Environmental Protection Commission of Hillsborough County, Florida v. Mercedes-Benz USA, LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

ENVIRONMENTAL PROTECTION

COMMISSION OF HILLSBOROUGH

COUNTY, FLORIDA,

Plaintiff,

v. Case No. 8:20-cv-2238-VMC-MRM

MERCEDES-BENZ USA, LLC and

DAIMLER AKTIENGESELLSCHAFT,

Defendants.

______________________________/

ORDER

This matter is before the Court on consideration of

Defendants Daimler Aktiengesellschaft and Mercedes-Benz USA,

LLC’s (“the Mercedes Defendants’”) Motion to Dismiss

Plaintiff’s Fourth Amended Complaint (Doc. # 167), filed on

May 16, 2022. Plaintiff Environmental Protection Commission

of Hillsborough County, Florida responded on June 6, 2022.

(Doc. # 172). The Motion is granted.

I. Background

Because the Court and the parties are familiar with the

allegations and history of this case, the Court need not

outline them in great depth here. The Commission, a unit of

Hillsborough County’s government responsible for providing

and maintaining standards of atmospheric purity, initiated

this action on September 24, 2020. (Doc. # 1). On December

16, 2021, the Commission filed a third amended complaint,

seeking monetary damages and injunctive relief for violations

of the Commission’s anti-tampering ordinance, EPC Rule

Chapter 1-8, “Mobile Source.” (Doc. # 116). The Mercedes

Defendants moved to dismiss the third amended complaint.

(Doc. # 122).

On April 18, 2022, the Court granted the motion in part

but gave the Commission leave to file a fourth amended

complaint. (Doc. # 153). In the Order on the motion to

dismiss, the Court explained that the Commission could not

proceed on the “inaction theory” of tampering because

software updates that merely fail to remove the

original defeat device from Mercedes vehicles do

not plausibly violate EPC Rule Section 1-8.05(1).

These updates are not “tampering” as defined by the

rule because they do not cause the emissions

control system to be inoperable. Rather, the

original pre-sale defeat devices — on which the

Commission has not and cannot base its claims —

have rendered the emissions control system

inoperable and the later software update has no

effect on that system. Thus, Count I is dismissed

with prejudice to the extent it is based on software

updates that simply do not remove the original

defeat device.

(Id. at 14-15).

And, while explaining that the Commission could

potentially state a claim based on software updates, recalls,

and field fixes that worsened the performance of the vehicles’

emission controls systems, the Commission had not plausibly

alleged that such conduct had occurred. (Id. at 15).

The Commission filed its fourth amended complaint on May

2, 2022. (Doc. # 156). Count I seeks monetary damages for

violations of EPC Rule Chapter 1-8. (Id. at 44-45). Count II

seeks injunctive relief preventing the Mercedes Defendants

from continuing to violate EPC Rule Chapter 1-8 and directing

them to repair the Affected Vehicles. (Id. at 45). According

to the fourth amended complaint, the Mercedes Defendants

engaged in a conspiracy to create and install “defeat device”

software in new Mercedes diesel vehicles to reduce the

effectiveness of the vehicles’ emission control systems when

not in an emissions-testing environment. (Id. at 1-4).

As with the previous complaint, the Commission’s claims

are not based on the creation of these defeat devices and

their installation in new Mercedes vehicles pre-sale. Rather,

the Commission “is only asserting claims relating to post-

sale activities of the Defendants.” (Id. at 4). Specifically,

the Commission bases its claim in part on “every post-sale

update that does not remove the workaround” — the defeat

device — from the relevant Mercedes vehicles. (Id. at 29).

The Commission has not amended this portion of its complaint

between the third and fourth iterations. Compare (Doc. # 116

at 29) with (Doc. # 156 at 29).

The Commission also alleges that the Mercedes Defendants

violated EPC Rule Chapter 1-8 by “tampering post-sale with

the emission control systems of Affected Vehicles registered

in Hillsborough County, through a program of newly created

field fixes and recall campaigns.” (Doc. # 156 at 44–45).

The Commission has added some additional detail to its

fourth amended complaint. Specifically, the Commission has

inserted the phrase “through field fixes and/or recall

campaigns” throughout the fourth amended complaint. (Id. at

¶¶ 60, 61, 82, 83, 89, 90, 92, 95, 98, and 105). The Commission

also points to separate litigation against the Mercedes

Defendants regarding the same defeat devices filed by the

California Air Resources Board (CARB), as well as previous

litigation against Volkswagen, to support its contention that

the Mercedes Defendants engaged in post-sale tampering. (Id.

at 38–39).

