Leary et al v. BP Lubricants USA, Inc. et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.June 26, 2017

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ALISON N. LEARY and TIMOTHY M. LEARY, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. BP LUBRICANTS USA, INC.; and CARSENSE, INC., Defendants. Civil Action No. 2:17-cv-02070-BMS [PROPOSED] ORDER GRANTING DEFENDANT BP LUBRICANTS USA, INC.’s MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT AND NOW, this ___ day of ______, 2017, upon consideration of Defendant BP Lubricants USA, Inc.’s Motion to Dismiss Plaintiffs’ Class Action Complaint, any response thereto, and any oral arguments, the Motion is hereby GRANTED and Plaintiffs’ Complaint is DISMISSED WITH PREJUDICE with respect to Defendant BP Lubricants USA Inc. IT IS SO ORDERED. Dated: _______, 2017 BY THE COURT: The Honorable Berle M. Schiller Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 1 of 28 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ALISON N. LEARY and TIMOTHY M. LEARY, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. BP LUBRICANTS USA, INC.; and CARSENSE, INC., Defendants. Civil Action No. 2:17-cv-02070-BMS BP LUBRICANTS USA, INC.’S MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT ORAL ARGUMENT REQUESTED Defendant, BP Lubricants USA, Inc. (“BP Lubricants”), hereby respectfully moves the Court for an Order in the form attached hereto dismissing with prejudice Plaintiffs’ Class Action Complaint as against BP Lubricants pursuant to Federal Rule of Civil Procedure 12(b)(6). In support of this Motion, BP Lubricants relies upon and incorporates by reference the attached Memorandum of Law, Declaration of Michael H. Steinberg and supporting exhibits. Dated: June 26, 2017 REED SMITH LLP By: /s/ Thomas J. McGarrigle Thomas J. McGarrigle tmcgarrigle@reedsmith.com Kristen Ashe kashe@reedsmith.com Three Logan Square, Suite 3100 1717 Arch Street Philadelphia, Pennsylvania 19103 Telephone: (215) 851-8100 Facsimile: (215) 851-1420 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 2 of 28 -2- Of counsel: SULLIVAN & CROMWELL LLP Michael H. Steinberg steinbergm@sullcrom.com Antonia E. Stamenova-Dancheva stamenovaa@sullcrom.com (Pro hac vice application forthcoming) Lauren M. Cruz cruzlm@sullcrom.com 1888 Century Park East Los Angeles, California 90067 Telephone: (310) 712-6600 Attorneys for Defendant BP Lubricants USA, Inc. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 3 of 28 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ALISON N. LEARY and TIMOTHY M. LEARY, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. BP LUBRICANTS USA, INC.; and CARSENSE, INC., Defendants. Civil Action No. 2:17-cv-02070-BMS BP LUBRICANTS USA, INC.’S MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT ORAL ARGUMENT REQUESTED MEMORANDUM OF LAW IN SUPPORT OF BP LUBRICANTS USA, INC.’S MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 4 of 28 -i- TABLE OF CONTENTS Page I. PRELIMINARY STATEMENT .........................................................................................1 II. SUMMARY OF PLAINTIFFS’ ALLEGATIONS .............................................................4 A. Plaintiffs’ Contradictory Allegations Regarding BP Lubricants and Its Castrol Engine Warranty ..........................................................................................4 B. Plaintiffs’ Failure to Allege Illegal Tying, Breach of Warranty, Actual Damages, Notice and an Opportunity to Cure .........................................................7 III. LEGAL STANDARD ..........................................................................................................9 IV. PLAINTIFFS’ SOLE CAUSE OF ACTION FOR VIOLATION OF THE ANTI- TYING PROVISION OF THE MAGNUSON-MOSS WARRANTY ACT MUST BE DISMISSED ................................................................................................................10 A. Plaintiffs Have Not Alleged an Illegal Tying ........................................................10 B. Plaintiffs Cannot Maintain a Magnuson-Moss Claim Because They Have Not Alleged a Breach of Warranty, Damages, or a Notice and Opportunity to Cure, as Required by the Act .............................................................................14 1. Plaintiffs Have Not Alleged That BP Lubricants Breached Its Warranty or That Plaintiffs Suffered Actual Damages ..............................14 2. Plaintiffs Have Not Provided BP Lubricants With Notice and Opportunity to Cure ...................................................................................18 V. CONCLUSION ..................................................................................................................19 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 5 of 28 -ii- TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) .....................................................................................................9, 14 Atchole v. Silver Spring Imports, Inc., 379 F. Supp. 2d 797 (D. Md. 2005) ...................................................................................15, 18 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .........................................................................................................5, 9, 10 In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997)...................................................................................................10 Matter of Cadillac V8-6-4 Class Action, 461 A.2d 736 (N.J. 1983).........................................................................................................18 Falkenberg v. Alexico Corp., 2008 WL 2478384 (D.N.J. June 17, 2008) ..............................................................................13 Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009).................................................................................................9, 14 In re Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010).................................................................................................5, 10 Kaplan v. Wholesale Auto. Supply Co., 2009 WL 1347404 (N.J. Super. Ct. App. Div. May 15, 2009) ..........................................15, 16 Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727 (3rd Cir. 1970) ...............................................................................................4, 17 Lum v. Bank of America, 361 F.3d 217 (3d Cir. 2004).................................................................................................5, 10 McGarvey v. Penske Auto. Grp., Inc., 2010 WL 1379967 (D.N.J. Mar. 29, 2010) ........................................................................13, 15 McGarvey v. Penske Auto. Grp., Inc., 639 F. Supp. 2d 450 (D.N.J. 2009) ....................................................................................15, 16 Moreno v. Autozone, Inc., 2009 WL 3320489 (N.D. Cal. Oct. 9, 2009) ............................................................................17 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 6 of 28 -iii- Moroz v. Alexico, 2008 WL 109090 (E.D. Pa. Jan. 8, 2008) ................................................................4, 13, 15, 18 Phillips v. Cnty. of Allegheny, 515 F.3d 224 (3d Cir. 2008).....................................................................................................10 Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548 (3d Cir. 2002).................................................................................................5, 10 In re RAIT Fin. Trust Sec. Litig., 2008 WL 5378164 (E.D. Pa. Dec. 22, 2008) ...........................................................................17 Weiner v. Bank of King of Prussia, 358 F. Supp. 684 (E.D. Pa. 1973) ............................................................................................17 Statutes 15 U.S.C. § 2302(a) .......................................................................................................................15 15 U.S.C. § 2302(c) ............................................................................................................... passim 15 U.S.C. § 2310(d) ............................................................................................................... passim 15 U.S.C. § 2310(e) .........................................................................................................4, 9, 14, 18 15 U.S.C. § 2310(f) ........................................................................................................................13 Other Authorities 16 C.F.R. § 700.4 ...........................................................................................................................13 16 C.F.R. § 700.10(c).................................................................................................................3, 12 42 Fed. Reg. 36112, 36114 ..................................................................................................3, 11, 12 80 Fed. Reg. 42710, 42721-42722 .................................................................................................12 Federal Rule of Civil Procedure 12(b)(6) ..............................................................................1, 9, 19 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 7 of 28 