BELL, District Judge.
In this action alleging gender and disability discrimination as well as retaliatory termination, Plaintiff-Appellant Jaimi L. Bowers ("Bowers") appeals the district court's order dismissing her complaint. For the reasons that follow, we affirm the decision of the district court.
I. BACKGROUND
During the relevant time period, Bowers worked at the Youngstown Air Reserve Station as a Logistics Support Specialist in the Logistics Readiness Squadron, 910th Maintenance Support Group. As an Air Reserve Technician ("ART"), she was a federal civilian employee of the Air Force, but she held the military rank of Staff Sergeant and was required, as a condition of her employment, to maintain membership in the Air Force Reserve. Bowers alleges that she suffers from several emotional and medical disorders, including anxiety, depression, gastroesophageal re-flux disease, and gastritis. She alleges that Major Dawn Sturdevant, her supervisor, and Major Ronald Coburn interfered with the grant of a security clearance and "went beyond the normal requirements" in requiring her to substantiate her medical disabilities. (R. at 4.) She asserts that "Defendant Secretary Michael W. Wynne, acting through Major Sturdevant and Major Coburn, acted maliciously by disregarding Ms. Bowers' medical documentation, and by using a pretext regarding the processing of a security clearance, to discharge Ms. Bowers." ( Id. at 5.) Bowers filed a fraud, waste, and abuse complaint alleging that Major Sturdevant was forging signatures on performance recommendations and engaging in "abuse of power and conduct unbecoming an officer, particularly fraternization with enlisted." ( Id. at 115, 116.) Bowers was terminated from her position on August 15, 2005. She contends that she was wrongfully charged with being absent without leave and discharged on the basis of her gender, her disabilities, and in retaliation for filing the fraud, waste, and abuse complaint. Following a CORE fact-finding proceeding in November of 2007, and a final agency decision in June of 2008, Bowers filed her complaint in United States District Court for the Northern District of Ohio, naming as defendant Defendant-Appellee Michael W. Wynne, the Secretary of the Air Force (the "Secretary"). Bowers's complaint contains three counts: (1) discrimination in violation of the Rehabilitation Act of 1973, (2) unlawful retaliatory discrimination, and (3) gender discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e. On February 12, 2009, the Secretary moved to dismiss the complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that Bowers's claims were barred by the doctrine of Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). On March 31, 2009, the district court granted the Secretary's motion. Bowers now appeals the dismissal of her complaint.
CORE is an acronym for "Compressed, Orderly, Rapid, Equitable," and it refers to the Air Force's Equal Employment Opportunity dispute resolution procedure. See Air Force Instruction 36-1201, Equal Employment Opportunity Complaints (Feb. 12, 2007), available at http://www.adr.af.mil/shared/media/document/AFD-070402-075.pdf.
II. LAW AND ANALYSIS
A. Standard of Review
Because the Secretary attached evidence in support of its motion to dismiss, the parties and the court construed the Secretary's motion as an attack on the factual basis for subject matter jurisdiction. "When a Rule 12(b)(1) motion attacks the factual basis for jurisdiction, the district court must weigh the evidence and the plaintiff has the burden of proving that the court has jurisdiction over the subject matter." Golden v. Gorno Bros., Inc., 410 F.3d 879, 881 (6th Cir. 2005). The Court reviews the district court's application of the law to the facts de novo and its factual determinations for clear error. Id. The Court reviews de novo a district court's determination of the applicability of the Feres doctrine. Lovely v. United States, 570 F.3d 778, 781 (6th Cir. 2009).
B. Feres doctrine
In Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950), the Supreme Court held that military personnel could not pursue claims against the government under the Federal Tort Claims Act for injuries that "arise out of or are in the course of activity incident to service." Id. at 146, 71 S.Ct. 153. Because "the relationship of military personnel to the Government has been governed exclusively by federal law," the Court did not "think that Congress, in drafting this Act, created a new cause of action dependent on local law for service-connected injuries or death due to negligence." Id.
Thereafter, the Supreme Court applied the analysis in Feres to discrimination claims brought by naval personnel against their superiors pursuant to the Bivens doctrine. Chappell v. Wallace, 462 U.S. 296, 299, 103 S.Ct. 2362, 76 L.Ed.2d 586 (1983). The Court explained that "[i]n the last analysis, Feres seems best explained by the `peculiar and special relationship of the soldier to his superiors, [and] the effects on the maintenance of such suits on discipline.'" Id. (quoting United States v. Muniz, 374 U.S. 150, 162, 83 S.Ct. 1850, 10 L.Ed.2d 805 (1963)). The Court determined that the "unique disciplinary structure of the military establishment and Congress' activity in the field" constituted "special factors" making it inappropriate to allow a judicially-created remedy. Id. at 304, 103 S.Ct. 2362.
