-ES SOCIAL CLUBHOUSE v. FORD MOTOR COMPANY, No. 2:2003cv04558 - Document 141 (D.N.J. 2008)

Court Description: OPINION AND ORDER granting and denying in part Ford's motion to dismiss. Signed by Judge Harold A. Ackerman on 09/02/2008. (nr, )

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NOT FOR PUBLICATION UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY ____________________________________ ) IN RE FORD MOTOR CO. E-350 ) VAN PRODUCTS LIABILITY ) LITIGATION (NO. II) ) ____________________________________) Civ. No. 03-4558 (HAA) MDL 1687 OPINION & ORDER Daniel R. Lapinski, Esq. Kevin P. Roddy, Esq. Jennifer Sarnelli, Esq. WILENTZ, GOLDMAN & SPITZER P.A. 90 Woodbridge Center Drive, Suite 900 Woodbridge, New Jersey 07095 Ira Press, Esq. KIRBY MCINERNEY , LLP 825 Third Avenue, 16th Floor New York, New York 10022 Attorneys for Plaintiffs C. Scott Toomey, Esq. Diane L. Scialabba, Esq. CAMPBELL CAMPBELL EDWARDS & CONROY , P.C. 3 South Broad Street, Suite 2C Woodbury, New Jersey 08096 Garrett W. Wotkyns, Esq. S. Bradley Perkins, Esq. O MELVENY & MYERS LLP 1625 Eye Street, N.W. Washington, D.C. 20006 James D. Smith, Esq. Meridyth M. Andresen BRYAN CAVE LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004 Attorneys for Defendant 1 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 TABLE OF CONTENTS I. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 II. ANALYSIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A. Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 B. Presence of an Express Warranty.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 C. Express and Implied Warranties: Pre-Litigation Notice. . . . . . . . . . . . . . . . . . . . 11 1. Alabama. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2. Arkansas.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3. California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4. Illinois. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 D. Express and Implied Warranties: Actual Injury.. . . . . . . . . . . . . . . . . . . . . . . . . . 26 1. California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 2. New Jersey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 E. Express and Implied Warranties: Time Bar.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 F. Implied Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 1. Implied Warranty: Failure to Allege Lack of Merchantability. . . . . . . . . 38 2. Implied Warranty: Durational Limitations.. . . . . . . . . . . . . . . . . . . . . . . . 39 G. Unjust Enrichment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 H. State Consumer Fraud. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 1. Alabama. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 2. Arkansas.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3. California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 a. The California UCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 b. The California FAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 c. The California CLRA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 4. Illinois. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 5. New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 III. CONCLUSION AND ORDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 2 76 77 78 ACKERMAN, Senior District Judge: 79 to dismiss the Consolidated and Amended Class Action Complaint in this multidistrict litigation. 80 For the reasons set forth below, Defendant s motion to dismiss will be granted in part and denied 81 in part. Before the Court is a motion (Doc. No. 33) by Defendant Ford Motor Company ( Ford ) 82 83 84 I. BACKGROUND On June 16, 2005, the Judicial Panel on Multidistrict Litigation ( MDL Panel ) 85 transferred five actions1 to this Court for consolidated pretrial proceedings pursuant to 28 U.S.C. 86 § 1407. In re Ford Motor Co. E-350 Van Prods. Liab. Litig. (No. II), 374 F. Supp. 2d 1353 87 (J.P.M.L. 2005). Following the transfer to this Court, Plaintiffs filed on January 1, 2006, a 88 Consolidated and Amended Class Action Complaint ( Complaint ). In the Complaint, Plaintiffs 89 allege that their Ford E-350 15-passenger vans are defectively designed due to a high center of 90 gravity that leads to an unusually high rollover rate, and therefore an increased risk of death or 91 injury. No Plaintiffs or members of the proposed class have actually suffered a rollover. 92 Plaintiffs, however, claim economic harm because the alleged defect makes the E-350 vans 93 unsuitable and unfit for transporting 15 passengers. 94 95 Plaintiffs bring the following causes of action: (1) breach of express warranty; (2) breach of implied warranty; (3) unjust enrichment; and (4) violation of state consumer fraud statutes. 1 New Bethlehem Baptist Church v. Ford Motor Co., No. 2:05-519 (N.D. Ala.); Eleventh Street Baptist Church v. Ford Motor Co., No. 4:05-4020 (W.D. Ark.); Greater All Nation Pentecost Church of Jesus Christ v. Ford Motor Co., No. 2:05-1765 (C.D. Cal.); Pentecostal Temple Church of God in Christ v. Ford Motor Co., No. 1:05-1340 (N.D. Ill.); Social Clubhouse, Inc. v. Ford Motor Co., No. 2:03-4558 (D.N.J.). 3 96 Specifically, Plaintiffs seek damages for the alleged diminution in value of their vehicles as a 97 result of the vehicles alleged defects; the cost of purchasing or leasing additional vehicles and of 98 training drivers; equitable relief requiring Ford to correct the alleged defect and enjoining Ford 99 from selling any more extended passenger vans unless the alleged defect is corrected; restitution; 100 101 disgorgement of revenues; and applicable statutory damages. The Complaint asserts claims on behalf of eight named Plaintiffs, including: New 102 Bethlehem Baptist Church (Alabama) ( New Bethlehem ), Eleventh Street Baptist Church 103 (Arkansas) ( Eleventh Street ), Greater All Nation Pentecost Church of Jesus Christ (California) 104 ( Greater All Nation ), Pentecostal Temple Church (Illinois) ( Pentecostal ), Faith Tabernacle 105 Church (New Jersey) ( Faith Tabernacle ), Macedonia Free Will Baptist Church (New Jersey) 106 ( Macedonia Free Will ), Greater Holy Trinity Baptist Church (New Jersey),2 and Social 107 Clubhouse, Inc. (New Jersey). The Complaint also asserts claims on behalf of a putative 108 nationwide class that includes: all persons and entities who purchased or otherwise lawfully 109 acquired E350 15-passenger vans (a/k/a E350 Super Club Wagons, Econoline 15-passenger 110 vans, or E350 Super Duty Extended Length passenger vans) manufactured by Defendant Ford 111 Motor Company . . . model years 1991-2005, and who reside in the fifty states and/or the District 112 of Columbia. (Compl. ¶ 1.) This class includes persons or entities who purchased new or used 113 vans between January 1, 1991 and the date of the filing of the Complaint, inclusive. The 114 proposed class, however, specifically excludes those who claim damages for personal injury as a 115 116 117 result of purchasing or leasing a Ford E350 van. (Compl. ¶ 63.) 2 On May 4, 2007, Greater Holy Trinity Baptist Church voluntarily dismissed its lawsuit. 4 118 119 II. ANALYSIS Federal Rule of Civil Procedure 12(b)(6) permits a court to dismiss a complaint, or a 120 count therein, for failure to state a claim upon which relief may be granted. In evaluating a 121 motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true all well-pleaded 122 allegations of the complaint[] and construe them liberally in the light most favorable to the 123 plaintiffs. Labov v. Lalley, 809 F.2d 220, 221 (3d Cir. 1987). While a complaint attacked by a 124 Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff s obligation 125 to provide the grounds of his entitlement to relief requires more than labels and conclusions, 126 and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. 127 Twombly, U.S. , 127 S. Ct. 1955, 1964-65 (2007) (internal citations omitted). A complaint 128 must contain enough facts to state a claim to relief that is plausible on its face, and the 129 [f]actual allegations must be enough to raise a right to relief above the speculative level on the 130 assumption that all the allegations in the complaint are true. Twombly, 127 S. Ct. at 1965, 1974. 131 A court need not accept unsupported conclusions and unwarranted inferences, Baraka v. 132 McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (quoting Schuylkill Energy Res., Inc. v. Pa. Power 133 & Light Co., 113 F.3d 405, 417 (3d Cir. 1997)), and [l]egal conclusions made in the guise of 134 factual allegations . . . are given no presumption of truthfulness, Wyeth v. Ranbaxy Labs., Ltd., 135 448 F. Supp. 2d 607, 609 (D.N.J. 2006) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 136 As a general rule, a court may only consider the pleading which is attacked by an FRCP 137 12(b)(6) motion in determining its sufficiency. Pryor v. NCAA, 288 F.3d 548, 560 (3d Cir. 138 2002). However, a court may consider documents which are attached to or submitted with the 139 complaint, as well as legal arguments presented in memorand[a] or briefs and arguments of 5 140 141 142 143 144 counsel. Id. (emphasis omitted). 145 federal court is called upon to decide matters of state law, it must apply the choice-of-law rules of 146 the state in which its sits. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). New 147 Jersey choice of law principles require an interest analysis, in which the forum court compares 148 the interests of the states whose laws are potentially involved in the underlying action and 149 determines which state has the greatest interest in having its law applied. In re Ford Motor Co. 150 Ignition Switch Prods. Liab. Litig., 174 F.R.D. 332, 347-48 (D.N.J. 1997) (citing Gantes v. 151 Kason Corp., 145 N.J. 478 (1996)). A. Choice of Law At the outset, this Court must determine which law to apply to Plaintiffs claims. When a 152 Ford maintains that the laws of each Plaintiff s home state must be applied because those 153 states have interests that outweigh the interests of any one state, such as Michigan, where the 154 E350s were designed and manufactured. In their pleading, Plaintiffs assert that all 50 states and 155 the District of Columbia provide consumer protection laws, but in the alternative, Plaintiffs 156 plead, if any one jurisdiction s law applies, that it is Michigan, the state in which Ford is 157 headquartered. (Compl. ¶¶ 73, 96.) In their brief, Plaintiffs do not otherwise seriously contest 158 Ford s choice of law argument, citing law from all five jurisdictions where Plaintiffs reside in 159 discussing Plaintiffs claims on the merits. 160 161 162 163 164 The Court agrees with Ford. As another court in this District determined upon similar facts: Each plaintiff s home state has an interest in protecting its consumers from in-state injuries caused by foreign corporations and in delineating the scope of recovery for its citizens under its own laws. 6 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 These interests arise by virtue of each state being the place in which plaintiffs reside, or the place in which plaintiffs bought and used their allegedly defective vehicles or the place where plaintiffs alleged damages occurred. In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 174 F.R.D. at 348. Similarly, this 183 Court concludes that the states in which the plaintiffs reside have a greater interest in the 184 underlying litigation than Michigan or any one state. The named plaintiffs bringing the 185 Complaint are residents of Alabama, Arkansas, California, Illinois, and New Jersey. Except 186 where there is no material difference, the Court will apply the law of those states to determine 187 whether the causes of action brought by these named plaintiffs are legally cognizable. In re 188 Ford Motor Co. Ignition Switch Prods. Liab. Litig., Nos. 96-3125, -1814, -3198, 2001 WL 189 1266317, at *5 (D.N.J. Sept. 30, 1997). While it might be desirable, for the sake of efficiency, to settle upon one state like Michigan or New Jersey and apply its laws in lieu of the other 49 jurisdictions, due process requires individual consideration of the choice of law issues raised by each class member s case before certification. Since the laws of each of the fifty states vary on important issues that are relevant to plaintiffs causes of action and defendants defenses, the court cannot conclude that there would be no conflict in applying the law of a single jurisdiction, whether it be Michigan, or New Jersey, as the plaintiffs suggest. Thus, the court will apply the law of each of the states from which plaintiffs hail. 190 B. Presence of an Express Warranty 191 In the First Cause of Action of their Complaint, Plaintiffs allege breach of express 192 warranty under UCC § 2-313, as codified by each of the states at issue. According to Plaintiffs, 193 with each sale of an E350 van, Ford expressly warranted by its representations that the van could 194 legally and practically accommodate 15-passenger[s.] (Compl. ¶ 78.) In turn, Ford breached 7 195 its warranty by selling a defective vehicle which could not safely transport 15 passengers. (Id. ¶ 196 79.) 197 In the instant motion to dismiss, Ford asserts that Plaintiffs have failed to properly allege 198 the existence of any specific statement or affirmation that could support an express warranty 199 claim. Ford argues that many of the statements that Plaintiffs allege were made by Ford occurred 200 after Plaintiffs had already purchased their respective vehicles, and thus could not have formed 201 the basis for Plaintiffs respective bargains. Although Plaintiffs cite many of Ford s 202 advertisements and public statements, Ford insists that such advertisements could not create 203 express warranties. In particular, Ford argues that its statements that the E350 van is a very safe 204 vehicle, and that the E350 van is America s Most Trustworthy constitute classic examples of 205 non-actionable opinion, or puffing. (Def. s Br. at 16.) Notably, Plaintiffs do not suggest 206 otherwise. And courts have routinely deemed such statements non-actionable. See, e.g., 207 Lithuanian Comm. Corp., Ltd. v. Sara Lee Hosiery, 214 F. Supp. 2d 453, 459 (D.N.J. 2002) 208 ( [I]n contracts for the sale of goods governed by New Jersey s U.C.C., a seller s statement about 209 the value of goods cannot create a warranty. ); Haskell v. Time, Inc., 857 F. Supp. 1392, 1399 210 (E.D. Cal. 1994) ( Advertising that amounts to mere puffery is not actionable because no 211 reasonable consumer relies on puffery. ); Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d 212 801, 847 (Ill. 2005) ( Describing a product as quality or as having high performance criteria 213 are the types of subjective characterizations that Illinois courts have repeatedly held to be mere 214 puffing. ); Mason v. Chrysler Corp., 653 So.2d 951, 953-54 (Ala. 1995) (holding that a national 215 advertising campaign referring to a vehicle s quality engineering, reliability and smooth riding 216 was puffing); Cornish v. Friedman, 126 S.W. 1079, 1083 (Ark. 1910) ( [M]ere words of praise 8 217 and commendation or which merely express the vendor s opinion, belief, judgment, or estimate, 218 do not constitute a warranty. ). 