Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 1 of 11
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
JONI PRECHT, on behalf of herself and
all others similarly situated,
Civil Action No. 1:14-cv-20971-PCH
Plaintiff,
vs.
GENERAL MOTORS LLC,
Defendant.
OPPOSITION TO DEFENDANT GENERAL MOTORS, LLC’S MOTION TO DISMISS
Plaintiff Joni Precht (“Precht” or “Plaintiff”), by and through undersigned counsel,
hereby files her Opposition to Defendant General Motors, LLC’s Motion to Dismiss.
I.
INTRODUCTION
The foundation of Defendant’s motion to dismiss rests on the faulty premise that
Plaintiff’s claims are moot. They are not. The potential relief afforded by this action is broader
in scope than what is available through a recall, and broader relief is warranted by the
circumstances of this case.
As described in the operative Amended Complaint, Plaintiff experienced repeated and
consistent problems with her Chevrolet Traverse airbag system at approximately 65,000 miles,
70,000 miles, 75,000 and 82,775. See Amended Complaint (“AC”) ¶ 19. Defendant has been
aware of the very issues complained of by Plaintiff since mid-2011 at the latest. See, e.g., AC ¶
30. Mysteriously, the light seemed to go out after service visits, but reappeared as noted above.
AC ¶ 19. Plaintiff was informed by the staff of the GM authorized dealer where she brought her
car for service at her 65,000 service that the repair would cost $300. Id. Contrary to the
statements in Defendant’s recall (not unlike the position GM took with respect to the now-
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 2 of 11
ubiquitous ignition switch failures), prior to issuance of the recall, Plaintiff was informed that the
condition posed no safety risk.
On March 14, 2014, Plaintiff filed the instant case, and in her Prayer for Relief sought,
“actual, general, special, incidental, statutory, punitive, and consequential damages” for herself
and the proposed class.
Three days later, on March 17, 2014, Defendant issued a recall
purportedly addressed to the issues raised by Plaintiff’s complaint. Even if the recall did fix the
issue with the brakes (Plaintiff does not concede that it does), the recall does not provide the full
damages to which the class is entitled. As a result, Plaintiff’s claims were ripe for adjudication
when she filed her case, which preceded (and perhaps precipitated), Defendant’s recall. The
subsequent recall does nothing to moot Plaintiff’s claims because this suit offers additional relief
unavailable through the recall to compensate Plaintiff and class members for, among other
things, Defendant’s concealment of this safety-related defect and diminution in value of the
vehicles at issue.
II.
ARGUMENT
A.
Plaintiff’s Claims Are Not Moot.
Defendant advances the unavailing argument that the filing of a recall after Plaintiff’s
case was filed moots the case. Selectively quoting from the Amended Complaint, Defendant
states that the recall provides the “precise relief” Plaintiff requested. See Motion to Dismiss
(“MTD”) Pg. 5. In reality, the relief available to Plaintiff and the class through this action
includes categories of damages unavailable to Plaintiff and the class through the recall. For
example, while Plaintiff seeks punitive damages in this case, they are unavailable through the
recall. The recall also provides no compensation for the diminished value of Defendant’s
vehicles—staggeringly, Defendant has issued approximately 40 recalls covering approximately
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 3 of 11
20 million vehicles this year alone. The recall, on the other hand, is limited to repair or
reimbursement. See MTD Pg. 4.
Punitive damages may be appropriate, where, as here, Plaintiff has made colorable claims
that Defendant’s conduct was willful.
First, the Amended Complaint excerpts a host of
complaints from the NHTSA website and elsewhere dating back to 2011, yet Defendant took no
action until March 17, 2014—a delay of nearly three years. AC ¶¶ 30-31. Second, while
Defendant’s agents took the position that the issue posed no danger to Plaintiff, the recall
submitted by Defendant in conjunction with its motion to dismiss states otherwise.
