BROWN v. HYUNDAI MOTOR AMERICA

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

ELIZABETH BROWN, THOMAS Civil Action No. 18-11249 (SDW) (JAD)

PEARSON, JANESHIA MARTIN, and

NICHOLAS MOORE, individually and on OPINION

behalf of all others similarly situated

Plaintiffs,

v.

HYUNDAI MOTOR AMERICA, and

HYUNDAI MOTOR COMPANY, LTD.,

Defendants.

WIGENTON, District Judge

Before this Court is Defendant1 Hyundai Motor America’s motion to dismiss the First

Amended Complaint (“FAC”) pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No.

22). Plaintiffs have opposed this motion, (ECF No. 24), and Defendant Hyundai Motor America

(“HMA”) has replied to same. (ECF No. 26). This opinion is issued without oral argument

pursuant to Federal Rule of Civil Procedure 78. For the reasons stated herein, HMA’s motion is

GRANTED.

1 As Defendant Hyundai Motor America notes in its moving brief, Plaintiffs have not properly served Hyundai Motor

Company, Ltd. (ECF No. 22 at 14 n.1). Plaintiffs do not contest this fact, and as such, the Court does not consider

Hyundai Motor Company, Ltd. a party to this litigation.

I. BACKGROUND2

This putative class action arises out of an alleged defect found in certain model year 2011

through 2016 Hyundai Elantras with “Nu” 1.8 liter engines (the “Class Vehicles”) (FAC ¶ 1).

The defect resides in the the Class Vehicle’s engine, specifically in the pistons, which are a

component of the engine that creates the necessary force to power the car. (FAC ¶¶ 2, 80). The

defect manifests with a knocking noise in the engine, either while the car is warming up or while

driving. (FAC ¶ 2). The defect allegedly causes “total and irreparable engine failure,” resulting

in a loss of engine power, power steering, and brake assistance. (FAC ¶ 2).

Named Plaintiffs are residents of various states who purchased and currently own

allegedly defective Class Vehicles. (FAC ¶¶ 16–57). Plaintiff Brown is a citizen of New Jersey

who purchased a new 2013 Hyundai Elantra with a 1.8 liter “Nu” engine from an authorized

Hyundai dealer located in Avenel, New Jersey. (FAC ¶¶ 16–18). Plaintiff Pearson is a citizen of

Washington state who purchased a 2015 Hyundai Elantra3 from Korum Hyundai in Puyallup,

Washington. (FAC ¶¶ 28–30). Plaintiff Martin is a citizen of Georgia who purchased a used

2015 Hyundai Elantra with a 1.8 liter “Nu” engine from Superior Chevrolet in Decatur, Georgia.

(FAC ¶¶ 39–41). Finally, Plaintiff Moore is a citizen of Illinois who purchased a used 2013

Hyundai Elantra from Green Chevrolet in Peoria, Illinois. (FAC ¶¶ 50–52).4 Plaintiffs now

bring this action on behalf of themselves and others similarly situated as a nationwide class, or,

in the alternative as New Jersey, Washington, Georgia, and Illinois subclasses, alleging that

2 The facts as stated herein are taken as alleged in Plaintiffs’ First Amended Complaint (“FAC”). (ECF No. 633.) For

purposes of this motion to dismiss, these allegations are accepted by the Court as true. See Phillips v. Cty. of

Allegheny, 515 F.3d 224, 228 (3d Cir. 2008) (“The District Court, in deciding a motion [to dismiss under Rule]

12(b)(6), was required to accept as true all factual allegations in the complaint and draw all inferences from the facts

alleged in the light most favorable to [the plaintiff].”).

3 The FAC does not state whether this Elantra was new or used.

4 The Court notes that Plaintiffs Pearson and Moore fail to allege that their Hyundai Elantras contain or contained

the affected 1.8 liter “Nu” engines. Such a pleading failure is potentially fatal to their claims. Nevertheless, the

Court will address the further substantive aspects of Pearson and Moore’s claims.

HMA knew about the piston defect, failed to inform consumers of the defect, and that Plaintiffs

relied on those omissions in purchasing their Class Vehicles. (FAC ¶¶ 3, 19, 31, 42, 53, 107).

Plaintiffs set forth eleven counts against HMA: (1) breach of express warranty; (2) breach of

implied warranty, (3) breach of the written warranty under the Magnuson-Moss Warranty Act,

(4) violations of the New Jersey Consumer Fraud Act, (5) violations of the Washington

Consumer Protection Act, (6) Violations of the Georgia Fair Business Practices Act, (7)

violations of the Georgia Uniform Deceptive Trade Practices Act, (8) violations of the Illinois

Consumer Fraud and Deceptive Practices Act, (9) violations of the Illinois Uniform Deceptive

Trade Practices Act,5 (10) common law fraud, and (11) unjust enrichment. (FAC ¶¶ 116–234).

