defendant contends that there is no claim of unjust enrichment under Florida or Ohio law when a valid contract governs the transaction (Fla. Def.'s Mem. of P. & A., filed Sept. 22, 2008 ("Fla. MTD"), at 1; Ohio Def.'s Mem. of P. & A., filed Oct. 23, 2008 ("Ohio MTD"), at 1.), and that Ohio plaintiff's unjust enrichment claim also fails because Sidner did not adequately plead that he conferred a benefit on defendant. (Ohio MTD at 1.) Defendant further contends that Paikai and Sidner failed to state claims under the Florida Deceptive and Unfair Trade Practices Act ("Florida DUTPA" or "FDUTPA") and the Ohio Consumer Sales Practices Act ("Ohio CSPA" or "OCSPA") respectively, or, alternatively, that plaintiffs failed to meet the heightened pleading requirements of Rule 9(b) for these claims. (Fla. MTD at 1-2; Ohio MTD at 1-2.) Lastly, defendant asserts that plaintiffs' class claims fail because the elements of the various claims make them "unsuitable for class treatment." (Fla. MTD at 2; Ohio MTD at 2.) Plaintiffs oppose the motions or, in the alternative, seek leave to amend their complaints.
For the reasons set forth below, defendant's motions to dismiss are GRANTED in part and DENIED in part. Plaintiff is granted leave to amend on the grounds set forth below.*fn3
Plaintiffs claims arise from the following alleged facts:
1. Facts Pertaining to Both Plaintiffs
The tires on 2004, 2005, and 2006 Pontiac GTOs are "prone to failure because the suspension system and alignment settings (and specifically the camber settings) are improperly designed, assembled, and/or installed, causing, inter alia, uneven and premature tire wear and failure, as well as causing the inside front tires to graze the struts during normal operation and use." (Fla. Pl.'s Second Am. Compl., filed Aug. 14, 2008 ("Fla. Compl."), ¶ 2; Ohio Pl.'s Compl., filed Oct. 23, 2008 ("Ohio Compl."), ¶ 2.) The subject GTOs were built by defendant GM on the same platform as Australia's Holden Monaro ("Monaro"), which is manufactured by the GM subsidiary GM Holden Limited. (Fla. Compl. ¶ 3; Ohio Compl. ¶ 3.) The Monaros were equipped with 235 mm wide tires mounted on 17" wheels. (Fla. Compl. ¶ 3; Ohio Compl. ¶ 3.) However, the vehicles at issue were equipped with 245 mm wide tires mounted on 17" wheels when sold as GTOs within the United States. (Fla. Compl. ¶ 3; Ohio Compl. ¶ 3.)
Defendant provided plaintiffs and each owner and lessee of the subject vehicles with a 3 year, 36,000 mile bumper-to-bumper factory warranty. (Fla. Compl. ¶ 20; Ohio Compl. ¶20.) The warranty, in relevant part, states:
The warranty covers repairs to correct any vehicle defect related to materials or workmanship occurring during the warranty period.
Warranty repairs, including towing, parts, and labor, will be made at no charge.
The tires supplied with your vehicle are covered against defects in material or workmanship under the Bumpter-to-Bumper coverage. Any tire replaced will continue to be warranted for the remaining portion of the Bumper-to-Bumper coverage period. (Fla. Compl. ¶ 20; Ohio Compl. ¶ 20.) In addition to the warranty, defendant made the following assertions in its GTO owner's manual:
The wheels on your vehicle were aligned and balanced carefully at the factory to give you the longest tire life and best overall performance. Scheduled wheel alignment and wheel balancing are not needed. (Fla. Compl. ¶ 21; Ohio Compl. ¶ 21.)
Plaintiffs allege that defendant, through its "marketing and sales campaign," and in its "sales and marketing materials, warranties, and through its sales representatives" concealed, failed to disclose, and misrepresented material information regarding the vehicles. (Fla. Compl. ¶ 22; Ohio Compl. ¶22.) Specifically, plaintiffs allege that defendant omitted and misrepresented information relating to defects in "the suspension system and alignment setting," that such defects would cause premature tire wear, and that defendant would not repair or provide full reimbursement for damages caused by the defects. (Fla. Compl. ¶ 22; Ohio Compl. ¶ 22.) According to plaintiffs, defendant was on notice and "had exclusive knowledge of the defects and reduced useful life of the tires that resulted." (Fla. Compl. ¶¶ 24-25; Ohio Compl. ¶¶ 24-25.) Had plaintiffs known of these defects, they "would not have purchased, or would have paid substantially less for, their Vehicles." (Fla. Compl. ¶ 23; Ohio Compl. ¶ 23.) For these reasons, plaintiffs maintain that "the limited warranties accompanying the Vehicles are unconscionable." (Fla. Compl. ¶ 26; Ohio Compl. ¶ 26.)
