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Second Amended Consolidated Competitor Dealership Class Action

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Second Amended Consolidated Competitor Dealership Class Action Case 3:15-md-02672-CRB Document 1806 Filed 09/02/16 Page 1 of 98 1 Elizabeth J. Cabraser (State Bar No. 083151) LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 2 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 3 Telephone: 415.956.1000 Facsimile: 415.956.1008 4 E-mail: [email protected] 5 Lead Counsel for Plaintiffs (Plaintiffs’ Steering Committee Members 6 Listed on Signature Page) 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN FRANCISCO DIVISION 10 11 IN RE: VOLKSWAGEN “CLEAN DIESEL” 12 MARKETING, SALES PRACTICES, AND MDL No. 2672 CRB (JSC) PRODUCTS LIABILITY LITIGATION 13 This document relates to: 14 SECOND AMENDED CONSOLIDATED Carriage Chevrolet, Inc. v. Volkswagen Group COMPETITOR DEALERSHIP CLASS 15 ACTION COMPLAINT of America, Inc., et al., Case No. 3:16-cv- 16 00296 JURY TRIAL DEMANDED Brown Daub Chevrolet of Nazareth, Inc. v. 17 Volkswagen Group of America, Inc., et al., 18 Case No. 3:15-cv-06245 Eagle Auto Mall Corp. v. Volkswagen Group of 19 America, Inc., Case No. 3:15-cv-05923 Saturn SW Florida LLC et al. v. Volkswagen 20 Group of America, Inc. et al., Case No. 21 3:15-cv-05959 Windham Motor Co. Inc. v. Volkswagen Group 22 of America, Inc., et al., Case No. 3:16-cv- 00310 23 24 25 26 27 28 SECOND AM. CONSOL. COMPETITOR DEALERSHIP CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) 1315212.1 Case 3:15-md-02672-CRB Document 1806 Filed 09/02/16 Page 2 of 98 1 TABLE OF CONTENTS 2 Page 3 INTRODUCTION .................................................................................................................... 1 4 JURISDICTION AND VENUE ............................................................................................... 4 PARTIES .................................................................................................................................. 5 5 A. Individual and Representative Plaintiffs ................................................................. 5 6 B. Defendants .............................................................................................................. 6 7 1. Volkswagen Defendants ................................................................................ 6 a. Volkswagen AG ................................................................................... 6 8 b. Volkswagen Group of America, Inc. .................................................... 6 9 c. Audi AG ............................................................................................... 7 10 d. Audi of America, LLC ......................................................................... 7 e. Dr. Ing. h.c. F. Porsche AG .................................................................. 7 11 f. Porsche Cars North America, Inc. ........................................................ 8 12 g. Martin Winterkorn ................................................................................ 8 13 h. Michael Horn ........................................................................................ 9 2. Bosch Defendants .......................................................................................... 9 14 b. Robert Bosch GmbH .......................................................................... 10 15 c. Robert Bosch, LLC ............................................................................. 10 16 d. Volkmar Denner ................................................................................. 11 COMMON FACTUAL ALLEGATIONS .............................................................................. 11 17 A. Volkswagen’s Plot to Dominate the Automotive Market ..................................... 11 18 B. Defendants’ Illegal “Defeat Device” Scheme ....................................................... 17 19 C. Bosch Played a Critical Role in the Defeat Device Scheme ................................. 23 1. Volkswagen and Bosch Conspire to Develop the Illegal Defeat 20 Device .......................................................................................................... 24 21 2. Volkswagen and Bosch Conspire to Conceal the Illegal “Akustikfunktion” ........................................................................................ 32 22 3. Volkswagen and Bosch Conspire in the U.S. and Germany to Elude U.S. Regulators ............................................................................................ 34 23 4. Bosch Keeps Volkswagen’s Secret Safe and Pushes “Clean” Diesel 24 in the U.S. .................................................................................................... 38 5. Defendant Denner Also Played a Critical Role in the Scheme .................... 