2:17-cv-11661-GCS-APP Doc # 1 Filed 05/25/17 Pg 1 of 191 Pg ID 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN ANDREI FENNER and JOSHUA No. HERMAN, individually and on behalf of themselves and all others similarly situated, JURY TRIAL DEMANDED Plaintiffs, v. GENERAL MOTORS LLC, a Delaware Limited Liability Company; ROBERT BOSCH GMBH, a corporation organized under the laws of Germany; and ROBERT BOSCH LLC, a Delaware Limited Liability Company, Defendants. CLASS ACTION COMPLAINT 010611-12 959897 V1 2:17-cv-11661-GCS-APP Doc # 1 Filed 05/25/17 Pg 2 of 191 Pg ID 2 TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................... 1 II. JURISDICTION ............................................................................................ 10 III. VENUE .......................................................................................................... 11 IV. PARTIES ....................................................................................................... 12 A. Plaintiffs .............................................................................................. 12 1. Andrei Fenner ........................................................................... 12 2. Joshua Herman .......................................................................... 13 B. Defendants ........................................................................................... 15 1. General Motors ......................................................................... 15 2. The Bosch Defendants .............................................................. 16 V. FACTUAL ALLEGATIONS ........................................................................ 19 A. The Environmental Challenges Posed by Diesel Engines and the U.S. Regulatory Response Thereto ............................................... 19 B. Both the Silverado and Sierra Share a Common Duramax Engine .................................................................................................. 22 1. HCI – Hydrocarbon Injector ..................................................... 22 2. DOC – Diesel Oxidation Catalyst ............................................. 22 3. Diesel Exhaust Fluid Injector .................................................... 23 4. SCR – Selective Catalytic Reduction ....................................... 23 5. DPF – Diesel Particulate Filter ................................................. 23 6. EGR – Exhaust Gas Recirculation ............................................ 25 C. Emission Test Cycles and Emission Standards ................................... 26 D. GM Profited from Using Multiple Defeat Devices in Its Duramax Diesel Powertrains ............................................................... 28 E. GM Promoted the Silverado and Sierra Duramax as Low Emission Vehicles Because It Knew the Environment Is Material to a Reasonable Consumer ................................................... 33 - i - 010611-12 959897 V1 2:17-cv-11661-GCS-APP Doc # 1 Filed 05/25/17 Pg 3 of 191 Pg ID 3 F. The Deception ..................................................................................... 37 1. The 2013 Silverado 2500 diesel test setup. ............................... 37 2. Initial results indicate higher than expected emissions. ............ 39 3. Further testing demonstrates that GM—enabled by Bosch’s EDC-17—employs three defeat devices. .................... 44 a. Defeat Devices One and Two: the Temperature Defeat Devices ................................................................ 45 b. Defeat Device Three: the Steady Speed Time-Out Defeat .............................................................................. 45 4. The test vehicle is representative of all Sierra and Silverado vehicles. .................................................................... 51 G. This Is Not the Only GM Model to Employ This Deception ............. 52 H. The Bosch EDC-17 ............................................................................. 53 I. Bosch Played a Critical Role in the Defeat Device Scheme in Many Diesel Vehicles in the U.S. ....................................................... 58 1. Volkswagen and Bosch conspire to develop the illegal defeat device. ............................................................................ 59 2. Volkswagen and Bosch conspire to conceal the illegal “akustikfunktion.” ..................................................................... 63 3. Volkswagen and Bosch conspire in the U.S. and Germany to elude U.S. regulators who regulated not just Volkswagen diesels but all diesels. ........................................... 64 4. Bosch keeps Volkswagen’s secret safe and pushes “clean” diesel in the U.S. .......................................................... 