219 Plaintiffs, however, do not concede Ford s argument in full. Instead, Plaintiffs pin their 220 express warranty claim on Ford s purported core description of the E350 van as a 15- 221 passenger van. Plaintiffs argue that Ford does not deny that it advertised, described and 222 labeled the E350 as a 15-passenger van . . . . Indeed, Ford, simply by the act of outfitting the 223 E350 with seats for fifteen passengers, expressly warrants that the van is in fact capable of 224 transporting 15 passengers. (Pls. Br. at 9.) Because the E350 vans could not safely carry 15 225 passengers, Plaintiffs argue, Ford s express warranty that the vehicles were 15-passenger vans 226 was breached. 227 228 Section 2-313 of the UCC recognizes three general classes of statements or representations by which a seller may create an express warranty: 229 230 231 232 233 234 235 236 237 238 239 240 (a) See Ala. Code § 7-2-313(1); Ark. Code Ann. § 4-2-313(1); Cal. Com. Code § 2313(1); Ill. Comp. 241 Stat. Ann. § 5/2-313(1); N.J.S.A. § 12A:2-313(1). Importantly, under the UCC, [i]t is not 242 necessary to the creation of an express warranty that the seller use formal words such as warrant 243 or guarantee or that he have a specific intention to make a warranty. See, e.g., N.J.S.A. § (b) (c) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description. Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model. 9 244 12A:2-303(2). However, an affirmation merely of the value of the goods or a statement 245 purporting to be merely the seller s opinion or commendation of the goods does not create a 246 warranty. Id. 247 Plaintiffs sufficiently allege that Ford s description of the E350 as a 15-passenger van 248 constitutes an express warranty under UCC § 2-313. First, accepting Plaintiffs allegations as 249 true, Ford s representation that the E-350 van was capable of transporting 15 people was not a 250 subjective statement relating to the good s value, but rather an objective representation 251 warranting the van s design and safety. Second, this Court observes that whether a given 252 statement constitutes an express warranty is normally a question of fact for the jury. See Betaco, 253 Inc. v. Cessna Aircraft Co., 32 F.3d 1126, 1130 (7th Cir. 1994) ( [Defendant] does not challenge 254 the jury s determination that [its] representation as to the relative range of the CitationJet 255 constituted an express warranty. ); Union Ink Co., Inc. v. AT&T Corp., 352 N.J. Super. 617, 645 256 (App. Div. 2002) ( Whether the advertisements contained material misstatements of fact, or were 257 merely puffing, as alleged by defendants, presents a question to be determined by the trier of 258 fact. ); Lucky Mfg. Co. v. Activation, Inc., 406 So. 2d 900, 905 (Ala. 1981) (recognizing that jury 259 found express warranty as to written representation); Greenman v. Yuba Power Products, Inc., 59 260 Cal. 2d 57, 60 (1963) ( The jury could also reasonably have concluded that statements in the 261 manufacturer s brochure . . . constituted express warranties ); Cornish, 126 S.W. at 1083 262 ( [W]hether a particular assertion is an affirmance of a positive fact, or, on the other hand, only 263 praise and commendation, opinion or judgment, is a question for the jury, where the meaning is 264 ambiguous, and the intention of the parties may be gathered from the surrounding 265 circumstances. ) (citation omitted). 10 266 Here, several issues cannot be resolved on a motion to dismiss, including: whether Ford s 267 description of the E350 van as a 15-passenger van or Ford s outfitting the vans with seats for 268 15 passengers independently supports an express warranty; if so, whether any such warranty was 269 the basis of the bargain between Plaintiffs and Ford; and whether Ford breached any such 270 warranty. Therefore, this Court will deny Ford s motion to dismiss Plaintiffs express warranty 271 claims. 272 C. Express and Implied Warranties: Pre-Litigation Notice 273 Ford argues that the breach of express and implied warranty claims asserted by Plaintiffs 274 New Bethlehem (Alabama), Eleventh Street (Arkansas), Greater All Nation (California), and 275 Pentecostal Temple (Illinois) must be dismissed based upon Plaintiffs failure to allege 276 compliance with the notice requirement of section 2-607(3)(a) of the Uniform Commercial 277 Code.3 278 Defendant asserts that the laws of Alabama, Arkansas, California, and Illinois require a 279 buyer, prior to the filing of a complaint, to notify a seller that there has been a breach; failure to 280 provide such notice serves as a bar to suit. See Hart v. Yamaha-Parts Distribs., Inc., 787 F.2d 281 1468, 1474 (11th Cir. 1986); Fieldstone Co. v. Briggs Plumbing Prods. Inc., 62 Cal. Rptr. 2d 282 701, 708-709 (Cal. Ct. App. 1997); Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584, 590 (Ill. 283 1996); Williams v. Mozark Fire Extinguisher Co., 888 S.W.2d 303, 305-06 (Ark. 1994); Parker 284 v. Bell Ford, Inc., 425 So. 2d 1101, 1103 (Ala. 1983). 285 Nowhere in the Complaint does any Plaintiff plead that it provided direct notice of the 3 Defendants do not argue that the New Jersey Plaintiffs claims suffer from the same infirmity. 11 286 alleged breach to Defendant or any immediate seller of the vehicles. However, according to 287 Plaintiffs, the pre-litigation notice requirements of the state statutes at issue were satisfied 288 because: (1) Ford had actual notice of the alleged defect of the E350 van model generally; (2) 289 Ford had constructive notice of the alleged defect based upon the filing of the complaint; (3) 290 Ford failed to allege any prejudice due to any lack of notice; and (4) the sufficiency of Plaintiffs 291 notice is a question of fact not to be decided on a motion to dismiss. (Pls. Br. at 33-36.) For the 292 reasons discussed below, this Court will grant Defendant s motion to dismiss for failure to plead 293 pre-litigation notice as to the Plaintiffs from Alabama, Arkansas and Illinois, but not as to the 294 California Plaintiff. The breach of warranty claims that are dismissed are done so without 295 prejudice and with leave to amend. If Plaintiffs from Alabama, Arkansas and Illinois can allege 296 that they provided pre-litigation notice to Ford in any way recognized under the respective laws 297 of those states, they may do so in an amended complaint. 298 The pre-litigation notice requirement stems from § 2-607(3) of the Uniform Commercial 299 Code, which provides: Where a tender has been accepted (a) the buyer must within a reasonable 300 time after he discovers or should have discovered any breach notify the seller of breach or be 301 barred from any remedy. This language has been adopted in the codes of each state at issue. 302 Ala. Code § 7-2-607(3)(a); Ark. Code Ann. § 4-2-607-(3)(a); Cal. Com. Code. § 2607(3)(A); 810 303 Ill. Comp. Stat. 5/2-607(3)(a). 304 The notice requirement of § 2-607(3)(a) is supported by a number of justifications, such 305 as to prevent stale claims, allow sellers to marshal evidence for a defense, and allow sellers to 306 correct the defect or mitigate damages. See Hobbs v. Gen. Motors Corp., 134 F. Supp. 2d 1277, 307 1283 (M.D. Ala. 2001); Jackson v. Swift-Eckrich, 830 F. Supp. 486, 491 (W.D. Ark. 1993); 12 308 Goldstein v. G.D. Searle & Co., 62 Ill. App. 3d 344, 350 (Ill. App. Ct. 1978), holding limited by 309 Bd. of Educ. of City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 462 (Ill. 1989); Pollard v. Saxe 310 & Yolles Dev. Co., 525 P.2d 88, 92 (Cal. 1974). 311 With this background in mind, the Court first considers Plaintiffs contention that direct 312 notice of the breach of warranty should be excused because Ford had actual notice of the alleged 313 defects of the E350 vans. Specifically, Plaintiffs allege that Ford was fully aware of the alleged 314 defect from the earliest stages of the E350 s development, [and] was further warned by the NTSB 315 and NHTSA, to which agencies the Defendant gave extensive responses. (Pls. Br. at 33.) To 316 be sure, Plaintiffs Complaint alleges numerous occasions upon which Defendant likely became 317 aware of the possibility that its E350 vans contained design defects. (Compl. ¶¶ 21-55.) For 318 example, Plaintiffs allege that in April 2001, the NHTSA released a study that found that 15- 319 passenger vans manufactured and sold by Ford, when loaded with ten or more occupants, 320 exhibited a rollover rate in single vehicle crashes (crashes in which no other vehicle was 321 involved) that was nearly three times the rate of crashes involving vehicles that were lightly 322 loaded (i.e., having just a driver and no passengers). (Id. ¶ 28.) Plaintiffs also allege that in an 323 April 2002 recommendation to consumers, the NHTSA announced that 15-passenger vans should 324 be operated only by specially trained, experienced drivers, rather than ordinary or unskilled 325 drivers. (Id. ¶ 31.) According to Plaintiffs, Ford issued a September 5, 2002 press release in 326 response to this NHTSA recommendation in which Ford asserted that the E350 vans were very 327 safe vehicles, yet warned its E350 van customers that it is important that 15-passenger vans be 328 operated by trained, experienced drivers, that drivers should avoid sharp turns and abrupt 329 maneuvers, and that extra precautions should be taken. (Id.) Plaintiffs assert that on two 13 330 occasions in 2002, the alleged hazards of Ford s E350 vans were the subject of segments on the 331 television program 60 Minutes II. (Id. ¶¶ 38, 61.) Based upon these alleged events, among 332 others, Plaintiffs insist that Defendant had actual, if not direct, notice of the alleged defects. 333 Plaintiffs contend that in a majority of cases, actual notice sufficiently complies with 334 the notice requirement of UCC § 2-607(3). (Pls. Br. at 33 (citing James J. White & Robert S. 335 Summers, Uniform Commercial Code 611 n.1 (4th ed. 1995); U.C.C. § 1-201(25).)4 However, 336 whether there exists a majority or minority position regarding the purpose of the UCC s notice 337 requirement is of limited value. This Court is not writing on a blank slate; it must canvas the 338 interpretation of the pre-litigation notice requirement in Alabama, Arkansas, California, and 339 Illinois. As discussed above, choice-of-law analysis requires that this Court render a decision in 340 accordance with the prevailing law of the appropriate forum state. Accordingly, the Court turns 341 to an analysis of the laws in the four states at issue. 342 343 1. Alabama This Court finds that Alabama Plaintiff New Bethlehem failed to comply with the notice 344 requirement. Defendant asserts that New Bethlehem s warranty claims are barred because the 345 Complaint fails to allege compliance with Alabama Code § 7-2-607(3)(a), which describes a 346 buyer s obligation upon learning of a defect in a product he has accepted: 347 348 349 350 351 352 (3) Where a tender has been accepted: (a) The buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of the breach or be barred from any remedy[.] Ala. Code § 7-2-607(3)(a). The Alabama Supreme Court has recognized that, although this 4 For this proposition, however, Plaintiffs cite no specific cases from, or applying the law of, Alabama, Arkansas, California, or Illinois. 14 353 provision does not indicate what constitutes sufficient notice, the corresponding Committee 354 Comment states that [t]he notification which saves the buyer s rights under this Article need 355 only be such as informs the seller that the transaction is claimed to involve a breach, and thus 356 opens the way for normal settlement through negotiation. Jewell v. Seaboard Indus., Inc., 667 357 So.2d 653, 660 (Ala. 1995) (citing Ala. Code § 7-2-607 cmt. 4). The Court noted that UCC § 7- 358 1-201(26) provides that a person notifies or gives a notice or notification to another by taking 359 such steps as may be reasonably required to inform the other in ordinary course whether or not 360 such other actually comes to know of it. Id. Further, [t]he question of sufficient notice must 361 be tested in light of the facts of the particular case. Id. 362 The Alabama Supreme Court has recognized that pre-litigation notice, as required by 363 Alabama Code § 7-2-607(3)(a), is a condition precedent to recovery for a breach of warranty 364 action. Parker, 425 So. 2d at 1102; see also Hart v. Yamaha-Parts Distribs., Inc., 787 F.2d 365 1468, 1474 (11th Cir. 1986) ( The Alabama courts have held that notice of breach is a condition 366 precedent to bringing a breach of warranty action . . . which must be affirmatively pleaded in the 367 complaint. ) (citations omitted). 368 However, in certain circumstances, such as personal injury actions, the notice requirement 369 for asserting warranty claims has been abrogated by Alabama courts. Hobbs, 134 F. Supp. 2d at 370 1283 (citing Simmons, 368 So. 2d 509 (Ala. 1979)). The court s departure in certain 371 circumstances from strict enforcement of the UCC notice requirement evinces a policy on the 372 part of the Alabama Supreme Court to evaluate the underlying justifications for notice in a given 373 case. See Hobbs, 134 F. Supp. 2d at 1284. For example, according to the Alabama Supreme 374 Court, the policies which support the notice requirement are not applicable to personal injury 15 375 actions where notice is inconsequential in preventing or mitigating the harm since the injury has 376 already occurred. Simmons, 368 So. 2d at 514. 