The opinion of the court was delivered by: GREEN
This matter is before the Court on defendant's motion to dismiss, plaintiffs' opposition thereto, supplemental memoranda from both parties and oral argument on the motion. For the reasons stated below, the Court denies defendant's motion to dismiss second amended complaint.
This case has been before the Court since August 25, 1981. It involves an action for damages, declaratory and injunctive relief for breach of written and implied warranty, negligence, and strict liability for allegedly defective automatic transmissions in certain types of automobiles manufactured by defendant, Ford Motor Company ("Ford"). The complaint alleges that defendant's 1976-79, as well as certain 1980 model vehicles with FMX, C-3, C-4, or C-6 automatic transmissions, slipped into the reverse position after the driver had attempted to place the transmission in the park position. The second amended complaint includes 210 named plaintiffs described in some detail and 158 motor vehicles. The complaint alleges the existence of claims under the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq. ("Magnuson-Moss" or "the Act"), as well as various state statutes and common law. The Act permits "consumers" to sue in Federal court if they have been "damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under [the Act], or under a written warranty, implied warranty, or service contract," 15 U.S.C. § 2310(d)(1), and they have satisfied certain strict jurisdictional requirements.
Since the inception of this suit in August 1981, the Court has endured endless motions by both parties, including at least three motions to amend the complaint and as many motions to dismiss. The following motions are presently before the Court: defendant's motion to dismiss second amended complaint, plaintiffs' motion for class certification and defendant's motion to dismiss implied warranty claims for lack of vertical privity. At this time, the Court will address Counts I and II of defendant's motion to dismiss second amended complaint which allege Magnuson-Moss warranty claims. This will require the Court to delve into the vertical privity issues in order to address properly the motion to dismiss. Counts III through V of the complaint are not addressed in this decision. The Court's prior ruling of December 22, 1982, shall stand as to those counts.
I. Background of this Litigation
Finding it necessary to amend their first amended complaint, plaintiffs sought leave from the Court to file a second amended complaint. On May 23, 1983, the Court granted plaintiffs' motion. Ford had opposed that motion and noted that if the Court were to grant plaintiffs' motion for leave to file a second amended complaint, defendant would have to file another motion to dismiss in order to preserve its right of appeal.
On June 17, 1983, defendant filed its motion to dismiss the second amended complaint. The final briefing of this motion was to be completed on August 19, 1983. As early as February 1983, however, the Court had observed that there was substantial room for disagreement concerning some of the Court's determinations as outlined in the memorandum opinion of December 22, 1982. See Memorandum Order at 2, filed February 3, 1983. The Court subsequently concluded that it might be necessary to re-examine its 1982 decision and redetermine whether plaintiffs had satisfied the jurisdictional requirements under Magnuson-Moss. With that in mind, the Court requested an informal chambers conference to discuss, inter alia, the numerous motions that were before the Court and a possible extended briefing schedule and argument date for defendant's motion to dismiss the second amended complaint.
At that meeting, the parties agreed to submit additional briefing papers on the motion to dismiss. By order filed September 29, 1983, the Court directed plaintiffs to submit any additional briefing papers on the motion to dismiss by October 13, 1983. The Court further ordered defendant to file any additional papers by October 24, 1983. The hearing date for the motion to dismiss was later set for November 2, 1983.
Prior to oral argument, the Court issued a memorandum opinion dated October 28, 1983, staying plaintiffs' motion to add parties to the second amended complaint. The Court imposed the stay on plaintiffs' motion in order to focus on the issues already before it, namely the motion to dismiss.
Since the hearing, both counsel have filed additional briefing papers on the motion to dismiss. In mid-January, the parties requested further opportunity to submit additional memoranda. The Court has denied those requests because it was determined that additional briefing could not be helpful to the Court.
During the course of the additional briefing, plaintiffs' counsel has indicated that it is somehow inappropriate for this Court to reconsider its prior rulings. First, it is evidently clear that the Court has the plenary power to reconsider any prior interlocutory judgments when it believes that its prior decision may have been incorrect or at least deserved careful re-examination and evaluation. See John Simmons Co. v. Grier Brothers Co., 258 U.S. 82, 83, 88 (1922) (an interlocutory decree may be modified or rescinded by the court at any time before final judgment). Further, the Court must review carefully its prior decisions if it believes that those decisions are incorrect. See In re Multi-Piece Rim Products Liability Litigation, 209 U.S. App. D.C. 416, 653 F.2d 671, 678 (D.C. Cir. 1981).