2. Facts Pertaining to Florida Plaintiff
On September 20, 2005, Paikai purchased a 2005 Pontiac GTO from Allen J. Pontiac ("Allen"), an authorized GM dealership in Florida, through a written sales contract. (Fla. Compl. ¶¶ 7, 27.) Paikai's GTO came with standard 17" wheels and BF Goodrich tires. (Id.) On April 20, 2006, plaintiff took his GTO to Yarbrough Tire ("Yarbrough") in Lake Placid, Florida in response to finding his tires significantly worn after 12,003 miles. (Id. ¶ 30.) Yarbrough determined that the tires needed replacement. (Id.) Paikai paid Yarbrough $1895.14 for four new wheels and tires. (Id.)
Paikai took his GTO to Allen in October 2007 because he thought it was pulling to the right. (Id. ¶ 34.) Allen realigned the vehicle, explaining that the alignment, specifically the camber, was out of specification. (Id.) Later, on December 17, 2007, plaintiff returned to Yarbrough to purchase four new tires due to inner shoulder wear, despite having used the tires for only 20,369 miles and rotating them according to schedule. (Id. ¶ 35.) The tires cost $568.13. (Id.)
Paikai filed the instant action on November 15, 2007 on behalf of himself and all others similarly situated. Plaintiff asserts class action claims for: (1) violations of the Florida DUTPA, Fla. Stat. section 501.201 et seq.; (2) breach of warranty; and (3) unjust enrichment. Plaintiff filed a first amended complaint on April 3, 2008 and a second amended complaint on August 14, 2008, modifying certain factual allegations but asserting the same causes of action against defendant. Defendant now moves to dismiss Paikai's second amended complaint for failure to state a claim upon which relief can be granted.
3. Facts Pertaining to Ohio Plaintiff
On April 4, 2006, Sidner purchased a new 2006 GTO from H & K Motor Sales, Inc., ("H & K"), an authorized GM dealership in Ohio. (Ohio Compl. ¶ 27.) He purchased the vehicle pursuant to a written contract for $29,200.00. (Id.) In early January 2008, Sidner telephoned Haydocy Pontiac GMC Buick ("Haydocy"), an authorized Pontiac dealer, to explain that he had tire damage. (Id. ¶ 31.) Upon the dealership's assertion that the tire wear was not covered under the warranty, Sidner called defendant's customer service to complain. (Id. ¶¶ 31-32.) He was directed to take the car back to Haydocy, where the service writer reaffirmed that the tire would not be covered by the warranty.
(Id. ¶ 32.) Sidner subsequently took the vehicle to a Firestone in Columbus, Ohio and paid $304.00 for a replacement tire. (Id. ¶ 33.)
Sidner filed the instant action on September 15, 2008 on behalf of himself and all others similarly situated. Plaintiff asserted class action claims for: 1) violations of the Ohio CSPA, Ohio Rev. Code section 1345.01 et seq.; 2) violation of the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. section 2301 3) breach of warranty, Ohio Rev. Code section 1302.26, and 4) unjust enrichment. Defendant now moves to dismiss Sidner's complaint for failure to state a claim upon which relief can be granted.
On a motion to dismiss, the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id.
Nevertheless, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986).
Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007). Only where a plaintiff has not "nudged [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. "[A] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (quoting Hudson v. King & Spalding, 467 U.S. 69, 73 (1984)).
In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).
This case was brought pursuant to federal diversity jurisdiction. (Fla. Compl. ¶ 9; Ohio Compl. ¶ 9.) Plaintiffs alleged in their respective complaints that Florida and Ohio law apply, and the parties agree on the motions that under the relevant conflict of law standards, Florida law applies to Paikai's claims and Ohio law applies to Sidner's claims.
1. Unjust Enrichment
The court first considers defendant's challenges to the unjust enrichment claims. Defendant moves to dismiss plaintiffs' unjust enrichment claims due to the existence of an express contract governing the subject matter of the dispute. (Fla. MTD at 4-5; Ohio MTD at 5.)