377 Following a detailed discussion of the treatment by Alabama courts of the notice 378 requirement under § 7-2-607(3)(a), a district court in Alabama held in Hobbs that a breach of 379 warranty action against a car manufacturer was barred for failure to give timely notice. The court 380 in Hobbs acknowledged that another district court in Alabama had previously determined albeit 381 in dicta, that under Alabama law, if a plaintiff is a buyer, and not a third party beneficiary of a 382 consumer warranty, the plaintiff must notify the seller of an alleged breach of warranty before 383 being allowed to pursue a warranty action against the remote manufacturer. Id. at 1286 (citing 384 Snell v. G.D. Searle & Co., 595 F. Supp. 654 (N.D. Ala. 1984)). Further distilling this idea, the 385 court in Hobbs determined that under Alabama law: 386 387 388 389 390 391 392 Id. at 1285. Therefore, the notice requirement applies to suits against car manufacturers, like 393 Defendant Ford in the instant matter, as it does to sellers. 394 for remote manufacturers to be held liable for an unintentionallycreated express warranty, as are sellers under the UCC, remote manufacturers should be afforded the same protections as sellers, either by way of notice provided directly to them, or through notice provided to them by the direct seller from the buyer. Notably, the court recognized that the Alabama Supreme Court s decision in Parker 395 stands for the proposition that in the context of economic harm rather than personal injury, the 396 filing of a lawsuit is not considered to be sufficient notice under Alabama law. Id. at 1285 397 ( Notice must, therefore, precede the filing of the complaint. ); see also Rampey v. Novartis 398 Consumer Health, Inc., 867 So. 2d 1079, 1086 (Ala. 2003). Hence, New Bethlehem s argument 399 that notice-by-suit is sufficient under Alabama s notice requirement is without merit. 16 400 The court in Hobbs recognized that as a general matter, the issue of sufficiency of notice 401 is a question of fact for a jury to determine. Where, however, no notice is given, there is no issue 402 of sufficiency for a jury to determine. Id. (citing Parker, 425 So. 2d at 1103). In other words, 403 where no form of notice recognized under Alabama law is given, the issue of sufficiency of 404 notice need not be determined by a jury; logically, no notice is insufficient notice. See id. at 1286 405 n.3. Thus, the issue remains one of law, not fact, and this Court may properly address the issue 406 of notice on the instant motion to dismiss. 407 As noted above, Plaintiff New Bethlehem also challenges a strict application of the notice 408 requirement under Alabama law where a defendant has actual notice of an alleged defect. 409 According to Plaintiff New Bethlehem, [a]ll that is required is that the seller know that the 410 transaction is still troublesome and must be watched. (Pls. Br. at 33-34 (internal quotation 411 marks omitted).) There are several problems with Plaintiff s argument. Plaintiff New Bethlehem 412 does not allege that Ford, or any immediate seller of its E350 van, knew that New Bethlehem s 413 specific transaction was troublesome and must be watched. Additionally, the statement that 414 actual notice is sufficient to satisfy 2-607 is correct, but in a limited context. After a careful 415 inspection of the treatise to which Plaintiff cites, and specifically the footnote in which the 416 authors suggest that a majority of cases find actual notice to suffice, this Court is not persuaded 417 that the Alabama Supreme Court would recognize such an exception to the notice requirement as 418 Plaintiff New Bethlehem now pursues. First, the authors rely on no Alabama case to support this 419 proposition.5 Second, in no case relied upon by the authors does a court hold that absent 5 The authors also do not cite to any case from Arkansas or California to support this proposition. 17 420 knowledge of problems with the product of a specific transaction, a manufacturer s general 421 awareness of an alleged defect with a product line satisfies the notice requirement of § 2- 422 607(3)(a). Recognition of actual notice as an exception to the notice requirement, in the cases 423 cited by the authors, and in every other case applying Alabama law of which this Court is aware, 424 is limited to situations where a seller has actual knowledge of the defect of the product sold in a 425 particular transaction, prior to the filing of a lawsuit. Contrary to Plaintiffs argument, 426 generalized knowledge of alleged defects in a product line has not been held to suffice. 427 Evidently, prior to filing suit, New Bethlehem took no steps to notify Defendant 428 regarding the alleged breach of warranties, or any problem it was having in connection with its 429 E350 van. As such, Defendant was not afforded the same protections under the UCC as are 430 provided for sellers. See Hobbs, 134 F. Supp. 2d at 1285. Given its importance, this Court is not 431 persuaded that the Alabama Supreme Court would create an exception to the notice requirement 432 that exonerates plaintiffs from taking any affirmative steps to notify a seller that a particular 433 transaction is problematic prior to bringing a claim for breach of warranty. Similarly, this Court 434 is not persuaded that the Alabama Supreme Court would waive the notice requirement where a 435 defendant does not allege prejudice. 436 Therefore, New Bethlehem s claims for breach of warranty will be dismissed without 437 prejudice. If New Bethlehem can allege that it provided pre-litigation notice to Ford in any way 438 recognized under Alabama law, it may do so in an amended complaint. 439 2. Arkansas 440 Defendant argues similarly that Arkansas Plaintiff Eleventh Street s warranty claims are 441 barred for failure to allege compliance with Arkansas Code § 4-2-607(3)(a), which provides that 18 442 a buyer must within a reasonable time after he discovers or should have discovered any breach 443 notify the seller of breach or be barred from any remedy. For the following reasons, this Court 444 agrees with Defendant and will dismiss without prejudice Eleventh Street s warranty claims. 445 Plaintiff Eleventh Street s argument that notice by complaint satisfies the notice 446 requirement under Arkansas law is without merit. See Williams v. Mozark Fire Extinguisher Co., 447 888 S.W.2d 303, 306 (Ark. 1994) ( [N]otice must be more than a complaint. ); see also 448 Jackson, 830 F. Supp. at 491 (W.D. Ark. 1993) (recognizing that although notice need not be in 449 writing, it nevertheless must be more than a complaint ). The more difficult question, 450 however, is whether the Supreme Court of Arkansas would recognize other exceptions to the pre- 451 litigation notice requirement, such as actual notice. As a district court in Arkansas noted: The 452 content of the notification need merely be sufficient to let the seller know that the transaction is 453 still troublesome and must be watched. Jackson, 830 F. Supp. at 491. Here, the Court is unable 454 to evaluate the content of the notification, i.e., whether Eleventh Street included a claim for 455 damages, threatened litigation, or other resort to remedy, because Eleventh Street does not allege 456 that it provided Defendant with any notification. Thus, prior to filing the Complaint, Plaintiffs 457 pursued no course of communication that would have open[ed] the way for negotiation of a 458 normal settlement. Id. 459 In addition, the Arkansas Supreme Court has recognized that the purpose of the statutory 460 notice requirement for breach is twofold. Mozark Fire Extinguisher, 888 S.W.2d at 306. 461 First, it is to give the seller an opportunity to minimize damages in some way, such as by 462 correcting the defect. Second, it is to give immunity to a seller against stale claims. Id. (citing 463 L.A. Green Seed, 438 S.W.2d at 720). Although the seller in Mozark Fire Extinguisher could no 19 464 longer minimize damages because the system was destroyed, the Court noted that the other 465 statutory purpose, i.e., immunity against stale claims, is present. Id. Thus, the Court declined 466 to ignore the statutory requirement. See id. 467 Here, unlike the destroyed fire extinguishing system in Mozark Fire Extinguisher, 468 Eleventh Street alleges no comparable injuries to itself as a result of the E350 vans alleged 469 defect. Therefore, the first statutory purpose recognized by the Arkansas Supreme Court 470 providing a seller an opportunity to minimize damages in some way, such as by correcting the 471 defect remains present. Although the notice requirement under Arkansas law is not stringent, 472 Jackson, 830 F. Supp. at 491, for similar reasons as discussed above with respect to Alabama 473 law, this Court is not persuaded that the Arkansas Supreme Court would adopt an exception 474 based on a manufacturer s general awareness of the alleged warranty breaches for an entire line 475 of products. This Court is aware of no case applying Arkansas law that requires, or even 476 suggests, such an application of the statutory notice requirement of § 4-2-607(3)(a). Likewise, 477 this Court is not persuaded that the Arkansas Supreme Court would waive the notice requirement 478 where a defendant does not allege prejudice. 479 Plaintiff Eleventh Street also asserts that the question of sufficiency of notice for 480 purposes of § 4-2-607(3)(a), is a question of fact, inappropriate to be decided on a motion to 481 dismiss. (Pls. s Br. at 35 (citing Jackson, 830 F. Supp. at 491).) But, as discussed above, where 482 a plaintiff alleges no pre-litigation notice at all, the issue of the notice s sufficiency is moot and 483 appropriately can be decided as a matter of law at this stage. Eleventh Street s claims for breach 484 of warranty will be dismissed without prejudice. 485 3. California 20 486 Under California Commercial Code § 2607(3)(A), a buyer must, within a reasonable 487 time after he or she discovers or should have discovered any breach, notify the seller of breach or 488 be barred from any remedy. In certain circumstances, the Supreme Court of California has 489 excused the notice requirement. For instance, in Greenman v. Yuba Power Products, a plaintiff 490 who had been injured while using a power tool brought claims for breach of warranty against the 491 retailer and manufacturer of the tool. 377 P.2d 897, 888 (Cal. 1963). The injured plaintiff 492 actually provided the retailer and manufacturer written pre-litigation notice of the claimed 493 breaches of warranties, but he only did so about ten months after he was injured. The 494 manufacturer argued that the plaintiff had not provided notice within a reasonable time and was 495 therefore barred by the statutory notice requirement.6 Id. at 899. The Court held that the 496 statutory notice requirement was not an appropriate one for the court to adopt in actions by 497 injured consumers against manufacturers with whom they have not dealt. Id. at 900. The Court 498 reasoned: 499 500 501 502 503 504 505 506 507 508 As between the immediate parties to the sale [the notice requirement] is a sound commercial rule, designed to protect the seller against unduly delayed claims for damages. As applied to personal injuries, and notice to a remote seller, it becomes a booby-trap for the unwary. The injured consumer is seldom steeped in the business practice which justifies the rule, and at least until he has had legal advice it will not occur to him to give notice to one with whom he has had no dealings. Id. (quoting William L. Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 509 69 Yale L.J. 1099, 1130 (1960)) (citation omitted). 6 At the time, the notice requirement appeared in section 1769 of the Civil Code, which provided that if a buyer fails to give notice to the seller of the breach of any promise or warranty within a reasonable time after the buyer knows, or ought to know of such breach, the seller shall not be liable therefor. Id. 21 510 By contrast, a California appellate court in Fieldstone Co. v. Briggs Plumbing Products, 511 Inc., held that a residential developer who had purchased sinks from plumbers, as opposed to the 512 plaintiff in Greenman, was a sophisticated development company which has built many 513 thousands of homes over the last two decades. 62 Cal. Rptr. 2d 701, 708 (Cal. Ct. App. 1997). 514 The court determined that the statutory notice provision should apply because the plaintiff in 515 Fieldstone was not unaware of his rights as against the manufacturer until he had received legal 516 advice. Id. (citing Presiding Bishop v. Cavanaugh, 32 Cal. Rptr. 144 (Cal. Ct. App. 1963)). 517 Based on these two cases applying the California statutory notice requirement, and 518 viewing Greater All Nation s allegations in a favorable light, this Court finds that Greater All 519 Nation s position as a consumer is more analogous to the injured plaintiff in Greenman. 520 According to the Complaint, Greater All Nation brings the instant action based upon its October 521 1999 purchase of one used E350 van. (Compl. ¶ 9.) Greater All Nation is a not-for-profit 522 religious organization that apparently uses its E350 van to transport church members to retreats, 523 volunteer events and other community functions. (Id.) Thus, by any measure, Greater All 524 Nation is not in the business of purchasing vans, and, as opposed to the residential developer in 525 Fieldstone, likely was entirely unaware of its rights vis a vis Defendant Ford until it received 526 legal advice. See Fieldstone, 62 Cal. Rptr. 2d at 708. 527 At the same time, this Court notes that Greenman is not directly analogous to this case. 528 The injured plaintiff in Greenman, unlike California Plaintiff Greater All Nation, did in fact 529 provide written pre-litigation notice of claimed breaches of warranties to the retailer and to the 530 manufacturer. Id. at 898. Additionally, the decision in Greenman occurred in the context of a 531 personal injury action. Thus, it is unclear whether the Supreme Court of California would have 22 532 arrived at the same broad conclusion in Greenman had the plaintiff not suffered any personal 533 injury, and had the plaintiff not notified either the retailer or the manufacturer prior to bringing 534 suit. Nevertheless, given the prior application of the statutory notice requirement in California 535 cases, this Court is not persuaded that the Supreme Court of California would apply § 2607(3)(A) 536 so strictly, and necessarily foreclose Greater All Nation from pursuing its breach of warranty 537 claims. Therefore, Defendant s motion to dismiss on this ground will be denied. 