The Supreme Court reiterated its concern to avoid intrusion into military discipline and military decisionmaking in United States v. Shearer, 473 U.S. 52, 105 S.Ct. 3039, 87 L.Ed.2d 38 (1985). In that case, the Court held that the mother of an army private could not pursue a FTCA claim based on the murder of her son by another member of the military. Id. at 59, 105 S.Ct. 3039. Her son was off duty and away from his base when he was killed. Id. at 53, 105 S.Ct. 3039. The plaintiff alleged that the government was negligent in its supervision and control over the killer. Id. at 54, 105 S.Ct. 3039. The Court rejected the appellate court's heavy reliance on the site of the murder and the duty status of the army private when the murder occurred because "the situs of the murder is not nearly as important as whether the suit requires the civilian court to second-guess military decisions and whether the suit might impair essential military discipline." Id. at 57, 105 S.Ct. 3039 (internal citations omitted).
In United States v. Johnson, 481 U.S. 681, 107 S.Ct. 2063, 95 L.Ed.2d 648 (1987), the Supreme Court invoked the military discipline rationale underlying the Feres doctrine in a case involving negligence on the part of civilian employees of the government. Id. at 683, 107 S.Ct. 2063. The plaintiffs husband, a member of the Coast Guard, was killed when his helicopter crashed during a rescue mission. Id. at 682-83, 107 S.Ct. 2063. The plaintiff alleged that the crash resulted from the negligent actions of civilian radar controllers. Id. The Court held that the plaintiff could not pursue her FTCA claim, in part, because:
[M]ilitary discipline involves not only obedience to orders, but more generally duty and loyalty to one's service and to one's country. Suits brought by service members against the Government for service-related injuries could undermine the commitment essential to effective service and thus have the potential to disrupt military discipline in the broadest sense of the word.
Id. at 691,
107 S.Ct. 2063. The Court noted that "[c]ivilian employees of the Government also may play an integral role in military activities," and reasoned that, "[e]ven if military negligence is not specifically alleged in a tort action, a suit based upon service-related activity necessarily implicates the military judgments and decisions
that are inextricably intertwined with the conduct of the military mission."
Id. at 691 n. 11,
107 S.Ct. 2063 (emphasis added). Because the plaintiffs husband was engaged in an activity incident to his service and was acting pursuant to the standard operating procedures of the Coast Guard, the Court determined that "the potential that [the] suit could implicate military discipline is substantial."
Id. at 691-92,
107 S.Ct. 2063.
In United States v. Stanley, 483 U.S. 669, 107 S.Ct. 3054, 97 L.Ed.2d 550 (1987), the Supreme Court affirmed the broad "incident to service test" from Feres. The plaintiff was a member of the military claiming injury as a result of his participation in a military program designed to test the long-term effects of LSD. Id. at 671-72, 107 S.Ct. 3054. The plaintiff argued that his case did not involve the sort of chain-of-command issues that were at issue in Chappell because he was not acting under orders from superior officers, and because at least some of the defendants were not his superior officers. Id. at 679, 107 S.Ct. 3054. The Court declined to limit Feres to claims by officers against their superiors because even an inquiry into whether a suit questions "military discipline and decisionmaking would itself require judicial inquiry into, and hence intrusion upon, military matters." Id. at 682-83, 107 S.Ct. 3054.
This Court extended the analysis in Feres and Chappell to discrimination claims brought by military personnel pursuant to Title VII and the Rehabilitation Act in Coffman v. Michigan, 120 F.3d 57 (6th Cir. 1997). See id. at 59 ("Consistent with the reasoning in Chappell, courts of appeals have consistently refused to extend statutory remedies available to civilians to uniformed members of the armed forces absent a clear direction from Congress to do so."). By its terms, 42 U.S.C. § 2000e-16(a) applies to all personnel actions affecting "employees" of the "military departments." Id. However, "[t]he Equal Employment Opportunity Commission and the circuits that have considered this statute have interpreted it to apply only to suits by civilian employees of the military departments, and not members of the armed forces." Fisher v. Peters, 249 F.3d 433, 438 (6th Cir. 2001); see Brown v. United States, 221 F.3d 295, 298 n. 3 (5th Cir. 2000) (citing cases); 29 C.F.R. § 1614.103(d)(1).
C. Sixth Circuit Precedent
This Court has never considered claims brought under Title VII or the Rehabilitation Act by an ART. In Leistiko v. Stone, 134 F.3d 817 (6th Cir. 1998), the plaintiff alleged that he had been discharged from his position as a National Guard technician in violation of the Rehabilitation Act. Id. at 818. Like an ART, a National Guard technician occupies a hybrid civilian/military position. National Guard technicians are federal civilian employees that must, as a condition of their employment, be members of the National Guard. 32 U.S.C. § 709(b)(2); 10 U.S.C. § 10216(a)(1)(B). This Court affirmed the district court's grant of summary judgment in favor of the defendant because "`[e]very court having occasion closely to consider the capacity of National Guard technicians has determined that capacity to be irreducibly military in nature.'" Leistiko, 134 F.3d at 821 (quoting Leistiko v. Sec'y of the Army, 922 F.Supp. 66, 73 (N.D.Ohio 1996)); see Wright v. Park, 5 F.3d 586, 588-89 (1st Cir. 1993) ("[S]ince National Guard technicians' positions are encompassed within a military organization and require the performance of work directly related to national defense, such positions are themselves military in nature."); Stauber v. Cline, 837 F.2d 395, 400 (9th Cir. 1988) (noting that plaintiff and defendant, both National Guard technicians, were always under the command of active-duty military officers, were subject to military discipline, and were performing work "integral to routine military activities"); NeSmith v. Fulton, 615 F.2d 196, 201 (5th Cir. 1980) ("Formally, a civilian technician is a federal civil employee outside the competitive civil service. In substance, however, the position is one in a military organization."). This Court has reiterated the holding from Leistiko on several occasions. See, e.g., Broimi v. Roche, 206 Fed.Appx. 430, 432 (6th Cir. 2006) (unpublished); Fisher v. Peters, 249 F.3d 433, 439 (6th Cir. 2001).