The Court finds that plaintiffs have satisfied the strict jurisdictional requirements of the Act. Therefore, their Magnuson-Moss warranty claims in Counts I and II of the complaint have survived Ford's motion to dismiss. The Court outlines in detail its reasons for this conclusion below.
Plaintiffs' complaint includes two counts based on warranty claims under the Act. It alleges that Ford breached the implied warranty of merchantable quality and its written warranty to all plaintiffs and potentially similarly situated class members. Jurisdiction for these claims is based on section 110(d) of the Act, 15 U.S.C. § 2310(d)(3), which provides:
(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.
Defendant has moved to dismiss the Magnuson-Moss claims arguing that plaintiffs have failed to satisfy the strict jurisdictional, 100-named plaintiff requirement of the Act. It argues that because of the unique 100-named plaintiff requirement for class actions, plaintiffs must do more than merely assemble 100 individuals for subject-matter jurisdiction to attach in Federal court. It argues that each plaintiff, in order to be counted toward meeting the 100-named plaintiff requirement, must be able to state a claim for relief.
In opposition, plaintiffs argue that the Court should not take a "merits inquiry" to determine whether it has jurisdiction. Instead, they argue, the Court must look to the doctrine outlined in Bell v. Hood, 327 U.S. 678, 90 L. Ed. 939, 66 S. Ct. 773 (1946). In that decision, the United States Supreme Court noted that:
the failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of action on which relief could be granted is a question of law and just as issues of fact it must be decided after and not before the court has assumed jurisdiction over the controversy. If the court does later exercise its jurisdiction to determine that the allegations in the complaint do not state a ground for relief, then dismissal of the case would be on the merits, not for want of jurisdiction.
Id. at 682 (citations omitted).
Contrary to plaintiffs' assertion, the reasoning of Bell v. Hood is not applicable in the present case. Bell v. Hood was interpreting the broad general Federal question jurisdictional statute, the predecessor to Title 28, United States Code, Section 1331. Although it is true that a Federal court may not make a merits inquiry where jurisdiction is based solely on section 1331, that condition is not universally true when other jurisdictional statutes apply. There can be no argument that other jurisdictional statutes, including 28 U.S.C. §§ 1343, 1350, 1361, require a Federal court to make a merits inquiry before asserting subject matter jurisdiction under those provisions. See Mount Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 278-79, 50 L. Ed. 2d 471, 97 S. Ct. 568 (1977) (if a court were to base jurisdiction solely on 28 U.S.C. § 1343, it must make merits-related jurisdictional inquiry as to whether defendant was in fact a person within the meaning of 42 U.S.C. § 1983), Apton v. Wilson, 165 U.S. App. D.C. 22, 506 F.2d 83, 96 & n. 16 (D.C. Cir. 1974) (id.); Filartiga v. Pena-Irala, 630 F.2d 876, 887-88 (2d Cir. 1980) (in interpreting the Alien Tort Statute, 28 U.S.C. § 1350, "courts have . . . engaged in a more searching preliminary review of the merits than is required, for example, under the more flexible 'arising under ' formulation. Compare O'Reilly de Camara v. Brooke, 209 U.S. 45, 52 [52 L. Ed. 676, 28 S. Ct. 439] . . . (1907) (question of Alien Tort Statute jurisdiction disposed of 'on the merits') (Holmes, J.) with Bell v. Hood, 327 U.S. 678 [90 L. Ed. 939, 66 S. Ct. 773] . . . (1946). . . ."); Associated Businesses of Franklin, Inc. v. Warren County Board, 522 F. Supp. 1015, 1020 (S.D. Ohio 1981) (the Mandamus Act, 28 U.S.C. § 1361, requires a court to take a "merits inquiry" to determine the amount of discretion vested in a federal officer before it may take jurisdiction), National Treasury Employees Union v. Campbell, 191 U.S. App. D.C. 146, 589 F.2d 669, 676 n. 14 (D.C. Cir. 1978) (dictum) ("a determination on the merits is in effect required before the [Mandamus Act's] applicability can be decided").
The Court is in agreement with defendant's argument that the jurisdictional rule outlined in Bell v. Hood was designed to be a liberal one because it involves the general Federal question jurisdictional statute of 28 U.S.C. § 1331. But where "the jurisdiction of Federal courts . . . has been narrowed by . . . acts of Congress . . . the statute calls for its strict construction." Healy v. Ratta, 292 U.S. 263, 270, 78 L. Ed. 1248, 54 S. Ct. 700 (1934) (footnote omitted). Under 15 U.S.C. § 2310(d)(3), Congress has sought to limit plaintiffs access to Federal courts. It established strict jurisdictional requirements in an attempt to channel most of the Act's litigation into State courts. See H.R. Rep. No 93-1107, 93rd Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & Ad. News 7702, 7724 ("The purpose of these jurisdictional provisions is to avoid trivial or insignificant actions being brought in the Federal courts.") The reasons for such strict jurisdictional limitation is that the rights under Magnuson-Moss and general warranty law are largely derived from the laws of individual states. See e.g., 15 U.S.C. § 2301(3), (7).
