Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Fla.: Auto parts recycler lacked standing in suit over Takata airbags, (Mar 14, 2016)

By Linda O’Brien, J.D., LL.M.

An automotive parts recycler lacked standing to pursue claims against eight automobile manufacturers for collaborating with a vehicle airbag manufacturer to conceal defects in the airbags, the federal district court in Miami has decided. Thus, the defendant automotive manufacturers’ motion to dismiss was granted (Takata Airbag Products Liability Litigation, March 11, 2016, Moreno, F.).

Consumers of vehicles equipped with Takata airbags containing ammonium nitrate as a propellant alleged that Takata Corporation and the manufacturers of Honda, BMW, Ford, Mazda, Mitsubishi, Nissan, Subaru, and Toyota vehicles engaged in a collaborative scheme to defraud consumers by concealing a defect in Takata airbags. The consumers alleged economic loss and personal injury, and asserted claims for fraudulent misrepresentation, fraudulent concealment, and violations of Florida’s Deceptive and Unfair Trade Practices Act and the consumer protection laws of 27 other states. Three Florida businesses—Rigsby’s Auto Parts & Sales, Inc., M&K Used Auto Parts, Inc., and Quarno’s Auto Salvage—assigned their claims to Automotive Recyclers Association (ARA). The defendant automotive manufacturers moved to dismiss ARA’s claims for lack of standing.

Traceable injuries. The court determined that ARA did not sufficiently allege that the three assignors purchased a vehicle manufactured by each and every automotive defendant. According to the court, ARA alleged that the assignors purchased recalled vehicles that contained Takata airbags. However, ARA failed to allege the specific vehicles the assignors purchased, identify the general make of the vehicles purchased, or expressly define “recalled vehicles.” Since it could not be ascertained from the complaint which automotive defendants were responsible for the alleged wrongful conduct, the alleged injury was not fairly traceable to the action of any automotive defendant. Therefore, ARA’s claims against the automotive defendants were dismissed.

State law claims. Additionally, ARA lacked standing to bring state law claims when the assignors’ injuries did not arise under the laws of those states. The three assignors were located in Florida, and there were no allegations that they purchased vehicles outside of Florida. Since the assignors did not reside in the 27 other states or suffer any injury due to transactions in those states, ARA could not pursue class claims under the deceptive trade practices statutes of states other than Florida, the court held.

Associational standing. Finally, the court found that ARA failed to plead sufficient facts to establish associational standing. According to the court, the complaint did not limit the automotive recycler putative class only to ARA’s members, and ARA failed to establish that the interests at stake were germane to ARA’s purpose. The only information in the complaint regarding ARA’s purpose was that ARA was dedicated to the “efficient removal and reuse of automotive parts and the safe disposal of inoperable motor vehicles.” The one statement was insufficient to satisfy the “germane” standing requirement, the court concluded.

The case is No. 14-24009-CV-MORENO.

Attorneys: Peter Prieto (Podhurst Orseck, P.A.) for Daniel S. Silva. Martin Leonard Steinberg (Hogan Lovells US, LLP) for FCA US LLC. Stephen J. Krigbaum (Carlton Fields Jorden Burt, P.A.) for Inflation Systems Inc.

Companies: FCA US LLC; Inflation Systems Inc.; Takata Corporation; TK Holdings

Cases: StateUnfairTradePractices CaliforniaNews