Plaintiffs have since expressly waived Plaintiffs Martin and Moore’s implied warranty claims,

Plaintiff Brown’s common law fraud claim, and Counts VII and VIII, and as such, those claims

are dismissed with prejudice. (ECF No. 24 at 31 n.4, 45 n.15, 51 n.18, and 52 n.19).

II. LEGAL STANDARD

When considering a motion to dismiss under Rule 12(b)(6), a court must “accept all factual

allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine

whether, under any reasonable reading of the complaint, the plaintiff may be entitled to

relief.” Phillips, 515 F.3d at 231 (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7

(3d Cir. 2002)). However, “the tenet that a court must accept as true all of the allegations contained

in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause

of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210–11 (3d Cir.

5 Plaintiffs mistitled Count IX, labeling it repetitively as a violation of the Illinois Consumer Fraud and Deceptive

Practices Act, but in the following paragraphs of the FAC they set out their claims under the Illinois Uniform

Deceptive Trade Practices Act.

2009) (discussing the Iqbal standard). If the “well-pleaded facts do not permit the court to infer

more than the mere possibility of misconduct,” the complaint should be dismissed for failing to

show “that the pleader is entitled to relief” as required by Rule 8(a)(2). Iqbal, 556 U.S. at 679.

Pursuant to Rule 9(b), plaintiffs alleging fraud must “meet a heightened pleading standard

by ‘stat[ing] with particularity the circumstances constituting fraud[.]’” N.Y.C. Emps.’ Ret. Sys. v.

Valeant Pharm. Int’l, Inc., No. 18-0032, 2018 WL 4620676, at *2 (D.N.J. Sept. 26, 2018)

(quoting Fed. R. Civ. P. 9(b)). Plaintiffs can satisfy this heightened standard by alleging dates,

times, places and other facts with precision. Park v. M & T Bank Corp., No. 09-02921, 2010 WL

1032649, at *5 (D.N.J. Mar. 16, 2010).

III. DISCUSSION

A. Article III Standing

To bring a suit in federal court, a plaintiff must have standing pursuant to Article III of

the United States Constitution. To establish Article III standing, a plaintiff must show:

(1) injury in fact, (2) causation, and (3) redressability. See Lujan v. Defs. of Wildlife, 504 U.S.

555, 560–61 (1992); Horvath v. Keystone Health Plan E., Inc., 333 F.3d 450, 455 (3d Cir.2003).

To demonstrate an injury in fact, a plaintiff must demonstrate the invasion of a legally protected

interest which is “(a) concrete and particularized, and (b) actual or imminent, not conjectural or

hypothetical.” Lujan, 504 U.S. at 560 (citations and quotations omitted). Furthermore, “there

must be a causal connection between the injury and the conduct complained of—the injury has to

be ‘fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of]

the independent action of some third party not before the court.” Id. at 56–61 (quoting Simon v.

E. Ky. Welfare Rights Org., 426 U.S. 26, 41–42 (1976). Last, “it must be ‘likely,’ as opposed to

merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Id. (quoting

Simon, 426 U.S. at 38, 43). “[T]he injury must affect the plaintiff in a personal and individual

way.” Id. at 560 n.1.

HMA argues that Plaintiff Pearson lacks Article III standing because his claims for

economic harm are either too speculative or inadequately pleaded. (ECF No. 22 at 29–30; ECF

No. 26 at 10–12). The Court agrees. The engine in Pearson’s Elantra failed in July of 2018,

with approximately 76,000 miles on the car. (FAC ¶ 32). Pearson contacted HMA about the

issue, and HMA towed his car to Car Pros Hyundai in Renton, Washington. (FAC ¶ 33). HMA

agreed to cover the necessary engine replacement under Pearson’s warranty, but advised him that

he would need to pay out of pocket for a rental car. (FAC ¶ 34). When Pearson asked if HMA

would reimburse him, HMA could not guarantee that the rental car costs would be reimbursed.

(FAC ¶ 35). Pearson has spent approximately $800 on rental cars to date. (FAC ¶ 36). The

FAC conspicuously leaves open the possibility that Pearson will be reimbursed at some point for

his rental car fees. “When a plaintiff claims that a defendant’s threatened injury is the source of

his standing, he must show that the threatened injury is so imminent as to be ‘certainly

impending.’” Pub. Interest Research Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d

111, 122 (3d Cir. 1997) (quoting Whitmore v. Arkansas, 495 U.S. 149, 155–58 (1990)). The

FAC has not shown that Pearson’s out-of-pocket rental car costs are “certainly impending,” and

thus Pearson has failed to establish Article III standing. See Bay Acquisition, LLC v. Heller, No.