538 4. Illinois 539 Under 810 ILCS 5/2-607, the buyer must within a reasonable time after he discovers or 540 should have discovered any breach notify the seller of breach or be barred from any remedy[.] 541 Like other jurisdictions, Illinois recognizes several methods of notice. 542 In Connick, purchasers of a Samurai sport utility vehicle (SUV) sought to recover for, 543 inter alia, breach of express and implied warranties based upon the allegation that the Samurais 544 manufactured by defendant were unsafe because [they] had an excessive risk of rolling over 545 during sharp turns and accident avoidance maneuvers. 675 N.E.2d at 588. The Supreme Court 546 of Illinois recognized that the notice requirement can be fulfilled either by direct notice or under 547 two exceptions: when a seller has actual knowledge of the defects of a particular product or, in 548 certain circumstances, when a seller is deemed to have been reasonably notified by the filing of 549 [a] buyer s complaint alleging breach of UCC warranty. Id. (citing Malawy v. Richards Mfg. 550 Co., 501 N.E.2d 376 (1986), and Perona v. Volkswagen of Am., Inc., 684 N.E.2d 859, 863 (Ill. 551 App. Ct. 1997)). Ultimately, however, the Court dismissed plaintiffs breach of warranty claims, 552 holding that the plaintiffs failed to allege direct notice to the defendant and, importantly, were 553 unable to rely on either exception to the direct notice requirement. Connick, 675 N.E. 2d at 591. 23 554 The Court reasoned that, despite public reports of the product s general defects, the complaint 555 does not allege that Suzuki had actual knowledge of the alleged breach of the particular products 556 purchased by the named plaintiffs in this lawsuit. Id. at 590 (emphasis added). In addition, the 557 filing of a complaint did not suffice to constitute notice where the breach has not resulted in 558 personal injury because the UCC indicates a preference that the breach be cured without a 559 lawsuit. Id. at 591. 560 Here, Plaintiffs likewise assert compliance with the notice requirement of § 2-607 based 561 upon Ford s actual or constructive notice of the alleged E350 van defects. Plaintiffs description 562 of the events that necessarily would have informed Ford of the alleged defects of the E350 vans, 563 e.g., the NHTSA reports, Ford s response to the NHTSA recommendations, and the 60 Minutes 564 II broadcasts, is comparable to the events the Connick plaintiffs claimed separately or 565 cumulatively provided actual notice to the defendant manufacturer. Id. at 589-90 (noting an 566 unfavorable Consumers Union report, an investigation by seven states attorneys general, and the 567 commencement of the various actions). According to the court in Connick, it was undisputed 568 that the defendant was actually aware of the safety concerns of the Samurai SUV. Id. at 590. 569 Nevertheless, the Court held that a manufacturer s awareness of problems with a product line is 570 not a substitute for awareness problems with the particular product purchased by a particular 571 buyer. Id. (emphasis added). Connick also stands for the proposition that constructive 572 awareness based upon the filing of a complaint is not an exception to the notice requirement in 573 non-personal injury actions.7 Id. at 590-91. 7 Plaintiffs rely on a prior Illinois Supreme Court decision for the proposition that the filing of a lawsuit by injured consumers constitutes sufficient notice. (Pls. Br. at 34 (citing Goldstein v. G. D. Searle & Co., 378 N.E.2d 1083, 1088 (Ill. App. Ct. 1978).) That decision was 24 574 In the instant matter, Plaintiffs have satisfactorily alleged that Defendant Ford was 575 actually aware of the alleged design defects of the E350 van product line prior to the filing of 576 Plaintiffs Complaint. There is, however, no indication from Plaintiffs Complaint that, prior to 577 the filing of the Complaint, Defendant was ever apprised of a problem with Pentecostal Temple s 578 particular van, or of any potential warranty claims to be brought by Pentecostal Temple. 579 Therefore, Pentecostal Temple s pleadings are insufficient pursuant to the limited scope of the 580 actual notice exception as described by the Illinois Supreme Court. And because Pentecostal 581 Temple asserts only economic harm and no personal injuries, the limited exception of 582 constructive notice, i.e., notice-by-suit, is not available with regard to the Illinois notice 583 requirement. 584 Relying on a decision from a district court in the Northern District of Illinois, Plaintiffs 585 argue that dismissal is inappropriate because Defendant has failed to allege any prejudice due to 586 lack of notice. (Pls. s Br. at 34 (citing Blommer Chocolate Co. v. Bongards Creameries, Inc., 587 635 F. Supp. 911, 918 (N.D. Ill. 1985)).) This Court finds instructive the fact that the Illinois 588 Supreme Court in Connick did not specifically recognize lack of prejudice as one of the two 589 noted exceptions to the direct notice requirement under 810 ILCS 5/2-607(3). Connick, 675 590 N.E.2d at 589. Additionally, in Connick, the court recognized that the UCC indicates a 591 preference that the breach be cured without a lawsuit. Id. at 591. This preference, therefore, limited by the Illinois Supreme Court in Board of Education of City of Chicago v. A, C and S, Inc., 546 N.E.2d 580, 596 (Ill. 1989), to cases involving personal injuries to consumers. Brookings Mun. Utilities, Inc. v. Amoco Chem. Co., 103 F. Supp. 2d 1169, 1177 n.8 (D.S.D. 2000). Here, Illinois Plaintiff Pentecostal Temple asserts economic harm, not personal injuries, and Plaintiffs proposed class specifically excludes any person who claims damages for personal injury as a result of purchasing or leasing an E350 van. 25 592 militates against requiring that Defendant allege prejudice due to a lack of direct pre-litigation 593 notice because, here, a lawsuit ensued nevertheless. This Court, therefore, finds that Plaintiffs 594 failure to allege prejudice argument is unsupported under Illinois law as an exception to the 595 notice requirement. Accordingly, mindful of Court s holding in Connick, this Court is 596 constrained to grant Defendant s motion to dismiss Plaintiff Pentecostal Temple s breach of 597 warranty claims for failure to comply with the notice requirement of 810 ILCS 5/2-607(3). 598 To recap, this Court will dismiss the breach of express and implied warranty claims of the 599 Alabama, Arkansas and Illinois Plaintiffs. However, if they can allege that they provided pre- 600 litigation notice to Ford in a manner recognized under the respective laws of those states, they 601 may do so in an amended complaint. As for California Plaintiff Greater All Nation, its breach of 602 warranty claim will survive. 603 D. Express and Implied Warranties: Actual Injury 604 Ford also moves to dismiss Plaintiff s express and implied warranty claims for failure to 605 adequately allege an actual injury.8 No Plaintiff has sustained a rollover or claimed any personal 606 injury as a result of purchasing or leasing an E350 van. In fact, the proposed Plaintiff Class 607 expressly excludes anyone who claims personal injury damages. (Compl. ¶ 63.) Hence, 608 although the Complaint alleges that the E350 vans are defectively designed due to [the van s] 609 high center of gravity leading to an unusually high rollover rate, (id. ¶ 17) Plaintiffs and 610 members of the proposed Class, by definition, have never experienced a rollover-related accident 611 or physical injury. According to Plaintiffs, however, the alleged defect of the E350 vans resulted 8 Other elements of Plaintiffs implied warranty claims are discussed in greater detail later in this Opinion. See infra Section II.F. 26 612 in loss of use of the van s full capacity, diminishment of the van s resale value and increased 613 insurance costs. (Pls. Br. at 14.) 614 Because the Court will dismiss the warranty claims of the Alabama, Arkansas, and 615 Illinois Plaintiffs for lack of pre-litigation notice, the Court will only examine the actual injury 616 issue as it concerns the California and New Jersey Plaintiffs. 617 618 1. California Ford argues that, under California law, Plaintiff Greater All Nation s breach of warranty 619 claims must be dismissed absent a present and manifest injury. For the reasons discussed below, 620 this Court does not find that California precedent mandates dismissal of Greater All Nation s 621 breach of warranty claims on this ground. 622 In American Suzuki Motor Corp. v. Superior Court, a case relied upon by Ford, the issue 623 before the California Court of Appeals was whether plaintiffs could state a cause of action for 624 breach of implied warranty where they have suffered no personal injury or property damage 625 from a vehicle they claim is defectively designed, and it is impliedly conceded that their vehicles 626 have since the date of purchase remained fit for their ordinary purpose. 44 Cal. Rptr. 2d 627 526, 527 (Cal. Ct. App. 1995) (emphasis added). The California appellate court answered this 628 question in the negative, reversing the trial court s class certification. Id. at 531. 629 Importantly, Greater All Nation has not conceded that its Ford E350 has remained fit for 630 its ordinary purpose. Plaintiffs specifically allege that their E350 vans were totally unfit to 631 accommodate and safely transport 15 passengers, and, accordingly, Ford breached its implied 632 warranty of merchantability in violation of UCC § 2-314. (Compl. ¶ 84.) Yet, whether a vast 633 majority of Ford E350s did what they were supposed to do for as long as they were supposed to 27 634 do it i.e., whether they were fit for their ordinary purpose remains an open question which 635 this Court cannot determine on a motion to dismiss, especially where, unlike plaintiffs in 636 American Suzuki, Greater All Nation does not concede merchantability. American Suzuki, 637 therefore, does not mandate dismissal of Greater All Nation s breach of warranty claim. 638 The only other California case upon which Ford relies for this point is Khan v. Shiley Inc., 639 266 Cal. Rptr. 106 (Cal. Ct. App. 1990). There, the court suggested that [n]o matter which 640 theory is utilized [including breach of express and implied warranty] where a plaintiff alleges a 641 product is defective, proof that the product has malfunctioned is essential to establish liability for 642 an injury caused by the defect. Id. at 855. (emphasis in original). However, a more recent 643 California appellate court decision has challenged the propriety of the sweeping language in 644 Khan, and in particular the quoted sentence. See Hicks v. Kaufman & Broad Home Corp., 107 645 Cal. Rptr. 2d 761, 771 (Cal. App. Ct. 2001). [T]hat sentence does not accurately reflect the 646 holding in Khan nor the state of the law on breach of warranty claims. Id. According to Hicks, 647 the primary right alleged to have been violated in Khan was not the right to take a product free 648 from defect but the right to be free from emotional distress caused by worry the defect would 649 result in physical injury. Id. (emphasis added). Accordingly, Hicks held that a product s 650 malfunction is not an element of a cause of action for breach of warranty where the primary 651 right alleged to have been violated . . . [is] the right to take a product free from defect. Id. at 652 771; see also id. at 773 n.54. Instead, to establish a breach of express or implied warranty, a 653 plaintiff must ultimately prove that a product contains an inherent defect that is substantially 654 certain to result in malfunction during the useful life of the product. Id. at 773. ( We see no 655 reason why [plaintiff] should have to wait for the inevitable injuries to occur before recovering 28 656 damages to repair the defect and prevent the injuries from occurring. ). A cause of action for 657 breach of warranty does not require proof the product has malfunctioned. Id. at 768. 658 In Hicks, plaintiffs pursued breach of warranty claims based upon the allegedly defective 659 concrete foundations of their houses. It is unclear whether the substantial certainty 660 requirement described in Hicks would necessarily apply in the instant matter. That is not 661 something this Court need or should decide today. And this Court finds Hicks s criticism of the 662 sweeping language of Khan to be highly persuasive. A California court likely would not find that 663 product malfunction is a necessary element of Greater All Nation s breach of warranty claims. 664 See id. at 771-72. Hence, California Plaintiff Greater All Nation s breach of warranty claims will 665 not be dismissed for failure to plead actual injury. 666 2. New Jersey 667 Ford relies on several cases in support of its argument that New Jersey Plaintiffs 668 warranty claims should be dismissed for failure to allege actual injury. For example, in Yost v. 669 General Motors Corp., 651 F. Supp. 656, 657 (D.N.J. 1986), the district court dismissed the 670 plaintiff s breach of warranty and fraud claims because the plaintiff failed to allege that he 671 suffered any present damages: All he is able to allege is that the potential leak is likely to 672 cause damage and may create potential safety hazards. Id. By contrast, Plaintiffs here assert 673 that the E350 van is presently defective, and that such defect currently creates a potential safety 674 hazard. See Connick, 656 N.E. 2d at 178-79 (distinguishing Yost where plaintiffs did not allege 675 the engine was actually defective). Additionally, Plaintiffs allege damages not discussed in Yost, 676 including loss of use of the van s full capacity and increased insurance costs. Given these 677 differences, this Court is not convinced that Yost mandates dismissal of Plaintiffs breach of 29 678 679 warranty claims. Ford next draws this Court s attention to Walus v. Pfizer, Inc., 812 F. Supp. 41, 42 680 (D.N.J. 1993), for the court s assertion that New Jersey courts have never allowed recovery 681 based on a product that is and has been working normally. 