Defendant BP Lubricants USA, Inc. (“BP Lubricants”) respectfully submits this Memorandum of Law, together with the Declaration of Michael H. Steinberg (the “Steinberg Decl.”), in support of BP Lubricants’ Motion to Dismiss Plaintiffs’ Class Action Complaint (ECF No. 1, the “Complaint” or “Compl.”) as against BP Lubricants, pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion to Dismiss”). I. PRELIMINARY STATEMENT Modern automobile engines require motor oil products to lubricate critical elements of the engine by providing a thin film where heated metallic parts, like a piston, can move thousands of times per minute. Because of the tight tolerances in, significant heat surrounding and rapid movement of an engine’s parts where the thin film operates, imperfections in the motor oil can lead to disastrous results for an engine. BP Lubricants, which produces Castrol® motor oils (“Castrol”), stands behind its products by informing consumers that if Castrol causes engine harm, BP Lubricants will take care of damages caused by it. Through the warranty, BP Lubricants “agrees to repair or replace, at its option and expense, the engine parts listed in the coverage section that fail or experience abnormal wear due to the failure of Castrol® motor oil to provide proper lubrication to the engine of the vehicle identified [by the consumer on the warranty certificate].” (Steinberg Decl. Ex. 1 (emphasis added).) But, of course, BP Lubricants only stands behind its products, and not those of its motor oil competitors. Because of difficult issues of causation when multiple different manufacturers’ oils are combined to create the thin film within a single engine, BP Lubricants limits the engine warranty it offers to any harm that Castrol causes. Thus, the Castrol Engine Warranty requires its customers to use Castrol oil exclusively, so that if there is a problem, it is a Castrol problem, and not one attributed to other competing lubricants. Nothing, however, in the warranty identifies that a consumer waives any state law remedy for any failing Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 8 of 28 -2- of BP Lubricants’ Castrol products.1 Instead, BP Lubricants provides greater peace of mind to its customers through the free limited warranty of its products. Plaintiffs here, however, accuse BP Lubricants of violating the anti-tying provision of the Magnuson-Moss Warranty Act (the “Act” or “Magnuson-Moss”) because of this free limited warranty. Ignoring the actual terms of the Castrol Engine Warranty, and abandoning all common sense, Plaintiffs allege in a conclusory manner that what BP Lubricants offers to consumers is not a warranty for its Castrol motor oils, but an “automobile warrant[y].” (Compl. ¶ 9 (emphasis added).) Under Plaintiffs’ unprecedented theory of liability, BP Lubricants violated the Act’s anti-tying provision because this “automobile warrant[y]” is “tied” to consumers using Castrol motor oil products. According to Plaintiffs, “requir[ing] consumers to use only premium Castrol motor oils” in order to take advantage of BP Lubricants’ warranty is a “per se violation of the [Act’s] tying prohibition.” (Id. ¶ 5.) Plaintiffs’ theory is nonsensical. BP Lubricants does not offer an “automobile warranty.” Instead, BP Lubricants stands behind its Castrol motor oil products and guarantees their performance with a free limited warranty. In Plaintiffs’ skewed view, however, BP Lubricants is required by the Act to subsidize competing motor oil providers by offering consumers to repair or replace, free of charge, their car engines when competing engine lubricants fail to do their job. Magnuson-Moss requires no such thing. The goal of the Act’s anti-tying provision is simple, is not implicated by the Castrol Engine Warranty, and addresses a very different fact pattern. The Act provides that a warrantor shall not condition its warranty “on the consumer’s using, in connection with such [warranted] product, any article or service … which is identified by brand, trade, or corporate name.” 15 U.S.C. § 2302(c). Amplifying on this point, the Federal Trade Commission (“FTC”) 1 To the extent that imperfections are found in Castrol products and those imperfections cause harm, consumers will have whatever remedies they may have under state law. (See Steinberg Decl. Ex. 2 at 2 (“[T]his warranty gives you specific legal rights and you may also have other rights which vary from state to state.”).) But the Castrol warranty, which Plaintiffs challenge here, is a way to provide greater assurances than may be available as a matter of state law. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 9 of 28 -3- recently noted that “a provision in the warranty such as, ‘use only an authorized ABC dealer’ or ‘use only ABC replacement parts’ is prohibited…” 16 C.F.R. § 700.10(c) (July 20, 2015). And as the FTC previously explained, the Act prohibits “tying arrangements in warranties that effectively restrict consumer’s ability to choose among competing brands of products or services that can be used in conjunction with the warranted product.” 42 Fed. Reg. 36112, 36114 (July 13, 1977) (emphasis added). This is not the case of a General Motors’ automobile warranty requiring that only “GM Parts” be installed by “Authorized GM Services providers”; this is Castrol guaranteeing the performance of its own products. The Complaint does not allege that Castrol motor oil products cannot be purchased from any location or installed by any service provider. In fact, the Castrol Engine Warranty is generally available in the U.S. marketplace and can be obtained by a customer via Castrol’s website. (See Steinberg Decl. Ex. 2 (directing consumers to www.castrol.com/us).) Unsurprisingly, given the fundamental flaw in their claim, Plaintiffs’ Magnuson- Moss claim against BP Lubricants fails as a matter of law for multiple independent reasons. First, the Complaint does not allege any facts in support of an illegal tying arrangement in BP Lubricants’ warranty. The Castrol Engine Warranty is not an “automobile” warranty and does not require that consumers use only “ABC” dealer or “ABC” replacement parts in connection with the warranted Castrol motor oil products; the only “requirement” in the warranty is that consumers use one of the warranted Castrol motor oil products to obtain the benefit of the warranty. Simply using the warranted product does not constitute “tying” under the Act. Second, Plaintiffs fail to allege that they suffered actual damages flowing from BP Lubricants’ alleged violation of the anti-tying provision, as required by the Act. Because the Complaint does not allege that the Castrol Engine Warranty was breached or even implicated, Plaintiffs have not alleged that they were “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.” 15 U.S.C. § 2310(d). Furthermore, because Plaintiffs cannot maintain a Magnuson-Moss cause of action in their own right, they may not avoid Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 10 of 28 -4- dismissal by relying on hypothetical damages that members of as-of-yet uncertified class may have suffered. Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 734 (3rd Cir. 1970) (“What [plaintiff] may not achieve himself, he may not accomplish as a representative of a class.”), cert. denied, 401 U.S. 974 (1971). Third, Plaintiffs do not allege that they gave BP Lubricants a “reasonable opportunity to cure,” as required by the Act. 15 U.S.C. § 2310(e). In fact, as another court in this District has held, where, as here, “the warranty was never breached or even implicated, there is no way for a warrantor to ‘cure’ any violation,” and thus no reasonable opportunity to cure can be afforded. Moroz v. Alexico, 2008 WL 109090, at *6 (E.D. Pa. Jan. 8, 2008). In short, Plaintiffs’ claim against BP Lubricants fails both because Plaintiffs do not allege any “tying” prohibited by the Act and because Plaintiffs do not meet the basic requirements for a private cause of action under Magnuson-Moss. II. SUMMARY OF PLAINTIFFS’ ALLEGATIONS The crux of Plaintiffs’ allegations underlying the sole cause of action in the Complaint is that “Defendants sell automobiles with warranties that require consumers to use only premium Castrol motor oil products, otherwise the warranty is void. Defendants’ warranty is a per se violation of the [Magnuson-Moss] tying prohibition.” (Compl. ¶ 5.) However, as evident from the Complaint and the two warranties on which the Complaint expressly relies (but does not attach), Plaintiffs have failed to state a claim against BP Lubricants. A. Plaintiffs’ Contradictory Allegations Regarding BP Lubricants and Its Castrol Engine Warranty Plaintiffs’ case against BP Lubricants is based almost entirely on vague allegations and generalities. First, Plaintiffs contend that BP Lubricants, together with the other defendant, CarSense, a used car dealership, “sell[s] automobiles with warranties” that violate the tying prohibition of the Act. (Id.) Not so. As the Complaint alleges elsewhere, BP Lubricants “provides its customers with fuel for transport, energy for heat and light, lubricants to keep Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 11 of 28 -5- engines running, and petrochemicals used to manufacture a wide array of products.” (Id. ¶ 9.) BP Lubricants does not sell