Conspicuously absent from Defendant’s quotations of the recall in Defendant’s motion to
dismiss is “[o]ver time, the resistance may reach a level where the SIABs [side impact airbags],
front center side airbag, if quipped, and pretensioners will not deploy in a crash.” See MTD Ex.
B, Pg. 2. The NHTSA website includes multiple complaints dating back to 2012, which state
that the airbags failed to deploy in accidents or deployed “haphazardly” at low speed. See
http://www-odi.nhtsa.dot.gov/owners/SearchResults. And the 2011 Traverse is not part of the
ignition switch recall so the cause of the failure of the airbags to deploy in these multiple
instances would not, ostensibly, have been the failure of the ignition switch; rather, the defect at
issue in the instant litigation.
The decision to not disclose these problems, nor issue the recall until years later is
consistent with the image of Defendant that has emerged in conjunction with the ignition switch
failure and the allegations of concealment in the Amended Complaint. See, e.g., AC ¶¶ 4, 7, 23,
24, and 72. It is a striking coincidence that the Center for Auto Safety analysis concerning the
GM ignition switch failure, and the filing of this case occurred only days before this and a host
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 4 of 11
of other recalls were issued. Unfortunately, it appears Defendant has put economics before the
safety of consumers.
Senate hearings concerning GM—the very same company and corporate culture at play
here—have reinforced this image.
For example, on April 2, 2014, the Senate Commerce,
Science and Transportation Subcommittee on Consumer Protection, Product Safety and
Insurance held a hearing on the ignition switch recall (the “Hearing”). CEO of Defendant, Mary
Barra, testified at the hearing. Having reviewed the documents and heard from Ms. Barra,
former New Hampshire Attorney General, now-Senator Kelly Ayotte, stated in response to the
concealment of facts, “I think this goes beyond unacceptable.
I believe this is criminal.”
Hearing Transcript Pg. 25. Directly pertinent to the case at issue, Senator Edward Markey of
Massachusetts stated, “Ms. Barra, if I have a car accident and decide to report the details to
NHTSA, NHTSA puts that information into a public consumer complaint database. But if I
made the very same complaint to General Motors instead of to NHTSA, G.M. can deem all the
details of my complaint to be confidential business information, and it does that every single
time.” Id. at 34. In relation to delaying the ignition switch recall, Florida Senator Marco Rubio
questioned whether “in fact, there were individuals, or a culture in the company created by a
group of individuals that encouraged employees to make these sorts of cost benefit analysis
based on economics and not on customer safety?”
Hearing Transcript Pgs.28-29.
Only
discovery will shed light on exactly how early Defendant knew of the defect at issue in this
litigation, and how long it sat on the information.
In short, Plaintiff has made a showing of willfulness and concealment by Defendant that
opens the door to an entire realm of damages unavailable through the recall, undermining any
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 5 of 11
assertion that Plaintiff’s claims are moot. The cases cited by Defendant for the proposition that a
NHTSA recall moots a claim regarding an alleged defect are readily distinguishable.
In Winzler v. Toyota Motor Sales USA, Inc., 681 F.3d 1208 (10th Cir. 2012), the Court
focused only on equitable relief, not the other categories of damages sought by Plaintiff here,
stating, “if a plaintiff can show that the remedial mechanisms selected by a coordinate branch
aren't just different but that those differences present a cognizable, a perceptible, a recognizable
danger they will lead our coordinate branch to fail to achieve its stated objectives, we can and
will proceed with the case.” Winzler, 681 F.3d at 1214-1215.
Unlike the instant case, in Cheng v. BMW of North America, 2013 WL 3940815, *4 (C.D.
Cal. July 26, 2013), the Plaintiff did not seek monetary damages—only injunctive relief.
Finally, Hadley v. Chrysler Group LLC, 2014 WL 988962, *1 (E.D. Mich. March 13,
2014) involved a lawsuit filed at least eight months after a recall was issued. In Hadley, the
Plaintiff did not seek damages stemming from concealment, as Plaintiff does here. Id.
B.