812 F. Supp. at 42. Although Walus 682 provides sweeping language regarding a product liability claim, that decision did not concern 683 breach of warranty claims. Thus, Walus also does not mandate dismissal of Plaintiffs claims. 684 In another case, Thiedemann v. Mercedes-Benz USA, LLC, 872 A.2d 783, 793 (2005), the 685 Supreme Court of New Jersey affirmed a grant of summary judgment for a defendant car 686 manufacturer based upon alleged violations of the New Jersey Consumer Fraud Act ( CFA ), 687 N.J.S.A. §§ 56:8-1 to -20. Specifically, plaintiff had alleged a defect in the fuel gauges in 688 Mercedes-Benz vehicles. Although plaintiff had asserted a claim for breach of the implied 689 warranty of merchantability under N.J.S.A. § 12A:2-314, the Court limited its review to the 690 enigmatic requirement of an ascertainable loss under the CFA. 872 A.2d at 786-87. Because 691 plaintiff made no attempt to sell his vehicle, and did not present any expert evidence to support 692 an inference of loss in value notwithstanding the lack of any attempt to sell the vehicle, i.e., that 693 the resale market for the specific vehicle had been skewed by the defect, the court determined 694 that plaintiff s CFA diminution in value argument was too speculative. Id. at 795. Hence, 695 even though the car owner could not satisfy his burden on summary judgment, the court in 696 Thiedemann clearly acknowledged that diminution in value could qualify as an ascertainable loss 697 under the CFA. Id. at 792. 698 699 Thiedemann does not mandate dismissal of the New Jersey Plaintiffs breach of warranty claims at this juncture. Thiedmann dealt exclusively with the CFA s ascertainable loss 30 700 requirement; moreover, the Supreme Court of New Jersey certainly did not foreclose entirely the 701 use of diminution in value as a form of ascertainable loss. Apparently, the court contemplated 702 the possibility of certain proofs of diminution in value such as expert evidence directed to [a] 703 defective vehicle s loss in value or some other similarly quantifiable lost benefit-of-the-bargain. 704 Id. Perhaps in the future this Court, on a full record at a later procedural stage, will determine 705 whether the New Jersey Plaintiffs diminution-in-value claim is too speculative. Thiedemann, 706 183 N.J. 234, 238 (2005) Id. at 795. That is not an appropriate inquiry, however, at this stage on 707 a motion to dismiss. 708 For the reasons discussed above, Ford has not demonstrated that the New Jersey 709 Plaintiffs breach of warranty claims should be dismissed under New Jersey law for failure to 710 allege actual injury, and this Court is aware of no New Jersey precedent that suggests dismissal.9 711 Accordingly, Ford s motion to dismiss New Jersey Plaintiffs breach of warranty claims for 712 failure to plead actual injury will be denied. 713 To summarize, after an exhaustive review of caselaw from California and New Jersey, 714 this Court is satisfied that the California and New Jersey Plaintiffs warranty claims do not 715 require dismissal for failure to plead actual injury as a matter of law. 716 E. Express and Implied Warranties: Time Bar 9 Sinclair v. Merck & Co., 195 N.J. 51 (2008), handed down on June 4, 2008, and cited by Ford in supplemental briefing, is inapposite. There, the Supreme Court of New Jersey dismissed a Products Liability Act ( PLA ) claim for failure to allege a physical injury as required by the statute. Id. at 64. Here, Plaintiffs do not pursue a PLA claim, in part because, by design, the PLA except[s] actions for harm caused by breach of an express warranty[,] which Plaintiffs expressly allege. N.J.S.A. § 2A:58C-1b(3). The Sinclair Court also does not mandate dismissal of unjust enrichment and state consumer fraud claims where a party does not plead a PLA claim. See Sinclair, 195 N.J. at 65. 31 717 Defendant moves to dismiss the breach of express and implied warranty claims of 718 Plaintiffs Eleventh Street (Arkansas), Greater All Nation (California), Pentecostal Temple 719 (Illinois), and the New Jersey parties on the grounds that they are barred by their states relevant 720 statute of limitations.10 Again, because the Court will dismiss the breach of warranty claims 721 alleged by the Alabama, Arkansas, and Illinois Plaintiffs for failure to comply with notice 722 requirements, the Court will here only address Ford s time bar argument as to the California and 723 New Jersey Plaintiffs. 724 A district court may dismiss a complaint for failure to state a claim, based on a time-bar, 725 where the time alleged in the statement of a claim shows that the cause of action has not been 726 brought within the statute of limitations. Bieregu v. Ashcroft, 259 F. Supp. 2d 342, 355 n.11 727 (D.N.J. 2003) (quoting Bethel v. Jendoco Constr. Co., 570 F.2d 1168, 1174 (3d Cir. 1978)). The 728 Court looks to the allegations of the complaint when assessing a dismissal on statute of 729 limitations grounds: When reviewing a Rule 12(b)(6) dismissal on statute of limitations 730 grounds, we must determine whether the time alleged in the statement of a claim shows that the 731 cause of action has not been brought within the statute of limitations. Cito v. Bridgewater Twp. 732 Police Dep t, 892 F.2d 23, 25 (3d Cir. 1989) (emphasis in original). Although a statute of 733 limitations defense is not included in the enumerated defenses listed in Rule 12(b)(6), the defense 734 may be raised in a motion to dismiss where it is clear on the face of a complaint that the action is 735 not brought within the statute of limitations. See Oshiver v. Levin, Fishbein, Sedran & Berman, 736 38 F.3d 1380, 1384 n.1 (3d Cir. 1994). District courts are cautioned, however, that [i]f the bar 10 Ford does not move to dismiss Plaintiff New Bethlehem s (Alabama) warranty claims based on statute of limitations grounds. 32 737 is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the 738 complaint under Rule 12(b)(6). Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002) 739 (internal citation and quotation marks omitted). 740 Section 2-725 of the Uniform Commercial Code provides the relevant statute of 741 742 743 744 745 746 747 748 749 750 751 752 753 limitations: 754 Code. § 2725; N.J.S.A. § 12A:2-725. According to this provision, Plaintiffs claims for breach 755 of warranty accrued when tender of delivery was made for their E350 vans. Thus, at the latest, 756 the four-year statute of limitations commenced against each named Plaintiff when they actually 757 obtained their individual vehicles. This analysis, however, is substantially complicated by the 758 fact that Plaintiffs do not clearly specify the model year or purchase date of every E350 at issue 759 in the instant matter. The Court gathers the following information from paragraphs 6-12 of the 760 Complaint: 761 (1) (2) (4) This language has been adopted without change in California and New Jersey. See Cal. Com. ¢ 762 763 764 An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. .... A cause of action accrues when the breach occurs, regardless of the aggrieved party s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made[.] .... This Section does not alter the law on tolling of the statute of limitations . . . . Greater All Nation (California) purchased a used E350 van of unspecified model year on October 29, 1999; ¢ Faith Tabernacle (New Jersey) purchased a used E350 van of unspecified model year on August 30, 2001; 33 765 ¢ 766 767 Macedonia Free Will (New Jersey) purchased two new 2002 E350 vans on an unspecified date; and, ¢ Social Clubhouse (New Jersey) purchased five different E350 vans including 768 those from model years 1993, 1994, 1997, and 2002. The 1997 model was 769 purchased on August 8, 2002, and the 2002 model was purchased on April 9, 770 2003. 771 Unless otherwise specified, it is also unclear whether each E350 van was purchased in new or 772 used condition. 773 The earliest complaint filed by any individual Plaintiff in the instant matter was that of 774 Social Clubhouse, which filed its original complaint in the Superior Court of New Jersey on 775 August 11, 2003. Greater All Nation, which purchased a van on October 29, 1999, first filed suit 776 in California state court on February 17, 2005. Thus, Greater All Nation filed suit more than 4 777 years after purchasing its respective vehicles. As listed above, only some of the vans purchased 778 by New Jersey Plaintiffs appear to have been purchased less than four years prior to filing suit. 779 Plaintiffs propose several reasons why their breach of warranty claims are not barred by 780 the relevant statutes of limitations. Plaintiffs chief argument is that Ford s fraudulent 781 concealment tolled the statute of limitations. Due to Ford s false and misleading statements, 782 Plaintiffs argue that their causes of action accrued only when Ford s breach was or should have 783 been discovered. Here, Plaintiffs had no reason to discover Defendant Ford s false and 784 misleading statements because the problems with the E350 were not publicized until shortly 785 before the plaintiff filed suit. (Pls. Br. at 38.) The Official Comment to UCC § 2-725 states: 786 Subsection (4) makes it clear that this Article does not purport to alter or modify in any respect 34 787 the law on tolling of the Statute of Limitations as it now prevails in the various jurisdictions. 788 Thus, Plaintiffs warranty claims are not time-barred if they allege proper grounds for equitable 789 tolling. See Cal. Com. Code. § 2725(4); Mills, 108 Cal. App. 4th at 641 (enforcing statute of 790 limitations for breach of warranty claim subject to tolling or estoppel ); Simpson v. Widger, 311 791 N.J. Super. 379, 390 (App. Div. 1998) ( [T]he presence of fraud may toll the running of the 792 statute for breach of warranty claims); see also Foodtown v. Sigma Mktg Sys., Inc., 518 F. Supp. 793 485, 488 (D.N.J. 1980). 794 To establish fraudulent concealment for the purposes of tolling a statute of limitations, 795 the Ninth Circuit has recognized that, applying California law, a complaint must show: (1) when 796 the fraud was discovered; (2) the circumstances under which it was discovered; and (3) that the 797 plaintiff was not at fault for failing to discover it or had no actual or presumptive knowledge of 798 fact sufficient to put him on inquiry. Conerly v. Westinghouse Electric Corp., 623 F.2d 117, 799 120 (9th Cir. 1980) (citing Baker v. Beech Aircraft Corp., 114 Cal. Rptr. 171, 175 (Cal. Ct. App. 800 1974)). New Jersey law sets forth comparable elements. See Dewey v. Volkswagen AG, F. 801 Supp. 2d , Nos. 07-2249, -2361, 2008 WL 878324, at *13 (D.N.J. Apr. 1, 2008). 802 Defendant argues that Plaintiffs have failed to plead the fraudulent concealment elements 803 necessary to avoid a limitations-based dismissal. Specifically, Defendant argues that Plaintiffs 804 must allege actual reliance on statements made by Defendant. It is true that reliance is an 805 element of a claim for misrepresentation. For example, in Simpson, a case cited by Plaintiffs, 806 [a] misrepresentation amounting to actual legal fraud consists of a material representation of a 807 presently existing or past fact, made with knowledge of its falsity and with the intention that the 808 other party rely thereon, resulting in reliance by that party to his detriment. 311 N.J. Super. at 35 809 810 392 (citing Jewish Ctr. of Sussex County v. Whale, 432 A.2d 521 (N.J. 1981)) (emphasis added). Although Plaintiffs could have done so with greater precision, this Court finds that for the 811 purposes of withstanding a motion to dismiss, Plaintiffs have sufficiently pled reliance on 812 Defendant s alleged misrepresentation and omissions. Notably, in the Complaint, Plaintiffs 813 allege that Defendant s conduct constituted acts of deception, fraud, false pretenses, false 814 promises, misrepresentation and/or a knowing concealment, suppression, or omission of material 815 facts with the intent that Plaintiffs . . . would rely upon such concealment, suppression, or 816 omission in connection with the sale, marketing, advertisement and subsequently performance of 817 the E350 van. (Compl. ¶ 93.) (emphasis added). In addition, Plaintiffs assert that Ford s 818 conduct ha[d] the capacity to, and did, deceive consumers into believing that they were 819 purchasing a vehicle that could be used safely, legally and practically to accommodate and 820 transport 15 passengers. (Id.) 821 The Court finds that the California and New Jersey Plaintiffs allege a claim for fraudulent 822 concealment in the context of tolling the statute of limitations. Although Ford proffers that 823 claims for breach of warranty accrue on the date of delivery rather than on the date of discovery, 824 it fails to articulate why the principles of equitable tolling premised on fraudulent concealment 825 are not available to Plaintiffs as a matter of law. Assuming the truth of Plaintiffs allegations, 826 and drawing inferences in a light most favorable to them, Plaintiffs sufficiently contend that they 827 discovered Ford s alleged fraudulent concealment between the years 2002 and 2005, under 828 circumstances owing to the revelation of the alleged defects by the media and other public 829 reports. For instance, Plaintiffs allege that the television program Sixty Minutes II publicized 830 the concerns regarding the vans safety on September 9, 2002, and that a former Ford test driver 36 831 testified to the vans defects in January 2003. (Compl. ¶ 23.) Furthermore, Plaintiffs allege that 832 they are not at fault for failing to discover the alleged defects earlier because Ford acted 833 wrongfully by issuing repeated assurances of the vans safety despite Ford s alleged knowledge 834 of the falsity of their warranty. (Id. ¶¶ 2, 22-23, 31, 36-37, 48-52, 54.) Thus, looking first at 835 Greater All Nation, its 2005 filing does not run afoul of the four-year statute of limitations 836 because Plaintiffs allegedly discovered the breach within four years prior to 2005. Similarly, the 837 earliest filing by a New Jersey Plaintiff was in 2003, also well within four years of Plaintiffs 838 supposed discovery of Defendant s alleged concealment. 839 In sum, reading Plaintiffs Complaint with latitude, the California and New Jersey 840 Plaintiffs warranty claims are not barred by the relevant statutes of limitations and exceptions 841 thereto because the bar is not apparent on the face of the [C]omplaint. Robinson, 313 F.3d at 842 135 (internal citation and quotation marks omitted). Ford s motion to dismiss the California and 843 New Jersey Plaintiffs warranty claims on statute of limitations grounds will be denied. 