vehicles, and therefore cannot sell vehicles with illegal warranties. Second, Plaintiffs contend that BP Lubricants “provides consumers with limited written automobile warranties.” (Id.; see also id. ¶ 14 (Plaintiffs’ used car purchased at CarSense “was backed by the warranties”2); ¶ 15 (same).) This is also incorrect. Contrary to Plaintiffs’ conclusory allegations, even a cursory review of the Castrol Engine Warranty, explicitly relied on in the Complaint,3 shows that BP Lubricants only warrants its Castrol motor oil products, not used cars or used car engines. For example, the limited warranty certificate states that BP Lubricants “agrees to repair or replace, at its option and expense, the engine parts listed in the coverage section that fail or experience abnormal wear due to the failure of Castrol® motor oil to provide proper lubrication to the engine of the vehicle identified above.” (Steinberg Decl. Ex. 1, at 1 (emphasis added).) The warranty certificate further states that “[t]his warranty [is] provided for the Castrol motor oil products listed below and the periods specified.” (Id. (emphasis added).) Third, Plaintiffs suggest that they paid for the Castrol Engine Warranty.4 (See Compl. ¶ 14 (“As part of the purchase price for the vehicle, Plaintiffs were provided the ‘Lifetime Engine Guarantee’ from CarSense, as well as the ‘Castrol® Engine Warranty’.”); ¶ 15 (“After purchasing the vehicle and warranties…”); ¶ 31 (“Plaintiffs seek to enjoin further sales of 2 Elsewhere, the Complaint correctly notes that there are two separate warranties: the “Lifetime Engine Guarantee,” provided by CarSense, and the Castrol Engine Warranty, provided separately by BP Lubricants. (See e.g., Compl. ¶ 14 (“Plaintiffs were provided the ‘Lifetime Engine Guarantee’ from CarSense as well as the ‘Castrol Engine Warranty.’”); ¶ 5 (“warranties”); ¶ 12 (same); ¶ 15 (same); ¶ 26 (same); ¶ 29 (same).) 3 In deciding a motion to dismiss, the Court may consider documents “integral to and relied upon in the complaint.” Lum v. Bank of America, 361 F.3d 217, 221 n.3 (3d Cir. 2004) (citations omitted), abrogated in part on other grounds by Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), as recognized in In re Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010). See also Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 559 (3d Cir. 2002) (“[A] trial court has discretion to address evidence outside of the complaint when ruling on a motion to dismiss.”). 4 Whether the Castrol Engine Warranty is free, or whether it is purchased, is irrelevant in this case. See Part IV.B.1 infra at 14-15. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 12 of 28 -6- the warranties…”).) But BP Lubricants does not “sell” the Castrol Engine Warranty; it is free, as expressly stated on both the warranty application and warranty certificate. (See, e.g., Steinberg Decl. Ex. 1 (“This Certificate confirms your registration in the free Castrol® limited engine warranty.”); id. Ex. 2 (“Why should I apply for the Castrol Engine Warranty? ... It’s quick, it’s easy and it’s free!”).) Fourth, by impermissibly lumping together BP Lubricants and CarSense (the dealership where Plaintiffs purchased their car and the other defendant named in the Complaint) and their separate warranties, the Complaint suggests that BP Lubricants sells or otherwise provides the “Lifetime Engine Guarantee” offered by CarSense. (See, e.g., Compl. ¶ 12 (“Under these warranties, CarSense and BP Lubricants cover the engine in vehicles sold by CarSense to consumers from oil related mechanical failure or abnormal wear….”); ¶ 14 (“These warranties were an important factor in Plaintiffs’ decision to purchase the vehicle from CarSense and to pay the price paid for the vehicle.”).) But the Complaint does clearly, and accurately, allege that there are two separate warranties. See supra, note 2. Contrary to Plaintiffs’ conclusory allegations, however, BP Lubricants does not offer the CarSense Lifetime Engine Guarantee. Even a quick review of the documents relied on explicitly in the Complaint (but not attached to it) contradicts Plaintiffs’ wholesale allegations. For example, it is clear from the face of the CarSense Lifetime Engine Guarantee, accessible on the CarSense website, that it is a warranty offered solely by CarSense, and not by BP Lubricants. (See Steinberg Decl. Ex. 3 (“There’s no greater guarantee than ours”; “We cover your engine . . .”; “Bring your vehicle to CarSense once a year . . .”; “CarSense may repair or replace parts . . .”; “CarSense is not responsible . . .”; “CarSense Budget Cars do not qualify . . .”; “Our guarantee covers . . .”; and “However, as CarSense no longer offers Quaker State, current customers are required to use Castrol”).) The CarSense Lifetime Engine Guarantee is offered through CarSense’s website, and not Castrol’s website. (See id.) Although CarSense offers a broader Lifetime Engine Guarantee that adds coverage on top of the Castrol Engine Warranty, the two offers are distinct. The fact that CarSense incorporates the Castrol Engine Warranty into its Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 13 of 28 -7- broader CarSense Lifetime Engine Guarantee does not make the two warranties one and the same. The Castrol Engine Warranty is offered independently of the CarSense Lifetime Engine Guarantee. Any CarSense customer can get a Castrol Engine Warranty whether or not that customer avails itself of the CarSense Lifetime Engine Guarantee. The purchaser of a car from CarSense or any other car dealer can pursue a Castrol Engine Warranty directly by simply going to the Castrol website. (See Steinberg Decl. Ex. 2.) So, in no sense is the Castrol Engine Warranty tied to the purchase of a car from CarSense. Nor do BP Lubricants and CarSense offer a third, “Defendants’ warranty,” as Plaintiffs claim, without any support, in a further attempt to confuse the Court. (Compl. ¶ 5; see also id. ¶ 1 (“Defendants sell a written warranty….”).) In the end, Plaintiffs’ vague, compound and conclusory allegations attempt to obscure the simple fact that BP Lubricants offers a free limited warranty for its motor oil products: the Castrol Engine Warranty. BP Lubricants does not sell automobiles, does not warrant used cars or used car engines, does not offer the second warranty at issue here (CarSense’s Lifetime Engine Guarantee), nor does it offer a putative third, unnamed warranty jointly with CarSense. The fact that CarSense’s Lifetime Engine Guarantee bootstraps or incorporates the Castrol Engine Warranty into its broader coverage does not make the CarSense Lifetime Engine Guarantee a Castrol warranty offer. The Castrol Engine Warranty is expressly limited to the performance of Castrol lubricants and is not tied to the purchase of any other product by any other seller. B. Plaintiffs’ Failure to Allege Illegal Tying, Breach of Warranty, Actual Damages, Notice and an Opportunity to Cure While Plaintiffs are generous with their vague and contradictory allegations concerning BP Lubricants and its Castrol Engine Warranty, the Complaint lacks the factual assertions necessary for Plaintiffs’ Magnuson-Moss claim against BP Lubricants. As a preliminary matter, the Complaint fails to provide even a single factual allegation concerning any form of prohibited tying in BP Lubricants’ Castrol Engine Warranty. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 14 of 28 -8- Tellingly, the Complaint does not attach either the Castrol Engine Warranty, or the warranty offered by the other defendant, despite using the warranties as the basis for Plaintiffs’ claim. Instead, Plaintiffs complain about a “warranty [that] contains an illegal tying provision,” (Compl. ¶ 1), “a per se violation of the [Act]’s tying prohibition,” (id. ¶ 5), “an illegal tying arrangement [created] by requiring Plaintiffs to change their motor oil … with only Castrol products,” (id. ¶ 16), and “Defendants’ requirement that consumers use only Castrol motor oil, [which] is an illegal tying provision under [Magnuson-Moss]” (id. ¶ 29). That Plaintiffs cannot offer more than formulaic and boilerplate recitations is apparent from even a cursory review of BP Lubricants’ Castrol Engine Warranty. For example, consumers are not required to purchase or use, in connection with the Castrol motor oil products covered by the warranty, any additional products or services identified by brand or name. The warranty requires that the oil change and related services “be performed by an automotive service center, commercial fast oil change facility or auto dealer,” but no professional service providers are specifically identified, and consumers remain free to choose where to have their cars serviced. (Steinberg Decl. Ex. 1, at 2.) BP Lubricants’ warranty is not “condition[ed] … on the consumer’s using, in connection with such [Castrol motor oil] product[s] any article or service … which is identified by brand, trade or corporate name….” 