Plaintiff States Plausible Warranty Claims.
Defendant’s effort to hide behind its original 3-year, 36,000 mile warranty misses the
mark. Plaintiff is not seeking to recover for a mere latent defect, or simply because Defendant
may have had some knowledge of the alleged defect at some point, but an inherent defect that
Defendant knew or should have known at the time of manufacture or certainly during the
vehicle’s warranty period because the defect has always existed. Plaintiff has alleged with great
specificity why the durational limitations in Defendant’s warranty period is not applicable and/or
isunconscionable as it pertains to the fundamental safety issue presented here:

Defendant was well aware of the existence of the inherent defect years ago, but
failed to disclose it. See, e.g., AC ¶¶ 2, 4-8, 23-24.
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 6 of 11

The defect often manifests shortly after (and during) the warranty period—and
well before such a component should be expected to fail. AC ¶¶ 2, 7.

Defendant possessed superior knowledge of the defect. AC ¶¶ 7, 72.

Defendant actively concealed information about the defect by providing false
information to class members, indicating, among other things, that the defect did
not constitute a safety risk. AC ¶¶ 4, 7, 23, 24, 72.

Plaintiff and class members had no meaningful choice in determining the time
limitations in the warranties. AC ¶ 57.

The warranties were drafted by Defendant without input from Plaintiff, the terms
unreasonably favored Defendant, a gross disparity in bargaining power existed,
and Defendant knew (or should have known) that the class vehicles were
defective at the time of sale. Id.

Numerous putative class members have complained about the defect directly to
Defendant, as well as through a variety of blogs and internet websites—including
the NHTSA website. AC ¶¶ 8, 30, 31.

Defendant expressly warranted that the vehicles were of high quality and that they
would repair and/or replace defects in material and/or workmanship free of charge
that occurred during the warranty period. AC ¶ 53.
Several recent decisions have found warranty limitations to be unconscionable when
faced with similar allegations. For example, Henderson v. Volvo Cars of N. Am. LLC, involved
defectively designed transmissions in certain Volvo vehicles. No. 09-4146 (DMC)(JAD), 2010
U.S. Dist. LEXIS 73624, at *1 (D.N.J. Jul. 21, 2010). The alleged defect in that case did not
become apparent until shortly after Volvo’s 4 year/50,000 mile express warranty period had
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 7 of 11
1
elapsed. Id. at *4-5. Like Plaintiff here, the Henderson plaintiffs alleged that these express
warranty limitations were unconscionable in light of, inter alia, Volvo’s longstanding knowledge
of the defective design, gross disparity of bargaining power, and lack of a meaningful chance for
consumers to determine the warranty limitations. Id. at *27, n.6.
In Henderson, the court held that the warranty period was unconscionable under the
circumstances and, accordingly, denied Volvo’s motion to dismiss the plaintiffs’ breach of
express warranty claim. Henderson, 2010 U.S. Dist. LEXIS 73624, at *20. The court’s analysis
began by acknowledging the general rule that limited warranties do not cover repairs made after
that time period.
Id. at *21.
2
In Henderson, the judge acknowledged the notion that a
manufacturer’s “mere knowledge that a part will ultimately fail, after the expiration of a
warranty period, is insufficient to provide a basis for a breach of express warranty claim.” Id. at
*26. However, the court went on to explain that there is an exception to this general rule where
“a plaintiff alleges that the warranty in question is unconscionable.” Id. at *21. Applying that
principle, the court found that the Henderson plaintiffs had adequately pled unconscionability
when Volvo’s knowledge that the transmission would ultimately fail was coupled with their
allegations that (i) consumers had no meaningful choice in determining the time limitations of
the warranties, and (ii) a gross disparity in bargaining power existed as between them and
3
Volvo. Id. at *27, n.6.
1
Henderson included plaintiffs from Florida. Henderson, 2010 U.S. Dist. LEXIS 73624, at *45.