The Commission adds a description of CARB’s complaint

taken from a Joint Consent Decree between CARB and the

Mercedes Defendants. See id. at 38 (“[T]he Joint Consent

Decree…stated CARB’s lawsuit included allegations that

Mercedes installed “prohibited Defeat Devices, as well as

several unreported, unapproved running changes and field

fixes[.]”). The Commission also points to “the previous VW

litigation,” which allegedly “included post-sale software

updates implemented through recall campaigns.” (Id. at 39).

The Mercedes Defendants now seek dismissal of the claims

against them for failure to state a claim and on statute of

limitations grounds. (Doc. # 167 at 1). The Commission

responded (Doc. # 172), and the Motion is ripe for review.

II. Legal Standard

On a motion to dismiss pursuant to Rule 12(b)(6), this

Court accepts as true all the allegations in the complaint

and construes them in the light most favorable to the

plaintiff. Jackson v. Bellsouth Telecomms., 372 F.3d 1250,

1262 (11th Cir. 2004). Further, the Court favors the plaintiff

with all reasonable inferences from the allegations in the

complaint. Stephens v. Dep’t of Health & Human Servs., 901

F.2d 1571, 1573 (11th Cir. 1990). But,

[w]hile a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide

the grounds of his entitlement to relief requires

more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action

will not do. Factual allegations must be enough to

raise a right to relief above the speculative

level.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal

citations omitted). Courts are not “bound to accept as true

a legal conclusion couched as a factual allegation.” Papasan

v. Allain, 478 U.S. 265, 286 (1986). The Court must limit its

consideration to well-pleaded factual allegations, documents

central to or referenced in the complaint, and matters

judicially noticed. La Grasta v. First Union Sec., Inc., 358

F.3d 840, 845 (11th Cir. 2004).

Additionally, “[a] plaintiff is ‘not required to negate

an affirmative defense in [its] complaint.’ Thus,

‘[g]enerally, the existence of an affirmative defense will

not support a motion to dismiss.’” Twin City Fire Ins. Co. v.

Hartman, Simons & Wood, LLP, 609 F. App’x 972, 976 (11th Cir.

2015) (citations omitted).

III. Analysis

The Mercedes Defendants raise three arguments for

dismissal. The Court addresses them in turn.

A. Statute of Limitations

The Mercedes Defendants argue that the Commission’s

claims are time-barred under the applicable statute of

limitations. See Fla. Stat. § 95.11(3)(f) (“An action founded

on a statutory liability…shall be commenced…within four

years.”). They contend that the Commission, by requesting

relief for every vehicle registered in Hillsborough County

between 2007 and 2016, has “failed to allege any actionable

conduct within the limitations period.” (Doc. # 167 at 39-

40). The Commission contends that it is not apparent from the

face of the complaint that its claims are time-barred because

it has not pled the specific dates of the relevant post-sale

software updates. (Doc. # 172 at 10-12).

The Court is still not convinced that the Commission’s

claims are barred by the statute of limitations, given that

the dates of the relevant post-sale software updates, field

fixes, and recalls are still not alleged. See United States

ex rel. Hunt v. Cochise Consultancy, Inc., 887 F.3d 1081,

1085 (11th Cir. 2018) (“A dismissal for failure to state a

claim on statute of limitations grounds is appropriate ‘only

if it is apparent from the face of the complaint that the

claim is time-barred.’” (citation omitted)), aff’d, 139 S.

Ct. 1507 (2019). Because it is not apparent from the face of

the fourth amended complaint that the Commission’s claims are

time-barred, the Court will not grant the motion to dismiss

on the ground that the claims are barred by the statute of

limitations.

B. Claims Previously Dismissed with Prejudice

The Mercedes Defendants point out that the Commission

has re-pled the allegations based on the “inaction theory.”

The Commission responds that it is now only alleging that

“updates that cause an alteration to the emissions system or

the original defeat device” are illegal. (Doc. # 172 at 2).

The Commission speculates in its response that “certainly, an

update could fail to remove the original defeat device while

making a change to the software.” (Doc. # 172 at 4) (emphasis

added). However, the Commission has not updated the language

in its complaint to match this argument. See Donovan v.

