Sloan v. General Motors LLC

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFF SZEP'S CLAIMS IN THE FIFTH AMENDED COMPLAINT DOCKET NO. 158

          EDWARD M. CHEN, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiffs allege that Defendant General Motors (“GM”) knowingly manufactured and sold a car engine with inherent defects that caused excessive oil consumption and engine damage. The defects affect 2010 to 2014 model-year GM vehicles. Based on those allegations, Plaintiffs assert claims under various state consumer-protection and fraud statutes on behalf of a nationwide class as well as twenty-nine statewide classes. Plaintiffs' original class action complaint was filed in December 19, 2016. Docket No. 2. They have since amended their pleadings several times, and the operative complaint is the Fifth Amended Complaint (“5AC”). Docket No. 157. Before the Court is Defendant's Motion to Dismiss Plaintiff Szep's Claims in the Fifth Amended Complaint. Docket No. 158.

         II. BACKGROUND

         A. Factual Background

         Although individual Plaintiffs' discussion of the alleged defects' impact on their own vehicles has evolved somewhat since prior complaints, the core factual background of this case remains the same. Plaintiffs allege that the Gen IV Vortec 5300 engine suffers from an “inherent” “Oil Consumption Defect.” 5AC ¶ 7. The engine was installed in each of the Class Vehicles: the 2010-2014 Chevrolet Avalanche; 2010-2012 Chevrolet Colorado; 2010-2013 Chevrolet Express; 2010-2013 Chevrolet Silverado; 2010-2014 Chevrolet Suburban; 2010-2014 Chevrolet Tahoe; 2010-2013 GMC Canyon; 2010-2013 GMC Savana; 2010-2013 GMC Sierra; 2010-2014 GMC Yukon; and the 2010-2014 GMC Yukon XL. Id. ¶ 2.

         Plaintiffs identify five defects that “contribute” to the overall “Oil Consumption Defect.” Id. ¶ 7-13. First, the “primary cause” is “piston rings . . . [that] do not maintain sufficient tension to keep oil in the crankcase.” Id. ¶ 8. Second, the Active Fuel Management (AFM) system “contributes” to the defect by “spraying oil directly at the piston skirts, ” which “overloads and fouls the defective piston rings, triggering oil migration past the rings.” Id. ¶ 9. Third, the PCV system “vacuums oil from the valvetrain into the intake system, where it is ultimately burned in the combustion chambers” contributing to excessive oil combustion. Id. ¶ 10. Fourth, the defective “Oil Life Monitoring System” does not monitor oil level, but rather, engine conditions like revolutions and temperature to predict oil quality. Id. ¶ 11. Because it does not take oil level into account, the system “directs drivers to travel thousands of miles with inadequate engine lubricity levels, wearing out and damaging moving internal engine components.” Id. Fifth, the oil pressure gauge “does not provide any indication as to when the oil pressure . . . falls to levels low enough to damage internally lubricated parts or cause engine failure” and the oil canister symbol does not illuminate “until well past the time when the Class Vehicles are critically oil starved.” Id. ¶ 13. Furthermore, plaintiffs contend that “oil migration from the Oil Consumption Defect fouls spark plugs no matter how often drivers top off their oil levels.” Id. ¶ 14. This problem can, in turn, cause “engine misfires and shutdown events.” Id.

         Plaintiffs allege that, GM “instructed its dealers to address the excessive oil loss problem . . . by performing stop-gap fixes . . . [and] decarbonize[ing] combustion chambers and rings with chemical abrasives, ” id. ¶ 15, an approach which “failed to provide a complete, and adequate, remedy for the Oil Consumption Defect that has plagued - and continues to plague - each of the Class Vehicles.” Id. In 2014, GM replaced the Generation IV Vortec 5300 Engine with a Generation V version that was “designed and intended to remedy the excessive oil consumption problem plaguing the Class Vehicles.” Id. ¶ 16. Plaintiffs contend, however, that the change “did nothing for the owners and lessees of the Class Vehicles, namely, Plaintiffs and the other Class members . . . [who] remain saddled with their defective Generation IV Vortec 5300 Engines with no relief from GM.” Id. ¶ 17. Those owners and lessees were “damaged in that they paid more for their Class Vehicles than they would have paid had they known about the defect that GM failed to disclose, or they would not have purchased or leased their Class Vehicles at all.” Id. ¶ 20.

         Plaintiffs allege that “GM has long known of the Oil Consumption Defect and the resulting engine damage.” Id. ¶ 18. They point to the “extraordinary number of complaints” GM received about excessive oil consumption and GM's issuance of “Technical Service Bulletins” to dealers addressing problems with excessive oil consumption as evidence of the company's knowledge. Id. However, Plaintiffs contend that “[d]espite this knowledge, GM continued selling and leasing Class Vehicles without ever disclosing the Oil Consumption Defect. Indeed, GM has never disclosed the Oil Consumption Defect to consumers.” Id. ¶ 19.