41 25 D. Porsche Knowingly Adopts the Defeat Device in Its 3.0-liter Class 26 Vehicles ................................................................................................................. 43 E. Volkswagen’s “Clean” Diesel Advertising Campaign ......................................... 44 27 1. VW’s False and Misleading Advertisements ............................................... 45 28 2. Audi’s False and Misleading Advertisements ............................................. 55 SECOND AM. CONSOL. COMPETITOR DEALERSHIP - i - CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) 1315212.1 Case 3:15-md-02672-CRB Document 1806 Filed 09/02/16 Page 3 of 98 1 3. Porsche’s False and Misleading Advertisements ......................................... 58 2 4. Volkswagen’s Nationwide Advertising Campaign Was Highly Effective, and Volkswagen Profited Handsomely from Selling the 3 Class Vehicles .............................................................................................. 60 F. Defendants’ Dirty Diesel Scheme Starts to Unravel ............................................. 61 4 G. Once Caught, Volkswagen Admits its Fraud—in Part ......................................... 63 5 H. Defendants’ Conduct Harmed Competitor Dealers .............................................. 74 6 TOLLING OF THE STATUTE OF LIMITATIONS ............................................................. 75 A. Discovery Rule ...................................................................................................... 75 7 B. Fraudulent Concealment ....................................................................................... 76 8 C. Estoppel ................................................................................................................. 77 9 CLASS ACTION ALLEGATIONS ....................................................................................... 77 CLAIMS FOR RELIEF .......................................................................................................... 81 10 FIRST CLAIM FOR RELIEF: VIOLATION OF THE LANHAM ACT (On 11 behalf of the Competitor Dealer Plaintiffs and the Competitor Dealer Class) ..................................................................................................................... 81 12 SECOND CLAIM FOR RELIEF: UNJUST ENRICHMENT (On behalf of the Competitor Dealer Plaintiffs and the Competitor Dealer Class)........................... 84 13 THIRD CLAIM FOR RELIEF: DECEPTIVE TRADE PRACTICES UNDER 14 TENN. CODE ANN. § 47-18-104 (On behalf of Carriage Chevrolet and the Tennessee Subclass) ........................................................................................ 84 15 FOURTH CLAIM FOR RELIEF: UNFAIR COMPETITION UNDER TENNESSEE LAW (On behalf of Carriage Chevrolet and the Tennessee 16 Subclass) ............................................................................................................... 85 17 FIFTH CLAIM FOR RELIEF: UNFAIR COMPETITION UNDER PENNSYLVANIA LAW (On behalf of Brown Daub and the members of 18 the Pennsylvania Subclass) ................................................................................... 86 SIXTH CLAIM FOR RELIEF: DECEPTIVE ACTS AND PRACTICES 19 UNDER NEW YORK GEN. BUS. LAW § 349 (On behalf of Eagle Auto and the members of the New York Subclass) ....................................................... 87 20 SEVENTH CLAIM FOR RELIEF: UNFAIR COMPETITION UNDER NEW 21 YORK LAW (On behalf of Eagle Auto and the members of the New York Subclass) ............................................................................................................... 88 22 EIGHTH CLAIM FOR RELIEF: VIOLATION OF FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT (On behalf of Saturn SW 23 Florida and Victory Layne and the members of the Florida Subclass) ................. 89 24 NINTH CLAIM FOR RELIEF: UNFAIR COMPETITION UNDER FLORIDA LAW (On behalf of Saturn SW Florida and Victory Layne and the 25 members of the Florida Subclass) ......................................................................... 90 TENTH CLAIM FOR RELIEF: UNFAIR COMPETITION UNDER 26 ALABAMA LAW (On behalf of Windham and the Alabama Subclass)............. 91 27 PRAYER FOR RELIEF ......................................................................................................... 92 DEMAND FOR JURY TRIAL .............................................................................................. 92 28 - ii - SECOND AM. CONSOL. COMPETITOR DEALERSHIP 1315212.1 CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 1806 Filed 09/02/16 Page 4 of 98 1 Plaintiffs Carriage Chevrolet, Inc., Brown Daub Chevrolet of Nazareth, Inc., Eagle Auto 2 Mall Corp., Saturn SW Florida LLC, Bill Branch Chevrolet, Inc., and Windham Motor Company 3 (collectively, “Competitor Dealer Plaintiffs”), individually and on behalf of a class of all others 4 similarly situated (the “Competitor Dealer
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