15 U.S.C. § 2302(c). The Castrol Engine Warranty is not tied to the purchase of a car from CarSense or from any other identified source. The Castrol Engine Warranty is generally available in the marketplace and is readily obtainable online from Castrol’s website. Plaintiffs’ only factual “tying” allegation in connection with the Castrol Engine Warranty is that it “requires consumers to use only premium Castrol motor oils.” (Compl. ¶ 5.) Of course, consumers must use the warranted product in order to take advantage of the free limited warranty. This is how warranties work. There is no “illegal tying,” as Plaintiffs claim, because the use of the warranted Castrol motor oil products is not “tied to” or “conditioned upon” consumers using, in connection with the Castrol motor oil products, any other product or service identified by name. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 15 of 28 -9- Further, Plaintiffs fail to allege any facts showing that Plaintiffs may bring a private cause of action under the Act against BP Lubricants. Plaintiffs never had a warranty claim denied by BP Lubricants, never filed a warranty claim with BP Lubricants, and never alleged engine damage of any kind. Plaintiffs do not allege that BP Lubricants breached its warranty obligations, much less that Plaintiffs suffered damages as a result of such a breach. Instead, the Complaint claims that “Plaintiffs suffered damages by paying extra for Castrol motor oil” and that “[t]here may be many of [sic] Class members who have not used Castrol motor oil when changing the oil in their vehicles and have been told that as such the warranty on their vehicle is void.” (Compl. ¶ 32.) As detailed in Section IV.B.1 below, neither of Plaintiffs’ flawed damages theories is sufficient under the private cause of action provisions of the Act, 15 U.S.C. § 2310(d). Nor do Plaintiffs allege that they notified BP Lubricants of any alleged breach and of Plaintiffs’ intent to bring a class action lawsuit based on that breach, nor did Plaintiffs give BP Lubricants a reasonable opportunity to cure. Accordingly, as detailed in Section IV.B.2 below, Plaintiffs’ allegations are insufficient under the class action provision of the Act, 15 U.S.C. § 2310(e). III. LEGAL STANDARD The Court should dismiss the Complaint pursuant to Rule 12(b)(6) because Plaintiffs fail to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plaintiffs’ “obligation to provide the grounds of [their] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do.” Id. at 545 (internal quotations omitted). Thus, while the Court must accept as true well-pleaded factual allegations, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Nor must the Court “accept as true a legal conclusion couched as a factual allegation.” Id. (citations omitted). As the Third Circuit explained, “a complaint must do more than allege the plaintiff’s entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts.” Fowler v. UPMC Shadyside, 578 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 16 of 28 -10- F.3d 203, 211 (3d Cir. 2009) (citations omitted; emphasis added); see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) (“We caution that without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only ‘fair notice,’ but also the ‘grounds’ on which the claim rests.”) (citing Twombly, 550 U.S. at 555 n.3). Further, in deciding a motion to dismiss, the Court may consider, in addition to the allegations in the Complaint and any exhibits attached to it, “documents that form the basis of a claim.” Lum v. Bank of America, 361 F.3d 217, 221 n.3 (3d Cir. 2004) (citations omitted), abrogated in part on other grounds by Twombly, 550 U.S. 544 (2007), as recognized in In re Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010). See also Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 559 (3d Cir. 2002) (“[A] trial court has discretion to address evidence outside of the complaint when ruling on a motion to dismiss.”). “A document forms the basis of a claim if the document is ‘integral to or explicitly relied upon in the complaint.’” Lum, 361 F.3d at 221 n.3 (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). Because Plaintiffs “with a legally deficient claim that is based on a particular document” may not “avoid dismissal of that claim by failing to attach the relied upon document,” id., the Court should consider the Castrol Engine Warranty, as well as CarSense’s Lifetime Engine Guarantee, both of which form the basis of Plaintiffs’ claim. IV. PLAINTIFFS’ SOLE CAUSE OF ACTION FOR VIOLATION OF THE ANTI- TYING PROVISION OF THE MAGNUSON-MOSS WARRANTY ACT MUST BE DISMISSED A. Plaintiffs Have Not Alleged an Illegal Tying Plaintiffs’ sole cause of action alleges that Defendants violated the Act’s anti- tying provision, which states, in relevant part: No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name… 15 U.S.C. § 2302(c) (emphasis added); see also Compl. ¶ 27. Plaintiffs go on to allege that “[t]he warranties both are conditioned on a consumer’s use of Castrol branded motor oil…. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 17 of 28 -11- Accordingly, Defendants’ requirement that consumers use only Castrol motor oils is an illegal tying provision under [the Act].” (Compl. ¶ 29; see also id. ¶ 5.) As a preliminary matter, Plaintiffs’ claim against BP Lubricants is grounded in the incorrect premise that this manufacturer of motor oil products “provides consumers with limited written automobile warranties.” (Compl. ¶ 9 (emphasis added).) According to the Complaint, BP Lubricants warrants any and all cars (including used cars) and/or car engines, apparently no matter who supplied the motor oil. In other words, Plaintiffs ask this Court to require BP Lubricants to provide the Castrol Engine Warranty regardless of the brand of motor oil products used by consumers, and therefore without regard for its economic self-interest. Neither the terms of the Castrol Engine Warranty, nor the plain text of the Act’s anti-tying provision, nor the FTC’s and courts’ interpretations of the provision, support Plaintiffs’ unprecedented and illogical theory of liability. The Castrol Engine Warranty “is provided for the Castrol motor oil products listed below” (i.e., not the automobile) and in it, BP Lubricants agrees to repair or replace certain engine parts “that fail or experience abnormal wear due to the failure of Castrol® motor oil to provide proper lubrication to the engine of the vehicle identified above.” (Steinberg Decl. Ex. 1, at 1 (emphasis added).) The Act’s anti-tying provision does not prohibit manufacturers from providing warranties for their products. Instead, it prohibits a warrantor from requiring that consumers use, in connection with the warranted product, other products or services identified by brand or name. 15 U.S.C. § 2302(c). As the FTC clarified in its 1977 statement accompanying its Interpretations of Magnuson-Moss, “Section 102(c) prohibits tying arrangements in warranties that effectively restrict the consumer’s ability to choose among competing brands of products or services that can be used in conjunction with the warranted product.” 42 Fed. Reg. 36112, 36114 (July 13, 1977) (emphasis added); see also Compl. ¶ 28 (quoting 45 [sic.] Fed. Reg. 36112, 36114 as Congress’s “purpose and intent behind Section 102(c)”). And recently, the FTC further clarified that “[n]o warrantor may condition the continued validity of a warranty on the use of only authorized repair service and/or authorized replacement parts for non-warranty service and Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 18 of 28 -12- maintenance….” 16 C.F.R. § 700.10(c), 42 Fed. Reg. 36112, 36114 (July 13, 1977), as amended at 80 Fed. Reg. 42710, 42721-42722 (July 20, 2015). It is one thing to prohibit a warrantor from using a warranty to restrict consumers’ choice of competing products used in connection with the warranted product (e.g., requiring only “GM Parts” or “Authorized GM Servicers”); it is quite another to require a distributor or manufacturer to warrant its competitors’ products. The latter approach, urged by Plaintiffs, is not mandated by the Act.5 Furthermore, when the Castrol Engine Warranty is viewed for what it is—a limited warranty for certain Castrol motor oil products—there are no conditions that impermissibly restrict consumers’ choice of products or services to be used in conjunction with the warranted motor oil products. For example, the Castrol Engine Warranty is not conditioned on consumers using Castrol motor oil products only in certain brands of vehicles or engines, or only in vehicles purchased from certain dealerships identified by name—if the Castrol motor oil products listed in the warranty fail to lubricate a vehicle’s engine properly, BP Lubricants agrees to repair or replace certain engine parts for whatever vehicle a consumer pens in on the warranty certificate, regardless of what brand it is or where it was purchased. (See Steinberg Decl. Ex. 1.) Likewise, the warranty is not conditioned on consumers using only certain dealerships or service centers identified by name to change the Castrol motor oil in their vehicle. (Id.) There is no “tying.” Notwithstanding the Complaint’s vague and fact-free reference to a “mutually beneficial” “warranty arrangement” between BP Lubricants and CarSense, (Compl. ¶ 13), there is nothing in the Castrol Engine Warranty that requires consumers to purchase their car from 5 Plaintiffs’ references to statements by Kevin Sheehy of BP Lubricants and the Automotive Oil Change Association, provided in response to the FTC’s request for comments in connection with the Act’s anti-tying provision, are a distraction. Both statements relate to automobile manufacturers’ impermissibly conditioning their automobile warranties on consumers using specified branded or licensed motor oils. (See Compl. ¶¶ 4, 29.) Of course, such tying is impermissible under the Act as it restricts consumers’ ability to choose among competing brands of motor oils to use with the warranted vehicles. Neither comment urges, however, that motor oil manufacturers be precluded from warranting their own motor oil products or, conversely, be required to warrant competing motor oil products. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 19 of 28 -13- CarSense or to have the car or car engine serviced at CarSense. In fact, the Complaint confirms elsewhere that under the Castrol Engine Warranty consumers are free to choose where to have their engine oil changed—Plaintiffs changed their motor oil at Tolsdorf Oil Lube Express. (Id. ¶ 15.) Plaintiffs do not allege that their use of the third-party oil change facility voided the Castrol Engine Warranty; to the contrary, Plaintiffs assert their actions preserved the warranty. (Id.) The only limitation in the Castrol Engine Warranty is that the oil change and related services “be performed by an automotive service center, commercial fast oil change facility or auto dealer.” (See Steinberg Decl. Ex. 1, at 2 (emphasis added).) Since no automotive service center, commercial fast oil change facility or auto dealer is “identified by brand, trade or corporate name,” this limitation does not violate the Act’s anti-tying provision. 15 U.S.C. § 2302(c); see also Moroz v. Alexico Corp., 2008 WL 109090, at *5 (E.D. Pa. Jan 8, 2008) (Magnuson-Moss anti-tying provision not violated where warranty for vehicle anti-theft product required consumers to purchase comprehensive vehicle theft insurance but did not require that such insurance be purchased from a particular company); Falkenberg v. Alexico Corp., 2008 WL 2478384, at *4 (D.N.J. June 17, 2008) (same); see also McGarvey v. Penske Auto. Grp., Inc., 2010 WL 1379967, at *9-10 (D.N.J. Mar. 29, 2010) (McGarvey II) (on reconsideration, finding that plaintiffs did not show that a limited warranty, which provided for issuance of credit to a specified dealership for consumer’s use towards the purchase of a future vehicle, violated the Act’s anti-tying provision, and vacating grant of summary judgment in plaintiffs’ favor). Finally, BP Lubricants does not sell or otherwise provide the “Lifetime Engine Warranty,” which is provided separately by CarSense. To be liable under the Act for a written warranty, a warrantor must actually offer the warranty at issue. See 15 U.S.C. § 2310(f) (“For purposes of this section, only the warrantor actually making a written affirmation of fact, promise, or undertaking shall be deemed to have created a written warranty, and any rights arising thereunder may be enforced under this section only against such warrantor and no other person.”). See also 16 C.F.R. § 700.4 (“[The Act] 15 U.S.C. 2310(f), provides that only the Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 20 of 28 -14- supplier “actually making” a written warranty is liable for purposes of . . . private enforcement of the Act.”). A “warrantor” is defined as “any supplier or other person who gives or offers to give a warranty . . . .” Id. The Castrol Engine Warranty is only offered by BP Lubricants. (See Steinberg Decl. Ex. 1 (“BP Lubricants USA Inc. makes the following warranty to you . . .”).) Whereas, CarSense’s Lifetime Engine Guarantee is only offered by CarSense. (See id. Ex. 3 (“We cover your engine . . .” and “Our guarantee . . .”).) As BP Lubricants does not offer the Lifetime Engine Guarantee, BP Lubricants cannot be liable as a warrantor thereunder. To the extent that Plaintiffs allege otherwise, in the absence of any supporting facts, such allegation is, at best, conclusory and need not be credited. See Iqbal, 556 U.S. at 678. In fact, such an allegation is contradicted by the CarSense “Lifetime Engine Warranty,” which the Complaint explicitly relies on but fails to attach, and which clearly states that it is provided solely by CarSense. See supra. Because the Complaint does no “more than allege the [Plaintiffs’] entitlement to relief,” and does not “‘show’ such an entitlement with its facts,” the Complaint must be dismissed. Fowler, 578 F.3d at 211. B. Plaintiffs Cannot Maintain a Magnuson-Moss Claim Because They Have Not Alleged a Breach of Warranty, Damages, or a Notice and Opportunity to Cure, as Required by the Act The Complaint must be dismissed for the additional reason that Plaintiffs have not met the requirements for the Act’s private right of action. See 15 U.S.C. §§ 2310(d), (e); see also Compl. ¶ 23 (citing 15 U.S.C. §§ 2310(d), (e) as authorizing suits for damages, legal and equitable relief, as well as class action suits). 1. Plaintiffs Have Not Alleged That BP Lubricants Breached Its Warranty or That Plaintiffs Suffered Actual Damages Congress provided a private cause of action “for damages and other legal and equitable relief” only to those consumers who are “damaged by the failure of a … warrantor … to comply with any obligation under [the Act], or under a written warranty….” 15 U.S.C. § 2310(d) (emphasis added). It is insufficient as a matter of law to claim damages arising from Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 21 of 28 -15- the purchase of a warranty that violated the Act. “It is readily apparent that by restricting the class of [Magnuson-Moss] plaintiffs to consumers ‘damaged’ by a defendant’s [Magnuson- Moss] violation, Congress did not intend to afford a right of action to a consumer who merely ‘paid for a warranty that was technically illegal under the statute.’” McGarvey v. Penske Auto. Grp., Inc., 639 F. Supp. 2d 450, 456 (D.N.J. 2009) (McGarvey I), vacated in part on reconsideration, McGarvey II, 2010 WL 1379967 (citations omitted). The Complaint does not allege that BP Lubricants breached its Castrol Engine Warranty, or any other warranty for that matter. Instead, Plaintiffs claim that BP Lubricants failed to comply with its obligations under the Act—specifically, the Act’s anti-tying provision. (See Compl. ¶¶ 27-29, 32.) Plaintiffs offer two theories of damages, neither of which can sustain Plaintiffs’ Magnuson-Moss claim. First, Plaintiffs claim that they “suffered damages by paying extra for Castrol motor oil.” (Id. ¶ 32.) Because one of the Plaintiffs “did not want to risk voiding the warranties … he paid approximately $40.00 extra for the Castrol motor oil to be used in the oil change service.” (Id. ¶ 15.) But, as courts in the Third Circuit who have considered the issue have determined, “the damage sustained by the plaintiff must flow from the [alleged] violation [of the Act].” Kaplan v. Wholesale Auto. Supply Co., 2009 WL 1347404, at *16 (N.J. Super. Ct. App. Div. May 15, 2009) (emphasis added) (“[t]o interpret the [Magnuson-Moss] any differently would simply entitle a plaintiff to recover for a bad bargain which he made”); see also McGarvey I, 639 F. Supp. 2d at 456 (“all courts within this Circuit to have addressed the question, have held that a plaintiff is required to show that he has sustained actual damage, proximately caused by the defendant’s failure to comply with the [Magnuson-Moss] in order to state an actionable [Magnuson-Moss] claim”) (citations and quotations omitted); Moroz, 2008 WL 109090, at *6 (stating that “[i]n the absence of any allegation of breach, it is difficult to see how [Defendants’ failure to comply with the Magnuson-Moss disclosure provision, 15 U.S.C. §2302(a)] caused Plaintiffs to sustain actual damages” and finding that “damages recoverable under [15 U.S.C.] §2310(d) are those resulting from an uncured breach”); Atchole v. Silver Spring Imports, Inc., 379 F. Supp. 2d 797, 802-03 (D. Md. 2005) (“Plaintiff is required to show Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 22 of 28 -16- that he has sustained actual damage, proximately caused by Defendant SSI’s failure to disclose the terms of the warranty in accordance with the [Magnuson-Moss].”). In Kaplan, the court recognized that the Act “requires more than a showing that the plaintiff paid for a warranty that was technically illegal under the statute.” 2009 WL 1347404, at *16. The court reasoned that, “if plaintiff’s car had been stolen and not recovered, and if he sought reimbursement from defendant under the warranty and was told that he could only get the second half of his $2000 if he bought a new car from the dealer who sold him the original car, then he might have sustained damages.” Id. But, “absent an event triggering the warranty in issue,” the court held that “plaintiff did not suffer any damages which entitle him to recover under the [Magnuson-Moss].” Id. Likewise, in McGarvey I, plaintiffs did not allege that their vehicle was stolen pursuant to the terms of the limited warranty for defendant’s anti-theft system, or that defendants breached the terms of the limited warranty. 