In determining whether a plaintiff has satisfied the jurisdictional requirements of Magnuson-Moss, courts have taken a close and careful inquiry. Saval v. BL Ltd. [1983-2 TRADE CASES P65,494], 710 F.2d 1027, 1029 (4th Cir. 1983) (close examination of the total amount of the sum in controversy is necessary to determine jurisdiction); Lieb v. American Motors Corp., 538 F. Supp. 127, 132-35 (S.D.N.Y. 1982) (id.); Watts v. Volkswagen Artiengesellschaft, 488 F. Supp. 1233, 1236 (W.D. Ark. 1980) ("Courts lack subject matter jurisdiction over class actions . . . unless at the time federal jurisdiction was invoked there were 100 named plaintiffs."); Barr v. General Motors Corp. [1978-2 TRADE CASES P62,403], 80 F.R.D. 136, 140 (S.D. Ohio 1978) (court sua sponte dismissed action for lack of subject matter jurisdiction because there were not 100-named plaintiffs). In fact, the jurisdictional preconditions of the Act have been termed "critical limitations upon federal jurisdiction." Novosel v. Northway Motor Car Corp., 460 F. Supp. 541, 543 (N.D.N.Y. 1978) (emphasis in original). The Novosel court, in examining the legislative history of the Act, noted that "the purpose of these jurisdictional provisions is . . . to avoid trivial or minor actions being brought as class actions in Federal district courts." Id. See also H.R. Rep. No. 93-1107, 93d Cong., 2d Sess., reprinted in 1974 Code Cong. & Admin. News 7702, 7724; Skelton v. General Motors Corp., 660 F.2d 311, 319 n. 15 (7th Cir. 1981). "Thus, the federal jurisdictional requirements of the Act . . . evince an intent to limit the private remedy in federal court." Skelton v. General Motors Corp., 660 F.2d at 319 n. 15; see also Saval v. BL Ltd., 710 F.2d at 1030 ("§ 2310(d) . . . is designed to restrict access to federal courts."). Indeed "the jurisdictional provisions of section 2310(d) were designed by Congress to assure that substantial class actions could be brought in federal court." Jacks v. Firestone Tire & Rubber Co., C78-1261A, slip op. at 6 (N.D. Ohio June 4, 1974).
Federal courts have dismissed many cases for lack of subject matter jurisdiction where plaintiffs have failed to meet the 100-named plaintiff requirement. E.g., Watts v. Volkswagen Artiengesellschaft, 488 F.2d at 1236; Tutwiler v. General Motors Corp., No. 77-P-1143-S (N.D. Ala. March 6, 1977); Jacks v. Firestone Tire & Rubber Co., No. C79-1261A, slip op. at 7.
Based on the above, it is evident to the Court that in order to comply with the exclusionary purposes of the Act, which are designed to limit the numbers and kinds of cases brought in Federal court, it must look closely at each plaintiff to determine whether he states a claim for relief before he may be counted towards meeting the 100-named plaintiff requirement. Without making that inquiry, the jurisdictional prerequisites established by Congress could be easily circumvented by merely joining 100 individuals who may or may not have a valid claim for relief. The 100-named plaintiff requirement is a "substantial barrier," In Re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1114 n. 2 (7th Cir.), cert. denied, 444 U.S. 870, 62 L. Ed. 2d 95, 100 S. Ct. 146 (1979), and in order to give it meaningful effect, at least 100-named plaintiffs must allege facts in the complaint sufficient to demonstrate an individual cause of action. Therefore, the Court will examine the complaint closely and determine whether plaintiffs have satisfied the jurisdictional requirements by assembling 100 or more individuals who allege claims sufficient to constitute an individual cause of action under the Act.
A. Duplicative Plaintiffs
In its December 22, 1982 memorandum opinion, the Court indicated that:
counting the claims of joint owners of a single consumer product twice, as plaintiffs do, is improper for purposes of satisfying the 100-named plaintiff requirement. Permitting 50 joint owners of consumer products to bring a class action under the Magnuson-Moss Act would dilute significantly the plain intent of the 100 plaintiff rule.
Garbo v. Ford Motor Co., 1983-2 TRADE CASES para. 65,701 (1982).