08-3769, 2010 WL 3211146, at *2 (D.N.J. Aug. 13, 2010) (denying Article III standing where

plaintiff’s claim of injury was based on the possibility that Army Corps of Engineers may seek to

acquire or condemn a property at some future date).

Pearson also argues that his Article III standing is buttressed by allegations of

overpayment for his Elantra and the diminished value of that vehicle. (ECF No. 24 at 14–15).

However, the FAC contains one mention of overpayment that could apply to Pearson, where it

states generally that Plaintiffs “overpaid for their vehicles.” (FAC ¶ 122). While overpayment is

a cognizable form of injury, such a conclusory allegation is insufficient to establish Article III

standing. See Estrada v. Johnson & Johnson, No. 16-7492, 2017 WL 2999026, at *15 (D.N.J.

July 14, 2017) (finding “threadbare allegation that” Plaintiff purchased product at a premium,

“without any factual allegations to support that claim” insufficient to support Article III injury-

in-fact requirement).

Pearson’s claims of future repairs and diminished value of his vehicle are similarly

flawed. Pearson’s claim of future repairs is based on the conclusory allegation that the

replacement engines provided under the warranty are “just as likely to fail as the original engine

due to it containing the same latent defect.” (FAC ¶ 4). Plaintiffs have not asserted facts

showing that HMA’s replacement engines contain the same defects alleged to exist in the Class

Vehicles’ original engines, and even if they had, Plaintiffs have not alleged that all engines are

certain to fail, so any claim based on the future repair costs of a replacement engine are, again,

impermissibly speculative. Lastly, Pearson’s diminished value claim is also based on a one-line

conclusory allegation without supporting facts. (FAC ¶ 37). This allegation, without more, is

insufficient to establish standing. See Chan v. Daimler AG, No. 11-5391, 2012 WL 5827448, at

*9 (D.N.J. Nov. 9, 2012) (holding that allegations that plaintiff “traded in his Mercedes-Benz

E63 for an amount below fair market value,” and that a vehicle’s engine defect made it “worth

less than [it] otherwise would [have been]” were not sufficient to establish Article III standing

because there “must be a factual predicate upon which th[e] Court may draw the plausible

inference that Plaintiffs’ vehicles did, in fact, diminish in value as a result of the allegedly

defective engines”). As such, Plaintiff Pearson lacks Article III standing, and all his claims are

dismissed.

B. Breach of Express Warranty6

1. Plaintiff Brown

To plead a claim for breach of express warranty under New Jersey law, a plaintiff “must

allege (1) a contract between the parties; (2) a breach of that contract; (3) damages flowing

therefrom; and (4) that the party stating the claim performed its own contractual

obligations.” Frederico v. Home Depot, 507 F.3d 188, 203 (3d Cir. 2007). At the time that

Brown’s engine failed, her Elantra was covered by Hyundai’s 10-year/100,000 mile powertrain

warranty. (FAC ¶ 23). Under the terms of that warranty, Brown was required to perform certain

maintenance on her vehicle and produce maintenance records to receive warranty coverage.

(ECF No. 23-1 at 23, 25). Brown makes the single assertion that “Plaintiffs and the Class

Members have complied with all obligations under the warranty, or otherwise have been excused

from performance of said obligations as a result of Defendant[’s] conduct described herein.”

(FAC ¶ 126). Brown’s claim of compliance is conclusory, and her determination of excusal is a

legal conclusion. “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of

the elements of a cause of action will not do . . . [, n]or does a complaint suffice if it tenders

‘naked assertion[s]’ devoid of ‘further factual enhancement.” Iqbal, 556 U.S. at 678 (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007)).

Brown also improperly asserts that future discovery will show that she did comply with

the terms of the warranty. However, Plaintiffs may not use the prospect of future discovery as a

prop to support the sufficiency of their existing FAC. See Flaherty v. Guala Pack N.A., Inc., No.

6 The Court assumes, as the parties did, that for the purposes of a motion to dismiss, the law of the named plaintiff’s

state sub-class applies to his or her breach of contract claims.

17-8895, 2019 WL 1375706, at *3 (D.N.J. Mar. 27, 2019) (collecting cases). Brown has thus

failed to state a claim for breach of express warranty under New Jersey law.

2. Plaintiff Martin

Under Georgia law, “[a] manufacturer’s liability for breach of an express warranty

derives from, and is measured by, the terms of that warranty.” Hines v. Mercedes-Benz USA,

LLC, 358 F. Supp. 2d 1222, 1227 (N.D. Ga. 2005). Georgia law also imposes a requirement that

a plaintiff give “(1) notice of the defect and (2) a reasonable opportunity to repair the defect.”

Roland v. Ford Motor Co., 655 S.E.2d 259, 264 (Ga. Ct. App. 2007) (quoting Knight v. Am.

