Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D.Fla.: Consumer class action against Volkwagen for alleged defective door locks fails, (Dec 6, 2013)

By Linda O’Brien, J.D., LL.M.

A putative class action by consumers against an automobile manufacturer for alleged concealment of a door lock defect in one of their cars was dismissed due to lack of actual damages, the federal district court in Fort Lauderdale has decided (Licul v. Volkswagen Group of America, Inc., December 5, 2013, Cohn, J.).

Scheherezade Marles purchased a new Volkswagen Jetta sedan in 2001 which came with a two-year/24,000 mile limited warranty. In 2006, Marles married Oliver Licul and sold the Jetta to him. In 2011, the door locks on the plaintiffs’ Jetta failed and froze in the locked position. Licul and Marles filed a putative class action against Volkswagen asserting violations of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), the Magnuson-Moss Act, breach of express warranty, breach of good faith and fair dealing, and unjust enrichment. Specifically, the plaintiffs claimed that Volkswagen knew of the defects in the door locks as early as February 2000, continued to manufacture and sell Jettas, and concealed the defects of the door locks to consumers. Volkswagen moved to dismiss.

A plaintiff asserting a FDUTPA claim must allege: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. The plaintiffs could not plead actual damages, the court held.

The plaintiffs contended that they were economically harmed by Volkswagen’s failure to disclose the door lock defect by paying more for the Jetta then they otherwise would have. They also contended that Marles sold the Jetta to an unsuspecting purchaser, Licul, before the door lock defect had manifested. Because the plaintiffs purchased the Jetta at a price that did not account for the defect and sold it at a price that did not account for the defect, the plaintiffs did not suffer any loss of value in the Jetta that could constitute actual damages, the court found.

The plaintiffs’ FDUTPA claim was also time-barred since the statute of limitations on a FDUTPA claim expired in 2005, before Marles sold the Jetta to Licul. Moreover, the plaintiffs failed to plead facts that the statute of limitations was tolled under the doctrine of fraudulent concealment. The mere non-disclosure of the defect to the public was insufficient to show that Volkswagen concealed the door lock defect through fraudulent means.

Additionally, the court found that the plaintiffs’ breach of express warranty, Magnuson-Moss Act, and breach of duty of good faith and fair dealing claims failed since the express warranty expired before the manifestation of the door lock defect. Finally, the plaintiffs’ claim of unjust enrichment was dismissed as duplicative of the alleged wrongdoing referenced in their other legal causes of action.

The case is No. 13-61686-CIV.

Attorneys: James C. Shah (Shepherd Finkelman Miller & Shah) for Oliver Licul. Jeffrey L. Chase (Herzfeld & Rubin, PC) for Volkswagen Group of America, Inc.

Companies: Volkswagen Group of America, Inc.

Cases: StateUnfairTradePractices FloridaNews