BSP Secures Dismissal of Nationwide Economic-Loss Class Action at Pleadings Stage

On behalf of Ford, BSP attorney Stephanie Douglas secured the dismissal of a 120-count nationwide class action that claimed the lug nuts on millions of putative class vehicles were defective, shutting down the action before discovery.  As in other similar no-injury product-defect actions, a recent favorite of the plaintiffs’ bar, the plaintiffs alleged that a component of their vehicle (here, the lug nuts) required replacement outside of the warranty period, causing economic harm to those vehicles’ owners.   The plaintiffs alleged no injury to themselves or others from the alleged defect.  Although none of the plaintiffs had presented their vehicles for repair in compliance with the terms of their warranties, they asserted claims for breach of warranty, consumer fraud, and unjust enrichment.  The Court agreed with BSP’s argument that the 429-page complaint failed to state a single viable claim.

The Court dismissed the plaintiffs’ “placeholder” claims for failure to state a claim, and dismissed counts for states without a named plaintiff for lack of standing. Enforcing the terms of the “New Vehicle Limited Warranty,” the Court dismissed the warranty claims for failure to plead compliance with the presentment requirement, and rejected the argument that because the parts outlasted the warranty, the warranty somehow failed its essential purpose.  For the fraud claims, the Court dismissed the misrepresentation-based claims because Ford made no lug-nut-focused representations, and the omission-based claims for failure to plead “what” Ford allegedly knew but failed to disclose.  The Court rejected Plaintiffs argument that complaints to the NHTSA allege knowledge “let alone exclusive knowledge.”  Finally, dismissing the unjust enrichment claims, the Court held that Plaintiffs had not pleaded a benefit to Ford, in part because Ford had no duty to pay for lug nut replacements outside the warranty.

The opinion can be found here.