65 5. Bosch also made the EDC-17 found in Fiat Chrysler vehicles that pollute excessively. .............................................. 68 6. Bosch also made the EDC-17 found in polluting Mercedes diesels. ...................................................................... 70 J. The Damage from Excessive NOx ...................................................... 70 K. The GM Scheme Is Just the Latest in a Worldwide Diesel Emissions Cheating Scandal That Adds Plausibility to the Allegations as Virtually All Diesel Manufacturers Are Falsely Advertising Their Vehicles ................................................................. 75 VI. TOLLING OF THE STATUTE OF LIMITATIONS ................................... 78 A. Discovery Rule Tolling ....................................................................... 78 - ii - 010611-12 959897 V1 2:17-cv-11661-GCS-APP Doc # 1 Filed 05/25/17 Pg 4 of 191 Pg ID 4 B. Fraudulent Concealment Tolling ......................................................... 80 C. Estoppel ............................................................................................... 80 VII. CLASS ALLEGATIONS .............................................................................. 81 VIII. CLAIMS ........................................................................................................ 85 A. Claims Brought on Behalf of the Nationwide RICO Class ................ 85 COUNT 1 VIOLATIONS OF RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (RICO) VIOLATION OF 18 U.S.C. § 1962(C), (D) .................................................................................... 85 1. The members of the Emissions Fraud Enterprise ..................... 86 2. The Predicate Acts .................................................................... 94 B. Claims Brought on Behalf of the California Class ........................... 101 COUNT 2 VIOLATIONS OF THE CALIFORNIA UNFAIR COMPETITION LAW (CAL. BUS. & PROF. CODE § 17200 ET SEQ.) ............................................................................................................ 101 COUNT 3 VIOLATIONS OF THE CALIFORNIA FALSE ADVERTISING LAW (CAL. BUS. & PROF. CODE § 17500 ET SEQ.) ............................ 106 COUNT 4 BREACH OF CONTRACT (BASED ON CALIFORNIA LAW) ..... 109 COUNT 5 FRAUDULENT CONCEALMENT (BASED ON CALIFORNIA LAW) ........................................................................................................... 111 C. Claims Brought on Behalf of the Louisiana Class ............................ 118 COUNT 6 VIOLATION OF THE LOUISIANA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW (LA. REV. STAT. § 51:1401 ET SEQ.) ......................................................................... 118 COUNT 7 FRAUDULENT CONCEALMENT (BASED ON LOUISIANA LAW) ........................................................................................................... 120 D. Claims Brought on Behalf of the Other State Classes ...................... 121 COUNT 8 VIOLATION OF THE ALABAMA DECEPTIVE TRADE PRACTICES ACT (ALA. CODE § 8-19-1 ET SEQ.) ................................ 121 COUNT 9 VIOLATION OF THE ALASKA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION ACT (ALASKA STAT. ANN. § 45.50.471 ET SEQ.) ........................................................... 122 COUNT 10 VIOLATION OF THE ARIZONA CONSUMER FRAUD ACT (ARIZONA REV. STAT. § 44-1521 ET SEQ.) .......................................... 124 - iii - 010611-12 959897 V1 2:17-cv-11661-GCS-APP Doc # 1 Filed 05/25/17 Pg 5 of 191 Pg ID 5 COUNT 11 VIOLATION OF THE ARKANSAS DECEPTIVE TRADE PRACTICES ACT (ARK. CODE ANN. § 4-88-101 ET SEQ.) ................. 125 COUNT 12 VIOLATION OF THE COLORADO CONSUMER PROTECTION ACT (COLO. REV. STAT. § 6-1-101 ET SEQ.) .............. 127 COUNT 13 VIOLATION OF THE CONNECTICUT UNFAIR TRADE PRACTICES ACT (CONN. GEN. STAT. § 42-110A ET SEQ.) ............... 128 COUNT 14 VIOLATION OF THE DELAWARE CONSUMER FRAUD ACT (DEL. CODE TIT. 6, § 2513 ET SEQ.).............................................. 129 COUNT 15 VIOLATION OF THE GEORGIA FAIR BUSINESS PRACTICES ACT (GA. CODE ANN. § 10-1-390 ET SEQ.) .................... 130 COUNT 16 VIOLATION OF THE GEORGIA UNIFORM DECEPTIVE TRADE PRACTICES ACT (GA. CODE. ANN § 10-1-370 ET SEQ.) ..... 132 COUNT 17 VIOLATION OF THE HAWAII ACT § 480-2(A) (HAW. REV. STAT. § 480 ET SEQ.) ...................................................................... 133 COUNT 18 VIOLATION OF THE IDAHO CONSUMER PROTECTION ACT (IDAHO CODE ANN. § 48-601 ET SEQ.) ........................................ 134 COUNT 19 VIOLATION OF THE INDIANA DECEPTIVE CONSUMER SALES ACT (IND. CODE § 24-5-0.5-3) ................................................... 135 COUNT