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In re Ford Fusion and C-Max Fuel Economy Litigation

United States District Court, S.D. New York

July 24, 2017

In re FORD FUSION AND C-MAX FUEL ECONOMY LITIGATION This Document Relates to All Actions

          Paul Geller, Esq. Stuart A. Davidson, Esq. Mark Dearman, Esq. Sheri Coverman, Esq. Robbins Geller Rudman & Dowd LLP Boca Raton, FL Co-Lead Counsel for Plaintiffs and the Class

          Samuel H. Rudman, Esq. Robbins Geller Rudman & Dowd LLP Melville, NY Co-Lead Counsel for Plaintiffs and the Class

          Rachel L. Jensen, Esq. Robbins Geller Rudman & Dowd LLP San Diego, CA Co-Lead Counsel for Plaintiffs and the Class

          Eric H. Gibbs, Esq. Geoffrey A. Munroe, Esq. David K. Stein, Esq. Girard Gibbs LLP San Francisco, CA Co-Lead Counsel for Plaintiffs and the Class

          John A. Yanchunis, Esq. Rachel L. Soffin, Esq. Morgan & Morgan, P.C. Tampa, FL Counsel for Plaintiffs' Executive Committee

          Peter G. Safirstein, Esq. Morgan & Morgan, P.C. New York, NY Counsel for Plaintiffs' Executive Committee

          Richard D. McCune, Esq. Elaine S. Kusel, Esq. McCune Wright, LLP Redlands, CA Counsel for Plaintiffs' Executive Committee

          Scott A. George, Esq. Seeger Weiss, LLP New York, NY Counsel for Plaintiffs' Executive Committee

          Stephen R. Jaffe, Esq. Mark Fistos, Esq. Seth Lehrman, Esq. Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, P.L. Fort Lauderdale, FL Counsel for Plaintiffs' Executive Committee

          Bruce W. Steckler, Esq. Mazin Sbaiti, Esq. Steckler Law LLP Dallas, TX Counsel for Plaintiffs' Executive Committee

          Michael A. Caddell, Esq. Cynthia B. Chapman, Esq. Cory S. Fein, Esq. Caddell & Chapman Houston, TX Counsel for Plaintiffs' Executive Committee

          Joel A. Dewey, Esq. Jeffrey M. Yeatman, Esq. Matthew A. Goldberg, Esq. Timothy H. Birnbaum, Esq. DLA Piper LLP New York, NY Counsel for Defendant

          John M. Thomas, Esq. Dykema Gossett PLLC Ann Arbor, MI Counsel for Defendant

          Peter J. Fazio, Esq. Aaronson Rappaport Feinstein & Deutsch, LLP New York, NY Counsel for Defendant

          OPINION & ORDER

          KENNETH M. KARAS, District Judge.

         Plaintiffs are consumers who purchased or leased a 2013 Ford Fusion Hybrid (“Fusion”) or 2013 Ford C-MAX (“C-MAX, ” and collectively, the “Vehicles”) from dealerships licensed by Ford Motor Company (“Ford, ” or “Defendant”), an automobile manufacturer based in Dearborn, Michigan, allegedly in reliance on Ford's “misrepresentations and material omissions” about the Vehicles' fuel economy. (Consolidated Second Am. Class Action Compl. (“SAC”) ¶¶ 7-9, 35 (Dkt. No. 84).) Plaintiffs bring this Consolidated Second Amended Class Action Complaint (“SAC”) on their own behalf and on behalf of members of a putative class (“Class”), alleging that they would not have otherwise purchased or leased the Vehicles, or would not have paid as much for them, had it not been for Defendant's misrepresentations, and that they have otherwise been damaged because of higher fuel costs and the diminution in the Vehicles' value. (See id. ¶ 8.) Before the Court is Defendant's second Motion To Dismiss this Action pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”). The Court granted in part and denied in part Defendant's first motion in a prior Opinion & Order, and granted Plaintiffs leave to amend certain claims asserted in the Consolidated Amended Class Action Complaint. See In re Ford Fusion & C-MAX Fuel Economy Litig., No. 13-MD-2450, 2015 WL 7018369 (S.D.N.Y. Nov. 12, 2015) (“Ford I”).[1] For the reasons stated herein, Defendant's Motion To Dismiss is granted in part and denied in part.

         I. Background

         A. Factual Background

         The following facts are drawn from the SAC, and they are assumed to be true for purposes of deciding Defendant's Motion. Because this is Defendant's second Motion To Dismiss, the Court assumes the Parties' familiarity with many of the allegations asserted in the SAC. What follows is a condensed recitation of Plaintiffs' allegations, with a specific focus on any new additions contained in the SAC.