639 F. Supp. 2d at 453- 54. In the absence of such allegations, the court found that plaintiffs’ Magnuson-Moss claim based on defendants’ violation of the anti-tying provision was “unsustainable,” and dismissed it. Id. at 455-57. Just as in Kaplan and McGarvey I, Plaintiffs here have not alleged a warranty- triggering event, and therefore have not alleged actual damages that flow from any claimed violation of the Magnuson-Moss. That Plaintiffs purchased Castrol motor oil (as the predicate to the supposed Castrol Engine Warranty), which Plaintiffs claim cost them “approximately $40 more than … a comparable non-Castrol synthetic product,” (Compl. ¶ 15), is insufficient to sustain their cause of action. Plaintiffs may well think this is a “bad bargain,” but they have not “sustained actual damage, proximately caused” by the alleged violation of the Act’s anti-tying provision. McGarvey I, 639 F. Supp. 2d at 456. Second, in the absence of a warranty-triggering event and any actual damages flowing to Plaintiffs from such an event, Plaintiffs contend that “[t]here may be many of [sic] Class members who have not used Castrol motor oil when changing the oil in their vehicles and have been told that as such the warranty on their vehicle is void.” (Compl. ¶ 32.) But passing Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 23 of 28 -17- the fact that there is no suggestion anywhere that BP Lubricants told any consumer that its warranty is “void,” it is axiomatic that Plaintiffs cannot remedy their lack of damages, and therefore their inability to bring a claim, by relying on hypothetical damages suffered by unnamed members of as-of-yet uncertified class. See, e.g., Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 734 (3rd Cir. 1970) (reversing district court’s refusal to dismiss a complaint and holding that plaintiff cannot remedy his lack of standing to assert a claim by purporting to represent a class which is entitled to assert a claim because “[w]hat he may not achieve himself, he may not accomplish as a representative of a class”), cert. denied, 401 U.S. 974 (1971); Weiner v. Bank of King of Prussia, 358 F. Supp. 684, 694-95 (E.D. Pa. 1973) (where a claim under the Truth-in-Lending law “depends on the existence of a contractual relationship between the injured debtor and injuring creditor,” named plaintiff cannot assert a claim against banks with which plaintiff had no contractual relationship by arguing that class members had such a relationship); In re RAIT Fin. Trust Sec. Litig., 2008 WL 5378164, at *4 (E.D. Pa. Dec. 22, 2008) (finding that named plaintiffs who did not purchase stock in a stock offering could not maintain claims for securities law violations in connection with that offering by relying on alleged purchases by members of the class, and dismissing those claims); Moreno v. Autozone, Inc., 2009 WL 3320489, at *3 (N.D. Cal. Oct. 9, 2009) (vacating class certification and dismissing named plaintiff’s timely payment claims because “[w]hile Plaintiff may indeed be correct that Defendant’s payment policy would regularly result in checks being issued more than 72 hours after a resignation, and that some individuals would have requested payment before the check was available, Plaintiff has no evidence that she was such an individual”), aff’d, 410 F. App’x 24 (9th Cir. 2010) (unpublished). Because Plaintiffs have not alleged any damages flowing from BP Lubricants’ alleged violation of the Act’s anti-tying provision, and therefore cannot maintain a Magnuson- Moss cause of action in their own right under 15 U.S.C. §2310(d), Plaintiffs cannot assert this claim on behalf of putative class members. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 24 of 28 -18- 2. Plaintiffs Have Not Provided BP Lubricants With Notice and Opportunity to Cure “[Magnuson-Moss 15 U.S.C.] §2310—the provision by which Plaintiffs seek to proceed [Compl. ¶ 23]—requires a consumer to give the warrantor an opportunity to cure any violation before the consumer may commence suit.” Moroz, 2008 WL 109090, at *6. In other words, an opportunity to cure is a “condition precedent” to a Magnuson-Moss claim. Matter of Cadillac V8-6-4 Class Action, 461 A.2d 736, 744 (N.J. 1983). In class actions, “such reasonable opportunity [to cure a failure to comply] will be afforded by the named plaintiffs and they shall at that time notify the defendant that they are acting on behalf of the class.” 15 U.S.C. § 2310(e) (emphasis added). “Reasonable opportunity to cure” means that “the seller has a practical opportunity to repair or replace defective parts of a contracted-for product.” Atchole, 379 F. Supp. 2d at 800. As the Eastern District of Pennsylvania previously held, however, “where the warranty was never breached or even implicated, there is no way for a warrantor to ‘cure’ any violation.” Moroz, 2008 WL 109090, at *6. Plaintiffs do not allege that they notified BP Lubricants of any breach of the Castrol Engine Warranty, much less that they notified BP Lubricants “at that time” that Plaintiffs “are acting on behalf of [a] class.” Plaintiffs also do not allege that they gave BP Lubricants a reasonable opportunity to cure any breach of the Castrol Engine Warranty. Nor can Plaintiffs allege such notice and opportunity to cure—the Complaint is clear that no breach of the Castrol Engine Warranty has occurred, and Plaintiffs have not even sought to invoke the warranty. (See, e.g., Compl. ¶¶ 15, 22-33.) Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 25 of 28 -19- V. CONCLUSION For all of the foregoing reasons, BP Lubricants respectfully requests that the Court grant its Motion to Dismiss Plaintiffs’ Complaint with prejudice as against BP Lubricants pursuant to Rule 12(b)(6). Dated: June 26, 2017 REED SMITH LLP By: /s/ Thomas J. McGarrigle Thomas J. McGarrigle tmcgarrigle@reedsmith.com Kristen Ashe kashe@reedsmith.com Three Logan Square, Suite 3100 1717 Arch Street Philadelphia, Pennsylvania 19103 Telephone: (215) 851-8100 Facsimile: (215) 851-1420 Of counsel: SULLIVAN & CROMWELL LLP Michael H. Steinberg steinbergm@sullcrom.com Antonia E. Stamenova-Dancheva stamenovaa@sullcrom.com (Pro hac vice application forthcoming) Lauren M. Cruz cruzlm@sullcrom.com 1888 Century Park East Los Angeles, California 90067 Telephone: (310) 712-6600 Facsimile: (310) 712-8800 Attorneys for Defendant BP Lubricants USA, Inc. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 26 of 28 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ALISON N. LEARY and TIMOTHY M. LEARY, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. BP LUBRICANTS USA, INC.; and CARSENSE, INC., Defendants. Civil Action No. 2:17-cv-02070-BMS BP LUBRICANTS USA, INC.’S MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT ORAL ARGUMENT REQUESTED CERTIFICATE OF SERVICE I hereby certify that on this 26th day of June, 2017, I caused the foregoing Defendant BP Lubricants USA, Inc.’s Motion to Dismiss Plaintiffs’ Class Action Complaint, Memorandum of Law, Declaration of Michael H. Steinberg and corresponding exhibits in support thereof to be filed electronically with the Clerk of the Court using the Court’s CM/ECF system, which served a copy on all interested parties registered for electronic filing, and is available for viewing and downloading from the ECF system. Dated: June 26, 2017 REED SMITH LLP By: /s/ Thomas J. McGarrigle Thomas J. McGarrigle tmcgarrigle@reedsmith.com Kristen Ashe kashe@reedsmith.com Three Logan Square, Suite 3100 1717 Arch Street Philadelphia, Pennsylvania 19103 Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 27 of 28 -2- Telephone: (215) 851-8100 Facsimile: (215) 851-1420 Of counsel: SULLIVAN & CROMWELL LLP Michael H. Steinberg steinbergm@sullcrom.com Antonia E. Stamenova-Dancheva stamenovaa@sullcrom.com (Pro hac vice application forthcoming) Lauren M. Cruz cruzlm@sullcrom.com 1888 Century Park East Los Angeles, California 90067 Telephone: (310) 712-6600 Attorneys for Defendant BP Lubricants USA, Inc. Case 2:17-cv-02070-BMS Document 12 Filed 06/26/17 Page 28 of 28 Case 2:17-cv-02070-BMS Document 12-1 Filed 06/26/17 Page 1 of 2 Case 2:17-cv-02070-BMS Document 12-1 Filed 06/26/17 Page 2 of 2 EXHIBIT 1 Case 2:17-cv-02070-BMS Document 12-2 Filed 06/26/17 Page 1 of 3 ® E NG INE FREE LIMITED WARRANTY CERTIFICATE Maximum Protection for one of life's biggest investments Vehicle Owner Name/Lessee Installer Name BP Lubricants USA Inc. makes the following warranty to you, the vehicle owner or lessee whose name appears above. Subject to the term contained herein, it agrees to repair or replace, at its option and expense, the engine parts listed in the coverage section that fail or experience abnormal wear due to the failure of Castrol® motor oil to provide proper lubrication to the engine of the vehicle identified above. This Certificate confirms your registration in the free Castrol® limited engine warranty. This warranty takes effect on (60 days from the date of the application). The warranty period is defined in Section III below. A vehicle is eligible for this warranty if it is a privately-owned passenger car, van or pickup/light truck with a GVWR of 10,000 pounds or less; and if: 1. The vehicle has been driven for less than 48,000 miles since the in-service date and has been manufactured within the last 48 months. 