Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Fla.: Subaru unable to steer clear of consumers’ fraudulent concealment claims, (Jun 23, 2016)

By Greg Hammond, J.D.

Consumers have adequately alleged fraudulent concealment and state deceptive and unfair trade practices claims against Subaru of America, Inc., based on an alleged failure to disclose any information concerning defective airbags. The federal district court in Miami denied Subaru’s motion to dismiss, finding that the consumers met the heightened pleading requirements of Federal Rule of Civil Procedure 9(b) and sufficiently pleaded reliance, causation, and resulting damages (In re Takata Airbag Products Liability Litigation, June 21, 2016, Moreno, F.).

Consumers of vehicles that were equipped with Takata airbags containing ammonium nitrate as a propellant alleged that Subaru and other vehicle manufacturers engaged in fraudulent concealment and violated both the Alabama Deceptive Trade Practices Act (ADTPA) and Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Subaru moved to dismiss.

As a preliminary matter, the court first determined that the consumers sufficiently alleged Subaru’s knowledge of the alleged inflator defect to satisfy the heighted pleading requirements of Rule 9(b).

ADTPA. Subaru first argued that the consumers’ claims of fraudulent concealment and violation of the ADTPA should be dismissed because the plaintiffs have not met the heightened pleading requirements of Rule 9(b) and have not sufficiently pleaded reliance on the alleged concealment and resulting damages. The court disagreed, referring to its earlier decision regarding Mazda Motor of America, Inc.’s motion to dismiss the same claims. In particular, the court found that the plaintiffs sufficiently pleaded the "who, what, when, and where" of their omission claim. The consumers had alleged that Subaru had a duty to disclose the inflator defect because it made incomplete representations about the safety and reliability of the class vehicles, while purposefully withholding material facts from consumers that contradicted those representations.

FDUTPA. The consumers also adequately alleged their FDTUPA claim, the court concluded, because they pleaded that Subaru’s alleged omissions and concealed material facts caused their injuries. In particular, the consumers claimed that but for Subaru’s omission of a dangerous safety defect—a highly material fact for consumers—plaintiffs would not have purchased class vehicles or would not have paid as much for them as they did.

The case is No. 1:15-md-02599-FAM.

Attorneys: John Delionado (Hunton & Williams LLP) for Plaintiffs. Martin Leonard Steinberg (Hogan Lovells US, LLP), Mitchell Edward Widom (Bilzin Sumberg Baena Price & Axelrod LLP) and Scott M. Sarason (Rumberger, Kirk & Caldwell) for FCA US LLC. Stephen J. Krigbaum (Carlton Fields Jorden Burt, P.A.) for Inflation Systems Inc.

Companies: FCA US LLC; Inflation Systems Inc.

Cases: StateUnfairTradePractices FloridaNews