Rivadeneira, 557 F. Supp. 3d 1236, 1244 (S.D. Fla. 2021)

(citing Huls v. Llabona, 437 F. App'x 830, 832 n. 5 (11th

Cir. 2011)) (“[A] complaint may not be amended by briefs in

opposition to a motion to dismiss.”). Instead, in its fourth

amended complaint, the Commission again alleges that “every

post-sale update that does not remove the workaround [defeat

device]” is “illegal.” (Doc. # 156 at 29). The Commission did

not add any other language to explain that it now only alleges

that updates that alter the defeat device are illegal. Even

if the Court interpreted the language in the fourth amended

complaint in light of the Commission’s response, the

Commission still fails to provide any detail on how any such

updates altered the defeat devices.

The Commission’s attempt in its response to reframe the

language in the fourth amended complaint does not change the

Court’s plain reading of the fourth amended complaint. In its

Order granting the motion to dismiss the third amended

complaint, the Court dismissed Count I “to the extent it is

based on software updates that simply do not remove the

original defeat device.” (Doc. # 153 at 14). The Court again

dismisses the Commission’s claims to the extent they are based

on software updates that simply do not remove the original

defeat device.

B. Plausibility

Next, the Mercedes Defendants argue that the claims

against them should be dismissed under Rule 12(b)(6) because

the Commission has not stated plausible claims for violation

of EPC Rule Chapter 1-8. The Court agrees.

EPC Rule Section 1-8.05(1) provides: “No person shall

tamper, cause, or allow the tampering of the emission control

system of any motor vehicle.” EPC Rule § 1-8.05(1). Section

1-8.03(2)(h) defines “tampering” as “the intentional

inactivation, disconnection, removal or other modification of

a component or components of the emission control system

resulting in it being inoperable.” EPC Rule § 1-8.03(2)(h)

(emphasis added). Section 1-8.03(2)(c) defines “inoperable

emission control system” as “any emission control system or

component thereof whose operation or efficiency has been

circumvented, defeated, or deleteriously affected by improper

maintenance, improper up-keep, wear and tear, misfueling, or

tampering.” EPC Rule § 1-8.03(2)(c). The Court noted that the

Commission’s allegations in its third amended complaint were

insufficiently detailed to state a claim based on EPC Rule

Chapter 1-8. (Doc. # 165 at 15).

The Mercedes Defendants highlight the limited nature of

the new allegations the Commission added to the fourth amended

complaint. They point out that the Commission’s additions to

the fourth amended complaint fall into two categories. First,

the Commission added the phrase “through field fixes and

recall campaigns” to several of its allegations. See (Doc. #

156 at ¶¶ 60, 61, 82, 83, 89, 90, 92, 95, 98, and 105).

Second, the Commission incorporated allegations from two

other lawsuits.

The Commission points to litigation filed against the

Mercedes Defendants by CARB. That case, the Commission

alleges, includes allegations that the Mercedes Defendants

“installed ‘prohibited [d]efeat [d]evices, as well as several

unreported, unapproved running changes and field fixes, that

have resulted in, and continue to result in, increased NOx

emissions from each Subject Vehicle significantly in excess

of California limits.’” (Id. at 38). The Commission claims

that “Defendants implemented post-sale updates and

modifications into these Affected Vehicles…via the same field

fixes as were alleged to have been implemented in the CARB

lawsuit.” (Id. at 38-39). The Commission also claims that,

“based on the conduct in the previous VW litigation,” the

Mercedes Defendants “implemented post-sale software updates

in the Affected Vehicles through recall campaigns.” (Id. at

39).

The Commission has not provided sufficient additional

detail to plausibly state a claim for post-sale tampering.

While it did not have to add the exact details suggested by

the Court in the prior Order dismissing the third amended

complaint, the Commission did have to provide some additional

information regarding the impact of the field fixes, recalls,

or post-sale software updates on the vehicles’ emission

control systems. The Commission had already asserted in its

third amended complaint that post-sale tampering had occurred

through field fixes and recalls. (Doc. # 116 at 44). Simply

inserting the phrase “through field fixes and recall

campaigns” into several additional sentences does not

suffice.

The Commission argues that the unsubstantiated claims

from other lawsuits allow the Court to infer that the Mercedes

Defendants were engaging in the same behavior in this case.

However, the Court cannot make such an inference. The

existence of another complaint does not show plausible facts.

See, e.g., Lipsky v. Commonwealth United Corp., 551 F.2d 887,

893 (2d Cir. 1976) (“[N]either a complaint nor references to

a complaint which results in a consent judgment may properly

be cited in the pleadings”); Brown v. Evans, No. 15-cv-2844,

2016 WL 69629, at *5 (N.D. Ill. Jan. 6, 2016) (“The

allegations of a different complaint involving different

facts and actors are irrelevant to Brown’s claims before this

Court.”); Del Puerto Water Dist. v. U.S. Bureau of

Reclamation, 271 F. Supp. 2d 1224, 1234 (E.D. Cal. 2003) (“To

the extent their contents are in dispute, such matters of

controversy are not appropriate subjects for judicial

notice.”).

