Romani v. General Motors LLC

Background

Marco Romani alleged that he purchased a new 2020 Chevrolet Bolt from a third-party dealership in California on or about December 23, 2020. The vehicle came with express warranties, including an eight-year, 100,000-mile warranty for its battery. Romani alleged that General Motors advertised the Bolt as a long-range, affordable electric vehicle and that dealership personnel described it as safe and capable of long-range use.

Romani further alleged that the vehicle’s battery could ignite when nearing a full charge. According to the complaint, GM warned him not to charge the vehicle above 90%, not to let the remaining battery mileage fall below 70 miles, and not to park the vehicle indoors overnight. He alleged that these issues severely limited his use and enjoyment of the vehicle and that he would not have bought it had he known it was unsafe and did not function as advertised.

Claims and Legal Standards

GM moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. The motion challenged Romani’s fourth cause of action for fraud and fifth cause of action under California’s Unfair Competition Law, which covers business practices alleged to be unlawful, unfair, or fraudulent.

The court explained that fraud claims must satisfy Federal Rule of Civil Procedure 9(b). That rule requires the complaint to describe the alleged fraud specifically, including who made the statement, what was said or concealed, when and where it occurred, how it was misleading, and why it was false. For both affirmative misrepresentation and fraudulent concealment, the court stated that Romani needed to allege facts supporting an inference that GM knew about the relevant defect before he purchased the vehicle.

Fraud Claim

Romani alleged that GM misrepresented the Bolt’s long-range capacity and its environmental, safety, and long-range capabilities through its website and statements by dealership personnel. He also alleged that GM concealed the vehicle’s limited range and battery-safety problems.

The court found that the complaint did not adequately plead GM’s pre-sale knowledge of defects affecting the safety and mileage range of Romani’s specific vehicle. The complaint alleged that GM had learned of some Bolt battery issues beginning in 2016, created a repair program in 2017, received a dealer notification in 2018, and knew of a Bolt battery fire in March 2019. The court found those allegations sufficient to plead knowledge of some battery issues, but insufficient to reasonably infer that GM knew, before Romani’s purchase, that the batteries in the relevant 2020 model vehicles had defects affecting safety and mileage range.

The court also noted that Romani referred in his opposition brief to an allegation that GM knew of at least 12 Chevrolet Bolt fires by August 2020, but that allegation did not appear in the complaint. The court stated that even if it had appeared there, the pre-sale allegations would not establish knowledge specifically concerning Romani’s vehicle.

For the same reasons, the court dismissed Romani’s fraudulent-concealment theory. The court granted GM’s motion to dismiss the affirmative-misrepresentation and fraudulent-concealment claims, but allowed Romani to amend the fourth cause of action to address the defects identified in the order.

Unfair Competition Law Claim

Romani asserted claims under all three Unfair Competition Law theories: unlawful, unfair, and fraudulent business practices. GM argued that he had not alleged an underlying statutory violation for the unlawful theory or an established public policy for the unfair theory. Romani did not oppose or otherwise address those arguments.

The court focused on the requirement that a plaintiff seeking equitable remedies under the Unfair Competition Law in a diversity case must show that he lacks an adequate remedy at law. The court concluded that Romani had not made that showing because he had an adequate remedy under the Song-Beverly Act. It ruled that no amendment could cure this deficiency.

Disposition

The court granted GM’s motion to dismiss the fourth and fifth causes of action. It granted leave to amend only the fourth cause of action for fraud. It dismissed the fifth cause of action under the Unfair Competition Law with prejudice and without leave to amend. Any amended complaint had to be filed within 21 days of the order.