Opinion
21-cv-02779
04-21-2023
MICAHEL VELEZ, individually and on behalf of all others similarly situated, Plaintiff, v. RM ACQUISITION, LLC d/b/a RAND MCNALLY, Defendant.
MEMORANDUM OPINION AND ORDER
Franklin U. Valderrama, United States District Judge.
Commercial truck drivers need a GPS system that accurately directs them to relevant points-of-interest along their journey, not to mention the correct route, so they can make their deliveries. Plaintiff Michael Velez (Velez), a commercial truck driver, purchased Defendant Rand McNally's (Rand) TND 730 and TND 740 GPS devices (TND Devices). Velez, however, experienced persistent problems with the TND Devices, ranging from inaccurate maps, misinformation about points-of-interest and poor or unsafe routes. After Rand's attempted repairs of the TND devices were unsuccessful, Velez filed this individual and putative class action against Rand, asserting violations of the Magnuson-Moss Warranty Act (the MMWA), 15 U.S.C. § 2301 et seq., related warranty claims, claims for violations of consumer protection statutes, and Illinois common law claims. R. 1, Compl.
Rand moves to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). R. 21, Mot. Dismiss. Rand also moves to strike the class allegations of the Complaint. R. 23, Mot. Strike. For the reasons set forth below, the Court grants in part and denies in part the Motion to Dismiss and strikes the Motion to Strike as moot.
Background
Rand manufactures, markets, and sells the TND 730 and TND 740 GPS devices. Compl. ¶¶ 12-14. The TND devices came with a one-year warranty, which provided that they “will be free of defects in workmanship and materials for a period of one (1) year from the date of first consumer purchase.” Id. ¶ 28. Via labels and packaging, Rand advertised and represented that the TND 730 came with “Lifetime Maps” that “provides the original purchaser of the device with an annual base map update subject to the terms and conditions described at randmcnally.com/lifetimemaps.” Id. ¶ 33. While the terms and conditions state that “Lifetime” may be limited to 36 months after the initial release, the packaging states that “Lifetime Maps and Traffic Everywhere” updates are provided to purchasers “as long as you own the TND™.” Id. (emphasis removed).
Velez, a Tennessee resident and commercial truck driver, purchased the TND 730 in 2014 at a truck stop for approximately $399.99. Compl. ¶¶ 14, 29. In 2017, Velez purchased a new TND 740 at a different truck stop in Illinois for approximately $499.00. Id. ¶ 29. Velez experienced persistent problems with both devices, including, but not limited to, displaying his location on parallel or non-existent roads and rerouting him to wrong locations, and taking him in the opposite direction of where he was headed. Id. ¶ 30. In addition to causing substantial delays, Velez has been left without a reasonable way to navigate to his destination in his truck. Id.
Velez shipped both TND Devices to Rand for repairs. Compl. ¶ 32. The repairs, however, did not provide Velez with better directions, maps, routing, or point-of-intertest information, or updated maps, and neither unit worked any better than they had originally. Id. ¶ 32. Velez repeatedly contacted Rand to complain about the problems he was experiencing with the TND Devices. Id. ¶ 34. Rand, in response to an April 3, 2021 email inquiry from Velez, informed him that “there will be no future updates provide for the TND 730 devices.” Id. ¶ 35. On November 16, 2020, and again in January 2021, Velez contacted Rand and complained about the lack of updates for the TND 740. Id. ¶¶ 37, 39. Rand informed Velez that the updates would be forthcoming. Id. ¶ 39. The updates were never provided. Id. ¶ 40.
Velez filed this class-action suit against Rand. Velez proposes a class consisting of “[a]ll current and former purchasers of the Rand McNally TND and/or TND 740 in the United States” (the Class). Compl. ¶ 65. Velez asserts the following causes of action on behalf of himself and the Class: (1) violations of the MMWA (Count I); (2) breach of the express warranty, 810 ILCS 5/2-313 (Count II); (3) breach of the implied warranty of merchantability, 810 ILCS 5/2-314 (Count III); (4) violations of the Illinois Consumer Fraud and Deceptive Practices Act (ICFA), 815 ILCS 505/2; (5) violations of the Illinois Uniform Deceptive Trade Practices Act (UDTPA), 815 ILCS § 510, et seq. (Count V); (6) unjust enrichment (Count VI). Compl. Before the Court is Rand's Motion to Dismiss the Complaint under Rules 12(b)(1) and 12(b)(6). Mot. Dismiss.
