Subaru-Complaint.Pdf

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY ROBERT TEDESCO, JR. and NATALIA TUZOVSKAYA, on behalf of themselves and No. ________________ all others similarly situated, Plaintiffs, CLASS ACTION COMPLAINT v. JURY TRIAL DEMANDED SUBARU OF AMERICA, INC., and FUJI HEAVY INDUSTRIES, LTD., Defendants. TABLE OF CONTENTS I. NATURE OF THE CASE ......................................................................................... 1 II. JURISDICTION AND VENUE ................................................................................ 4 III. PARTIES ................................................................................................................... 4 IV. FACTUAL ALLEGATIONS .................................................................................... 8 V. TOLLING OF STATUTES OF LIMITATION ...................................................... 33 VI. CHOICE OF LAW ALLEGATIONS ...................................................................... 33 VII. CLASS ALLEGATIONS ........................................................................................ 35 VIII. CAUSES OF ACTION ............................................................................................ 38 COUNT I - VIOLATIONS OF THE VIOLATIONS OF THE NEW JERSEY CONSUMER FRAUD ACT, N.J. STAT. ANN. § 56:8-1, ET SEQ. ............................................. 38 COUNT II - BREACH OF EXPRESS WARRANTY ................................................................. 40 COUNT III - BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY (N.J.S.A. § 12A:2-314) ............................................................................................................ 41 COUNT IV - BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY (C.G.S.A. § 42a-2-314) ............................................................................................ 42 COUNT V - BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING ................ 43 COUNT VI - VIOLATION OF CONNECTICUT UNFAIR TRADE PRACTICES ACT, C.G.S.A. § 42–110a ET SEQ. .................................................................................. 44 COUNT VII - VIOLATION OF MAGNUSON-MOSS WARRANTY ACT, 15 U.S.C. § 2301, ET SEQ..................................................................................................................... 45 IX. PRAYER FOR RELIEF .......................................................................................... 47 X. JURY TRIAL DEMANDED ................................................................................... 48 ii I. NATURE OF THE CASE 1. Plaintiffs Robert Tedesco, Jr. and Natalia Tuzovskaya (“Plaintiffs”), bring this action against Defendants Subaru of America, Inc. (“SAI”) and Fuji Heavy Industries, Ltd. (“Fuji”) (collectively “Defendants” or “Subaru”), to redress Defendants’ violations of various states’ consumer fraud statutes, and also to seek recovery for Defendants’ breach of express warranty, breach of implied warranty, and breach of the duty of good faith and fair dealing, on behalf of themselves and a class (the “Class” or “State Sub-Classes”) comprised by all current and former Subaru vehicle owners and lessees with defective piston rings. 2. As used in this complaint, the “Vehicles” refer to the Subaru vehicles sold in the United States sharing a common, uniform, and defective design, including, but not limited to, the following makes and model years: • 2011-2014 Subaru Forester 2.5L • 2013 Legacy 2.5L • 2013 Outback 2.5L • 2012-2013 Impreza 2.0L • 2013 XV Crosstrek 2.0L 3. This action arises from Defendants’ failure, despite their longstanding knowledge of a material design defect, to disclose to Plaintiffs and other consumers that the Vehicles have an oil consumption defect (referred to herein as the “Oil Consumption Defect”). This defect – which typically manifests during and/or shortly after the limited warranty period has expired – causes the Vehicles to burn an excessive portion of their engine oil, leading to increased emissions, decreased fuel efficiency, and potentially significant damage to the engine, catalytic converter, and other engine components. 4. The Oil Consumption Defect poses a safety risk to the driver and passengers of the Vehicles because it prevents the engine from maintaining the proper level of engine oil, and causes an excessive amount of engine oil consumption that can neither be reasonably anticipated nor predicted. Further, the Oil Consumption Defect can cause sudden engine failure while the Vehicles are in operation at any time and under any driving condition or speed. This exposes the driver and passengers of the Vehicles, as well as others who share the road with them, to an increased risk of accident, injury, or death. 