The Fifth Circuit eschews this Court's "categorical" approach to Title VII claims by dualstatus technicians, and distinguishes the First Circuit's opinion in Wright and its own decision in NeSmith because those cases involved 42 U.S.C. § 1983 claims. Brown v. United States, 227 F.3d 295, 299 n. 4 (5th Cir. 2000). According to Brown, "fi]n Title VII cases, as opposed to 42 U.S.C. § 1983 cases, we are required to differentiate the civilian and military positions associated with a dual-status job. This is because Title VII specifically provides for claims against the government for civilian employees in the military departments." Id. Notwithstanding the distinction noted in Brown, the conclusion in Wright has been accepted by this Court and applied to Title VII claims.
In Fisher v. Peters, the Court considered a Title VII claim by a National Guard technician who alleged that her supervisors had downgraded her performance appraisal and denied her requests for promotion. 249 F.3d at 435-36. In her technician position, the plaintiff was responsible for paying invoices provided to the base and for processing travel vouchers. Id. at 434. She was also required to wear a military uniform, observe military courtesies, and participate in unit training activities one weekend per month. Id. The Court affirmed a grant of summary judgment in favor of the defendant because the National Guard technician position is irreducibly military in nature:
In the case at hand, Plaintiff attempts to distinguish
Leistiko by emphasizing that Leistiko's dismissal from his civilian employment was precipitated by a military decision. While that distinction may be accurate, Plaintiff ignores the unambiguous statements made in
Leistiko that the positions of National Guard technicians are "irreducibly military in nature." In affirming the grant of summary judgment, this court did not discuss the facts of the underlying employment action taken which precipitated the suit. Rather, we simply confirmed that National Guard technician positions are irreducibly military in nature and that the Rehabilitation Act does not apply to hybrid positions that are irreducibly military in nature.
Id. at 439.
In the case before the Court, the district court determined that Fisher was controlling because the court could not discern any distinction between an ART and a National Guard technician. On appeal, Bowers contends that ARTs and National Guard technicians are governed by different statutes and that, unlike National Guard technicians, ARTs are not statutorily required to wear a uniform while performing their civilian functions. See 32 U.S.C. § 709(b) (requiring National Guard technicians to "wear the uniform appropriate for the member's grade and component of the armed forces" while "performing duties as a military technician (dual status)").
Though not dispositive in this matter, it appears that the Air Force changed its rules in August of 2007 to require ARTs to wear uniforms while performing their civilian duties. See Air Force Instruction 36-703, Civilian Conduct and Responsibility 11 A.7 (Feb. 17, 2009) ("Air Reserve Technicians will adhere to the requirements as those prescribed in AFI 36-2903, Dress and Personal Appearance of Air Force Personnel, when wearing the military uniform in civilian status."); Air Force Print News Today, Rules change to require technicians to wear uniforms fulltime (Aug. 8, 2007), http://www.af.mil/news/story. asp?id= 123063842.
Courts in some other circuits take a different approach to analyzing Title VII or Rehabilitation Act claims by dual status technicians. See Fisher, 249 F.3d at 440-43. Those courts consider the nature of the technician's claim or the challenged conduct. Id. For example, in the Ninth Circuit, dual status technicians are barred from bringing claims where "the challenged conduct is integrally related to the military's unique structure." Mier v. Owens, 57 F.3d 747, 750 (9th Cir. 1995). In the Fifth Circuit, only claims "arising purely" from the employee's civilian status may be brought. Brown v. United States, 227 F.3d 295, 299 (5th Cir. 2000). If the claim is difficult to characterize, the court will consider whether the conduct at issue is "integrally related to the military's unique structure.*' Id. at 299 n. 5. The Second and Third Circuits have adopted the approach used in the Fifth Circuit. Overton v. N. Y. State Div. of Military Naval Affairs,
Id. (emphasis in original). The plaintiffs also alleged, however, that "internal documents reveal that [the defendant] has known, since at least 2001, that the ME41 defect was causing premature print-head failure in MFC machines."
See id. The Court found that such allegations were sufficient to plead that the defendant had knowledge.
Id. Moreover, the plaintiff alleged that "internal documents reveal that [the defendant] has known, since at least 2001, that the ME41 defect was causing premature print-head failure in MFC machines."
See id. In view of these allegations, the Court found that the plaintiff's pleadings were sufficient to withstand a motion to dismiss.
Similarly, in Dewey, discussed supra, the Plaintiff asserted CFA/common law fraud claims. The Court determined that the pleadings satisfied the Rule 9(b) standard, where the plaintiff alleged that
Volkswagen did not fully and truthfully disclose to its customers the true nature of the inherent design defects, which were not readily discoverable until years later, often
after the warranty has expired. As a result, Plaintiffs and the other Class Members were fraudulently induced to lease and or purchase the Class Vehicles with the said design defects and all of the resultant problems. . . .