         Turning to Thomas Szep's claims in particular, he is a resident of Mayfield, Ohio, id. ¶ 155, who “owns a 2011 Chevrolet Silverado, equipped with a Generation IV Vortec 5300 Engine. Mr. Szep purchased his Silverado from Tim Lallie Chevrolet in Bedford Heights, Ohio, ” id. ¶ 156. He alleges that “GM failed to disclose the Oil Consumption Defect to [him] before he purchased his Silverado, despite GM's knowledge of the defect, and [he], therefore, purchased his Silverado with the incorrect understanding that it would be a reliable vehicle.” Id. ¶ 157. As summarized in Defendant's Motion to Dismiss Plaintiff Szep's Claims in the Fifth Amended Complaint, “Szep attempts to bring five claims under Ohio law: (1) violation of the Ohio Consumer Sales Practices Act, Ohio Rev. Code Ann. §§ 1345.01, et seq. (Count 93); (2) breach of express warranty, Ohio Rev. Code Ann. §§ 1302.26 and 1310.17 (Count 94); (3) breach of implied warranty in tort (Count 95); (4) fraudulent omission (Count 96); and (5) unjust enrichment (Count 97). Szep also joins in Plaintiffs' nationwide claim under the Magnuson Moss Warranty Act (“MMWA”), but admits . . . he is re-stating this dismissed claim only to preserve it for appeal.” Motion to Dismiss Plaintiff Szep's Claims in the Fifth Amended Complaint (“MTD”) at 1, Docket No. 158.

         B. Procedural Background

         Plaintiffs all “purchased or leased one or more model year 2010-2013 GM vehicles fitted with GM's defective Generation IV 5.3 Liter V8 Vortec 5300 engines.” 5AC at 2. The named plaintiffs bring their claims on behalf of a nationwide class and also seek to represent the following statewide classes:

Named Plaintiff	State of Intended Representation
Raul Siqueiros Todd and Jill Cralley	California
Joseph Brannan	Alabama
Larry Goodwin	Arkansas
Marc Perkins	Delaware
Thomas Shorter	Florida
Derick Bradford	Georgia
Gabriel Del Valle	Idaho
Kevin Hanneken Katelyn Doepel and Edwin Doepel III	Illinois
Dan Madson	Kansas
James Faulkner	Kentucky
Joseph Olivier	Louisiana
Scott Smith	Massachusetts
Ross Dahl Drew Peterson	Minnesota
Michael Ware	Mississippi
Steve Kitchen	Missouri
John Knoll	New Jersey
Barbara Molina	New Mexico
Dennis Vita	New York
William Davis, Jr.	North Carolina
Thomas Szep	Ohio
Mike Warpinski	Oklahoma
William Martell	Oregon
John Graziano	Pennsylvania
Monteville Sloan, Jr.	South Carolina
Joshua Byrge	Tennessee
Rudy Sanchez	Texas
Christopher Thacker	Virginia
Kelly Harris	Washington
James Robertson	West Virginia
Jonas Bednarek	Wisconsin

Id. at 58-60.

         Plaintiffs first filed their complaint in December 2016, see Docket No. 2, followed by a First Amended Complaint (“FAC”) in February 2017, see Docket No. 29. The named plaintiffs who filed the original complaint sought to represent classes from thirteen states. Id. at 25-26. On August 1, 2017, the Court dismissed the FAC in its entirety with leave to amend. See Docket No. 62 (“FAC Order”). Later that same month, Plaintiffs filed a Second Amended Complaint (“SAC”), see Docket No. 67, which added named plaintiffs from twenty additional states, id. at 55-56. After extensive briefing, the Court dismissed the Second Amended Complaint in part. See Docket No. 99 (“SAC Order”). In March 2018, Plaintiffs filed a Third Amended Complaint (“TAC”), see Docket No. 107, which added a plaintiff from one additional state, id. at 11. Plaintiffs subsequently sought leave to file a Fourth Amended Complaint (“4AC”), see Docket No. 120 (“First Mot. for Leave”), in order to “substitute William Davis, Jr., a member of the putative North Carolina class, in place of the current North Carolina class representative, Steven Ehrke, who is no longer able to participate in this litigation.” First Mot. for Leave at 1. No other change to the complaint was sought. Id. The Court granted the parties' joint stipulation to the filing of a Fourth Amended Complaint, permitting substitution of the North Carolina class representative. See Docket No. 122. After filing a Fourth Amended Complaint in November 2018, see Docket No. 123, Plaintiffs again sought leave to file a Fifth Amended Complaint in May 2019, see Docket No. 141 (“Second Mot. for Leave”). The purpose behind the request to file a Fifth Amended Complaint was the substitution of “Thomas Szep in place of the current Ohio class representatives, Thomas Gulling and Ronald Jones, who are for personal reasons no longer able to participate in this litigation.” Second Mot. for Leave at 1. No other modification of the Fourth Amended Complaint was sought. Id.

         Defendant opposed Plaintiffs' Motion for Leave to File a Fifth Amended Complaint, see Docket No. 153 (“Opposition to 5AC”), on the grounds that “add[ing] an Ohio plaintiff . . . comes too late and would be unfair and prejudicial to GM based on the history of this case and governing legal standards.” Opposition to 5AC at 1. More specifically, GM argued that “[c]hanging the parties and allegations after discovery is closed would deprive GM of the ability to fully defend itself. It would embroil the court again in pleadings and motions practice, upheave the current schedule, and disrupt the class certification proceedings set to begin in a few weeks.” Id. at 2. On July 2, 2019, the Court granted Plaintiffs' Motion for Leave to File a Fifth Amended Complaint. See Docket No. 156. Plaintiffs filed a Fifth Amended Complaint that same day, see Docket No. 157, and Defendant subsequently filed a Motion to Dismiss Plaintiff Szep's Claims in the Fifth Amended Complaint, see Docket No. 158.

         As noted in the Court's prior orders, in order to address manageability concerns raised by the Court, the parties agreed that Plaintiffs' initial motion for class certification would be limited to five bellwether states: California, New Jersey, Ohio, North Carolina, and Texas. See Docket No. 113. A Motion to Certify the Class was filed with the Court on September 3, 2019. See Docket No. 175. A hearing on the issue of class certification ...