That reasoning is still sound. If the Court were to allow numerous plaintiffs to assert identical or related claims on a single Ford vehicle, the "substantial burden" of meeting the 100-named plaintiff requirement would be easily circumvented. Therefore, the Court will exclude, for jurisdictional counting purposes only, those duplicative and triplicative plaintiffs whose claims are based on the same vehicle. There are 210 total plaintiffs in this action which involve 157 vehicles. In subtracting fifty-three duplicative or triplicative plaintiffs from the total number of individuals who are listed in the complaint, 157 remain to be counted as plaintiffs for Magnuson-Moss jurisdictional purposes.
B. Statute of Limitations
Defendant also seeks dismissal of certain plaintiffs whose vehicles were purchased more than four years prior to the commencement of this action. Ford argues that under section 2-725 of the Uniform Commercial Code ("UCC") a seller's exposure to allegations of breach of written or implied warranty should not extend beyond four years from the date of purchase. See, e.g., Clark v. DeLaval Separator Corp., 639 F.2d 1320, 1325 (5th Cir. 1981).
Section 2-725 provides in pertinent part:
§ 2-725. Statute of Limitations in Contracts for Sale
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. . . .
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made. . . .
U.C.C. § 2-725 (emphasis added). The limitations period, however, may be tolled under certain circumstances. See U.C.C. § 2-725(4).
Plaintiffs argue that because they have alleged fraud, the limitations period is tolled. In the complaint plaintiffs state:
Plaintiffs' Second Amended Complaint at para. 33 ("Plaintiffs' Complaint"). It is clear, however, that the "mere allegation of the word 'fraudulent' [concealment] is not sufficient to avoid the statute of limitations." General Aircraft Corp. v. Air America, Inc., 482 F. Supp. 3, 8 (D.D.C. 1979).
In addressing the limitation issue, this circuit has noted that a trial court must:
read into every federal statute of limitations, including the adoption of an analogous local statute of limitations . . . the equitable doctrine that in case of defendant's fraud or deliberate concealment of material facts relating to his wrongdoing, time does not begin to run until plaintiff discovers, or by reasonable diligence could have discovered, the basis of the lawsuit.
Fitzgerald v. Seamans, 180 U.S. App. D.C. 75, 553 F.2d 220, 228 (D.C. Cir. 1977) quoted in, Smith v. Nixon, 196 U.S. App. D.C. 276, 606 F.2d 1183, 1190 (D.C. Cir. 1979), cert. denied, 453 U.S. 912, 69 L. Ed. 2d 997, 101 S. Ct. 3147 (1981). In applying this reasoning, this Court has observed that:
three elements must be pleaded and proved in order to establish fraudulent concealment: (1) wrongful concealment by the party raising the statute of limitations defense (2) plaintiff's failure to discover the operative facts forming the basis of his cause of action during the limitations period (3) despite the exercise of due diligence.
General Aircraft Corp. v. Air America, Inc., 482 F. Supp. at 8 citing to, Charlotte Telecasters Inc. v. Jefferson-Pilot Corp., 546 F.2d 570, 574 (4th Cir. 1976); Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 394 (6th Cir. 1975). In applying this test the Court must "read with the required liberality" assertions in the complaint, before it may grant a motion to dismiss based on the running of the statute of limitations. Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980).
In their complaint, plaintiffs not only allege that Ford actively concealed the existence of a transmission defect, but also told those who inquired about the problem that the alleged incidents were caused by driver error and negligence.
In response, Ford argues that the complaint, when read liberally, merely claims that when certain consumers raised questions about the transmissions, Ford denied that they were defective. It notes that neither a denial of wrong doing nor a failure to inform consumers of circumstances that could indicate that a consumer product is defective constitutes fraudulent concealment. See e.g., Rockwell v. Ortho Pharmaceutical Co., 510 F. Supp. 266, 270 (N.D.N.Y. 1981).
Ford further notes that it consistently has taken the position that the transmissions at issue are not defective and that this position is reasonable given conclusions from prior court decisions. See Center for Auto Safety, Inc. v. Lewis, 222 U.S. App. D.C. 206, 685 F.2d 656, 663 (D.C. Cir. 1982) ("the existence of a defect was not conclusively established. . . . The Department would have faced great difficulties in sustaining its burden to prove the existence of a defect. . . ."); Center for Auto Safety, Inc. v. Lewis, No. 81-0550, slip op. at 11 (D.D.C. Oct. 21, 1981) ("Ford steadfastly maintained that no defect existed, and the agency had difficulty documenting reported incidents of roll back. . . . The agency . ...