558 F. Supp. 2d 505, 527-28 (D.N.J. 2008). Although the Dewey Court dismissed Plaintiff's claims based on affirmative misrepresentations, it determined that the plaintiff's omission-based claims could proceed.
This Court finds Plaintiffs' omission-based claims here to be substantially similar to those asserted in Maniscalco and Dewey, and a similar result is appropriate. Accordingly, Plaintiffs' omission-based fraud claims — brought under the NJCFA, California Unfair Competition Law, California's Consumer Legal Remedies Act, Mass. Gen. Laws ch. 93A, § 1, et seq., the Florida Deceptive and Unfair Trade Practices Act and the Washington Consumer Protection Act, as well as Plaintiffs' claim for common law fraud — will not be dismissed at this time.
The Court again notes that Defendants' motion to dismiss only asked this Court to address whether Plaintiffs' pleadings contained requisite specificity. See Doc. No. 20, at *9. The Court, therefore, has not exhaustively considered whether other grounds for dismissal exist, and expressed no view as to the ultimate merits of Plaintiffs' claims. Defendant's motion to dismiss Plaintiffs' fraud-based claims (Counts I, V, VIII, IX, XII, XIII and XIV) is granted in part and denied in part: Plaintiffs' claims based on affirmative misrepresentations are denied without prejudice and Plaintiffs' claims based on omissions will be permitted to proceed.
B. COUNT II (BREACH OF EXPRESS WARRANTY)
Defendant moves to dismiss Plaintiffs' claims for breach of express warranty. Defendant argues that the claim for breach of an express warranty must be dismissed because each plaintiff's warranty had expired at the time that the alleged defect manifested. Plaintiffs respond that, here, an express warranty claim may be maintained because, even if the express warranty expired, the warranty itself was unconscionable. This Court will deny Defendant's motion in this regard.
Express warranties in New Jersey are governed by Article 2 of the state's Uniform Commercial Code. N.J.S.A. 12A:2-101 et seq. Section 2-313(1) of the Code recognizes express warranties that arise from, among other things:
(a) 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.
(b) 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.
Generally warranties limited by time or mileage "do[] not cover repairs made after the applicable time . . . ha[s] elapsed."Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 616 (3rd Cir. 1995) (citing Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir. 1986) (collecting cases)); see Dewey, 558 F.Supp.2d at 519. Some courts, however, recognize an exception where a plaintiff alleges that the warranty in question is unconscionable. In re Samsung DLP TV Class Action Litig., 2009 U.S. Dist. LEXIS 100065, at *14 (D.N.J. Oct. 27, 2009).
Recently, in this District, three Courts have addressed an issue similar to the one before this Court: whether a plaintiff can assert a claim based on breach of an express warranty that is limited by time or mileage, when that time or mileage limitation has expired. One of the Courts dismissed the plaintiffs' express warranty claims, and the other two permitted the plaintiffs' claims to proceed past the motion to dismiss stage. See Samsung, 2009 U.S. Dist. LEXIS 100065 (finding that an action brought outside the express warranty period could survive a motion to dismiss because plaintiff asserted that the warranty was unconscionable); Dewey, 558 F. Supp. 2d 505 (granting defendant can manufacturer's motion to dismiss, agreeing that "Plaintiffs have failed to state a claim because their alleged injuries occurred outside the express warranty"); Payne v. Fujifilm U.S.A., Inc., 2007 U.S. Dist. LEXIS 94765 (D.N.J. Dec. 28, 2007) (determining that an action brought outside the express warranty period could be maintained because plaintiff asserted that the warranty was unconscionable).
The Court in South Jersey Gas Co. v. Mueller Co., also consider the express warranty jurisprudence in the Third Circuit and noted that "an express warranty does not cover repairs made after the applicable time . . . has elapsed, and thus concluded that latent defects discovered after the term of the warranty are not actionable." 2010 U.S. Dist. LEXIS 41407 (D.N.J. Apr. 27, 2010) (internal citations omitted) (citing Duquesne, 66 F.3d at 616 andAbraham, 795 F.2d at 250). The South Jersey Gas case, however, is distinguishable from Samsung, Dewey and Payne, because the plaintiffs in the latter three cases all asserted that the warranty was itself unconscionable or that the defendant was aware of the defect. Accordingly, the South Jersey Gas Court did not have to consider whether a departure from the general rule that warranties limited by time or mileage do not cover repairs made after the applicable time has elapsed was appropriate.
In Samsung, the plaintiffs alleged that "Samsung's limits on their express warranty are unenforceable as they knowingly sold a defective product without conspicuously informing consumers about the defect, and, as such, their express warranty was unconscionable." 2009 U.S. Dist. LEXIS 100065, at 15. Next they asserted that
The time limits contained in Samsung's extended written limited warranties were also unconscionable and grossly inadequate to protect the plaintiffs and the members of the Class. Among other things, plaintiffs and the members of the Class had no meaningful choice in determining those time limitations; the terms of the limited warranties unreasonably favored Samsung over members of the Class; a gross disparity in bargaining power existed as between Samsung and Class members; and Samsung knew or should have known that the Televisions were defective at the time of sale and would fail well before their useful lives, thereby rendering the time limitations insufficient, inadequate, and unconscionable.