Suzuki Motor Corp., 612 S.E.2d 546, 549 (Ga. Ct. App. 2005)). It is thus the refusal to remedy

the defect or failure to do so despite trying that constitutes a breach of an express warranty. Id.

Martin’s car was not under warranty when the engine failed, which she does not dispute.

(FAC ¶ 46; ECF No. 24 at 18). Instead, Martin argues that the warranty at issue is

unconscionable, which absolves her of the durational limits of the coverage. (ECF No. 24 at 18).

Martin claims that the warranty provisions are unconscionable because they “knowingly sold a

defective product without informing consumers about the defect,” and because “Plaintiffs and

Class Members had no meaningful choice in determining the[] time limitations the terms of

which unreasonably favored Defendant[],” and finally because a “gross disparity in bargaining

power existed between Defendant[] and the Class Members.” (FAC ¶ 123–25). The Northern

District of Georgia has made it quite clear that a defendant’s “knowledge of the alleged defect at

the time of sale, standing alone, is insufficient to render the [warranty’s] time and mileage

limitations unconscionable. McCabe v. Daimler AG, 948 F. Supp. 2d 1347, 1359 (N.D. Ga.

2013). McCabe left open the possibility that allegations supporting unconscionability could

include a lack of bargaining power between the plaintiff and defendant and a lack of meaningful

choice in determining the time and mileage limitations of the warranty. Id. However, Plaintiffs

have provided no factual predicate to support the conclusory statements regarding a lack of

meaningful choice and lack of bargaining power mentioned above. Plaintiff Martin has thus

failed to state a claim for breach of express warranty.

3. Plaintiff Moore

To state a claim for a breach of express warranty under Illinois law, a plaintiff must

establish “the terms of the warranty, the failure of some warranted part, a demand upon the

defendant to perform under the terms of the warranty, a failure of the defendant to do so, a

compliance with the terms of the warranty by the plaintiff, and damages measured by the terms

of the warranty.” Hasek v. DaimlerChrysler Corp., 745 N.E.2d 627, 638 (Ill. App. Ct. 2001).

Like Martin, Moore does not dispute that his car was not under warranty at the time of the engine

failure, and instead argues that the warranty is unconscionable. (ECF No. 24 at 18). Moore

relies on the same three paragraphs of the FAC as Martin in pleading unconscionability.

Under Illinois law, a contract can be either substantively or procedurally unconscionable.

Razor v. Hyundai Motor Am., 854 N.E.2d 607, 622 (Ill. 2006). “Procedural unconscionability

exists when a contractual term is so difficult to find, read, or understand that the party could not

fairly be said to have been aware he was agreeing to it,” and “substantive unconscionability

refers to contractual terms that are inordinately one-sided in a party’s favor.” Disher v. Tamko

Bldg. Prods., Inc., No. 14-740, 2018 WL 905362, at *3 (S.D. Ill. Feb. 15, 2018). A contract of

adhesion is not automatically unenforceable, and a party must allege “additional coercion or

overreaching” to establish unconscionability. Id. Plaintiffs have made no such allegations.

Illinois courts have rejected similar allegations of unconscionability as those made here. See

Schiesser v. Ford Motor Co., No. 16-730, 2017 WL 1283499, at *3 (N.D. Ill. Apr. 6, 2017)

(finding that insufficient allegations of defendant’s knowledge of defect based on consumer

complaints did not establish unconscionability); Darne v. Ford Motor Co., No. 13-03594, 2015

WL 9259455, at *8 (N.D. Ill. Dec. 18, 2015) (finding conclusory allegations of lopsided

bargaining power and a lack of meaningful choice in the warranty terms insufficient to plead

unconscionability). Moore has not pled any additional coercion or overreaching beyond

conclusory claims of unequal bargaining power and a lack of choice and thus fails to state a

claim for breach of express warranty.

C. Breach of Implied Warranty

The only remaining implied warranty claim belongs to Brown, as Plaintiffs

conceded Martin and Moore’s implied warranty claims, see supra Part I, and Plaintiff Pearson’s

claims were dismissed for lack of standing, see supra Part III.A. “[T]he UCC, as adopted by

New Jersey, specifically states that an implied warranty of merchantability ensures that goods

sold are ‘fit for the ordinary purposes for which such goods are used.’” Dzielak v. Whirlpool

Corp., 26 F. Supp. 3d 304, 329 (D.N.J. 2014) (quoting Arlandson v. Hartz Mountain Corp., 792

F. Supp. 2d 691, 706 (D.N.J. 2011)). “As ‘cars are designed to provide transportation, the

implied warranty of merchantability is simply a guarantee that they will operate in a safe

condition and substantially free of defects [and, therefore,] where a car can provide safe, reliable

transportation[,] it is generally considered merchantable.’” Henderson v. Volvo Cars of N.A.,

LLC, No. 09-4146, 2010 WL 2925913, at *9 (D.N.J. July 21, 2010) (quoting Carlson v. Gen.