Legal Standard
A Rule 12(b)(1) motion tests whether the court has subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Standing is an “essential component of Article III's case-or-controversy requirement,” and the plaintiff “bears the burden of establishing standing . . . in the same way as any other matter on which the plaintiff bears the burden of proof ....” Apex Digit., Inc. v. Sears Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009). In order to survive a Rule 12(b)(1) motion, the plaintiff bears the burden of establishing subject matter jurisdiction. Ctr. for Dermatology & Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588-89 (7th Cir. 2014). When deciding a facial challenge to subject matter jurisdiction-that is, when the defendant argues that the plaintiff's allegations as to jurisdiction are inadequate-“the court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff.” Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (citing Apex Digit., 572 F.3d at 443-44).
A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include only “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). To survive a motion to dismiss, a complaint need only contain factual allegations, accepted as true, sufficient to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. The allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678-79.
Analysis
I. Magnuson-Moss Warranty Act (Count I)
A. Subject Matter Jurisdiction
In Count I, Velez alleges that Rand violated the MMWA by breaching its written warranties by supplying the TND Devices in conditions that do not meet its warranty obligations. Compl. ¶ 93. Velez and the Class seek injunctive relief and damages. Id. Rand argues that Count I must be dismissed because the Court lacks subject matter jurisdiction over Count I, as the Complaint does not satisfy the numerosity requirement for federal subject matter over a MMWA class action. R. 22, Memo. Dismiss at 4. Predictably, Velez insists that the Court has subject matter jurisdiction over Count I. R. 39, Resp. at 4.
Before a court can address the merits of a dispute, it must first determine whether it has subject matter jurisdiction. See Scott Air Force Base Properties, LLC v. Cnty. of St. Clair, Ill., 548 F.3d 516, 520 (7th Cir. 2008). Subject matter jurisdiction is the “first issue in any case.” Miller v. Southwest Airlines Co., 926 F.3d 898, 902 (7th Cir. 2019). “The requirement that jurisdiction be established as a threshold matter springs from the nature and limits of the judicial power of the United States and is inflexible and without exception.” Cook v. Winfrey, 141 F.3d 322, 325 (7th Cir. 1998) (cleaned up).
The MMWA provides that “a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief ....” 15 U.S.C. § 2310(d)(1). The MMWA “is a consumer protection statute that requires transparency in warranties on consumer products and establishes minimum criteria for different types of warranties and warranty-like products.” Ware v. BestBuy Stores, L.P., 6 F.4th 726, 728 (7th Cir. 2021). The MMWA “requires that if a warrantied consumer good cannot be repaired, the written warranty must give consumer a choice of remedy: either replacement or a refund of the purchase price, less reasonable depreciation based on actual use.” Id. at 728-29 (emphases in original). The MMWA provides a private right of action by purchasers of consumer products against manufacturers or retailers who fail to comply with the terms of a written or implied warranty. 15 U.S.C. § 2310(d)(1). Under the MMWA, a consumer who is damaged by a warrantor's failure to comply with the obligations under a written or implied warranty may sue for damages in two alternative venues: (1) “any court of competent jurisdiction in any State or the District of Columbia”; and (2) “an appropriate district court of the United States.” Id. § 2310(d)(1)(A)-(B). A plaintiff, however, may not file suit under the MMWA in federal district court:
(A) if the amount in controversy of any individual claim is less than the sum or value of $25;
(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or
(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.Id. § 2310(d).
It is the 100-plaintiff requirement that is at issue in this case. See Memo. Dismiss at 5-6. That limitation applies only to actions filed in federal district courts. Id. § 2310(d)(3).
Velez does not invoke the Court's jurisdiction under the MMWA. Instead, he relies on the Class Action Fairness Act of 2005 (CAFA) for jurisdiction. Compl. ¶ 9 (citing 28 U.S.C. § 1711 et seq.; Id. § 1332(d)); see also R. 39, Resp. at 4.
CAFA grants district courts with original jurisdiction over any class action in which the amount in controversy exceeds the sum of $5,000,000 in the aggregate; there is minimal diversity among the parties, i.e., any class member and any defendant are citizens of different states; and there are at least 100 members in the class. 28 U.S.C. § 1332(d)(2), (5). “CAFA was enacted to grant broad federal jurisdiction over class actions and establishes narrow exceptions to such jurisdiction.” Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 618 (7th Cir. 2012) (cleaned up); see also S. Rep. No. 109-14, at 43, 45 (2005) (explaining that CAFA's provisions granting federal court jurisdiction should be read broadly).