Id. at 15-16. These allegations were sufficient to withstand a motion to dismiss. Similarly, in Payne, the plaintiff brought claims for breach of implied/express warranties, among others. 2007 U.S. Dist. LEXIS 94765. Although the product, a camera, failed after the limited one-year warranty expired, the plaintiff was permitted to proceed on her express warranty claims because the defendant "had, or should have had, knowledge of the alleged defect at the time of sale to Plaintiff, the time limitations in the express warranty are unconscionable." Id. at 12-13. There, the plaintiff claimed that "she state[d] a claim for breach of express warranty because the [complaint] alleges that the defect affects and manifests in the Camera immediately . . . [,] and the durational limits [of the express warranty] are unconscionable." Id. at 7. The Court permitted plaintiff to proceed
In contrast to the Samsung and Payne Courts, the Court in Dewey rejected the plaintiffs' arguments that "a defect is actionable if it was known to defendants during the warranty period, but was by fraud or concealment, made undiscoverable to plaintiffs." 558 F. Supp. 2d 505. The Dewey Court, quoting the Second Circuit inAbraham v. Volkswagen of Am., Inc., 795 F.2d 238, 249-51 (2d Cir. 1986), emphasized that
virtually all product failures discovered in automobiles after expiration of the warranty can be attributed to a `latent defect' that existed at the time of sale or during the term of the warranty. All parts will wear out sooner or later and thus have a limited effective life. Manufacturers always have knowledge regarding the effective life of particular parts and the likelihood of their failing within a particular period of time. Such knowledge is easily demonstrated by the fact that manufacturers must predict rates of failure of particular parts in order to price warranties and thus can always be said to `know' that many parts will fail after the warranty period has expired. A rule that would make failure of a part actionable based on such `knowledge' would render meaningless time/mileage limitations in warranty coverage.
Dewey, 558 F. Supp. 2d at 519 (quoting Abraham, 795 F.2d at 250). The Dewey Court, relying on Abraham as well as the Third Circuits decision in Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 616 (3d Cir. 1995) — which itself extensively relied upon Abraham — determined that the plaintiffs' claims based on defects that manifested themselves post-warranty-period must be dismissed.
This Court agrees with the Dewey Court that a manufacturer's mere knowledge that a part will ultimately fail, after the expiration of a warranty period, is insufficient to provide a basis for a breach of express warranty claim. Moreover, such knowledge does not alone make the time/mileage limitation unconscionable. Here, however, Plaintiffs' allege additional claims in support of their unconscionability claims. Whether Plaintiffs can demonstrate that the express warranty was unconscionable remains to be seen, however, this Court will not dismiss Plaintiffs' breach of express warranty claims at this early stage. See Cooper, 2008 U.S. Dist. LEXIS 75810 ("[M]uch of the information required to decide the issue of unconscionability is either not properly before the court" and is an issue "more suitable for decision at summary judgment."); In re Ford Motor Co. Ignition Switch Products Liability Litig., 1999 U.S. Dist. LEXIS 22892, at *12 (D.N.J. May 14, 1999) ("[The court is] unable at this juncture to determine, as a matter of law, whether or not Ford's durational limitation of the implied warranty of merchantability that accompanied plaintiff's Ford vehicles at the time of their original retail sale was unconscionable.") (vacated in part on other grounds).
For example, Plaintiffs assert that "members of the Class had no meaningful choice in determining those time limitations" and "a gross disparity in bargaining power existed as between Samsung and Class members." These allegations are sufficient to permit the claims to go forward at this time.
This Court will, accordingly, deny Defendant's motion to dismiss breach of express warranty claims.
Defendant, in its reply, asserts that certain Plaintiffs (e.g., Mr. Morby and Mr. Leets) "purchased their vehicles used after the express warranty provided by Volvo had expired, and thus did not receive any warranty from Volvo. Plaintiffs do not explain how these Plaintiffs have standing to allege that a warranty to which they were never parties or beneficiaries was unconscionable" See Doc. No. 23, at 5 (emphasis in original). Defendants did not raise the argument in their initial moving brief, however, and the Court will not consider this argument here.
C. COUNT III (BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY)
Defendant moves to dismiss Plaintiffs' claim for breach of the implied warranty of merchantability.
Implied warranties in New Jersey are governed by Section 2-314 of the Uniform Commercial Code. See N.J. STAT. ANN. § 12A:2-314;In re Ford Motor Co. E-350 Van Prods. Liab. Litig., 2008 U.S. Dist. LEXIS 73690, at *59 (D.N.J. 2008). The implied warranty of merchantability ensures that a merchant warrants that goods sold are fit for the ordinary purposes for which the goods are used.Id. (citing N.J.S.A. § 12A:2-314). 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." Carlson v. General Motors Corp., 883 F.2d 287, 297 (4th Cir. 1989), cert. denied, 495 U.S. 904, 910 (1990) (citations and quotation marks omitted).