As an equitable remedy, unjust enrichment is not available where there is an adequate remedy at law. Gary v. D. Agustini & Asociados, S.A., 865 F. Supp. 818, 827 (S.D. Fla. 1994) (citing Bowleg v. Bowe, 502 So.2d 71, 72 (Fla. 3d DCA 1987). Although plaintiffs may not recover under a theory of unjust enrichment where there is an adequate remedy at law, Florida and Ohio law clearly allow plaintiff to plead breach of contract and unjust enrichment in the alternative.*fn4 See, e.g., Donnelly v. Circuit City Stores, Inc., 2007 WL 896337, at *3 (M.D. Fla. Mar. 22, 2007) ("[I]t is well-settled in this Circuit that breach of contract and unjust enrichment may be pled in the alternative."); Thunderwave v. Carnival Corp., 954 F. Supp. 1562, 1565-66 (S.D. Fla. 1997) ("Under Florida law, a party may simultaneously allege the existence of an oral contract and seek equitable relief under the theory of unjust enrichment."); Nessle v. Whirlpool Corp., 2008 WL 2967703, at *6 (N.D. Ohio July 25, 2008) (allowing alternative pleading under Ohio law).
The issue here, however, is whether plaintiffs may plead such alternative theories where there is no question as to the existence of a valid contract governing the matter. Those courts allowing alternative pleading do so only "in the face of uncertainty as to the existence of a contract or, perhaps, uncertainty as to whether the particular issue at hand falls within the ambit of a contract that otherwise exists between the parties." Donnelly, 2007 WL 896337, at *3; see also Detrick v. 84 Lumber Company, 2007 WL 1467070 (N.D. Ohio May 10, 2007) (allowing alternative pleading where the existence and reach of the contract was in question). Thunderwave---a case upon which Florida plaintiff relies---allowed pleading in the alternative "because Defendant denie[d] the existence of an express contract . . . ." Thunderwave, 954 F. Supp. at 1566 (emphasis added).
In this case, however, plaintiffs do not allege facts in their complaints contesting the validity of their contracts with defendant, nor do they allege that their contracts do not govern the subject matter of these disputes, i.e., the vehicles' suspension system, alignment settings, and tires. Instead, in opposing the instant motions, plaintiffs state that "the entire relationship of the parties did not stem from [the] contractual agreement[s]," and thus, their "unjust enrichment claim[s] [are] much broader than the[ir] breach of warranty claim[s]." (Fla. Pl.'s Opp'n., filed Oct. 22, 2008 ("Fla. Opp'n"), at 20; Ohio Pl.'s Opp.'n, filed Nov. 17, 2008 ("Ohio Opp'n"), at 6) ("Defendant's wrongful conduct extends far beyond the terms of any contract between the parties.").) Plaintiffs essentially argue that the unjust enrichment claim should stand because some of plaintiff's allegations of wrongdoing do not stem from the warranty agreement itself. However, to the extent plaintiffs do not allege an inadequate remedy at law---an essential element of a claim for unjust enrichment---these claims cannot stand. See Gary, 865 F. Supp. at 827.
In their complaints, plaintiffs allege their unjust enrichment claims are asserted "to the extent that there is any determination that Plaintiff does not have standing to assert any contractual claims asserted against Defendant on the alleged basis of absence of contractual privity or otherwise." (Fla. Compl. ¶ 81; Ohio Compl. ¶ 93.) (emphasis added.) However, one may lack standing to assert a contractual claim despite the existence of a valid contract governing the dispute, thus precluding unjust enrichment as a viable, alternative remedy under the case law set forth above. Accordingly, this allegation is insufficient to adequately state an unjust enrichment claim under the controlling law.