         1. Ford's Advertising Campaign

         In 2013, Ford “launched a massive, ” and allegedly misleading, advertising campaign focusing on two of its new hybrid models-the Fusion and the C-MAX, highlighting that the Vehicles delivered 47 city, 47 highway, and 47 miles per gallon (“MPG”) combined. (SAC ¶ 3.) Ultimately, the campaign was a “tremendous success” and contributed to “record hybrid sales, ” allegedly attributable to the Vehicles' fuel economy. (Id. ¶ 4.) By the end of 2012, Ford had increased its share of the hybrid market to 16%, up from 3% as of mid-2012, and by April 2013, Ford was the “second-leading auto company in the hybrid market, ” with record hybrid sales continuing through August 2013. (Id.)

         The problem, Plaintiffs contend, is that Ford's advertising campaign was “highly misleading.” (Id. ¶ 5.) Plaintiffs allege that the campaign “emphasized that the ‘47 MPG' was something the Vehicles would actually deliver, ” (id. ¶ 53), and conveyed “the overall impression that Ford's 2013 Fusion Hybrid and C-MAX did, in fact, deliver . . . 47 MPG . . . under real[-] world driving conditions, ” (id. ¶ 62). However, “[o]utside of the laboratory, under real-world driving conditions, consumers who purchased a 2013 Fusion Hybrid or C-MAX [H]ybrid found themselves consistently unable to get anywhere near the advertised 47 MPG.” (Id. ¶ 5.) “Some of Ford's advertisements include[d] small type at the bottom that read[], ‘EPA-estimated 47 city/47 hwy/47 combined [MPG]. Actual mileage may vary, '” but Plaintiffs contend that this “standard boilerplate language . . . did not alter the campaign's overall impression on consumers, ” (id. ¶ 56), in part because “nowhere in the [advertising] campaign did [Ford] make a distinction between real-world performance and the EPA-estimated rating, ” (id. ¶ 57).[2]Plaintiffs maintain that the offending representations included:

• “The Ford Fusion Hybrid delivers a remarkable 47 mpg city and highway[.]”
• “The Ford Fusion delivers a U.S. EPA-certified 47 mpg city, 47 mpg highway[, ] and 47 mpg combined in its hybrid model!”
• “47 mpg in the city and on the highway? Yes, it's true. The all new Fusion Hybrid achieves 47 combined mpg-doubling the fuel economy of the average vehicle.”
• “Fusion Hybrid gets 47 MPG in the city, on the highway[, ] and combined.”
• “C-MAX Hybrid is Ford's first hybrid vehicle to offer 47 mpg across the board.”
• “C-MAX Hybrid delivers EPA-certified 47 mpg city, 47 mpg highway ratings-7 mpg better than the Toyota Prius [V] on the highway-for a 47 mpg combined rating.”
• “47 mpg hybrid for me.”

(Id. (emphasis and internal quotation marks omitted).) Plaintiffs also allege that several advertisements compared the Fusion and C-MAX to other hybrid cars available for sale. These advertisements include the following:

• An advertisement indicating that the Fusion “tops the Toyota Camry Hybrid by 8 mpg highway and 4 mpg city, and delivers the highest-ever fuel economy numbers in city and highway driving for a midsize sedan.” (Id. ¶ 64 (internal quotation marks omitted).)
• An advertisement entitled “Wrong Direction” in which the narrator indicated that the Fusion was “the most fuel efficient midsize sedan in America.” (Id. ¶ 65 (emphasis and internal quotation marks omitted).)
• An advertisement entitled “New Idea” which claimed that the “Fusion doubles the fuel economy of the average vehicle.” (Id. ¶ 66 (internal quotation marks omitted).)
• An advertisement indicating that the C-MAX “beats Prius V with better mpg” and is “Miles Per Gallon Ahead of the Competition.” (Id. ¶ 67 (internal quotation marks omitted).)

         The advertising campaign targeted the Toyota Prius V in particular, which “provided space comparable to Ford's 2012 Fusion Hybrid, but was advertised as achieving 44 MPG city, 40 MPG highway, for a combined 42 MPG.” (Id. ¶¶ 45, 68.) Plaintiffs allege that, in its advertisements, Ford “regularly compared the mileage of the C-MAX to that of the Toyota Prius.” (Id. ¶ 68.) The theme of these advertisements was that the C-MAX delivered better MPG than the Prius V. (See, e.g., Id. ¶¶ 67, 69.) Plaintiffs allege that these comparisons were false or misleading because “the Prius actually achieves better MPG than the C-MAX in real-world driving conditions.” (Id. ¶ 79.)