The Seventh Circuit has yet to address whether a class action based on violations of the MMWA that does not satisfy the MMWA's numerosity requirement but satisfies CAFA may be brought in federal court. The closest the court came to the issue was in Ware, where the court noted a “split in authority about the interaction between the class requirements under CAFA and the Magnuson-Moss Warranty Act.” 6 F.4th at 733 n.2. The Seventh Circuit, however, found that it did not need to decide the issue because it did not affect the outcome in that case. Id. The only two circuits to have addressed the issue have reached differing results.
In Kuns v. Ford Motor Co., 543 Fed.Appx. 572, 574 (6th Cir. 2013), cited by Velez, the Sixth Circuit in an unpublished opinion held that a plaintiff whose class action MMWA claims satisfy the requirements of CAFA establishes jurisdiction, even if it does not meet the MMWA's numerosity requirement. The court noted that, while the Sixth Circuit had yet to weigh in on the issue, numerous district courts had generally “held that the CAFA effectively supersedes the MMWA's more stringent jurisdictional requirements.“ Id. (citing Keegan v. Am. Honda Motor Corp., 838 F.Supp.2d 929, 954-55 (C.D. Cal. 2012); Stella v. LVMH Perfumes & Cosmetics USA, Inc., 564 F.Supp.2d 833, 837-38 (N.D. Ill. 2008); McCalley v. Samsung Elecs Am., Inc., 2008 WL 878402, at *5 (D.N.J. Mar. 31, 2008); Chavis v. Fidelity Warranty Servs., Inc., 415 F.Supp.2d 620, 626 (D.S.C. 2006)). The Sixth Circuit reasoned that CAFA renders a district court a “court of competent jurisdiction” and permits it to retain jurisdiction where CAFA's requirements are met, even where MMWA's requirements are not. Id.
The Ninth Circuit, on the other hand, more recently held that that CAFA may not be used to evade the specific numerosity requirement of the MMWA. In Floyd v. Am. Honda Motor Co., 966 F.3d 1027, 1033-35 (9th Cir. 2020), cited by Rand, the court found that it lacked subject matter jurisdiction over the MMWA claim because the plaintiff did not satisfy the MMWA's numerosity requirement. In addressing the interplay between CAFA and the MMWA, the court observed that “CAFA allows certain claims to proceed under diversity jurisdiction, while the MMWA provides for a distinct claim to be brought in federal court for certain state-law warranty violations.” Id. at 1035. The court reasoned that “construing CAFA to provide jurisdiction over MMWA claims despite Plaintiffs' failure to satisfy the plainlanguage requirement of at least one hundred named plaintiffs would have the effect of overriding a part of the MMWA.” Id. The court, however, found no evidence that by enacting CAFA, Congress intended “to repeal or alter parts of the MMWA's jurisdictional requirements.” Id.
District courts within the Seventh Circuit that have addressed the issue are also split. Many courts, including this Court, have held that CAFA provides alternative jurisdiction over a plaintiff's MMWA claim, notwithstanding the failure to satisfy the MMWA's numerosity requirement. See, e.g., Castle v. Kroger Co., 2022 WL 4776319, at *20 (E.D. Wis. Oct. 3, 2022); Van Zeeland v. Rand McNally, 532 F.Supp.3d 557, 564 (N.D. Ill. 2021); Stella v. LVMH Perfumes & Cosms. USA, Inc., 564 F.Supp.2d 833, 838 (N.D. Ill. 2008); Clark v. Wynn's Extended Care, 2007 WL 922244, at *4-5 (N.D. Ill. Mar. 23, 2007) (citing Chavis, 415 F.Supp.2d at 626); see also Corn v. Target Corp., No. 22-cv-04700 Dkt. 18 (N.D. Ill. Nov. 7, 2022).
Other district courts, conversely, following Floyd's reasoning, have held that CAFA does not provide an independent basis for jurisdiction where the plaintiff's MMWA claim fails to satisfy the MMWA's numerosity requirement. See, e.g., Corn v. Home Depot, Inc., 22-cv-04627 Dkt. 24 (N.D. Ill. Jan. 25, 2023); Wienhoff v. Conagra Brands, Inc., 2022 WL 4103974, at *7 (S.D. Ill. Sept. 8, 2022); Johnston v. Kashi Sales, LLC, No. 21-CV-00441-NJR, 2022 WL 4103973, at *11 (S.D. Ill. Sept. 8, 2022). Those courts find that the plain language of the MMWA requires satisfaction of the numerosity requirement.