The court nonetheless recognizes that plaintiffs may be able to cure the above defects by amending the claims. Specifically, plaintiffs may allege claims of unjust enrichment, in the alternative, to the extent that the contracts do not govern the subject matter of the dispute. Defendant's motions to dismiss the unjust enrichment claims are thus GRANTED with leave to amend.*fn5
In its motion to dismiss the Ohio claim, defendant makes the additional argument that Sidner failed to allege that he conferred a direct benefit on defendant as mandated by Ohio law. (Ohio MTD at 7.) To establish a claim for unjust enrichment under Ohio law, plaintiff must demonstrate "(1) a benefit conferred by a plaintiff upon a defendant; (2) knowledge by the defendant of the benefit; and (3) retention of the benefit by the defendant under circumstances where it would be unjust to do so without payment ('unjust enrichment')." Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298, 1302 (Ohio 1984) (internal citations omitted). The first element merely requires a "tie of causation between the plaintiff's loss and the defendant's benefit." Laurent v. Flood Data Services, Inc., 766 N.E.2d 221, 226 (Ohio App. 9 Dist. 2001). The court disagrees with defendant's contention that because plaintiff alleged that it bought the car "indirectly" through a dealer, plaintiff has not pled that GM received a benefit. The case upon which defendant relies, Johnson v. Microsoft Corp., 834 N.E.2d 791 (Ohio 2005), merely states that "an indirect purchaser cannot assert a common-law claim for restitution and unjust enrichment against a defendant without establishing that a benefit had been conferred upon that defendant by the purchaser." Id. at 799 (emphasis added). Here, Ohio plaintiff's complaint clearly alleges such a benefit. (See Ohio Compl. ¶¶ 14-33, 94-95.)*fn6
Furthermore, Johnson is factually distinguishable from this case. In Johnson, plaintiff bought a Gateway computer from a Gateway retailer preinstalled with defendant Microsoft's operating system. Johnson, 834 N.E.2d at 793. Here, plaintiff alleges that he bought a GM car from an authorized GM dealer (Ohio Compl. ¶ 27.) For these reasons, defendant's motion to dismiss Ohio plaintiff's unjust enrichment claim on this alternative basis is DENIED.
2. Ohio CSPA and Florida DUTPA Violations
Defendant moves to dismiss Ohio plaintiff's OCSPA claim and Florida plaintiff's FDUTPA claim on the same bases; specifically, defendant contends that both plaintiffs: (1) fail to plead affirmative misrepresentations by defendant and (2) fail to meet the heightened pleading requirements of FRCP 9(b). (Ohio MTD at 8-9; Fla. MTD at 6-8.)
The Ohio CSPA provides, "no supplier shall commit an unfair or deceptive act or practice in connection with a consumer transaction." Ohio Rev. Code Ann. Sec. 1345.02(A). Similarly, Florida's FDUTPA prohibits "[u]nfair or deceptive acts or practices in the conduct of any trade or commerce . . . ." Fla. Stat. S. 501.204(1). Despite defendant's contentions to the contrary, this court is not convinced that an omission alone is insufficient to state a claim under either the OCSPA or the FDUTPA. Though the statutes themselves are ambiguous as to whether an omission constitutes an unfair or deceptive "practice," case law supports this view. In Conrad v. Winnebago, an Ohio case cited by defendant, the court expressly stated that an OCSPA claim is actionable where the plaintiff establishes that "'a material misrepresentation, deceptive act or omission' impacted his decision to purchase the item at issue." Conrad v. Winnebago Industries, Inc., 2008 WL 1696950, at *5 (S.D. Ohio April 9, 2008) (emphasis added) (citing Mathias v. Am. Online, Inc., 2002 WL 377159, at *5 (Ohio App. 8 Dist. Feb. 28, 2002)); see also Fisher v. Rose Chevrolet, Inc., 612 N.E.2d 782, 786 (Ohio App. 12 Dist. 1992)(allowing OCSPA claim for dealership's failure to disclose previous use and ownership of vehicle). A Florida Supreme Court opinion likewise supports this view. See PNR, Inc. V. Beacon Property Management, Inc., 842 So.2d 773, 777 (Fla. 2003) (citing another case for the proposition that "deception occurs if there is a 'representation, omission, or practice that is likely to mislead the consumer . . . .'" (emphasis added)(citations omitted)).
Here, plaintiffs allege the following omissions:
1. "[GM] concealed material facts regarding the GTO alignment problems . . . " (Fla. Compl. ¶ 5; Ohio Compl. ¶ 5);
2. "Defendant has or should have the capability of fixing the suspension system and alignment settings . . . . Instead . . . Defendant has chosen to disclaim responsibility . . . " (Fla. Compl. ¶ 6; Ohio. Compl. ¶ 6);
3. "Throughout the period during which GM offered the GTO Vehicles, GM engaged in a uniform marketing and sales campaign, in which it consistently misrepresented and/or concealed material facts in its advertisements, sales, and marketing materials, warranties, and through its sales representatives and dealers, by concealing from, failing to disclose and/or misrepresenting to Plaintiffs and Class material information regarding the vehicles . . . " (Fla. Compl. ¶ 22; Ohio. Compl. ¶ 22);
4. "Defendant has been on notice of the defect in the Vehicles and that it did not comport with the representations made in the advertising, marketing and sale of the Vehicles . . . . However, Defendant concealed this knowledge from Plaintiff and the Class" (Fla. Compl. ¶ 25; Ohio. Compl. ¶ 25);
5. "GM failed to disclose the defects in the suspension and alignment settings that result in a markedly reduced useful life of the tires" (Fla. Compl. ¶ 28);
6. "[Plaintiff] was told [GM] had no information on the problem" (Fla. Compl. ¶ 32);
7. "The GM representative told Plaintiff [to] return to the dealer and failed to disclose the fact that the know[n] defect was responsible for the type of wear described by Plaintiff" (Ohio. Compl. ¶ 32);
8. "GM warranted all of GTOs against defects in material or workmanship at a time when it knew that these Vehicles suffered from a serious defect and, nevertheless, continued to market the Vehicles . . . " (Fla. Compl. ¶ 67; Ohio. Compl. ¶ 59); 9. "GM . . . willfully refused to pay for the new tires or alignment as required under the warranty" (Fla. Compl. ¶ 71; Ohio. Compl. ¶ 63).