844 F. Implied Warranty 845 In the second cause of action of their Complaint, Plaintiffs allege breach of implied 846 warranty under UCC § 2-314, as codified by each of the states at issue. Because the Court has 847 already dismissed the warranty claims brought by Plaintiffs New Bethlehem (Alabama), Eleventh 848 Street (Arkansas), and Pentecostal Temple (Illinois) for failure to comply with notice 849 requirements, the Court examines only the California and New Jersey Plaintiffs Second Cause 850 of Action on the merits. 851 852 According to Plaintiffs: 83. . . . Ford impliedly warranted that the E350 vans were 37 853 854 855 856 857 858 859 860 861 862 863 864 865 866 merchantable and w[ere] fit for the ordinary purposes for which a 15-passenger van is used. 84. 86. The E350 vans were totally unfit to accommodate and safely transport 15 passengers, and accordingly, Ford breached its implied warranty of merchantability on [sic] violation of UCC § 2-314. .... Plaintiffs and members of the Class have been damaged as a result of the conduct complained of herein, and the conduct continues and the harm or risks of harm is ongoing. (Compl. ¶¶ 83-84, 86.) Defendant argues that Plaintiffs claims for breach of the implied warranty of 867 merchantability should be dismissed for several reasons in addition to those discussed previously, 868 including: failure to allege the E350 vans were not merchantable at the time of sale; 869 enforceability of the durational limitations of Ford s implied warranty, and lack of privity. 870 (Def. s Br. at 28-29.) For the following reasons, Defendant s motion to dismiss the California 871 and New Jersey Plaintiffs implied warranty claims will denied. 872 873 1. Implied Warranty: Failure to Allege Lack of Merchantability Section 2-314 of the Uniform Commercial Code has been adopted by California and New 874 Jersey. Cal. Com. Code § 2314; N.J.S.A. § 12A:2-314. As both parties acknowledge, to state a 875 claim for breach of the implied warranty of merchantability under § 2-314 of the UCC, a plaintiff 876 must allege (1) that a merchant sold goods, (2) which were not merchantable at the time of 877 sale, (3) injury and damages to the plaintiff or its property, (4) which were was caused 878 proximately and in fact by the defective nature of the goods, and (5) notice to the seller of injury. 879 See 1 James J. White & Robert S. Summers, Uniform Commercial Code § 9-7, at 510-11 (4th ed. 880 1995) (footnote omitted). 38 881 Pursuant to the implied warranty of merchantability, a merchant warrants that goods sold 882 are fit for the ordinary purposes for which the goods are used. See, e.g., N.J.S.A. § 12A:2-314. 883 Merchantability does not mean that the goods are perfect or that they are exactly as the merchant 884 described them to be, but only that they are reasonably fit for the purpose intended. 885 Jakubowski v. Minn. Mining & Mfg. Co., 199 A.2d 826, 831 (N.J. 1964). The implied warranty 886 of merchantability need not be specifically mentioned in a contract; instead, it arises by operation 887 of law. See, e.g., N.J.S.A. § 12A:2-314. 888 Ford argues that Plaintiffs implied warranty of merchantability claims should be 889 dismissed for failure to allege that their vehicles were not merchantable at the time of sale. 890 (Def. s Br. at 30.) Plaintiffs, however, alleged in the second cause of action in their Complaint 891 that due to a design defect, the E350 vans were totally unfit to accommodate and safely 892 transport 15 passengers and, accordingly, Ford breached its implied warranty of merchantability 893 in violation of UCC § 2-314. (Compl. ¶ 84 (emphasis added).) Based upon the aforementioned 894 language of the Complaint, this Court finds that Plaintiffs have sufficiently alleged a breach of 895 the implied warranty of merchantability. Specifically, Plaintiffs assert that at the time of the sale, 896 their E350 vans they were totally unfit, i.e., not reasonably fit for their intended purpose of 897 safely transporting 15 passengers, and, therefore, not merchantable. Hence, this requirement has 898 been sufficiently pled. 899 900 901 2. Implied Warranty: Durational Limitations Ford argues that by virtue of the limited written warranties that come with each E350 van, it has limited its liability for breach of the implied warranty of merchantability to vehicle 39 902 malfunctions that occur during the warranty coverage period. (Def. s Br. at 31.) Section 2-316 903 of the UCC provides that parties may limit or exclude entirely the warranty of merchantability 904 that is otherwise implied in a contract for a sale of goods.11 905 In the Second Cause of Action of the Complaint, Plaintiffs allege that [a]ny express 906 limitation or negation of Ford s implied warranties that E350 vans were fit to accommodate and 907 safely transport 15 passengers, when such was not the case, would be unreasonable and 908 unconscionable and, accordingly, is unenforceable pursuant to UCC § 2-316. (Compl. ¶ 85.) 909 Pursuant to § 2-302(a) of the UCC, this Court may strike a clause of a contract [i]f the court as a 910 matter of law finds the contract or any clause of the contract to have been unconscionable at the 911 time it was made[.] See Cal. Com. Code § 2302; N.J.S.A. § 12A:2-302. Further, § 2-302(b) 912 provides that [w]hen it is claimed or appears to the court that the contract or any clause thereof 913 may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence 914 as to its commercial setting, purpose and effect to aid the court in making the determination. 915 See id. 916 As noted above, Plaintiffs alleged that the durational limitations on the implied warranty 11 The following language has been codified by California and New Jersey law: (2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that There are no warranties which extend beyond the description on the face hereof. See Cal. Com. Code § 2316; N.J.S.A. § 12A:2-316. 40 917 of merchantability that accompanied Plaintiffs E350s are unreasonable and unconscionable 918 and, accordingly, [are] unenforceable. Based on UCC § 2-302(b), this Court cannot make this 919 determination at the motion to dismiss stage. See In re Ford Motor Co. Ignition Switch Products 920 Liability Litig., Nos. MDL No. 1112, Civ. A. 96-3125, 96-1814, 1999 WL 33495352, at *12 921 (D.N.J. May 14, 1999) ( [The court is] unable at this juncture to determine, as a matter of law, 922 whether or not Ford s durational limitation of the implied warranty of merchantability that 923 accompanied plaintiff s Ford vehicles at the time of their original retail sale was 924 unconscionable. ) (vacated in part on other grounds by July 27, 1999 order). Accordingly, 925 Ford s motion to dismiss on this ground will be denied, and the California and New Jersey 926 Plaintiffs implied warranty claim shall remain at issue. 927 G. Unjust Enrichment 928 In the Third Cause of Action of their Complaint, Plaintiffs allege unjust enrichment on 929 the part of Ford. Generally, to claim unjust enrichment, a plaintiff must allege that (1) at 930 plaintiff s expense (2) defendant received benefit (3) under circumstances that would make it 931 unjust for defendant to retain benefit without paying for it. In re K-Dur Antitrust Litig., 338 F. 932 Supp. 2d 517, 544 (D.N.J. 2004). Although there may exist slight variations in various state 933 claims for unjust enrichment, any differences are not material to the instant motion to dismiss on 934 the grounds proffered by Ford. See In re Terazosin Hydochloride, 220 F.R.D. 672, 697 n.40 935 (S.D. Fla. 2004) ( The standards for evaluating each of the various states classes unjust 936 enrichment claims are virtually identical. Courts have recognized that state claims of unjust 937 enrichment are universally recognized causes of action that are materially the same throughout 938 the United States. ) (citation and quotation marks omitted). 41 939 Essentially, Plaintiffs allege that they purchased a defective product that was marketed 940 and sold by Ford or its agents for the price of a non-defective product and that, as a consequence, 941 Ford received a benefit from the sales at Plaintiffs expense. While Plaintiffs do not explicitly 942 allege the presumed difference in value between a defective and non-defective van, Plaintiffs do 943 contend that a defective van s value is greatly reduced from the value of a non-defective van. 944 (Compl. ¶ 88.) Plaintiffs also allege that Ford obtained additional benefits in the form of 945 revenues from repairs to E350 vans that failed after the expiration of the 90-day Limited 946 Warranty. As a result Ford has been unjustly enriched, having retained the benefits of its sales 947 of defective E350 vans and payment for repair services. (Compl. ¶ 90.) Based on these 948 statements, Plaintiffs sufficiently allege a claim for unjust enrichment. 949 Ford argues that Plaintiffs unjust enrichment claims must be dismissed because Plaintiffs 950 have not alleged any cognizable injury. However, Ford cites no case dismissing an unjust 951 enrichment claim for failure to plead a cognizable injury. Thus, this Court does not find that 952 Plaintiffs unjust enrichment actions merit dismissal for failure to plead injury. 953 Next, Ford asserts that unjust enrichment is not a cause of action in California, and thus 954 Greater All Nation s claim for unjust enrichment should be dismissed. (Def. s Reply Br. at 25.) 955 In Nordberg v. Trilegiant Corp., 445 F. Supp. 2d 1082, 1100 (N.D. Cal. 2006), a district court 956 observed that uncertainty exists as to whether a court applying California law may recognize a 957 claim for unjust enrichment as a separate cause of action. The Nordberg court concluded, 958 however, that causes of action labeled as unjust enrichment may nonetheless be understood as 959 claims for restitution. Id. ( Although their Eighth cause of action is entitled unjust enrichment 960 it is clear that plaintiffs are seeking restitution. ). Thus, although Plaintiffs cause of action as it 42 961 relates to Greater All Nation and members of the putative Class from California may have 962 mischaracterized the legal theory underlying this claim, Ford s argument for dismissal is 963 unavailing. 964 Ford also argues that unjust enrichment is based on quasi-contract, and that such 965 equitable proceedings are barred when there are adequate remedies at law. Although Plaintiffs 966 allege breach of express and implied warranty in the first and second causes of action of the 967 Complaint, the Court, at this juncture, cannot resolve these legal issues. See In re K-Dur 968 Antitrust Litig., 338 F. Supp. 2d 517, 544 (D.N.J. 2004) ( Plaintiffs, however, are clearly 969 permitted to plead alternative theories of recovery. Consequently, it would be premature at this 970 stage of the proceedings to dismiss the . . . unjust enrichment claims on this basis. ). Therefore, 971 the presence of these potential remedies at law does not mandate dismissal of Plaintiffs unjust 972 enrichment claims. See, e.g., In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 155 F. 973 Supp. 2d 1069, 1104 (S.D. Ind. 2001), rev d on other grounds, 288 F.3d 1012 (7th Cir. 2002). 974 Accordingly, Ford s motion to dismiss with regard to Plaintiffs unjust enrichment claim 975 will be denied.12 976 H. 977 In their Fourth Cause of Action, Plaintiffs allege that Ford violated state consumer fraud State Consumer Fraud 978 statutes. State consumer-protection laws vary considerably, and courts must respect these 979 differences rather than apply one state s law to sales in other states with different rules. In re 12 According to Ford, Plaintiffs unjust enrichment claims are also time barred. Although Plaintiffs failed to address this issue in their opposition brief, Ford also did not articulate why principles of fraudulent concealment or equitable tolling, as methods of tolling the relevant statutes of limitations, are not available to Plaintiffs in connection with their unjust enrichment claims. 43 980 Bridgestone/Firestone, Inc., 288 F.3d 1012, 1018 (7th Cir. 2002) (citing BMW of N. Am., Inc. v. 981 Gore, 517 U.S. 559, 568-73 (1996)). Thus, this Court will examine Plaintiffs fourth claim 982 separately under the law of each relevant jurisdiction: Alabama, Arkansas, California, Illinois, 983 and New Jersey. 984 1. 985 Alabama The Alabama Deceptive Trade Practices Act ( Alabama DTPA ) provides a cause of 986 action for a consumer, Ala. Code § 8-19-10, who is defined as any natural person who buys 987 goods or services for personal, family or household use. Ala. Code § 8-19-3(2). Only 988 consumers have private rights of action under this section. Deerman v. Fed. Home Loan 989 Mortg. Corp., 955 F. Supp. 1393, 1399 (N.D. Ala. 1997). Plainly, Plaintiffs are not natural 990 persons; nor have they purchased the E350 vans for personal, family or household use. Plaintiffs 991 offer no argument or authority to the contrary, and this Court finds as a matter of law that 992 Alabama Plaintiff New Bethlehem lacks standing to bring this claim. See EBSCO Indus., Inc. v. 993 LMN Enter., Inc., 89 F. Supp. 2d 1248, 1266 (N.D. Ala. 2000) (dismissing Alabama DTPA claim 994 for lack of standing); see also In re Bextra and Celebrex Mktg. Sales Practices & Prod. Liab. 995 Litig., 495 F. Supp. 2d 1027, 1036 (N.D. Cal. 2007) ( It is undisputed that the [plaintiffs] are not 996 natural persons, and thus they do not have a private right of action [under the Alabama 997 DTPA]. ) (quoting Ala. Code § 8-19-3(2)). Thus, New Bethlehem s Alabama DTPA claim will 998 be dismissed. 999 1000 1001 2. Arkansas Eleventh Street fails to state a cognizable claim under the Arkansas Deceptive Trade Practices Act ( Arkansas DTPA ). Under that statute, the responsibility for civil enforcement 44 1002 rests largely with the Attorney General. See Ark. Code Ann. § 4-88-113(a)-(e). A private cause 1003 of action is limited to instances where a person has suffered actual damage or injury as a result 1004 of an offense or violation as defined in this chapter. Ark. Code Ann. § 4-88-113(f). 