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Riaubia v. Hyundai Motor America

United States District Court, E.D. Pennsylvania

August 22, 2017

JOSHUA RIAUBIA, individually and for all persons similarly situated, Plaintiff,
v.
HYUNDAI MOTOR AMERICA, Defendant.

          MEMORANDUM

          C. Darnell Jones, II J.

         Plaintiff Joshua Riaubia purchased a 2015 Hyundai Sonata Limited in August of 2014. That vehicle, along with various other models, comes equipped with a “Smart Trunk, ” a feature that is advertised by Hyundai Motor America (“Defendant” or “HMA”) as being able to “automatically open the trunk fully, or at least wide enough for a person to deposit bulky items into the trunk - such as shopping bags, duffle bags, and sports equipment - without having to put the items down or manually open the trunk lid.” Compl. ¶ 3. Plaintiff claims that, despite those representations, “the Smart Trunk is defective in that it will frequently fail to open more than a few inches, ” and sometimes it “never open[s] more than a crack.” Id. at ¶ 4. Riaubia is a citizen of Pennsylvania, and HMA is a California corporation. Id. at ¶¶ 9-10.

         To recover for damages caused by this alleged defect, Plaintiff brings a series of claims under federal and state law on behalf of himself and a putative class of purchasers of various Hyundai models equipped with the same allegedly defective Smart Trunk feature: (1) violation of California's Unfair Competition Law; (2) violation of California's False Advertising Law; (3) violation of California's Consumer Legal Remedies Act; (4) breach of express warranty under Pennsylvania law; (5) breach of implied warranty of merchantability under Pennsylvania law; (6) violation of the federal Magnuson-Moss Warranty Act, and, in the alternative, (7) unjust enrichment.

         Defendant has moved to dismiss the Complaint pursuant to Federal Rule 12(b)(6) on various grounds, including lack of standing and failure to allege a defect, or any wrongful act. Defendant also challenges Plaintiff's right to bring an alternative unjust enrichment claim or pursue a nationwide class action under California law. For the following reasons, the motion is denied in all respects.

         Standard of Review

         In deciding a Rule 12(b)(6) motion, courts 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 v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation marks and citation omitted). Nevertheless, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         This standard, which applies to all civil cases, “asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678. “[A]ll civil complaints must now set out sufficient factual matter to show that the claim is facially plausible.” Fowler, 578 F.3d at 210 (internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

         Discussion

         Plaintiff has successfully defended against HMA's 12(b)(6) motion. Contrary to Defendant's assertions, Riaubia has standing to bring this class action. And the Complaint states consumer-fraud and warranty claims, as well as a properly pleaded alternative unjust enrichment claim.

         I. Plaintiff Has Standing to Bring this Class Action

         To establish Article III standing in a class action, at least one of the named plaintiffs must show “(1) an ‘injury in fact, ' (2) a sufficient ‘causal connection between the injury and the conduct complained of, ' and (3) a ‘likel[ihood]' that the injury ‘will be redressed by a favorable decision.'” Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 358-59 (3d Cir. 2015) (citing Susan B. Anthony List v. Driehaus, 134 S.Ct. 2334, 2341 (2014) (alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Riaubia has standing to bring this class action because, like the absent class members, he has allegedly suffered economic injury from purchasing a vehicle of the same make with the same allegedly non-conforming Smart Trunk feature. See Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353 (3d Cir. 2015) (finding that the named plaintiff had standing to represent absent class members based on his own alleged injury).

         HMA does not disagree that Plaintiff has standing to bring his own claim; rather it challenges his standing to represent absent class members that suffered the same injury but from purchasing different vehicle models. Def.'s Opening Br. 4-6. Defendant's argument is unavailing. “[O]nce the named parties have demonstrated they are properly before the court, ” adequacy of representation becomes “one of compliance with the [class certification] provisions of Rule 23, not one of Article III standing.” Neale, 794 F.3d at 361 (citing In re Prudential, 148 F.3d 283, 307 (3d Cir.1998) (quoting Goodman v. Lukens Steel Co., 777 F.2d 113, 122 (3d Cir.1985), aff'd, 482 U.S. 656 (1987)).

         The more persuasive cases cited by the parties confirm this rule in class actions where, like this one, absent members were allegedly injured by the same non-conforming feature of different models of the same product, manufactured or distributed by the same defendants based on uniform representations. See, e.g., NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 158 (2d Cir. 2012) (“But whether [the named plaintiff] has ‘class standing'- that is, standing to assert claims on behalf of purchasers of Certificates from other Offerings, or from different tranches of the same Offering-does not turn on whether [the plaintiff] would have statutory or Article III standing to seek recovery for misleading statements in those Certificates' Offering Documents.”) (emphasis in original); Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 599 (3d Cir. 2012) (“When a class includes purchasers of a variety of different products, a named plaintiff that purchases only one type of product satisfies the typicality requirement if the alleged misrepresentations or omissions apply uniformly across the different product types.”).

         Defendant improperly relies on a dissenting opinion in Gratz v. Bollinger, 539 U.S. 244 (2003), an equal protection case involving the use of race in college admissions, for the proposition that a named plaintiff's and absent class members' “injury-in-fact” must have been caused by the identical product. Def.'s Br. at 4. In Gratz, Justice John Paul Stevens, writing for a minority, raised the issue of Article III standing sua sponte on the grounds that the named plaintiff had not alleged any “real and immediate” personal injury, only a “conjectural or hypothetical” one, and that his alleged injury as a potential transfer student did not give him standing to represent an absent class of college freshman because the university used different race-based admissions standards for transfer students and freshmen applicants. Gratz, 539 U.S. at 260-63. The Court's majority disagreed, and concluded that the named plaintiff's own injury was sufficient for standing and that any difference in the use of race in transfer versus freshman undergraduate admissions did not “implicate a significantly different set of concerns” to undermine the named plaintiff's ...


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