Under the case law set forth above, these allegations alone are sufficient to state a claim under the Florida DUTPA and the Ohio CSPA. However, even if such omissions were insufficient to state a claim under these statutes, both Ohio and Florida plaintiffs do in fact allege affirmative misrepresentations, which defendant concedes are actionable under the States' unfair competition laws. (Fla. MTD at 6-7; Ohio MTD at 7-8.) For example, Ohio plaintiff claims that defendant "included misleading and deceptive information in the warranty" and "consistently misrepresented and/or concealed material facts in its advertisements, sales and marketing materials, [and] warranties . . . ." (Ohio Compl. at ¶¶ 21-22; Fla. Compl. ¶¶ 21-22.) Moreover, courts consistently emphasize liberal construction "in favor of consumers," especially at the pleading stage. See e.g., Richards v. Beechmont Volvo, 711 N.E.2d 1088, 1090 (Ohio App. 1 Dist. 1998); PNR, Inc. V. Beacon Property Management, Inc., 842 So.2d 773, 776 (Fla. 2003) ("[T]he Florida Legislature intended to create a simplified statutory cause of action to provide additional substantive remedies for consumers . . . ."). Based on the foregoing, the court concludes that Ohio and Florida plaintiffs have adequately pled their claims under the OCSPA and FDUTPA respectively, and defendant's motions to dismiss on this basis are DENIED.
As to defendant's second argument, that plaintiffs failed to meet the heightened pleading requirements of Rule 9, the court likewise finds this argument untenable. Rule 9 requires that circumstances constituting fraud be stated with particularity. Fed. R. Civ. P. 9(b). It is not clear that Rule 9 applies to an Ohio CSPA or Florida DUTPA claim. Notably, defendant cites no authority for the proposition that the Ohio CSPA is subject to the heightened pleading standards of Rule 9(b), and there is a split of authority as to whether Rule 9 applies to the Florida DUTPA. Compare State of Fla., Office of Atty. Gen., Dept. Of Legal Affairs v. Tenet Healthcare Corp., 420 F. Supp. 2d 1288, 1310 (S.D. Fla. 2005) ("[Defendant's] insistence that [plaintiff] plead its FDUTPA claim "'with particularity' is without merit.") with Stires v. Carnival Corp., 243 F. Supp. 2d 1313, 1322 (M.D. Fla. 2002) (stating that "most courts" require that FDUTPA claims meet heightened pleading standards). However, even if Rule 9 were to apply, the court agrees with plaintiffs that the complaints meet the heightened pleading standard. Defendant insists that plaintiffs must "plead 'what is false or misleading about a statement, and why it is false.'" (Fla MTD at 8.) (citing In re Glenfed Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994)). Plaintiffs do just that. (See Fla Compl. ¶¶ 13-40; Ohio Compl. ¶¶ 13-36.) (describing the alignment problems and alleging that defendant knew of the defects, concealed the defects "in its advertisements, sales and marketing materials," warrantied against the defects, and failed to notify consumers or correct the defects as promised under the warranty.) Plaintiffs also identify the dates of purchase, model purchased, price paid, dates on which defendant was notified of the problems, and repair costs. (Fla. Compl. ¶¶ 27-37; Ohio Compl. ¶¶ 27-33.) Most importantly, plaintiffs' complaints, read in full, put defendant on notice of the claims against it such that defendant can adequately "defend against the charge[s]" at hand, which is the very purpose behind Rule 9. Newrobronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1998). Thus, to the extent Rule 9 applies, it has been satisfied and defendant's motions to dismiss the FDUPTA and OCSPA claims on this basis are DENIED.