1005 Defendant cites Wallis v. Ford Motor Co., 208 S.W.3d 153, 159 (Ark. 2005) for the 1006 proposition that Plaintiffs fail to plead actionable injury to sustain a claim under the Arkansas 1007 DTPA. 208 S.W.3d at 159. In that case, the Supreme Court of Arkansas held that an DTPA 1008 claim could not be maintained where an SUV owner s only alleged injury was a diminution in 1009 value of the vehicle. Plaintiff had sought to certify a class consisting of Ford Explorer owners 1010 and lessees based upon Ford s alleged concealment of a design defect that caused Explorers to 1011 roll over under normal operations. Id. at 154. Like Plaintiffs in the instant matter, Wallis [did] 1012 not allege any personal injury or property damage caused by the design defect, nor [did] he allege 1013 that the Explorer malfunctioned in any way. Id. Wallis s entire damages claim instead rested 1014 on his assertion that his Explorer s value had been substantially diminished as a result of the 1015 design defect. Id. at 155. Yet the Court noted that actual damage or injury is sustained when 1016 the product has actually malfunctioned or the defect has manifested itself. Id. at 161. 1017 Accordingly, the Court held that Wallis did not state a cognizable cause of action under []DTPA 1018 where the only injury complained of is a diminution in value of the vehicle. Id. 1019 Wallis is squarely on point here. Plaintiffs allegation of damages for diminution of value 1020 is insufficient as a matter of law under the Arkansas DTPA. In addition, even though Plaintiffs 1021 also cite loss of use damages, Wallis elaborated that actual damage or injury is sustained when 1022 the product has actually malfunctioned or the defect has manifested itself. Id. at 161. Here, 1023 Plaintiffs do not allege damages resulting from any malfunction or manifest defect. In other 45 1024 words, Plaintiffs do not adequately allege actual damages as required for an Arkansas DPTA 1025 claim under Wallis. Because Arkansas law bars private rights of action under the Arkansas 1026 DPTA where no actual damages are alleged, this Court must dismiss Eleventh Street s statutory 1027 consumer fraud claim. 1028 1029 3. California Plaintiff Greater All Nation asserts claims under three California statutes: the California 1030 Unfair Competition Law ( California UCL ), Cal. Bus. & Prof. Code § 17200, et seq.; the 1031 California False Advertising Law ( California FAL ), Cal. Bus. & Prof. Code § 17500, et seq.; 1032 and the California Consumers Legal Remedies Act ( California CLRA ), Cal. Civ. Code § 1750, 1033 et seq. For the following reasons, the Court will dismiss Plaintiffs claim under the California 1034 CLRA, but permit Plaintiffs claim under the California UCL and FAL to proceed. 1035 1036 a. The California UCL The California UCL permits civil recovery for any unlawful, unfair or fraudulent 1037 business act or practice and unfair, deceptive, untrue or misleading advertising. Cal. Bus. & 1038 Prof. Code, § 17200. The UCL s purpose is to protect both consumers and competitors from 1039 unlawful, unfair or fraudulent business practices by promoting fair competition in commercial 1040 markets for goods and services. Kasky v. Nike, Inc., 27 Cal. 4th 939, 949 (2002). Until the 1041 UCL was amended in 2004, the statute authorized any person acting for the interests of itself, 1042 its members or the general public . . . to file a civil action for relief. Californians for Disability 1043 Rights v. Mervyn s, LLC, 39 Cal. 4th 223, 228 (2006) (quoting former § 17204). As Plaintiffs 1044 argue, standing to bring such an action did not depend on a showing of injury or damage. See 1045 Comm. on Children s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197, 211 (1983) 46 1046 ( Allegations of actual deception, reasonable reliance, and damage are unnecessary. ), 1047 superseded by statute, Cal. Bus. & Prof. Code § 17204 (2004), as recognized in Mervyn s, 39 1048 Cal. 4th at 228. 1049 Now amended, however, the California UCL defines who may sue to enforce the statute: 1050 any association, or . . . person who has suffered injury in fact and has lost money or property as 1051 a result of the unfair competition. Cal. Bus. & Prof. Code § 17204 (emphasis added); see also 1052 Standfacts Credit Servs. v. Experian Info. Solutions, Inc., Nos. 04-0358, -1055, 2006 WL 1053 4941834, at *1-2 (C.D. Cal. Oct. 12, 2006) ( [S]ince [the plaintiff] has failed to allege that it . . . 1054 has lost money or property, it lacks standing to bring its UCL claims. ) (internal quotation marks 1055 omitted); Hall v. Time Inc., 158 Cal. App. 4th 847, 852 (Cal. Ct. App. 2008) ( Proposition 64, 1056 approved by the voters at the November 2, 2004, General Election, changed the standing 1057 requirements for a UCL claim to create a two-prong test: A private person now has standing to 1058 assert a UCL claim only if he or she (1) has suffered injury in fact, and (2) has lost money or 1059 property as a result of such unfair competition. ). 1060 This Court must determine whether Plaintiffs allege injury in fact and money or property 1061 damages within the meaning of amended § 17204. The Court finds that they do. Since § 17204 1062 was amended, few California courts have had occasion to directly address what constitutes injury 1063 in fact and loss of money or property as a result of unfair competition for purposes of 1064 determining standing. Among those courts that have interpreted the new standing requirements, 1065 § 17204 has been interpreted to permit UCL suits when a plaintiff has: (1) expended or lost 1066 money (or property), see, e.g., Monarch Plumbing Co. v. Ranger Ins. Co., No. 06-1357, 2006 1067 WL 2734391, at *6 (E.D. Cal. Sept. 25, 2006); or (2) been denied money to which it has a right, 47 1068 see, e.g., Starr-Gordon v. Mass. Mut. Life Ins. Co., No. 03-68, 2006 WL 3218778, at *6-7 (E.D. 1069 Cal. Nov. 7, 2006) ( [D]isgorgement [under the UCL] is permissible only to the extent that it 1070 constitutes restitution ) (internal quotation omitted); see also Hall, 158 Cal. App. 4th at 854-55 1071 (collecting cases). 1072 Admittedly, none of the allegations in these cases resemble those before the Court here, 1073 where Plaintiffs allege diminution in value and loss of use damages. However, the California 1074 Court of Appeal decision in Hall v. Time, Inc. offers instructive guidance. In Hall, a customer 1075 agreed to try a book from a publisher for a free trial period and later paid for it via a collection 1076 agency after the free trial period expired. 158 Cal. App. 4th at 850. The customer subsequently 1077 brought a California UCL action, alleging that the publisher used fraudulent tactics to trick 1078 customers into believing that they were not obligated to pay for the book. Id. at 850-52. The 1079 court held that there was no injury in fact, in part because the customer did not allege that the 1080 book was unsatisfactory, or [that] the book was worth less than what he paid for it. Id. at 855. 1081 In reaching this conclusion, the court also noted that a common dictionary definition for [a] loss 1082 is [a]n undesirable outcome of a risk; the disappearance or diminution of value, usu[ally] in an 1083 unexpected or relatively unpredictable way. Id. (quoting Black s Law Dict. 963). 1084 Hall is readily distinguishable from this case because here, Plaintiffs allege injury in fact 1085 and money or property damages based on their contentions, as enumerated earlier, that the E350 1086 vans have diminished in monetary value because they are incapable of safely transporting 15 1087 passengers. In other words, the E350 vans are unsatisfactory or worth less than what 1088 Plaintiffs paid for them. Furthermore, liberally construing Plaintiffs allegations, Plaintiffs 1089 sufficiently allege that Ford s fraudulent behavior caused Plaintiffs pecuniary damages. (Compl. 48 1090 ¶ 62 ( As a result of . . . the actual risks posed by operation of the defective E350 vans, Plaintiff 1091 and Class members have sustained economic losses including, but not limited to, a significant 1092 diminution in the value of their vans. ) (emphasis added); id. ¶ 93 ( Ford s [fraudulent] conduct . 1093 . . did[] deceive consumers into believing that they were purchasing a vehicle that could be used 1094 safely, legally, and practically to accommodate and transport 15 passengers. ).) Given that 1095 Plaintiffs allege that the E350 vans are unsatisfactory and have diminished in value, this Court 1096 cannot find, as a matter of law, that Plaintiffs fail to plead a proper UCL claim. Thus, the Court 1097 will deny Ford s motion to dismiss Plaintiffs California UCL claim.13 1098 1099 b. The California FAL In order to state a claim under the California FAL, Plaintiffs must allege that statements 1100 or other representations appearing on Defendant s product labels are likely to deceive a 1101 reasonable consumer. Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995). If an alleged 1102 misrepresentation would not deceive a reasonable person or amounts to mere puffery, then this 1103 claim may be dismissed, as a matter of law, on a motion to dismiss. Haskell v. Time, Inc., 857 F. 1104 Supp. 1392, 1399 (E.D. Cal. 1994). The term likely indicates that deception must be probable, 1105 not just possible. Freeman, 68 F.3d at 289. California courts have defined the reasonable 13 Ford s argument that Plaintiffs California UCL claim is barred by the statute of limitations is unavailing. The discovery rule is inapplicable to a UCL claim, but as found earlier, Plaintiffs state a proper claim for equitable tolling based on fraudulent concealment. Stutz Motor Car of Am., Inc. v. Reebok Int l., Ltd., 909 F. Supp. 1353, 1364 (C.D. Cal. 1995); see also Suh v. Yang, 987 F. Supp. 783, 795 n.8 (N.D. Cal. 1997) ( The doctrine of equitable tolling suspends the running of the statute of limitations if the plaintiff proves that the defendant fraudulently concealed the existence of the cause of action so that the plaintiff, acting as a reasonable person, did not know of its existence. ) (internal quotation omitted). 49 1106 consumer as an ordinary member of the public who acts reasonably in the situation presented. 1107 Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 510, 512 (Cal. App. 2003). A California 1108 FAL claim must be pled with particularity, Bennett v. Suncloud, 56 Cal. App. 4th 91, 97 (Cal. Ct. 1109 App. 1997), here in accordance with Rule 9(b), see Fed. R. Civ. P. 9(b) ( [A] party must state 1110 with particularity the circumstances constituting fraud[.] ). 1111 This Court finds that Plaintiffs properly plead a cause of action under the California FAL. 1112 In addition to Plaintiffs exhaustive, particularized allegations discussed by the Court in Section 1113 II.E, supra, describing the circumstances surrounding Ford s alleged fraudulent concealment, 1114 Plaintiffs allege that Ford s conduct herein is an unfair practice that has the capacity to, and did, 1115 deceive customers into believing that they were purchasing a vehicle that could be used safely, 1116 legally and practically to accommodate and transport 15 passengers. (Compl. ¶ 93.) This Court 1117 has already found that Plaintiffs adequately allege an express warranty claim based on Ford s 1118 description of the E350 vans as a 15 passenger van. See supra Section II.B. Based on that 1119 determination, and the Court s finding that Plaintiffs sufficiently allege fraudulent concealment 1120 in the context of equitable tolling, the Court finds that Plaintiffs adequately allege that Ford s 1121 description is likely to deceive a reasonable customer into believing the E350 was capable of 1122 safely transporting 15 passengers. Accordingly, Plaintiffs California FAL claim withstands 1123 Ford s motion to dismiss. 1124 1125 c. The California CLRA Ford challenges Plaintiffs California CLRA claim on the ground that Greater All Nation 1126 lacks standing. The California CLRA applies to any contract undertaken by any person in a 1127 transaction intended to result or which results in the sale or lease of goods or services to any 50 1128 consumer. Cal. Civ. Code § 1770(a). Section 1761(d) defines consumer to mean an 1129 individual who seeks or acquires, by purchase or lease, any goods or services for personal, 1130 family, or household purposes. Cal. Civ. Code § 1761(d). Accordingly, the CLRA does not 1131 apply to commercial or government contracts, or to contracts formed by nonprofit organizations 1132 and other non-commercial groups. Ting v. AT&T, 319 F.3d 1126, 1148 (9th Cir. 2003); see also 1133 Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285, 1303 (S.D. Cal. 2003). Plaintiff Greater All 1134 Nation, a nonprofit church organization, does not fit within the CLRA s limited definition of 1135 consumer, and thus does not have standing to file suit. The Court will dismiss Plaintiffs 1136 California CLRA claim. 1137 1138 4. Illinois Ford challenges Plaintiffs claim brought under the Illinois Consumer Fraud Act ( Illinois 1139 CFA ), 815 ILCS § 505/1, et seq. To state a claim under the Illinois CFA, Plaintiffs must allege 1140 (1) a deceptive act or practice by defendant; (2) defendant s intent that plaintiff rely on the 1141 deception; and (3) that the deception occurred in the course of conduct involving trade and 1142 commerce. Siegel v. Levy Org. Dev. Co., 153 Ill.2d 534, 542 (1992); see also First Midwest 1143 Bank, N.A. v. Sparks, 289 Ill. App. 3d 252, 257 (Ill. App. Ct. 1997) ( Concealment is actionable 1144 where it is employed as a device to mislead and the concealed fact must be such that had the 1145 other party been aware of it, he would have acted differently. ). Plaintiffs need not allege 1146 reliance, see Harkala v. Wildwood Realty, Inc., 200 Ill. App. 3d 447, 453 (Ill. App. Ct. 1990), 1147 though a proper claim must allege that the consumer fraud proximately caused Plaintiffs injury, 1148 see Wheeler v. Sunbelt Tool Co., 181 Ill. App. 3d 1088, 1109 (App. Ct. 1989). Plaintiffs Illinois 1149 CFA claim must be pled with particularity. Connick, 675 N.E.2d at 593. 51 1150 The Court finds that Plaintiffs sufficiently state a claim under the Illinois CFA. As 1151 previously detailed in this Opinion, Plaintiffs allege that Ford deceived Plaintiffs by withholding 1152 information concerning the safety of E350 vans, that Ford intended that Plaintiffs rely, and that 1153 this deception occurred during the course of commerce.14 (Compl. ¶¶ 2, 14-17, 48-54, 93, 98.) 