2. The vehicle has a valid inspection sticker in the states where inspection is mandatory and has no pre-existing conditions. This warranty also extends to such vehicles when leased by an individual when the Lessee is primarily obligated for repairs. Said vehicle is covered both during the term of the lease and after purchase by Lessee. This warranty does not cover vehicles used for commercial, agricultural or farming purposes. This warranty provided for the Castrol motor oil products listed below and the periods specified. If you use GTX® or switch between GTX®, GTX® High Mileage™, GTX® MAGNATEC® (formerly GTX® SynBlend™) or EDGE®, this warranty lasts until the earlier of 10 years or 300,000 mile, whichever comes first. Only the following listed engine parts are covered: • Pistons and Rings • Turbo Bearings • Timing Chains • Cylinder Lining or Bore • Crankshaft & Bearings • Valve Lifters • Rocker Arms and Pivots • Distributor Drive Gear • Oil Pump • Rods and Rod Bearings • Balance Shafts & Push Rods • Cam Shaft & Bearings • Wrist Pins & Bushings • Timing Gear or Sprockets • Valve Stems & Guides (Grinding adjustments excluded) Vehicle Identification Number (VIN) I. EFFECTIVE DATE II. ELIGIBILITY III. PERIOD IV. COVERAGE Case 2:17-cv-02070-BMS Document 12-2 Filed 06/26/17 Page 2 of 3 V. LIMITS OF LIABILITY VI. CONDITIONS VII. EXCLUSIONS VIII. FILING A CLAIM 1. The payment of claims under this warranty is limited to the time needed to make the necessary repairs or to effect the replacement of any irreparably damaged engine part listed above as allocated by Chilton’s Flat Rate Guide or other auto industry accepted flat rate time guides times (x) the commercial repair shop’s posted hourly labor rate, plus (+) the reasonable cost of a replaced engine part of like kind and quality. 2. In no event shall the liability of BP Lubricants USA Inc. exceed $5000 or fair market value of the covered vehicle. To keep this warranty valid, you must comply with all the following requirements: 1. The vehicle engine must be serviced with the proper type and brand of Castrol® motor oil, exclusively. 2. The intervals between motor oil change since registering for the Castrol Engine Warranty not exceeding 4,000 miles or four months, whichever occurs first. Under no circumstances, however, shall the intervals between motor oil changes exceed the vehicle manufacturer’s recommendations for drain intervals as specified in the Owner’s Manual of the vehicle. 3. The motor oil used must be appropriate viscosity grade based on ambient conditions. 4. The oil filter and air cleaner element must be replaced in accordance with the manufacturer’s recommendations. 5. All services referred to in Section “VI” must be performed by an automotive service center, commercial fast oil change facility or auto dealer. 6. In the event of a claim, you must provide BP Lubricants USA Inc. with satisfactory evidence that all of the services referred to in Section VI were performed. IMPORTANT: You must retain copies of all service receipts and repair orders to collect on a claim under this warranty. These receipts must satisfactorily show that Castrol® motor oil was used; the mileage and date each time the motor oil was put into the vehicle; and the time and date that other services referred to in section VI were performed. This warranty is subject to all of the following conditions and exclusions: 1. It does not cover vehicles modified, or used in, competitive events. 2. It only covers factory-installed or OEM-specified engine parts. 3. It does not cover claims that are pre-existing conditions or the result of collision, negligent or intentional abuse, improper service or maintenance, defect in manufacturer, improper installation of any part , coolant contamination, or the failure to keep the motor oil and engine coolant at the levels prescribed by the manufacturer and herein. BP Lubricants USA Inc. will not refuse payment for claims that otherwise comply with the terms of this warranty unless it demonstrates in good faith that one or more of these causes resulted in the damage claimed. 4. It does not cover claims also covered by the vehicle manufacturer’s warranty or any extended service contract. However, if you have otherwise complied with the terms of this warranty, BP Lubricants USA Inc. will pay the deductible amount to be paid by you under any extended service contract purchased by you which covers such a claim. 5. It does not cover incidental or consequential damages. 6. This warranty is void if at the time you applied for this warranty, your vehicle had in excess of 48,000 miles or the vehicle was over 48 months old. 7. If the subject vehicle is transferred to a second owner or second lessee, this warranty is no longer valid. Procedure to follow in the event of a claim under this warranty: 1. Any warranty repairs may be made by the new car dealer from whom the vehicle was purchased or leased or in the repair shop of your choice. In all cases, you must notify BP Lubricants USA Inc. of a claim prior to having any repairs made by calling 1-888-CASTROL or writing to: BP Lubricants USA Inc. Castrol® Engine Warranty Headquarters Castrol Consumer Relations P.O. Box 485 Lewiston, NY 14092 Claims must be made to BP Lubricants USA Inc. and not to or through a dealer or distributor. 2. You must provide BP Lubricants USA Inc. with all of the following: a. A copy of your warranty; b. Copies of all service repair orders/receipts that will verify compliance with the terms of the warranty; c. A copy of your lease agreement if the vehicle is leased; d. A copy of the current vehicle registration card; e. A complete statement of damage and repair costs; f. A copy of the extended service contract if you are making a claim under Section VII (4) above; g. Upon request, a sample of the motor oil in the crankcase at the time the claimed damage was discovered. 3. If it is apparent that the damage claimed is covered by this warranty and you have complied with all of its terms, we will approve the claim and make payment after repairs are completed. BP Lubrications USA Inc. has limited responsibilities under this warranty, specifically to the cost of repairing or replacing the damaged engine parts listed above in the proper case, paying the deductible amount noted in, and in accordance with Section VII (4) above. However, some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. In addition, this warranty gives you specific legal rights and you may also have other rights which vary from state to state. ©2016 BP Lubricants USA Inc. Case 2:17-cv-02070-BMS Document 12-2 Filed 06/26/17 Page 3 of 3 EXHIBIT 2 Case 2:17-cv-02070-BMS Document 12-3 Filed 06/26/17 Page 1 of 3 CASTROL ® WARRANTY ENGINE FREE LIMITED WARRANTY APPLICATION Please complete this quick and easy application and mail back to BP Lubricants USA Inc. PERSONAL INFORMATION Name Vehicle registered to Street address City State Zip Home phone e-mail (optional) If we require additional information on your registration, which is your preferred method of contact? mail e-mail (email must be provided above if preferred method of contact) I give permission for Castrol to email me if further information is required for the Castrol Engine Warranty Program. I understand that I can withdraw my consent at any time. I agree to receive Castrol’s newsletter containing news, updates and promotions regarding Castrol’s products. I understand that I can withdraw my consent at any time. VEHICLE INFORMATION Make Model Year VIN Number (Important) Date of purchase/lease Odometer (must be under 48,000 miles) Is your vehicle covered by an Extended Service Contract? Yes No INSTALLER INFORMATION Business name Street address City State Zip Business phone FREQUENTLY ASKED QUESTIONS How do I apply for my warranty? • Please review the eligibility requirements to ensure that your vehicle qualifies • Complete the attached Warranty Registration What happens next? Upon our receipt of your eligible Registration/Owners Statement, you are approved and your detailed Warranty Certificate will be mailed to you. IMPORTANT: How do I keep my warranty valid?* • Have Castrol ® motor oils professionally installed per the guidelines in your Warranty Certificate • Maintain copies of your oil-change service receipts. Receipts must indicate the installer name, date of service, odometer reading, brand and grade of Castrol ® motor oil installed and price paid. Why should I apply for the Castrol Engine Warranty? 1. It’s MAXIMUM PROTECTION for one of life’s biggest investments! 2. Because your professional installer believes in Castrol®’s premium line of motor oils! 3. It’s quick, it’s easy and it’s free! What does the warranty cover? The Castrol ® Engine Warranty program covers your engine from oil-related mechanical failure or abnormal wear for 10 years or 300,000 miles whichever occurs first. Does my vehicle qualify? Yes, if: • You own or lease a passenger car, van or light truck with a gross vehicle weight rating (GVWR) less than 10,000 pounds. • Your vehicle has been driven less than 48,000 miles and has been manufactured within the past 48 months. • Your vehicle is not subject to any exclusion as set for in the Warranty Details * Refer to actual Warranty Certificate for complete details See Reverse Side For Warranty Details Top copy - Castrol / Middle copy - Car Sense / Bottom copy - Customer Case 2:17-cv-02070-BMS Document 12-3 Filed 06/26/17 Page 2 of 3 CASTROL ® WARRANTY ENGINE FREE LIMITED WARRANTY APPLICATION WARRANTY DETAILS Only the following listed engine parts are covered: • Pistons and Rings • Crankshaft & Bearings • Turbo Bearings • Valve Lifters • Timing Chains • Rocker Arms and Pivots • Cylinder Lining or Bore • Distributor Drive Gear This warranty is subject to all of the following conditions and exclusions: 1. It does not cover vehicles modified for, or used in, competitive events. 