Here, Plaintiffs allege that "the class vehicles are not fit for the ordinary purpose of driving because these vehicles are predisposed to slippage, hesitation, harshness, premature clutch wear, transmission fluid contamination by axle fluid, differential fluid, and/or engine coolant, internal metal debris, and overheating ultimately resulting in very serious and expensive damage to, and/or catastrophic failure of the transmissions." Doc. No. 22, at 18. These deficiencies, "may cause the vehicles to enter an emergency `Limp Mode' and/or sudden and unexpected transmission failure whereby the vehicles will not accelerate and/or move under their own power." Id. Plaintiffs' allegations are sufficient to survive this motion to dismiss.
In Hornberger v. GMC another district court in this Circuit addressed an issue similar to the one before this Court. 929 F. Supp. 884, 888 (E.D. Pa. 1996). The question there was whether "an implied warranty of merchantability claim may extend beyond the limits of an express warranty to the time when a latent defect arises in an automobile." Id. Specifically, whether the plaintiff could bring a claims for breach of the implied warranty of merchantability where their transmission failed "at approximately 40,000 miles and almost three years after Plaintiffs leased the vehicle." Id. The Court determined that "a material question of fact does exist as to whether a normal transmission of a newly leased vehicle would fail after being driven approximately 40,000 miles, rendering the car unfit for the purpose of driving and, therefore, unmerchantable." Id. In so holding, however, theHornberger Court observed that "Plaintiffs will have a very difficult path to hoe to establish their claim for breach of an implied warranty of merchantability. . . . However, this Court cannot hold as a matter of law that Plaintiffs' claim should be dismissed." Id. (internal citations omitted). For the same reason, this Court find that Plaintiffs' allegations are sufficient to withstand this motion to dismiss.
See Ford Motor Co. E-350 Van Prods., 2008 U.S. Dist. LEXIS 73690, at *59 ("As noted above, Plaintiffs alleged that the durational limitations on the implied warranty of merchantability that accompanied Plaintiffs' E350s are `unreasonable and unconscionable and, accordingly, [are] unenforceable'[; however b]ased on UCC § 2-302(b), this Court cannot make this determination at the motion to dismiss stage); Ford Motor Co. Ignition Switch, 1999 U.S. Dist. LEXIS 22892, at *12 ("[The court is] unable at this juncture to determine, as a matter of law, whether or not Ford's durational limitation of the implied warranty of merchantability that accompanied plaintiff's Ford vehicles at the time of their original retail sale was unconscionable.") (vacated in part on other grounds).
Notwithstanding this decision, however, the Court is mindful that "[d]efects can, and do, arise with complex instrumentalities such as automobiles." Thiedemann v. Mercedes-Benz USA, LLC, 872 A.2d 783, 794 (N.J. 2005). Accordingly if, for instance, it is later demonstrated that the transmission in the class product here meets or exceeds the average quality of similar goods in the industry, implied warranty of merchantability claims will be dismissed. See Sheris v. Nissan North America, Inc., 2008 U.S. Dist. LEXIS 43664, at *16 (D.N.J. June 2, 2008) "Merchantability does not mean that "the goods are exactly as the buyer expected, but rather that the goods satisfy a minimum level of quality."); Federal Signal Corp. v. Safety Factors, Inc., 886 P.2d 172,180 (Wash. 1994) ("A product which conforms to the quality of other brands in the market will normally be merchantable."); see also WHITE AND SUMMERS UNIFORM COMMERCIAL CODE § 9-13.
Defendant's motion to dismiss Plaintiffs' claims based on a breach of the implied warranty of merchantability is denied.
D. COUNT IV (UNJUST ENRICHMENT)
Defendant moves to dismiss Plaintiffs' unjust enrichment claim. Defendant argues that Plaintiffs did not have a direct relationship with Volvo — i.e., that the transactions were only between the Plaintiffs and the dealers — and, therefore, that the unjust enrichment claims cannot proceed. The Court, relying on two substantially similar cases from this District, agrees with Defendant.
In Alin v. Am. Honda Motor Co., the plaintiff leased a 2006 Honda Odyssey from an authorized Honda dealer in Denville, New Jersey. 2010 U.S. Dist. LEXIS 32584, at 2 (D.N.J. Mar. 31, 2010). The plaintiff alleged that the car was defective, and as a result, that Honda was unjustly enriched by entering into the lease. The Court explained:
[u]nder New Jersey law, to state a claim for unjust enrichment, a plaintiff must allege that: (1) a defendant received a benefit from the plaintiff; (2) retention of the benefit by the defendant without payment would be unjust; (3) plaintiff expected remuneration from defendant at the time he performed or conferred a benefit on defendant; and (4) the failure of remuneration enriched the defendant beyond its contractual rights.
See VRG Corp. v. GKN Realty Co.,
135 N.J. 539, 554,
641 A.2d 519 (1994).
An unjust enrichment claim also requires a "direct relationship" between the parties or a mistake on the part of the party conferring the benefit.
Premier Pork LLC v. Westin, Inc., 2008 U.S. Dist. LEXIS 20532, at *14-15 (D.N.J. Mar. 17, 2008) (Rodriguez, J.).