Motors Corp., 883 F.2d 287, 297 (4th Cir. 1989)). Additionally, “courts in this District and

others have held that the warrant of merchantability is not breached where a car has been driven

for years before a defect manifested.” Stevenson v. Mazda Motor of Am., Inc., No. 14-5250,

2015 WL 3487756, at *13 (D.N.J. June 2, 2015) (collecting cases).

Brown had driven her Elantra for over four years and roughly 64,000 miles when her

engine failed. (FAC ¶¶17, 20). At that point, Brown’s Elantra was not covered by her New

Vehicle Limited Warranty, but it was covered by her supplemental Powertrain Warranty. (FAC

¶¶ 99–100). Brown filed a complaint through Hyundai’s authorized alternative dispute

resolution program, which did not consider her claim because her engine had over 60,000 miles.

(FAC ¶ 22). Furthermore, Hyundai determined that Brown’s engine failed due to oil sludge

buildup, a sign of Brown’s purported inadequate maintenance of her vehicle and a purported

failure to comply with the terms of her warranty. (FAC ¶ 23). Nevertheless, Brown can—and

does—still drive her car. (FAC ¶ 18).

While implied warranty claims are not universally dismissed at the pleading stage where

cars have been driven for years and many thousands of miles, see Henderson, 2010 WL

2925913, at *9, the Court finds that the facts here are more in line with those of Stevenson and

Glass v. BMW of N. Am., No. 10-5259, 2011 WL 6887721 (D.N.J. Dec. 29, 2011). In both

Stevenson and Glass, a key factor in dismissing the implied warranty claims was the fact that the

plaintiffs were still able to drive their cars despite the alleged defects. 2015 WL 3487756, at

*13; 2011 WL 6887721, at *15. Here, Brown was also able to drive her car after the repair.

Furthermore, the New Vehicle Limited Warranty period had expired, as it had in Stevenson,

2015 WL 3487756, at *13. Additionally, Brown purportedly failed to properly maintain her car,

which Hyundai determined resulted in the engine failure. (FAC ¶ 23). These facts taken

together lead this Court to believe that dismissal of Brown’s implied warranty claim is

appropriate at this stage.

D. Magnusson-Moss Warranty Act

“Claims under the [Magnuson-Moss Warranty Act] depend upon the disposition of the

underlying state law warranty claims.” Argabright v. Rheem Mfg. Co., 201 F. Supp. 3d 578, 600

(D.N.J. 2016). Because Plaintiffs have failed to state any of their state law warranty claims, their

Magnuson-Moss Warranty Act claims must also be dismissed. Id. at 601.

E. Fraud

1. Plaintiff Brown’s Claim under the New Jersey Consumer Fraud Act (“NJCFA”)

“To state a claim under the NJCFA, a plaintiff must allege that the defendant engaged in

an unlawful practice that caused an ascertainable loss to the plaintiff.” Frederico, 507 F.3d at

202. An unlawful act may be an affirmative act,7 knowing omission, or regulatory violation. Id.

An actionable omission under the NJCFA occurs where “the defendant (1) knowingly concealed

(2) a material fact (3) with the intention that the consumer rely upon the concealment.” Arcand

v. Brother Int’l Corp., 673 F. Supp. 2d 282, 297 (D.N.J. 2009). “Implicit in the showing of an

omission is the underlying duty on the part of the defendant to disclose what he concealed to

induce the purchase.” Id. A claim under the NJCFA is subject to the heightened pleading

standards of Federal Rule of Civil Procedure 9(b). Lieberson v. Johnson & Johnson Consumer

Cos., 865 F. Supp. 2d 529, 538 (D.N.J. 2011).

HMA alleges that Brown’s NJCFA claim fails because she has not adequately pleaded

that HMA knew of the alleged piston defect. (ECF No. 22 at 42–44). The Court agrees and

finds the recent case in this district, Schechter v. Hyundai Motor America, No. 18-13634, 2019

WL 3416902 (D.N.J. July 29, 2019), particularly instructive. Schechter concerned a putative

7 Plaintiffs have not alleged any affirmative misrepresentations by Hyundai, and have effectively conceded as much

by failing to address Defendant’s affirmative misrepresentation arguments in its motion. As such, the Court

assumes that Plaintiffs fraud claims are premised on HMA’s omissions.

class action alleging that the defendants fraudulently concealed the fact that 2017 and 2018 Santa

Fe and Santa Fe Sport SUVs contained a defective powertrain. Id. at *1. The Schechter plaintiff

asserted an NJCFA claim alleging that the defendants, “concealed the Powertrain Defect from

the owners and lessees of the Class Vehicles at the time of sale or lease.” Id. at *6. As support

for his claim, the Schechter plaintiff “reference[d] 29 consumer grievances which were posted on

the NHTSA’s [National Highway Traffic Safety Administration] website by Class Vehicle

owners . . . [and] also point[ed] to two TSBs issued by Defendants.” Id.