Defendant also moves to dismiss Ohio plaintiff's class OCSPA claim. To state a claim for a violation of the Ohio CSPA on behalf of a class, plaintiff must allege that defendant had prior notice that its alleged misconduct was "deceptive or unconscionable." Marrone v. Philip Morris USA, Inc., 850 N.E.2d 31, 34 (Ohio 2006). To do so, plaintiff must allege either (1) that the Ohio Attorney General has adopted a rule declaring the act or practice at issue deceptive or unconscionable or (2) that an Ohio court decision, made available for public inspection by the Ohio Attorney General, has held the act or practice at issue deceptive or unconscionable. Id.; see also St. Clair v. Kroger, 581 F. Supp. 2d 896, 901 (N.D. Ohio 2008). As defendant contends, "[l]ack of prior notice requires dismissal of class action allegations." St. Clair, 581 F. Supp. 2d at 901. According to the Ohio Supreme Court, a complaint's reference to Ohio Admin. Code section 109.4-3-10(A) alone is insufficient to provide the requisite notice. Marrone, 850 N.E.2d at 36 ("[Ohio Adm. Code 109.4-3-10] is insufficient to provide prior notice under R.C. 1345.09(B) because it does not refer to any particular act or practice. A general rule is not sufficient to put a reasonable person on notice of the prohibition against a specific act or practice."). Although Ohio plaintiff cites to specific Ohio court opinions in his opposition, he does not do so in his complaint. For these reasons, the court GRANTS the motion to dismiss the Ohio CSPA class claim with leave to amend.
3. Ohio Statute of Limitations
Defendant further contends that the statute of limitations bars the Ohio plaintiff's Ohio CSPA claim. Under Ohio law, an OCSPA claim "may not be brought more than 2 years after the occurrence of the violation which is the subject of the suit." Ohio Rev. Code Ann. Sec. 1345.10(C). Thus, the issue is when the alleged "violation" occurred. Although defendant contends that the statute of limitations begins to run upon purchase of the vehicle, (Ohio Defs.' Reply at 4), the date of the purchase is not necessarily the "violation" that triggers the statute of limitations. For example, defendant acknowledges that the "failure to honor a warranty can be a violation of the OCSPA," and that where a consumer brings such an action, at least one court has held that the statute of limitations begins to run upon the expiration of the warranty. (Ohio MTD at 10); Temple v. Fleetwood Enterprises, Inc., 133 Fed. Appx. 254, 266-67 (6th Cir. 2005).*fn7 Other courts have held that the statute of limitations begins to run upon defendant's failure to fulfil its obligations under the warranty. See e.g., Bales v. Isaac, 2004 WL 1949419, at *3 (Ohio App. 2 Dist. 2004) (noting for purposes of the statute of limitations that the alleged "violation" occurred upon defendant's failure to repair the defects).
Defendant argues that the complaint does not allege a warranty-related violation of the Ohio CSPA. (Ohio Reply at 5.) Giving plaintiff the benefit of every reasonable inference that can be drawn from the allegations of the complaint (Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963)), the court finds that plaintiff has indeed pled that defendant failed to honor the warranty in violation of the Ohio CSPA. (See Ohio Compl. at ¶¶ 20-21, 31.) (stating that defendant "failed to satisfy the obligations" of the warranty, included "misleading and deceptive information in the warranty information provided to plaintiff" and "denied warranty coverage" to plaintiff). Thus, to the extent the Ohio CSPA action is based on a violation of the warranty, the statute of limitations does not begin to run until either: (1) the expiration of the warranty, or (2) defendant's alleged failure to repair under the warranty. Applying either standard, plaintiff's Ohio CSPA claim is not time-barred. The two-year warranty does not expire until April 4, 2009, and plaintiff alleges that he was denied warranty coverage as late as January 2008 (Ohio Resp. at 31).
