Quackenbush v. American Honda Motor Company, Inc.

Background

Vehicle owners brought a certified consumer class action against American Honda Motor Company, Inc., and Honda Motor Company, Ltd. They alleged that the variable timing control actuator in their vehicles was defective because a stopper pin could disengage prematurely, causing a rattling noise at ignition and potentially causing additional engine damage. The plaintiffs alleged that Honda knew about the problem but failed to disclose it.

The court had certified three classes: a California Repair Class, an Illinois Repair Class, and an Illinois New and Used Purchaser Class. The certified claims included alleged violations of California’s Consumer Legal Remedies Act and Unfair Competition Law, the Illinois Consumer Fraud and Deceptive Business Practices Act, and fraudulent omission. The named plaintiffs also asserted individual implied-warranty claims under California and Illinois law.

Honda moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when the admissible evidence shows that there is no genuine dispute over a material fact and the moving party is entitled to judgment as a matter of law. The court stated that it would not weigh conflicting evidence or decide witness credibility at this stage.

Individual Plaintiffs’ Claims

The court granted summary judgment on Feeney’s and Pellettieri’s individual implied-warranty claims under Section 2-316 of the Illinois Commercial Code because the plaintiffs did not challenge dismissal of those claims.

Quackenbush’s implied-warranty claim under the California Song-Beverly Act remained for a jury because Honda did not seek summary judgment on it. The court granted summary judgment on Quackenbush’s separate California Commercial Code Section 2314 implied-warranty claim. Under California law, a buyer generally must have contractual privity—a direct contractual relationship—with the defendant to pursue an implied-warranty claim. Because Quackenbush bought her vehicle from an authorized dealer rather than directly from Honda, the court found no privity. It also rejected the argument that a third-party-beneficiary exception applied to this vehicle purchase.

The court denied summary judgment based on the statute of limitations on Pellettieri’s fraudulent-omission and Illinois Consumer Fraud Act claims. The evidence conflicted about when she knew, or reasonably should have known, that her vehicle was injured and that Honda had wrongfully caused the injury. The court found that a jury could conclude Honda’s statements that the rattling was normal and did not affect safety, operation, or reliability delayed her understanding of the alleged injury and its cause.

California Repair Class

The court denied summary judgment on the California Repair Class’s fraudulent-omission claim. It rejected Honda’s argument that the California economic-loss rule barred the claim. The court reasoned that the absence of contractual privity between California vehicle purchasers and Honda prevented Honda from relying on the rule in the circumstances presented. The court also found evidence of alleged damages beyond the rattling itself, including possible damage to the timing chain, timing-chain tensioners, and other vehicle expenses. Whether the actuator caused additional physical damage or safety hazards was left for a jury.

The court also denied Honda’s arguments concerning damages under California’s Unfair Competition Law and Consumer Legal Remedies Act. The court held that reimbursement for repair costs could qualify as restitution—the return of money obtained through the alleged wrongdoing—if the plaintiffs proved liability. It rejected Honda’s argument that the plaintiffs could not trace their payments because they paid third-party dealerships.

Illinois New and Used Purchaser Class

The court dismissed with prejudice the Illinois New and Used Purchaser Class’s fraudulent-omission and Illinois Consumer Fraud Act claims. The plaintiffs’ only proposed damages model for the classes was based on repair costs. The court concluded that a repair-cost measure was unsuitable for a class in which a large majority of vehicles had not experienced, and likely would not experience, the rattle. In the court’s view, damages based on reduced vehicle value would better account for the probability that a repair would not be needed, but the plaintiffs had not offered a class-wide method for calculating reduced value. The court therefore ruled that the proposed repair-cost theory would provide a windfall and could not go to the jury.

Global No-Defect Argument and Disposition

The court denied Honda’s request to resolve all claims on the ground that there was no safety-related defect. The plaintiffs had offered evidence that the rattling could cause physical engine damage, and the court found that whether the evidence established a safety-related defect, including what a reasonable driver would do after seeing a check-engine light, involved factual questions for the jury.

The order’s final disposition was: Feeney’s and Pellettieri’s individual Illinois implied-warranty claims were dismissed; Quackenbush’s individual California Commercial Code Section 2314 implied-warranty claim was dismissed; and the Illinois New and Used Purchaser Class’s fraudulent-omission and Illinois Consumer Fraud Act claims were dismissed. Summary judgment as to all remaining claims and arguments was denied. Trial was set for July 24, 2023.