The Schechter Court held that the plaintiff failed to state an NJCFA claim because he had

failed to adequately plead that the defendants had knowledge of the defect. Id. The Schechter

Court pointed to the fact that the complaint did not allege that the defendants monitored or

tracked the NHTSA website, or that NHTSA informed the defendant about the posted

complaints. Id. “Absent such allegations, consumer complaints on third-party websites are

insufficient to support a manufacturer’s knowledge of an alleged defect.” Id. (collecting cases).

The Schechter Court further argued that even if it were to assume that the defendants knew of the

online postings, the consumer complaints and TSBs did not indicate that the defendants had

knowledge of the defect because: (1) “[a]pproximately half of the consumer complaints and two

of the TSBs were neither posted nor issued before” the date on which the plaintiff leased his

vehicle, and (2) the consumer complaints issued or posted after the date on which the plaintiff

leased his vehicle had to do with a vehicle the plaintiff did not lease or did not specify a vehicle.

Id. at 6–7.

Based on the facts presently before this Court, Schechter’s reasoning applies with equal

force. Plaintiffs allege, upon information and belief, that HMA possessed knowledge of the

alleged defect, “through (1) their own records of customers’ complaints, (2) dealership repair

records, (3) records from the National Highway Traffic Safety Administration (NHTSA), (4)

warranty and post-warranty claims, (5) internal pre-sale durability testing and TSBs, and ([6])

other various sources.” (FAC ¶ 92). Plaintiffs plead no further facts related to sources 1, 2, 4,

and 6, and such bare bones allegations are insufficient to satisfy the heightened pleading standard

of Rule 9(b), even when relaxed for omissions based allegations.

As to the NHTSA records, Plaintiffs make no allegations that HMA monitored the

NHTSA website. And, even if the Court assumes that HMA did monitor NHTSA complaints,

every NHTSA complaint listed in the FAC, save two, post-dates August 2013, when Brown

purchased her vehicle. (FAC ¶¶ 17, 97). Furthermore, the TSB that Brown purports to rely on

was issued on March 3, 2014, after Brown had purchased her car. (FAC ¶ 83). Brown “cannot

rely on events which occurred after [her purchase], in order to establish that Defendants were

aware of the alleged defect during that relevant timeframe.” Schechter, 2019 WL 3416902, at *6

(collecting cases).8 As for the two complaints that post-date Brown’s purchase, the FAC states

that the complaints are about Hyundai Elantras, but Plaintiffs do not allege that these complaints

pertain to Hyundai Elantras with the specifically affected 1.8 liter “Nu” engines. (FAC ¶ 97).

Brown has thus failed to plead that HMA had the requisite knowledge to establish a claim under

the NJCFA and her claim must be dismissed.

2. Plaintiff Martin’s Claims under the Georgia Fair Business Practices Act and Georgia

Common Law Fraud

Plaintiff Martin may sue under the Georgia Fair Business Practices Act (“GFBPA”) so

long as she suffered injury or damages “as a result of consumer acts or practices” in violation of

the GFBPA. Ga. Code Ann. § 10-1-399. “A private [G]FBPA claim has three elements: a

violation of the Act, causation, and injury.” Amin v. Mercedes-Benz USA, LLC, 301 F. Supp. 3d

8 This same reasoning applies to the complaints posted on the linked online forum page in FAC paragraph 96.

1277, 1289 (N.D. Ga. 2018) (quoting Tiismann v. Linda Martin Homes Corp., 637 S.E.2d 14, 17

(Ga. 2006)). Martin is also required to show that she justifiably relied on HMA’s consumer acts

or practices. Id. Martin alleges that HMA has violated the GFBPA by “[r]epresenting that goods

or services are of a particular standard, quality, or grade,” while they were of another and

“[a]dvertising goods or services with intent not to sell them as advertised.” (FAC ¶ 176 (quoting

Ga. Code Ann. § 10-1-393(b)(7), (9))).

HMA challenges Martin’s pleading of all three elements of a GFBPA claim. (ECF No.

22 at 54). HMA further argues that Martin has not pleaded that she satisfied the notice

requirement of the GFBPA. (ECF No. 22 at 53 n.19). Plaintiffs argue that pre-suit notice is not

required for a remote manufacturer under Georgia law. (ECF No. 24 at 51).

A GFBPA plaintiff must comply with the ante litem requirement of the statute which

requires that the plaintiff provide to the defendant “a written demand for relief, identifying the

claimant and reasonably describing the unfair or deceptive act or practice relied upon and the

injury suffered,” “at least 30 days prior to the filing of any such action.” Alvear v. Sandy Springs

Toyota, Inc., 775 S.E.2d 172, 177 (Ga. Ct. App. 2015) (quoting Ga. Code Ann. § 10-1-399(b)).