5. Defendants not only concealed the material fact that particular components within the Vehicles’ engines are defective, Defendants also failed to disclose that the existence of the Oil Consumption Defect would diminish the intrinsic and resale value of the Vehicles and lead to the safety concerns alleged herein. 6. Although Subaru has long been aware of the Oil Consumption Defect, it has regularly and systematically refused to repair the Vehicles without charge when the Oil Consumption Defect manifests itself, and have generally refused to pay for the costs of the excessive oil consumption and tests for the Oil Consumption Defect. 7. Many owners and lessees of the Vehicles have communicated with Defendants’ agents to request that they remedy and/or address the Oil Consumption Defect and/or resultant damage at no expense, but Defendants have failed and/or refused to do so. 8. Subaru has also refused to take any action to correct this concealed design defect when it manifests in the Vehicles outside of the warranty period. Since the Oil Consumption Defect typically manifests within and/or shortly outside of the warranty period for the Vehicles – and given Defendants’ knowledge of this concealed safety related design defect – any attempt by Subaru to limit the warranty with respect to the Oil Consumption Defect is unconscionable here. 2 9. Despite notice and knowledge of the Oil Consumption Defect from the numerous complaints it has received, information received from dealers, National Highway Traffic Safety Administration (“NHTSA”) complaints, and its own internal records – including durability testing and oil consumption testing – Subaru has not recalled the Vehicles to repair the Oil Consumption Defect, offered its customers a suitable repair or replacement free of charge, or offered to reimburse its customers who have incurred out-of-pocket expenses associated with the defect (such as reimbursement for additional engine oil) or to repair the defect. 10. As a result of Defendants’ unfair, deceptive and/or fraudulent business practices, owners and/or lessees of the Vehicles, including Plaintiffs, have suffered an ascertainable loss of money and/or property and/or loss in value. The unfair and deceptive trade practices committed by Defendants were conducted in a manner giving rise to substantial aggravating circumstances. 11. Had Plaintiffs and other Class members known about the Oil Consumption Defect at the time of purchase or lease, they would not have bought or leased the Vehicles, or would have paid substantially less for them. The Oil Consumption Defect has also injured Class members by requiring them to constantly replenish (and pay for) engine oil in the Vehicles at an unreasonably rapid pace. In addition, Class members are being charged for oil consumption tests and other repairs on their Vehicles that would not be necessary but for the existence of the Oil Consumption Defect. 12. As a result of the Oil Consumption Defect and the monetary costs associated with attempting to repair such defect, Plaintiffs and the Class members have suffered an injury in fact, incurred damages, and have otherwise been harmed by Subaru’s conduct. 3 II. JURISDICTION AND VENUE 13. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §1332(d), because this action is between citizens of different states, a class action has been pled, and the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs. 14. Venue is proper in this District under 28 U.S.C. §1391 because Defendants transact business in this district, are subject to personal jurisdiction in the District of New Jersey, and therefore are deemed to be citizens of this District. Additionally, Defendants have advertised in this District and have received substantial revenue and profits from selling and leasing the Vehicles in this District; therefore, a substantial part of the events and omissions giving rise to the claims occurred within this District. 15. This Court has personal jurisdiction over Defendants to this action because Defendants do substantial business in this District, and a substantial portion of the wrongdoing alleged took place in this District. III. PARTIES A. Plaintiffs 16. Plaintiff Robert Tedesco, Jr. (“Tedesco”) is a citizen of the State of Connecticut. 17. On January 14, 2013, Tedesco received delivery on his purchase of a new 2013 Subaru XV Crosstrek 2.0i premium from Dan Perkins Subaru, an authorized Subaru dealer and repair center located in Milford, Connecticut. 18. Tedesco purchased this vehicle for personal, family and/or household uses. 19. On or before March 16, 2013, with approximately 3,500 miles on his vehicle, Tedesco observed that the engine oil level warning light on his Crosstrek was illuminated. According to Subaru Technical

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