The Court can take notice of the description of CARB’s

complaint in the Joint Consent Decree. See Day v. Taylor, 400

F.3d 1272, 1276 (11th Cir. 2005) (holding that documents not

physically attached to a complaint may be incorporated by

reference if the document’s contents are alleged in the

complaint). The Commission only cites to one paragraph of the

Consent Decree, which provides a brief characterization of

CARB’s complaint. (Doc. # 156 at 38). The Consent Decree only

mentions CARB’s allegations of post-sale tampering once, and

it does not provide any further detail about how the Mercedes

Defendants engaged in post-sale tampering that violated EPC

Rule Chapter 1-8.1

Simply noting that another entity has made allegations

that the Mercedes Defendants “installed…unapproved running

changes and field fixes” does not provide sufficient detail

to support the Commission’s claims. (Id. at 38). The Court

can also draw no inference from the Commission’s vague

reference to the “VW litigation.” (Id. at 39). The Commission

did not reference any documents of which the Court could take

notice and did not sufficiently explain why accusations

against Volkswagen would tend to show that the Mercedes

1 The relevant paragraph in the Joint Consent Decree states that “the

California Complaint alleges, among other things, that the Subject

Vehicles contain undisclosed AECDs and prohibited Defeat Devices, as well

as several unreported, unapproved running changes and field fixes, that

have resulted in, and continue to result in, increased NOx emissions from

each Subject Vehicle significantly in excess of California limits.”

Consent Decree, United States v. Daimler AG, No. 1:20-cv-02564 (D.D.C.

Sept. 14, 2021) (Doc # 2-1 at 2). The following paragraph states that

“Defendants deny the allegations in the Complaints and do not admit any

liability to the United States, California, or otherwise arising out of

or in connection with the allegations in the Complaints.” Id.

Defendants engaged in post-sale tampering. The mere existence

of another lawsuit against a non-party does not support the

Commission’s claim that the Mercedes Defendants violated EPC

Rule Chapter 1-8.

Count I is dismissed with prejudice. The Commission has

amended its complaint four times in two years. Yet the

Commission still has not pleaded facts sufficient to support

a plausible claim for relief, even after the Court stated

that they needed to plead greater detail to survive a 12(b)(6)

motion. Therefore, dismissal with prejudice is appropriate.

See Inman v. Am. Paramount Fin., 517 F. App’x 744, 747–749

(11th Cir. 2013) (affirming district court’s decision

dismissing with prejudice pursuant to Rule 12(b)(6) after

plaintiff’s third amended complaint failed to state factual

allegations from which the court could infer a violation).

C. Injunctive Relief

In Count II of its fourth amended complaint, the

Commission requests injunctive relief to prevent what it

alleges are ongoing violations of EPC Rule Chapter 1-8 by the

Mercedes Defendants. The Mercedes Defendants argue that the

Commission has not met the requisite standard to receive

injunctive relief because the Commission has not sufficiently

pled a violation of EPC Rule Chapter 1-8. (Doc. # 167 at 15-

17).

To receive injunctive relief, “a plaintiff must

establish a violation, a serious risk of continuing

irreparable injury if the relief is not granted, and the

absence of an adequate remedy at law.” Wusiya v. City of Miami

Beach, 614 F. App’x 389, 393 (11th Cir. 2015). The Commission

fails at the first step of the test. As discussed above, the

Commission has not stated a plausible claim of violations of

EPC Rule Chapter 1-8. Because the Commission has failed to

establish a violation by the Mercedes Defendants, it is not

entitled to injunctive relief.

For the reasons stated above, Count II is dismissed with

prejudice.

Accordingly, it is hereby

ORDERED, ADJUDGED, and DECREED:

(1) Defendants Daimler Aktiengesellschaft and Mercedes-Benz

USA, LLC’s Motion to Dismiss Plaintiff’s Fourth Amended

Complaint (Doc. # 167) is GRANTED.

(2) This action is dismissed with prejudice.

(3) The Clerk is directed to terminate any previously

scheduled deadlines and, thereafter, CLOSE this case.

DONE and ORDERED in Chambers in Tampa, Florida, this

20th day of September, 2022.

tna Ih. Hermby (moi¥h

VIR IA M. HERNANDEZ’*COVINGTON

UNITED STATES DISTRICT JUDGE

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