In re Volkswagen Timing Chain Product Liability Litigation, the case Plaintiffs rely on for the

proposition that pre-suit notice is not required for a remote manufacturer, cites to In re

Bridgestone/Firestone, Inc. Tires Products Liability Litigation, 155 F. Supp. 2d 1069, 1009–10

(S.D. Ind. 2001), and explains in a parenthetical that this Southern District of Indiana case

surveyed cases in Georgia and determined that the filing of a complaint satisfies the notice

requirement. No. 16-2765, 2017 WL 1902160, at *13 (D.N.J. 2017). Bridgestone/Firestone and

In re Volkswagen however, were both analyzing the pre-suit notice requirement of Uniform

Commercial Code § 2-607, not the specific pre-suit notice requirement of the GFBPA. 2017 WL

1902160, at *13; 155 F. Supp. 2d at 1110. Furthermore, the Georgia case that

Bridgestone/Firestone cites, Hudson v. Gaines, 403 S.E.2d 852 (Ga. Ct. App. 1991), was issued

fourteen years before Alvear which expressly rejects the proposition that a complaint can satisfy

the GFBPA’s notice requirement. 775 S.E.2d at 177. Martin has thus failed to state a claim

under the GFBPA.

As for Martin’s common law fraud claim, she must plead “(1) false representation by

defendant; (2) scienter; (3) intent to induce the plaintiff to act or refrain from acting; (4)

justifiable reliance by the plaintiff; and (5) damage to the plaintiff.” Next Century Comms. Corp.

v. Ellis, 318 F.3d 1023, 1027 (11th Cir. 2003). “In the context of fraudulent-concealment claims,

the scienter element requires that ‘the alleged defrauder had actual, not merely constructive,

knowledge of the fact concealed’” and the alleged defrauder must be under an obligation to

disclose that fact. McCabe, 948 F. Supp. 2d at 1368 (quoting ReMax N. Atlanta v. Clark, 537

S.E.2d 138, 142 (Ga. Ct. App. 2000)).

HMA argues that Martin’s common law fraud claim fails because Martin bought her used

Elantra from a Chevrolet dealer and thus, Hyundai had no knowledge of her purchase and no

duty to disclose any alleged defect. (ECF No. 22 at 58). Plaintiffs do not respond to this

argument. “Absent a confidential relationship, no duty to disclose exists between parties

engaged in arms-length business transactions.” In re Atlas Roofing Corp. Chalet Shingle Prods.

Liab. Litig., No. 13-md-2495, 2018 WL 2765961, at *9 (N.D. Ga. June 8, 2018). Plaintiffs have

alleged no such confidential relationship. At most, Plaintiffs have alleged an arm’s length

business transaction between Martin and Superior Chevrolet. (FAC ¶ 40). Where there was no

pre-purchase communication or relationship between plaintiff and defendant, Georgia law

imposes no duty to disclose. See In re Atlas, 2018 WL 2765961, at *9–10 (imposing no duty to

disclose where plaintiffs had bought allegedly defective shingles made by the defendant and

alleged that defendant actively concealed defects in the shingles, but had “not established that

they had any pre-purchase communications or relationship with [the defendant] at all, let alone a

confidential or dependent relationship); McCabe v. Daimler AG, 160 F. Supp. 3d 1337, 1352

(N.D. Ga. 2015) (imposing no duty to disclose on Daimler AG, the manufacturer of Mercedes-

Benz vehicles, even where plaintiff had bought an allegedly defective Mercedes-Benz from a

Mercedes-Benz dealer). Thus, Martin has failed to state a Georgia common law fraud claim and

her claim is dismissed.

3. Plaintiff Moore’s Claims under the Illinois Uniform Deceptive Trade Practices Act

and Illinois Common Law Fraud9

The Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”) “provides a private

right of action for injunctive relief, and such a claim is permissible as a consumer action when

‘the consumer can allege facts indicating [a] likelihood of damage in the future.’” Aliano v.

Louisville Distilling Co., 115 F. Supp. 3d 921, 928 (N.D. Ill. 2015) (quoting Robinson v. Toyota

Motor Credit Corp., 735 N.E.d 2d 724, 735 (Ill. App. Ct. 2000)). “The problem in most

consumer actions under the [IUDTPA] is the inability to allege facts indicating the likelihood of

damage in the future.” Id. (quoting Howard v. Chi. Transit Auth., 931 N.E.2d 292, 299 (Ill. App.

Ct. 2010)). This is especially true with cases alleging deceptive practices, because the harm from

those practices has usually already occurred. Int’l Star Registry of Ill. v. ABC Radio Network,

Inc., 451 F. Supp. 2d 982, 990 (N.D. Ill. 2006).