2
Citing Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604 (3rd Cir. 1995); Abraham
v. Volkswagen of Am., Inc., 795 F.2d 238 (2d Cir. 1986); Dewey v. Volkswagen AG, 558 F. Supp.
2d 505, 519 (D.N.J. 2008).
3
The Court also remarked that it would not grant Volvo’s motion to dismiss the breach of
express warranty claim “at this early stage.” Id. at *26.
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 8 of 11
Several other recent decisions have likewise held, in similar situations, that consumers
had adequately alleged that a manufacturer’s warranty limitation was unconscionable. Neale v.
Volvo Cars of N. Am., LLC, No. 2:10-cv-4407(DMC)(MF), 2013 U.S. Dist. LEXIS 43235, at
*34-35 (D.N.J. Mar. 26, 2013) (denying Volvo’s motion for summary judgment in another
vehicle defect case where consumers asserted that Volvo’s 4 year / 50,000 mile warranty was
unconscionable); In re Samsung DLP TV Class Action Litig., No. 07-2141, 2009 U.S. Dist.
LEXIS 100065, at *13-16 (D.N.J. Oct. 27, 2009) (denying Samsung’s motion to dismiss breach
of express warranty claims where the plaintiffs had sufficiently alleged that the one year
warranty applicable to the defective televisions was unconscionable) (Brown, J.); Payne v.
Fujifilm U.S.A., Inc., No. 07-385, 2007 U.S. Dist. LEXIS 94765, at *7-11 (D.N.J. Dec. 28, 2007)
(Greenaway, J.) (denying motion to dismiss breach of warranty claims where the plaintiff’s
camera had failed after the expiration of the unconscionable one-year warranty). See also,
Martin v. Ford Motor Co., 765 F. Supp. 2d 673, 683 n.6 (E.D. Pa. 2011) (three year vehicle
warranty was unconscionable; noting that “[t]he Court is required to accept as true Plaintiff's
version of the facts for purpose of the [defendant’s motion to dismiss].”).
Additionally, as noted above, Plaintiff has alleged facts demonstrating that Defendant had
knowledge of the inherent defect during the effective dates of the warranty, and that Defendant
had a duty to disclose these pertinent safety facts to Plaintiff and Class members. See Jekowsky
v. BMW of North America, LLC, 2013 WL 6577293, at *5 (N.D. Cal. December 13, 2013) (“[A]
manufacturer has a duty to disclose any defects that fall within the warranty period, whether
relating to safety or to costly repairs, that would have caused the consumer to not purchase the
car if they had been disclosed.” (quoting Decker v. Mazda Motor of America, Inc., 2011 WL
5101705, at *4 (C.D.Cal. Oct. 24, 2011)).
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 9 of 11
C.
Plaintiff States Plausible FDUPTA Claims.
Defendant asserts that Plaintiff is unable to establish a Florida Deceptive and Unfair
Trade Practices Act (“FDUPTA”) claim because Plaintiff has not suffered “actual damages.”
MTD Pg. 12. Defendant is mistaken. Among other things, Plaintiff has alleged that her vehicle
has suffered a diminution in value due to the defect. Courts in Florida have repeatedly held that
diminution in value claims constitute actual damages under FDUPTA. See, e.g., Collins v.
DaimlerChrysler Corp., 894 So.2d 988, 990 (Fla. 5th DCA 2004) (“we observe that Florida
courts have allowed diminished value to serve as ‘actual damages’ recoverable in a FDUPTA
claim since at least Rollins in 1984…”).
Given the circumstances surrounding GM and this recall, whether repair or
reimbursement is sufficient compensation, or whether diminished value damages are required is
a factual question. Whether the defect caused a diminution in value, and the extent of such
diminution, “raises questions of fact that are not appropriate for this Court to address on a motion
to dismiss.” See Randolph v. J.M. Smucker Co., 2014 WL 1018007, *4 (S.D. Fla. March 14,
2014). Given the severity of the safety consequences of airbags that fail to deploy, and the
general safety concerns looming around General Motors vehicles, diminished value for the class
vehicles is a legitimate problem that raises important factual issues best resolved after discovery.
