Hammerschmidt v. General Motors, LLC

Background

Joseph Hammerschmidt and Edward Jackson alleged that the passenger-airbag indicator lights in their 2010 and 2011 Chevrolet Camaros malfunctioned. The complaint alleged that the light could read “OFF” when an adult passenger was seated, and that the underlying problem could cause the passenger airbag not to deploy in a crash. Hammerschmidt declined a proposed sensor-pad replacement estimated at $959.82. Jackson alleged that he replaced the sensor at a cost of $967.55. Both vehicles were outside their warranties when the problems arose.

The plaintiffs relied on GM’s earlier quality alerts, technical service bulletins, a redesigned passenger-presence-system sensor pad, and consumer complaints submitted to the National Highway Traffic Safety Administration. They asserted eight claims: Minnesota consumer-fraud, false-advertising, and unfair-trade-practices claims; Minnesota and Virginia implied-warranty claims; an implied-warranty claim under the Magnuson-Moss Warranty Act; and fraudulent omission. They also proposed nationwide, Minnesota, and Virginia classes.

Fraud-Based Claims

The court treated Counts One, Two, Three, Five, and Eight as based on alleged fraudulent omissions. Under the legal standards applied by the court, a plaintiff generally must show both that the omitted information was important to the transaction and that the defendant had a duty to disclose it. The plaintiffs argued that GM’s superior knowledge of the alleged safety defect created that duty.

The court held that the complaint did not plausibly allege GM had knowledge before the vehicles were sold that an airbag-indicator-light problem could cause the airbags themselves not to deploy. The September 2010 technical service bulletin identified a possible tear in the passenger-presence-system pad and addressed an indicator-light condition, but it did not state that the tear could prevent airbag deployment. The court also noted that the complaint did not allege that the alleged airbag-deployment risk had ever occurred. The court therefore dismissed Counts One, Two, Three, Five, and Eight. Because this reasoning resolved the fraud-based claims, the court did not reach GM’s additional arguments concerning those claims.

Implied-Warranty Claims

The court dismissed Counts Four, Six, and Seven, which asserted implied-warranty claims under Minnesota law, Virginia law, and the Magnuson-Moss Warranty Act. It explained that both Minnesota and Virginia law require a buyer to notify the seller of a breach before filing suit. The notice requirement gives the seller an opportunity to investigate, correct the problem, or negotiate.

The plaintiffs did not allege that either plaintiff communicated to GM or the immediate seller an intent to assert a warranty claim before filing this lawsuit. The court held that Jackson’s visit to an authorized Chevrolet dealership and the filing of a different lawsuit by different plaintiffs did not satisfy the notice requirement. The court did not reach GM’s other arguments concerning the warranty claims because the lack of adequate notice was dispositive.

Class Allegations and Disposition

GM separately moved to strike the nationwide class allegations. Because the court dismissed the complaint in its entirety, Judge Donovan W. Frank denied that motion as moot. The court stated that the plaintiffs had been given opportunities to amend and that the present complaint was the fourth complaint filed in the action. It therefore dismissed the claims with prejudice.

The order specifically: (1) granted GM’s motion to dismiss the consolidated class action complaint for failure to state a claim; (2) dismissed the plaintiffs’ claims with prejudice; and (3) denied as moot GM’s motion to strike the nationwide class allegations. The court directed that judgment be entered accordingly.