Moore has not alleged a sufficient likelihood of future harm. Plaintiffs allege in one

conclusory statement that “[e]ven where a replacement engine is provided under the warranty,

9 Moore does not respond to Defendants’ arguments seeking dismissal of its Illinois Consumer Fraud and Deceptive

Practices Act and instead requests leave to amend that claim. (ECF No. 24 at 52 n.19). Plaintiff Moore’s Illinois

Consumer Fraud and Deceptive Practices Act claim is therefore dismissed.

the replacement is just as likely to fail as the original engine due to it containing the same latent

defect.” (FAC ¶ 4). Moore has already had his engine replaced, (FAC ¶ 56), and has alleged no

additional facts supporting his conclusion that the replacement engine will inevitably fail for the

same reasons his original engine failed. Moore has “already claimed that it has been deceived

about the quality of [HMA’s] engine; any future monetary harm it incurs will be the product of

that past deception, not some future deception, which makes an injunction under the IUDTPA an

inappropriate form of relief.” Darne v. 2015 WL 9259455, at *12. Accordingly, Moore’s

IUDTPA claim is dismissed.

To adequately plead his common law fraud claim under Illinois law, Moore must allege:

(1) the concealment of a material fact; (2) that the concealment was intended to

induce a false belief, under circumstances creating a duty to speak; (3) that the

innocent party could not have discovered the truth through a reasonable inquiry or

inspection, or was prevented from making a reasonable inquiry or inspection and

relied upon the silence as a representation that the fact did not exist; (4) that the

concealed information was such that the injured party would have acted

differently had he been aware of it; and (5) that reliance by the person from whom

the fact was concealed led to his injury.

Int’l Star Registry, 451 F. Supp. 2d at 989 (quoting Trustees of the AFTRA Health Fund v.

Biondi, 303 F.3d 765, 777 (7th Cir. 2002)). Additionally, Moore must allege that HMA had a

duty to disclose the defect to him. Connick v. Suzuki Motor Co., 675 N.E.2d 584, 593 (Ill. 1996).

That duty arises where either the plaintiff and the defendant are in a confidential or fiduciary

relationship, or where the plaintiff “places trust and confidence in defendant, thereby placing

defendant in a position of influence and superiority over plaintiff.” Id. The second kind of

relationship “may arise by reason of friendship, agency, or experience.” Id. Moore has alleged

no special relationship with HMA. He purchased his Elantra from Green Chevrolet, not HMA or

an HMA authorized dealer, and even if Moore had purchased his Elantra from an authorized

dealer, that alone would not give rise to a duty to disclose. See id. (“Regarding the relationship

between plaintiffs and Suzuki, the complaint merely alleged that plaintiffs had purchased a

[Suzuki] Samurai [SUV] from an authorized Suzuki dealer, and that Suzuki manufactured and

distributed the Samurai. Nowhere in the complaint did plaintiffs sufficiently allege that they

were in a confidential or fiduciary relationship with Suzuki or that Suzuki was in a position of

superiority over them[, and w]ithout such allegations, plaintiffs’ complaint did not allege a duty

to disclose material facts which could give rise to a claim for fraudulent concealment.”) As such,

HMA had no duty to disclose the defect to Moore and his Illinois common law fraud claim is

dismissed.

F. Leave to Amend

Defendants request that the Court deny Plaintiffs leave to amend the FAC because they

believe amendment would be futile and prejudicial. (ECF No. 26 at 31). While Plaintiffs have

already amended their complaint once, this is the first time the Court has addressed it

dispositively. Given that there is a general presumption in favor of allowing a plaintiff to amend

its pleadings under Rule 15(a)(2), Hunter v. Dematic USA, 2016 WL 2904955, at *6 (D.N.J. May

18, 2016), the Court will allow Plaintiffs to amend their complaint except where explicitly stated.

The Court will not allow Plaintiffs leave to amend Brown’s implied warranty claim, Martin’s

common law fraud claim, and Moore’s IUDTPA and common law claims, as amendment would

be futile in those cases and they are thus dismissed with prejudice.10

10 Fatal to these claims are Brown’s ability to currently drive her car, and Martin and Moore’s purchase of their cars

from non-HMA dealerships, and the fact that Moore cannot allege future deception for the purposes of the

IUDTPA.

IV. CONCLUSION

For the reasons stated herein, the Court grants HMA’s motion to dismiss, except as it

pertains to Plaintiffs’ leave to amend certain aspects of the FAC. Plaintiffs shall have thirty days

to file an amended complaint in accordance with this opinion. An appropriate order follows.

DATED: August 30, 2019

s/ Susan D. Wigenton_______

SUSAN D. WIGENTON

UNITED STATES DISTRICT JUDGE