To the extent plaintiff alleges that he relied on defendant's omissions and affirmative misrepresentations beyond the warranty in purchasing the vehicle, defendants are correct that his claim cannot stand. However, all of plaintiffs' allegations in this case are inextricably intertwined with the alleged omissions and misrepresentations in the warranty itself. For example, plaintiff specifically alleges: "GM also included misleading and deceptive information in the warranty information provided to Plaintiff and Class members, by its (false) promise that the factory alignment was sufficient for the vehicle" (Ohio Compl. ¶ 21), and that plaintiff would not have purchased the vehicle, or would have paid significantly less, had he known of the defects. (Id. ¶ 23.) Plaintiff additionally pleads that "[i]n light of Defendant's knowledge regarding the defect and problems detailed above, including the reduced expected life of the tires, the provision of a limited warranty with respect to the Vehicles under all of these circumstances, constitutes an unlawful, unfair and fraudulent business practice, and, under all of the circumstances, the limited warranties accompanying the Vehicles are unconscionable." (Id. ¶ 26.) In other words, plaintiff alleges that, had it not been for the alleged unlawful, unfair and fraudulent business practices, including the alleged omissions and affirmative misrepresentations in the warranty, plaintiff would not have bought the vehicle or would have paid significantly less for the vehicle. Furthermore, it can be inferred from the allegations in the complaint that had defendant remedied the alleged defects within the warranty period, no claim would have been brought. Thus, considering "every reasonable inference" that can be drawn from the allegations in the complaint, the warranty, not the purchase date, determines the date upon which the statute of limitations begins to run in this case.
For these reasons, defendant's motion to dismiss the Ohio CSPA claim on the basis of the statute of limitations is DENIED.
4. Class Claims
Defendant next moves to dismiss Ohio plaintiff's class breach of warranty and MMWA claims and Florida plaintiff's class breach of warranty and FDUTPA claims.
a. Ohio Class Claims
The crux of defendant's argument regarding the Ohio claims is that the class claims are "unsuitable for class certification." (Ohio MTD at 16.) To support the proposition that "class allegations can, in some cases, be disposed of by a motion to dismiss," defendant cites various cases which denied class certification under Rule 23. See, e.g., Stewart v. Winter, 669 F.2d 328, 331 (5th Cir. 1982); Cohen v. Implant Innovations, Inc., 2008 WL 3927223 (S.D. Fla. 2008); In re General Motors Corp. Dex-Cool Products Liability Litigation, 241 F.R.D. 305, 315 (S.D. Ill. 2007). As these cases deal with class certification under Rule 23, and not motions to dismiss under Rule 12(b)(6), they are inapposite. The one case defendant cites in which the court dismissed the class claim at the pleading stage is distinguishable from the case at hand. In Stipelcovich v. Directv, Inc., 129 F. Supp. 2d 989 (E.D. Texas 2001), the plaintiff brought a class action on behalf of satellite dish buyers for, among other things, state law claims for negligent misrepresentation, gross negligence, and common law fraud. The Texas district court dismissed the state-based class claims because, even if discovery were allowed, applying the law of fifty-one jurisdictions would present "massive choice of law problems" and would make managing the litigation impracticable. Id. at 994-95. Here, on the other hand, plaintiff alleges a breach of warranty claim under federal law on behalf of a 48-state class, and an Ohio CSPA claim on behalf of an Ohio subclass. The claims allege that all class members purchased the same type of car under identical warranties. (Ohio Compl. at ¶ 20.) This is hardly a case that raises the same complex state-law issues apparent in Stipelcovich, where "variations in state law [could] swamp any common issues." Stipelcovich, 129 F. Supp. 2d at 995.
Furthermore, defendant's reliance on In re General Motors, 241 F.R.D. 305 (S.D. Ill. 2007), is unpersuasive. The key legal issue in that case was whether the manufacturer's owner's manual constituted an express warranty. Applying Illinois choice of law principles, the Illinois district court held that the state law of each class member governed this determination under the MMWA, thus making the case "unwieldy" and unmanageable. Id. at 324. The court also lamented the "extremely large number" of vehicles and models involved in the case. Id. Unlike here, where the allegations implicate only one GM model, the GTO, from three years, 2004 to 2006, In re General Motors involved over thirty-one GMC models with four different engine types over ten model years. Id. Most significantly, the sole issue in In re General Motors was whether the class should be certified, not whether the class claim should be dismissed under Rule 12(b)(6). Defendant's arguments are more appropriately addressed at the class certification stage.
b. Florida Class Claims
Defendant's arguments as to the Florida class claims are similarly unavailing. The two cases upon which defendant relies in its moving papers address motions for class certification, and are thus, unpersuasive. Cohen v. Implant Innovations, Inc., 2008 WL 392722, at *31 (S.D. Fla. 2008) (denying class certification) Kia Motors America Corp. V. Butler, 985 So.2d 1133, 1141 (Fla. App. 2008) (reversing an order certifying a class). Here, Florida plaintiff has yet to move for class certification. In its reply, defendant does provide authority for the proposition that class claims can be dismissed at the pleading stage. (Fla. Reply at 10.) However, the cases upon which defendant relies simply require that the complaint allege facts sufficient to show that there is a "reasonable possibility" of an ascertainable class. See, e.g., John v. National Security Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007) ("Where it is facially apparent from the pleadings that there is no ascertainable class, a district court may dismiss the class allegations on the pleadings."); Alvarez v. May Department Stores Co., 143 Cal. App. 4th 1223, 1231-32 (2006) ("An evidentiary hearing on the appropriateness of class litigation is not necessary unless there is a "reasonable possibility" that the plaintiff can establish a community of interest and ascertainable class."); Rose v. Medtronics, Inc., 107 Cal. App. 3d 150, 154 (1980) ("Procedurally, where there is a 'reasonable possibility' that the plaintiff in a class action can establish a community of interest among potential claimants, the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation.").