Defendant’s citation to Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla. 2d DCA 2006) is
misplaced, because, among other things, that was a decision on class certification, not on a
motion to dismiss.
D.
Plaintiff States Plausible Claims for Negligence.
Citing, among other cases, Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Cos., 110 So.
3d 399 (Fla. 2013), Defendant advances the argument that the economic loss rule precludes
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 10 of 11
Plaintiff’s negligence claims, found in Counts V and VII of the Amended Complaint. In Tiara,
the court repeatedly expressed concern about a variety of issues surrounding the economic loss
rule.
The court stated, with respect to the economic loss rule, that “its application and
parameters are somewhat ill-defined” and “[m]ore recently this Court has recognized the danger
in an unprincipled extension of the rule.” Id. at 401, 403 (quoting Moransais v. Heathman, 744
So.2d 973, 979, 981 (Fla.1999)).
In Pulte Home Corp. v. Osmose Wood Preserving, Inc., the Eleventh Circuit stated that
“the rationale underlying the economic loss rule is that parties should protect against the risk of
economic loss during contract negotiations through warranty provisions and price adjustments
rather than attempt to recover under tort law after the loss occurs.” 60 F.3d 734, 739-740 (11th
Cir. 1995). These interests are not advanced here, where Defendant argues no privity exists
(MTD Pgs. 9-10), and Plaintiff alleges a gross disparity of bargaining power and knowledge (AC
¶¶ 7, 57) in negotiation of the warranty.
The logic found in the Eleventh Circuit’s opinion in Squish La Fish, Inc. v. Thomco
Specialty Products, Inc., 149 F.3d 1288, 1290 (11th Cir. 1998), is persuasive. The court found
that there is an exception to the economic loss rule where the damage is not just to the product
itself, but when the failure of the product “poses an unreasonable risk of injury to persons and
property.” (internal citation omitted). As Plaintiff’s Amended Complaint makes clear, the defect
at issue is a “safety related design defect.” AC ¶ 7. There is simply no doubt that a failure of the
airbags to deploy in an accident (as repeatedly reported to NHTSA about this vehicle) is of
substantial concern and warrants application of an exception to the economic loss rule.
Here, Defendant attempts to shirk all responsibility for the defect by arguing that there is
no privity, and thus no contract remedy, and there is no remedy in tort due to the economic loss
Case 1:14-cv-20971-PAS Document 20 Entered on FLSD Docket 08/29/2014 Page 11 of 11
rule. This startling position, if successful, has the practical effect of permitting General Motors
to hide a known defect, mislead customers about the safety implications of the defect, and at the
last second when the deception is discovered issue a recall and avoid any punishment beyond
repair of the vehicles. Without any additional penalty, what motivation does this provide for the
company to act in the best interest of its customers?
III.
CONCLUSION
For the foregoing reasons, Plaintiff respectfully requests that the Court deny Defendant’s
motion to dismiss and order the parties to proceed with pre-trial discovery forthwith.
DATED: August 29, 2014
Respectfully submitted,
By:
//s// Jon M. Herskowitz
Jon M. Herskowitz
Florida Bar No. 814032
BARON & HERSKOWITZ, LLP
9100 South Dadeland Boulevard
One Datran Center, Suite 1704
Miami, FL 33156
Telephone: (305) 670-0101
Facsimile: (305) 670-2393
E-mail: jon@bhfloridalaw.com
Charles J. LaDuca (pro hac vice)
William H. Anderson (pro hac vice)
CUNEO GILBERT & LADUCA, LLP
507 C Street, NE
Washington, DC 20002
Telephone: (202) 789-3960
Facsimile: (202) 789-1813
E-mail: charlesl@cuneolaw.com
wanderson@cuneolaw.com
Attorneys for Plaintiff Joni Precht