Id. at 39-40 (emphasis added); see also Cooper v. Samsung Electronics America, Inc., 2008 U.S. Dist. LEXIS 75810, at *10 (D.N.J. Sept. 30, 2008) (finding that because plaintiff alleged that his purchase was through a retailer, "there was no relationship conferring any direct benefit on Samsung [the manufacturer] through [plaintiff's] purchase."); Maniscalco, 627 F.Supp. 2d at 506 (requiring the plaintiff "to allege a relationship between the parties to support [a claim for] unjust enrichment"). Here, as in Alin and Cooper, there was no "direct relationship" between Plaintiffs and the manufacturer (Volvo), and Plaintiffs' unjust enrichment claims must fail.
Defendant's motion to dismiss Plaintiffs' claims based on unjust enrichment is, accordingly, granted.
E. COUNT VI (NEGLIGENT MISREPRESENTATION)
Defendant moves to dismiss Plaintiffs' negligent misrepresentation claim. This Court will grant this motion.
The dismissal will be without prejudice as with Plaintiffs' fraud claims based on affirmative misrepresentations. See III.A.1, supra.
Under New Jersey law, a claim for negligent misrepresentation requires a plaintiff to establish that defendant made an incorrect statement, upon which he or she justifiably relied, causing economic loss. See McClellan v. Feit, 376 N.J. Super. 305, 317, 870 A.2d 644 (App. Div. 2005) (citing H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 334, 461 A.2d 138 (1983)). A negligent misrepresentation claim may also be based on an omission. See South Broward Hosp. Dist. v. MedQuist, Inc., 516 F. Supp. 2d 370, 397 (D.N.J. 2007). A plaintiff may not bring an omission-based claim "unless the breaching party owes [him or her] an independent duty imposed by law" requiring disclose.Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 315, 788 A.2d 268 (2002). In New Jersey, such a duty to disclose arises: (1) when there is a fiduciary relationship between the parties; (2) when the transaction is intrinsically fiduciary, and calls for food faith and full disclosure; and (3) and when one party expressly places a special trust or confidence in the other. Id.
First, with respect to Plaintiffs' negligent misrepresentation claim based on affirmative misrepresentations, the claim is dismissed without prejudice for the reasons stated above with respect to Plaintiffs' fraud claims based on affirmative misrepresentations. See III.A.1, supra. As to Plaintiffs' claim premised upon omissions, the requisite duty does not exist, and Plaintiffs' negligent misrepresentation claim must fail.
In a recent case in this District (decided after briefing was completed on this motion), the court addressed this very issue.Alin v. Am. Honda Motor Co., 2010 U.S. Dist. LEXIS 32584, at * (D.N.J., March 31, 2010). The Alin Court found that the plaintiff's claim "that Honda failed to disclose a defect during the sale, lease, or servicing of the Class Vehicles is insufficient to state a claim for negligent misrepresentation by omission." Id. 38. Specifically, it noted that, like here, the parties were not "in a fiduciary or intrinsically fiduciary relationship" nor did the plaintiff "repose[] a special trust in Honda when he entered into his lease." Id. Accordingly, the negligent misrepresentation claims based on omissions were dismissed. Id. (citing McClellan, 376 N.J. Super. at 317).
The New Jersey Appellate Division arrived at a similar decision in Green v. GMC, 2007 N.J. Super. Unpub. LEXIS 861, 2003 WL 21730592 (N.J. Super. Ct. App. Div. July 10, 2003). There, plaintiff car owners brought claims against GMC for an alleged design defect related to the front seats, which impacted the effectiveness of the seat belts. The Appellate Division affirmed trial court's dismissal of the negligent misrepresentation claim. The Court noted that there was no affirmative duty on GMC, the car manufacturer, to disclose information regarding the seat design. 2007 N.J. Super. Unpub. LEXIS 861, at *8. The Court explained: "no fiduciary or implied fiduciary relationship existed between plaintiffs and the manufacturers of their cars, and since neither defendants nor the dealers from whom plaintiffs purchased their cars did anything to encourage plaintiffs to repose special trust or confidence in their advice," the claims were dismissed. Id. Accordingly, the claims were dismissed.
Plaintiffs' negligent misrepresentation claims based upon Defendant's alleged affirmative misrepresentation are denied without prejudice, and Plaintiffs' claim based upon Defendant's alleged omissions are denied with prejudice.
F. COUNT VII (BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING)
Defendant moves to dismiss Plaintiffs' claim for breach of the implied covenant of good faith and fair dealing. The Court will not do so at this time.
"[E]very contract imposes on each party the duty of good faith and fair dealing in its performance and its enforcement." Pickett v. Lloyd's Peerless Ins. Agency, Inc., 131 N.J. 457, 621 A.2d 445, 450 (N.J. 1993). The purpose of the implied covenant is to ensure that "neither party to a contract shall injure the right of the other to receive the fruits of the agreement." Onderdonk v. The Presbyterian Homes of N.J., 85 N.J. 171, 425 A.2d 1057, 1062 (N.J. 1981).