Florida plaintiff has met this standard.*fn8 A class is sufficiently defined if it is "administratively feasible for the court to determine whether a particular individual is a member." O'Connor v. Boeing N. Am., Inc., 184 F.R.D. 311, 319 (C.D. Cal. 1998); see also Buford v. H&R Block, 168 F.R.D. 340, 347 (S.D. Ga. 1996) ("[T]he description of the class must be sufficiently definite to enable the court to determine if a particular individual is a member of the proposed class") (quoting Pottinger v. Miami, 720 F. Supp. 955, 957 (S.D. Fla. 1989)).
Paikai's class definition specifically identifies the make, model, and years of specific owners and lessees, while excluding certain individuals. (Fla. Compl. ¶ 41; Ohio. Compl. ¶ 37.) He alleges that defendant either maintains or has access to records that can identify each class member. (Fla. Compl. ¶ 48; Ohio. Compl. ¶ 44.) Furthermore, sales records, public filings, and other means are potentially available to identify a finite number of class members. Taken in the light most favorable to plaintiff, the class is sufficiently ascertainable from the pleaded facts.
c. Both Action's Class Claims
Defendant further contends, more specifically, that the class allegations for the breach of express warranty claims should be dismissed because individual issues will predominate over common issues of fact. (Fla. MTD at 8-10; Ohio MTD at 14-16) Defendant asserts that the difficulty of demonstrating that each class member has met the specific requirements of the warranty must be dealt with on an individual basis. (Fla. MTD at 8-10; Ohio MTD at 14-16.) Defendant's arguments are more appropriately raised at the class certification stage. At this juncture, it is sufficient that plaintiffs plead that GM knew about the defects prior to selling the subject vehicles, concealed the defects from the public, received numerous complaints and has refused to correct the defects. (Fla. Compl. ¶¶ 18-26, 38-40; Ohio Compl. ¶¶ 18-26, 34-36.)
One Ninth Circuit case has specifically held that "compliance with Rule 23 is not to be tested by a motion to dismiss for failure to state a claim . . . ." Gillibeau v. City of Richmond, 417 F.2d 426, 432 (9th Cir. 1969); see also In re Wal-Mart Stores, Inc., 505 F. Supp. 2d 609, 615 (N.D. Cal. 2007) (stating that courts have made it clear that "dismissal of class allegations at the pleading stage should be done rarely and that the better course is to deny such a motion because 'the shape and form of a class action evolves only through the process of discovery'") (citations omitted). Defendant argues in its reply that the court should not defer addressing the "inherent problems with the proposed class" to a later date. (Ohio Def. Reply at 11.) Yet this is the very purpose of allowing separate class certification proceedings. "Rule 23(c)(1) provides that, as soon as practicable after the commencement of an action brought as a class action, 'the court shall determine by order whether it is to be so maintained.'" Id. For these reasons, the court DENIES defendant's motions to dismiss the Ohio and Florida plaintiffs' class claims.
Based on the foregoing analysis, the court makes the following orders:
Defendant's motions to dismiss are:
(1) GRANTED in part and DENIED in part as to the unjust enrichment claims;
(2) DENIED as to the sufficiency of plaintiffs' individual Ohio CSPA and Florida DUTPA claims, but GRANTED as to the sufficiency of the Ohio CSPA class claim;
(3) DENIED as to the statute of limitations for the Ohio CSPA claim; and
(4) DENIED as to the Ohio class breach of warranty and MMWA claims, and DENIED as to the Florida class breach of warranty and FDUTPA claims.
Plaintiffs are granted leave to amend with respect to their unjust enrichment claims. Ohio plaintiff is granted leave to amend with respect to his Ohio CSPA class claim. Plaintiffs shall have 20 days from the date of this order to file their amended complaints. Defendant shall have 20 days after service thereof to file a response thereto.
IT IS SO ORDERED.