2. It only covers factory-installed or OEM-specified engine parts. 3. It does not cover claims that are the result of collision, negligent or intentional abuse, improper service or maintenance, defect in manufacture, improper installation of any part, coolant contamination, or the failure to keep the motor oil and engine coolant at the levels prescribed by the manufacturer. BP Lubricants USA Inc. will not refuse payment for such claims that otherwise comply with the terms of this warranty, unless it demonstrates in good faith, that one or more of these causes resulted in the damage claimed. 4. It does not cover claims also covered by the vehicle manufacturer’s warranty or any extended service contract. However, if you have otherwise complied with the terms of this warranty, BP Lubricants USA Inc. will pay the deductible amount to be paid by you under any extended service contract purchased by you which covers such a claim. 5. This warranty is void if at the time you applied for this warranty, your vehicle had in excess of 48,000 miles,and/or the vehicle was not manufactured within the past 48 months. 6. If the subject vehicle is transferred to a second owner or second lessee, this warranty is NOT transferable. This is a limited warranty which has certain conditions and restrictions that may apply to you. Refer to your Warranty Certificate for further details. In no event shall the liability of BP Lubricants USA Inc. exceed the fair market value of the covered vehicle. Actual Warranty Certificate will be sent to you upon approval Mail Completed Application to: BP Lubricants USA Inc. Castrol® Engine Warranty Headquarters Castrol Consumer Relations P.O. Box 485 Lewiston, NY 14092 For more information about Castrol products log onto: www.castrol.com/us CASTROL ® WARRANTY ENGINE FREE LIMITED WARRANTY APPLICATION Please complete this quick and easy application and mail back to BP Lubricants USA Inc. PERSONAL INFORMATION Name Vehicle registered to Street address City State Zip Home phone e-mail (optional) If we require additional information on your registration, which is your preferred method of contact? mail e-mail (email must be provided above if preferred method of contact) I give permission for Castrol to email me if further information is required for the Castrol Engine Warranty Program. I understand that I can withdraw my consent at any time. I agree to receive Castrol’s newsletter containing news, updates and promotions regarding Castrol’s products. I understand that I can withdraw my consent at any time. VEHICLE INFORMATION Make Model Year VIN Number (Important) Date of purchase/lease Odometer (must be under 48,000 miles) Is your vehicle covered by an Extended Service Contract? Yes No INSTALLER INFORMATION Business name Street address City State Zip Business phone FREQUENTLY ASKED QUESTIONS How do I apply for my warranty? • Please review the eligibility requirements to ensure that your vehicle qualifies • Complete the attached Warranty Registration What happens next? Upon our receipt of your eligible Registration/Owners Statement, you are approved and your detailed Warranty Certificate will be mailed to you. IMPORTANT: How do I keep my warranty valid?* • Have Castrol ® motor oils professionally installed per the guidelines in your Warranty Certificate • Maintain copies of your oil-change service receipts. Receipts must indicate the installer name, date of service, odometer reading, brand of Castrol ® motor oil installed and price paid Why should I apply for the Castrol Engine Warranty? 1. It’s MAXIMUM PROTECTION for one of life’s biggest investments! 2. Because your professional installer believes in Castrol®’s premium line of motor oils! 3. It’s quick, it’s easy and it’s free! What does the warranty cover? The Castrol ® Engine Warranty program covers your engine from oil-related mechanical failure or abnormal wear for 10 years or 300,000 miles whichever occurs first. Does my vehicle qualify? Yes, if: • You own or lease a passenger car, van or light truck with a gross vehicle weight rating (GVWR) less than 10,000 pounds. • Your vehicle has been driven less than 48,000 miles and has been manufactured within the past 48 months. • Your vehicle is not subject to any exclusion as set for in the Warranty Details * Refer to actual Warranty Certificate for complete details See Reverse Side For Warranty Details Top copy - Castrol / Middle copy - Car Sense / Bottom copy - Customer • Oil Pump • Wrist Pins & Bushings • Rods and Rod Bearings • Timing Gear or Sprockets • Balance Shafts & Push Rods • Valve Stems & Guides (Grinding adjustments excluded) • Cam Shaft & Bearings Case 2:17-cv-02070-BMS Document 12-3 Filed 06/26/17 Page 3 of 3 EXHIBIT 3 Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 1 of 6 Carsense's Lifetime Engine Guarantee https://www.carsense.com/lifetime-engine-guarantee/[5/25/2017 4:27:38 PM] All Makes All Models All Types Some good things do last forever. We cover your engine for as long as you own the car. Just abide by the following common-sense requirements – like changing your oil and performing timely maintenance – and you're good to go. Like forever. Lifetime Engine Guarantee There's no greater guarantee than ours. SEARCH CARS SELL YOUR CAR CAREERS LOCATIONSSEARCH WHY CARSENSE SERVICE SIGN UP | LOGIN (866) 736-7383 REQUEST SERVICE PITTSBURGH AREA | Robinson Twp, PA Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 2 of 6 Carsense's Lifetime Engine Guarantee https://www.carsense.com/lifetime-engine-guarantee/[5/25/2017 4:27:38 PM] Program Guidelines Change your oil every 4 months or 4,000 miles, whichever comes first, using Castrol oil products. If the maintenance is performed at a location other than CarSense, you must maintain a maintenance log, with receipts, and produce them if asked. Bring your vehicle to CarSense once a year to check belts, hoses, and fluid levels (for FREE, of course). CarSense may repair or replace parts with new, re-manufactured or used parts. CarSense is not responsible for incidental or consequential damages. Follow the manufacturer's maintenance schedule. Oil filter and air cleaner elements must be replaced and the emission control system maintained according to the vehicle manufacturer's recommendations. CarSense Budget Cars do not qualify for Lifetime Engine coverage. The warranty is not transferable. Vehicles must be registered in the original purchase name at time of claim. Damage caused by neglect is not covered. Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 3 of 6 Carsense's Lifetime Engine Guarantee https://www.carsense.com/lifetime-engine-guarantee/[5/25/2017 4:27:38 PM] DISCLAIMER: Our guarantee covers internally lubricated engine parts only: piston and rings, cam shafter and bearings, valve lifters, oil pump, push rods, crankshaft and bearings, wrist pins and bushings, distributor drive gear, rocker arms and pivots, cylinder liners or bores, Intake valves and guides, rods and rod bearings, timing gears or sprockets and timing chain. (Timing belts and damage to engine due to broken timing belts excluded.) PLEASE NOTE: Prior to 12/15/11, customers were required to use Quaker State oil. However, as CarSense no longer offers Quaker State, current customers are required to use Castrol. Customers covered prior to 12/15/11 may continue to service their cars elsewhere with Quaker State, or have the option to switch to Castrol – however, those making the switch MUST remain with Castrol. Switching between Quaker State and Castrol will void the warranty. Featured Cars See All Cars » CarSense Certified CarSense Ten $15,996 18K miles 2014 Jeep Patriot $22,496 28K miles 2014 Chrysler Town & Country $23,947 52K miles 2014 Jeep Grand Cherokee $15 201 Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 4 of 6 Carsense's Lifetime Engine Guarantee https://www.carsense.com/lifetime-engine-guarantee/[5/25/2017 4:27:38 PM] YOUR NEAREST STORE Robinson Twp, PA Visit a CarSense in the Philadelphia or Pittsburgh area. Shop 5 convenient locations across Pennsylvania and South Jersey — Near King of Prussia, West Chester, Doylestown, Cranberry Twp, Medford and more. CONNECT WITH US Follow @CarSense WE'RE HERE FOR YOU (866) 736-7383 SITE INDEX QUICK SEARCHES Used SUVs / Used Sedans / Used Pickups / Used Coupes / Used Convertibles / Used Vans / Contact Us Search See All Cars Web Specials Home Delivery Sell & Trade Service Request Service CARenu Why CarSense CarSense Certified Lifetime Engine Guarantee CarSense Ten Compare CarSense Financing Pulse Careers Locations & Hours Chester Springs, PA (844) 818-2858 Hatfield, PA (844) 839-2750 Mount Holly, NJ (855) 383-0645 Cranberry Twp, PA (844) 820-5165 Robinson Twp, PA (866) 654-4732 Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 5 of 6 Carsense's Lifetime Engine Guarantee https://www.carsense.com/lifetime-engine-guarantee/[5/25/2017 4:27:38 PM] Used Wagons / Used Hatchbacks / All Vehicles Under $15,000 Last inventory update: about 1 hour ago © 2017 CarSense All rights reserved. Privacy | Site Map Case 2:17-cv-02070-BMS Document 12-4 Filed 06/26/17 Page 6 of 6