As discussed above, see Section II.B, the plaintiff in Payne brought claims analogous to those asserted by Plaintiffs here — namely claims for fraud, express/implied warranty and a claim for breach of the implied covenant and fair dealing. 2007 U.S. Dist. LEXIS 94765, at *33-36. The Payne plaintiff's implied covenant of good faith and fair dealing claims were premised upon her allegations that: "FUJIFILM breached those implied covenants by selling Plaintiff and Class members digital cameras that were inherently defective in bad faith with knowledge that the contract and/or warranties were unconscionable," and "FUJIFILM also breached th[]e implied covenants by not providing terms in the contract and/or warranty that conspicuously stated to the Plaintiff and Class Members that the internal battery would fail." Id. at 35-36. Based on these allegations, the Court permitted the plaintiff to proceed on its claim for breach of the implied covenant and fair dealing.
Similarly, here, where warranty unconscionability has been alleged, see id. at 13-14, 35-36, the Court will not dismiss Plaintiffs' claim for breach of the implied covenant and fair dealing at the motion to dismiss stage.
G. COUNTS X-XI (BREACH OF EXPRESS AND IMPLIED WARRANTIES UNDER CALIFORNIA'S SONG-BEVERLY ACT)
Defendant moves to dismiss the (1) implied and (2) express warranty claims brought pursuant to California's Song-Beverly Act (brought by Plaintiff Morris, a California Plaintiff).
1. Breach of Implied Warranty Claims under Song-Beverly
First, with respect to the implied warranty claims brought pursuant to California's Song-Beverly Act, Defendant argues that the warranty period expired, and any warranty is therefore unenforceable.
As Section 1791.1 of the Song-Beverly act explains, "[t]he duration of the implied warranty of merchantability . . . shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer." (emphasis added). Accordingly, here, where the alleged defect manifested itself well after the one-year period, the Song-Beverly implied warranty claim must be dismissed.
Even if Plaintiffs established a claim for warranty unconscionability, the statute expressly prohibits Courts from implying a warranty over a year in length.
2. Breach of Express Warranty Claims under Song-Beverly
Second, Defendant argues that the express warranty claims brought pursuant to California's Song-Beverly Act should be dismissed.
Under Song-Beverly Act, a plaintiff bringing "a claim for breach of express warranty must allege (1) the exact terms of the warranty; (2) reasonable reliance thereon; and (3) a breach of warranty that proximately caused plaintiff's injury." Kearney v. Hyundai Motor Co., 2010 U.S. Dist. LEXIS 68242 (C.D. Cal., June 10, 2010) (citing Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142, 229 Cal. Rptr. 605 (1986). Here, Plaintiffs' have alleged no breach, and therefore the Song-Beverly express warranty claim must be denied. Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, (9th Cir. Cal. 2008) ("California has adopted a doctrine from the Second Circuit . . . [adopting t]he general rule is that an express warranty does not cover repairs made after the applicable time or mileage periods have elapsed.") (citing Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824, 830, 51 Cal. Rptr. 3d 118 (2006) and Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir. 1986)).
The Court notes that Plaintiffs' express warranty claims were tentatively permitted to proceed, despite the fact that Plaintiffs' did not allege a breach of warranty within the mileage period. See Section III.B, supra. With respect to those claims, the Court found that it is conceivable that Plaintiffs' claims may fall with a narrow exception to the general rule espoused in Abraham — namely, that the limited warranty was unconscionable.See id. Under Song-Beverly, however, no such exception exists. InWilson v. Hewlett-Packard Co., 2009 U.S. Dist. LEXIS 92692 (N.D. Cal. Sept. 17, 2009), the plaintiff asserted claims for breach of warranty notwithstanding the fact that the product (a laptop) failed after the two-year express warranty period expired. The Court dismissed the plaintiff's claims, noting that "Plaintiff's argument that the limitation of the warranty is unconscionable is not convincing. A two-year consumer product warranty is unremarkable and no facts suggests that it is unconscionable . . . [and such warranties] have been routinely upheld." Id. at *4. Similarly, in Brothers v. Hewlett-Packard Co., 2006 U.S. Dist. LEXIS 82027, at *25-26 (N.D. Cal. Oct. 31, 2006) the Court rejected Plaintiffs' argument that the time limitations of the warranty were unconscionable. It explained that
plaintiff argues that plaintiff and the class do not have any meaningful choice in the time limitations in the warranty, the express terms favor HP, and HP knew that the Pavilions were defective and would fail well before their useful lives. Even accepting each of plaintiff's contentions as true, plaintiff has failed to show how the warranty terms here are unconscionable. In particular, a time limitation, by itself, is not unconscionable.
Id. at 26; see also Jensen v. BMW of North America, Inc., 35 Cal. App. 4th 112, 127, 41 Cal. Rptr. 2d 295 (1995) ("[M]anufacturers are free to change the terms of express warranties they offer. The [Magnuson-Moss Warranty] Act merely reflects the Legislature's intent to make car manufacturers live up to their express warranties, whatever the duration of coverage.).
The Court will deny Defendant's motion in light of the discussion in Section III.B, supra (permitting Plaintiffs' claims for breach of express warranty to proceed).
IV. CONCLUSION
Defendant's motion to dismiss Plaintiffs' Amended Complaint is granted in part and denied in part. An appropriate Order accompanies this Opinion.