         Plaintiffs have specifically identified seven advertisements that they claim exemplify the false and misleading statements Ford made during the advertising campaign.

         a. Exhibit 1: Freight

         The “Freight” commercial begins as a cartoon, with a driver loading and getting into a C-MAX, starting it up, and driving past a second cartoon car, which the commercial implies is a Prius V. As the C-MAX passes the Prius V, the commercial's narrator states: “C-MAX also beats Prius V with better MPG.” The cartoon C-MAX then morphs into a real-world C-Max and the narrator instructs viewers to “say hi to the 47 combined MPG C-MAX Hybrid.” At the end of the commercial, a chyron stating “47 Combined MPG | Ford C-MAX Hybrid” appears above the C-MAX, and the disclaimer “EPA-Estimated 47 city/47 hwy/47 combined mpg. Actual mileage will vary, ” appears below the vehicle.

         b. Exhibit 2: Weeee

         The “Weeee” commercial begins as a cartoon, with multiple vehicles driving past a vehicle that the commercial implies is a hybrid. After the other vehicles pass the hybrid, the commercial's narrator comments that most hybrids “are just no fun to drive.” As the narrator says, “Here's one that will make you feel alive. Meet the five passenger Ford C-MAX Hybrid, ” a hand appears and draws the outline of a C-MAX. A cartoon character then gets into the C-MAX and drives past a series of cartoon vehicles. As this is occurring, the narrator states, “C-MAX says ha, C-MAX says weeee, which is what you get, don't you see because C-MAX has lots more horsepower than Prius V, a hybrid that C-MAX also bests in MPG. Say hi to the 47 combined MPG C-MAX Hybrid.” While the narrator is making this statement, the cartoon C-MAX morphs into a real-world C-MAX, which is then shown driving around on city streets. As the narrator gets to the point in the commercial where he states that the C-MAX “bests” the Prius V in MPG, text appears at the bottom of the screen stating: “EPA-estimated 47 city/47 hwy/47 combined mpg. Actual mileage will vary.” At the very end of the commercial, a chyron appears, which states, “47 combined MPG | Ford C-MAX Hybrid.”

         c. Exhibit 3: Hybrid Games

         In the internet advertisement entitled “The Hybrid Games” two actors portray reporters trying to determine whether the C-MAX or Prius V delivers better MPG. The reporters comment on the C-MAX and Prius V while two individuals are shown driving a C-MAX and a Prius around Los Angeles on various errands. Approximately 25 seconds into the commercial, the reporters compare the “specs” of the vehicles. One reporter states, “According to the specs, the C-MAX Hybrid delivers higher MPG than Prius V.” A chyron displays that the C-MAX gets 47 MPG in the city and on the highway, while the Prius V gets 44 MPG in the city and 40 MPG on the highway. As all of this is occurring, a disclaimer appears at the bottom of the screen stating: “EPA-estimated. Actual mileage may vary.” The next fuel economy related comparison occurs approximately one minute into the commercial. Two chyrons appear on the screen depicting the “total range” of the vehicles. The chyrons state that the C-MAX has a total range of 571 miles, while the Prius V has a total range of 450 miles. One of the reporters states, “Total range of the C-MAX Hybrid is 571 miles, so the C-MAX Hybrid should go farther on a tank of fuel.” A disclaimer at the bottom of the screen notes that these figures are “[b]ased on fueleconomy.gov.” As the commercial continues, the C-MAX and Prius are shown making various stops throughout Los Angeles. As the commercial nears its conclusion, the Prius is shown pulling into a gas station and fueling up. A chyron then declares the C-MAX the winner of the competition. Before the ad ends, two chyrons reiterate that the C-MAX delivers 47 MPG and has a total range of 571 miles. One reporter finally concludes that the C-MAX has “more power, torque, and better MPG.” No disclaimer appears along with these chyrons or statements.

         d. Exhibit 4: The Fusion Brochure

         The Fusion Brochure is a 16-page print brochure and spec sheet given to certain Plaintiffs before they purchased a Fusion. The most pertinent part of the brochure states:

47 mpg in the city and on the highway? Yes, it's true. Building upon the award-winning success of the 2012 model, the all-new 2013 Fusion Hybrid achieves 47 combined mpg.1 City mileage is best in class and 4 mpg more than its nearest class competitor.

(SAC Ex. 4, at 5.) The footnote referenced in this section states: “EPA-estimated 47 city/47 hwy/47 combined mpg.” (Id. at 5 n.1.)

         e.Exhibit 5: Fusion ...


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