1154 Ford argues that a claim sounding in fraudulent concealment requires an allegation of a fiduciary 1155 duty, see Lionel Trains, Inc. v. Albano, 831 F. Supp. 647, 650 (N.D. Ill. 1993), but Ford has not 1156 directed the court to any persuasive authority holding that these requirements of common law 1157 fraud are incorporated into a claim of statutory fraud under Illinois Consumer Fraud Act, Celex 1158 Group, Inc. v. Executive Gallery, Inc., 877 F. Supp. 1114, 1129 (N.D. Ill. 1995). The Court finds 1159 this requirement inapplicable in this context. See id. at 1130 (concluding that the common law 1160 requirement of a duty to disclose is not required in order for an omission or concealment to be 1161 actionable under the Consumer Fraud Act ); see also White v. DaimlerChrysler Corp., 368 Ill. 1162 App. 3d 278, 285 (Ill. App. Ct. 2006) ( Defendant . . . reads into the [Illinois CFA] a duty 1163 requirement that does not exist. ); Miller v. William Chevrolet/GEO, Inc., 326 Ill. App. 3d 642, 1164 658 (Ill. App. Ct. 2001) ( [C]ourts have recognized that the common law duty requirements do 1165 not appear in the Act s broad language. ). That the Illinois CFA has less restrictive elements 1166 than common law fraud is no accident, given its broader scope and remedial legislative purpose. 1167 See Eshaghi v. Hanley Dawson Cadillac Co., Inc., 214 Ill. App. 3d 995, 1001 (Ill. App. Ct. 1991) 1168 ( In interpreting the Consumer Fraud Act, courts have declined to use the restrictive elements of 1169 common law fraud and have been willing to give effect to the legislative goals behind enactment 14 Ford s arguments that the statute of limitations bars Plaintiffs claim, and that Plaintiffs failed to plead with particularity, lack merit. See supra Sections II.H.2; II.H.3.a. 52 1170 of this genre of consumer protection legislation. ). Without clear state authority requiring 1171 Plaintiffs to plead a fiduciary relationship with Ford under the Illinois CFA, the Court here 1172 declines to legislate an additional element from the bench. 1173 Moreover, Illinois courts have regularly found actionable CFA claims in like 1174 circumstances to this case, where a plaintiff brings suit against an automobile manufacturer for 1175 allegedly deceiving the consumer about safety risks. See, e.g., Lipinski v. Martin J. Kelly 1176 Oldsmobile, Inc., 325 Ill. App. 3d 1139, 1143 (Ill. App. Ct. 2001) (finding proper claim under 1177 Illinois CFA where plaintiff alleged that defendant knowingly concealed a defect in vehicle prior 1178 to sale, thus constituting an actionable omission); Perona v. Volkswagen of Am., Inc., 292 Ill. 1179 App. 3d 59, 67-69 (Ill. App. Ct. 1997) (holding that plaintiffs properly stated a claim under the 1180 Illinois CFA in class action brought against car manufacturer for concealing safety risks); 1181 Connick, 675 N.E.2d at 594 ( Plaintiffs alleged that Suzuki was aware of the Samurai s safety 1182 problems, including its tendency to roll over and its inadequate protection for passengers. . . . 1183 Plaintiffs further alleged that Suzuki failed to disclose these defects. ); Totz v. Cont l Du Page 1184 Acura, 236 Ill. App. 3d 891, 903 (Ill. App. Ct. 1992) (holding that failure of a used car dealer to 1185 disclose a known history of vehicle damage was actionable under the Illinois CFA, regardless of 1186 the existence of a common law duty to disclose). The Court will deny Ford s motion to dismiss 1187 Plaintiffs Illinois CFA claim. 1188 5. New Jersey 1189 The New Jersey Consumer Fraud Act ( New Jersey CFA ) declares it to be an unlawful 1190 practice for any person to use an unconscionable commercial practice, deception, fraud, false 1191 pretense, false promise, misrepresentation, or the knowing concealment, suppression, or 53 1192 omission of any material fact . . . in connection with the sale or advertisement of any 1193 merchandise. N.J.S.A. § 56:8-2. Thus, to state a claim under the CFA, a plaintiff must allege 1194 each of three elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss on the 1195 part of the plaintiff; and (3) a causal relationship between the defendants unlawful conduct and 1196 the plaintiff s ascertainable loss. N.J. Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 1197 8, 12 (App. Div. 2003); see also Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473 1198 (1988). Under the CFA, person is defined broadly to include any natural person, partnership, 1199 corporation or company. N.J.S.A. § 56:8-1(d). Dismissal for failure to state a claim, in the 1200 [New Jersey] CFA context, is . . . appropriately approached with hesitation. Schering-Plough 1201 Corp., 367 N.J. Super. at 13 (citing Seidenberg v. Summit Bank, 348 N.J. Super. 243, 249-50 1202 (App. Div. 2002)). 1203 Ford does not dispute that Plaintiffs properly allege the first element, unlawful conduct 1204 under the New Jersey CFA, and this Court finds that Plaintiffs allegations satisfy this prong. As 1205 the Court has already found, Plaintiffs allege fraudulent concealment of the E350 safety risks 1206 with regard to equitable tolling. For similar reasons, Plaintiffs properly allege fraudulent 1207 behavior in the context of the New Jersey CFA. However, again citing Thiedemann, 872 A.2d 1208 794, Ford contends that Plaintiffs fail to allege an ascertainable loss as mandated by the statute. 1209 For the reasons expressed earlier, see supra Section II.D.2, the Court finds this argument 1210 unavailing at this juncture. See Perkins v. DaimlerChrysler Corp., 383 N.J. Super. 99, 110-11 1211 (App. Div. 2006) ( [U]nlike Thiedemann, where the court reviewed a summary judgment, we 1212 cannot affirm the dismissal of the complaint based upon plaintiff s failure to provide evidence of 1213 a diminution in value. ); Lamont v. OPTA Corp., No. 2226-05, 2006 WL 1669019, at *7 (N.J. 54 1214 App. Div. June 16, 2006) ( There is nothing in Thiedmann that requires the pleading of an 1215 ascertainable loss element of a consumer Fraud Act cause of action with any special 1216 specificity. ). 1217 Ford also challenges Plaintiffs New Jersey CFA claim for lack of a causal nexus between 1218 the violation and the resulting loss. Specifically, Ford argues that Plaintiffs pursue a fraud on 1219 the market theory of recovery to prove causation. (Ford Br. at 66-67.) Under that theory, 1220 plaintiffs who purchased securities are permitted to demonstrate that they were damaged simply 1221 because defendant engaged in behavior otherwise prohibited and there was a change in price. 1222 Int l Union of Operating Eng rs Local No. 68 Welfare Fund v. Merck & Co., 192 N.J. 372, 392 1223 (2007). Yet, New Jersey courts have rejected the fraud on the market theory as being 1224 inappropriate in any context other than federal securities fraud litigation. Id.; see also Kaufman 1225 v. i-Stat Corp., 165 N.J. 94, 118 (2000). Thus, to the extent Plaintiffs indeed allege their New 1226 Jersey CFA claim under a fraud on the market theory, this theory cannot survive. See Schering- 1227 Plough, 367 N.J. Super. at 16 (determining, on motion to dismiss, that fraud on the market theory 1228 has no place as a part of the proofs required of plaintiffs in the CFA context ). 1229 Here, however, Plaintiffs do not expressly, nor impliedly, plead such a theory. Rather, 1230 the Court finds that Plaintiffs adequately allege causal nexus under circumstances distinguishable 1231 from fraud on the market. Plaintiffs allege that Ford s conduct herein is an unfair practice that 1232 has the capacity to, and did, deceive customers into believing that they were purchasing a vehicle 1233 that could be used safely, legally and practically to accommodate and transport 15 passengers. 1234 (Compl. ¶ 93.) Construing Plaintiffs allegations in a light most favorable to them, the 1235 Complaint charges that Ford s alleged violations led to Plaintiffs damages by virtue of Ford s 55 1236 misrepresentations and omissions directed at Plaintiffs as direct customers. These facts differ 1237 from fraud on the market, because under that theory, a plaintiff must allege only that the price 1238 charged for the product at issue was higher than it should have been as a result of defendant s 1239 fraudulent marketing campaign[.] Merck, 192 N.J. at 392. In other words, a party pursues fraud 1240 on the market, or price inflation theory, when it alleges that the fact of advertising the 1241 products caused the prices to rise both for the ones that are effective and for these, allegedly 1242 ineffective products as well. Schering-Plough, 367 N.J. Super. at 15, 16. Yet here, Plaintiffs 1243 allege that Ford s fraudulent acts and omissions caused Plaintiffs damages in the form of 1244 diminution in value and loss of use. They do not claim that the price charged for the allegedly 1245 unsafe vehicles was inflated by a broad advertising campaign. Thus, unlike the plaintiffs in 1246 Merck and Schering-Plough, Plaintiffs here do not pursue the price inflation theory, nor 1247 otherwise allege circumstances associated with a change in price on the market. Merck, 192 1248 N.J. at 392. Given the hesitation urged by New Jersey courts in approaching motions to 1249 dismiss New Jersey CFA claims, and generally construing Plaintiffs allegations with liberality, 1250 the Court cannot find that Plaintiffs plead fraud on the market as a matter of law. Accordingly, 1251 for the reasons discussed with regard to Plaintiffs California UCL claim, supra Section II.H.3, 1252 Plaintiffs properly plead a causal relationship between their loss and Ford s alleged unlawful 1253 conduct. 1254 Ford last argues that Plaintiffs New Jersey CFA claim is nevertheless barred by the 1255 economic loss doctrine. While the Supreme Court of New Jersey has excluded recovery in tort 1256 for purely economic losses that instead may be pursued under contract or warranty claims, see 1257 Alloway v. Gen. Marine Indus., L.P., 695 A.2d 264, 275 (N.J. 1997), Ford cites no authority 56 1258 extending this doctrine to bar recovery under the New Jersey CFA. Indeed, in Alloway, the court 1259 expressly recognized the Consumer Fraud Act, which provides generous protection to defrauded 1260 consumers[,] as an example of a statutory enactment granting consumers the right to recover 1261 economic losses. Id. at 274; see also Payne v. Fujifilm U.S.A., Inc., No. 07-385, 2007 WL 1262 4591281, at *10 (D.N.J. Dec 28, 2007) (rejecting defendant s economic loss doctrine argument 1263 and permitting New Jersey CFA and warranty claims to proceed); First Valley Leasing, Inc. v. 1264 Goushy, 795 F. Supp. 693, 699 (D.N.J. 1992) ( [T]he court believes that . . . the New Jersey 1265 Supreme Court would permit plaintiff to pursue its claims for tort [fraud and New Jersey CFA] 1266 damages against defendant alongside UCC claims); Coastal Group v. Dryvit Sys., 274 N.J. 1267 Super. 171, 180 (App. Div. 1994) ( Since this case must be remanded to the trial court to permit 1268 plaintiff to pursue its claims of fraud, misrepresentation and violation of the Consumer Fraud 1269 Act, we believe that the interests of justice will be served by also allowing plaintiff to amend its 1270 complaint to assert a claim against Dryvit under the UCC. ); Perth Amboy Iron Works v. Am. 1271 Home Assurance Co., 226 N.J. Super. 200, 226-27 (App. Div. 1988) (holding that commercial 1272 buyer of yacht could maintain Consumer Fraud Act and common-law fraud claims based on 1273 economic loss). 1274 Moreover, the UCC expressly preserves a buyer s right to maintain an action in fraud. 1275 See N.J.S.A. § 12A:1-103 ( Unless displaced by the particular provisions of this Act, . . . the law 1276 relative to . . . fraud . . . shall supplement [the UCC s] provisions. ), aff d, 118 N.J. 249 (1990); 1277 see also Delgozzo v. Kenny, 266 N.J. Super. 169, 183 (App. Div. 1993) (noting that under 1278 N.J.S.A. § 12A:1-103, the UCC does not preempt either common law fraud or CFA claims). 1279 Thus, Plaintiffs properly plead a violation of the New Jersey CFA, an ascertainable loss, and a 57 1280 causal connection. Accordingly, the Court concludes that Plaintiffs state a claim for relief under 1281 the New Jersey CFA. 1282 1283 1284 1285 1286 III. CONCLUSION AND ORDER For the foregoing reasons, Ford s motion to dismiss (Doc. No. 33) is GRANTED IN PART and DENIED IN PART. Specifically, 1. Plaintiffs First Cause of Action, breach of express warranty, is DISMISSED 1287 WITHOUT PREJUDICE as to the Alabama, Arkansas, and Illinois parties for 1288 failure to comply with notice requirements. The First Cause of Action, however, 1289 remains at issue for Plaintiffs California and New Jersey suits. 1290 2. Plaintiffs Second Cause of Action, breach of implied warranty, insofar as it is 1291 brought by the Alabama, Arkansas, and Illinois parties, is DISMISSED 1292 WITHOUT PREJUDICE for failure to comply with notice requirements. 1293 However, the Second Cause of Action remains pending as to Plaintiffs California 1294 and New Jersey suits. 1295 3. Ford s motion to dismiss Plaintiffs Third Cause of Action, sounding in unjust 1296 enrichment, is DENIED. Plaintiffs Third Cause of Action shall endure as to all 1297 parties. 1298 4. 1299 1300 1301 Plaintiff New Bethlehem s (Alabama) Fourth Cause of Action, brought under the Alabama DTPA, is DISMISSED for lack of standing. 5. Plaintiff Eleventh Street s (Arkansas) Fourth Cause of Action, brought under the Arkansas DTPA, is DISMISSED for lack of cognizable damages. 58 1302 6. Plaintiff Greater All Nation s (California) Fourth Cause of Action, insofar as it is 1303 brought under the California CLRA theory, is DISMISSED for lack of standing. 1304 However, Plaintiff Greater All Nation s Fourth Cause of Action with regards to 1305 the California UCL and California FAL, remains in contention. 1306 7. Ford s motion to dismiss Plaintiff Pentecostal Temple s (Illinois) Fourth Cause of 1307 Action, brought under the Illinois CFA, is DENIED. Pentecostal Temple s Fourth 1308 Cause of Action remains at issue. 1309 1310 1311 1312 1313 1314 1315 1316 8. Ford s motion to dismiss Plaintiffs Fourth Cause of Action, insofar as it sounds in the New Jersey CFA, is DENIED. Plaintiffs New Jersey CFA claim endures. Dated: September 2, 2008 Newark, New Jersey /s/ Harold A. Ackerman, U.S.D.J. 59

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