Case 3:17-md-02777-EMC Document 310 Filed 05/16/18 Page 1 of 452 1 Elizabeth J. Cabraser (State Bar No. 83151) 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 Email: [email protected] 4 Plaintiffs’ Lead Counsel 5 (Plaintiffs’ Steering Committee Members Listed on 6 Signature Page) 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 IN RE CHRYSLER-DODGE-JEEP ECODIESEL® MARKETING, SALES 12 PRACTICES, AND PRODUCTS MDL 2777 EMC LIABILITY LITIGATION 13 SECOND AMENDED CONSOLIDATED CONSUMER 14 This Document Relates to: CLASS ACTION COMPLAINT 15 JURY TRIAL DEMANDED ALL ACTIONS The Honorable Edward M. Chen 16 17 DORU BALI, et al., on behalf of themselves and all others similarly situated, 18 19 Plaintiffs, 20 v. 21 FIAT CHRYSLER AUTOMOBILES N.V., FCA US LLC, SERGIO MARCHIONNE, VM MOTORI 22 S.p.A., VM NORTH AMERICA, INC., ROBERT BOSCH GmbH, and ROBERT BOSCH LLC, 23 Defendants. 24 25 26 27 28 SECOND AMENDED CONSOLIDATED CONSUMER CLASS ACTION COMPLAINT 1528982.7 CASE NO. 3:17-MD-02777-EMC Case 3:17-md-02777-EMC Document 310 Filed 05/16/18 Page 2 of 452 1 TABLE OF CONTENTS 2 Page 3 INTRODUCTION .......................................................................................................................... 1 PARTIES ........................................................................................................................................ 4 4 I. DEFENDANTS .................................................................................................................. 4 5 A. Fiat Chrysler Defendants......................................................................................... 4 6 B. VM Motori Defendants ........................................................................................... 6 C. Bosch Defendants ................................................................................................... 7 7 II. PLAINTIFFS ...................................................................................................................... 9 8 JURISDICTION AND VENUE ................................................................................................... 65 9 INTRADISTRICT ASSIGNMENT .............................................................................................. 65 FACTUAL ALLEGATIONS COMMON TO ALL CLAIMS ..................................................... 66 10 I. FIAT CHRYSLER SEEKS TO CAPITALIZE ON THE GROWING U.S. 11 “CLEAN” DIESEL MARKET ......................................................................................... 66 II. DEFENDANTS’ DIRTY “ECODIESEL®” SCHEME ................................................... 69 12 III. FCA’S MISLEADING MARKETING ............................................................................ 79 13 A. Fiat Chrysler Identifies and Combats the “Dirty Diesel” Stigma. ........................ 79 14 B. The EcoDiesel Name and Badge Communicate Environmental Friendliness and Fuel Efficiency. .............................................................................................. 81 15 C. FCA Misrepresents the Class Vehicles to Consumers in a Consistent and Pervasive Marketing Campaign. ........................................................................... 85 16 1. Press Releases and Media Communications ............................................. 86 17 2. Dealer Training Materials ......................................................................... 87 18 3. Vehicle Brochures ..................................................................................... 90 4. FCA Websites ........................................................................................... 94 19 5. Print Media and Television ..................................................................... 100 20 D. The Defendants Knew These Representations Were False and Misleading. ...... 105 21 1. EGR AECD Strategy: EGR Rate Reduction ........................................... 106 2. SCR AECD Strategy: Dosing Disablement ............................................ 108 22 IV. “DIESELGATE” SCANDALIZES THE GLOBAL AUTO INDUSTRY. .................... 110 23 V. DEFENDANTS ARE CAUGHT CHEATING. ............................................................. 113 24 A. Plaintiffs’ Testing Reveals Cheating. .................................................................. 113 B. The EPA Issues A Notice of Violation to Fiat and FCA. ................................... 114 25 C. Bosch Software Documentation Further Verifies the Violations ....................... 116 26 1. AECDs 1 and 2: Reducing or Disabling EGR at Highway Speeds ....... 116 27 2. AECD 3: EGR Shut-Off for Exhaust Valve Cleaning ............................ 117 3. AECD 7: Alternative SCR Dosing Modes .............................................. 117 28 D. West Virginia University Testing of the Class Vehicles .................................... 118 SECOND AMENDED CONSOLIDATED CONSUMER - i - CLASS ACTION COMPLAINT 1528982.7 CASE NO. 3:17-MD-02777-EMC Case 3:17-md-02777-EMC Document 310 Filed 05/16/18 Page 3 of 452 1 TABLE OF CONTENTS (continued) 2 Page 3 E. European Investigation and Testing .................................................................... 119 F. Joint University of California, San Diego and German Study of the Fiat 4 500X .................................................................................................................... 120 5 VI. THE DAMAGE CAUSED BY DEFENDANTS’ DIRTY DIESEL SCHEME ............. 121 CLASS ACTION ALLEGATIONS ........................................................................................... 122 6 I. CLASS DEFINITIONS .................................................................................................. 122 7 II. CLASS CERTIFICATION REQUIREMENTS: FEDERAL RULE OF CIVIL PROCEDURE 23 ............................................................................................................ 128 8 ANY APPLICABLE STATUTES OF LIMITATION ARE TOLLED ...................................... 131 9 I. DISCOVERY RULE ...................................................................................................... 131 10 II. FRAUDULENT CONCEALMENT ............................................................................... 131 III. ESTOPPEL ..................................................................................................................... 132 11 CLAIMS FOR RELIEF .............................................................................................................. 132 12 I. CLAIMS ASSERTED ON BEHALF OF THE NATIONWIDE CLASS ...................... 132 13 NATIONWIDE COUNT I RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (“RICO”) Violation of 18 U.S.C. § 1962(c)-(d) ....... 132 14 A. Description of the EcoDiesel® RICO Enterprise ............................................... 135 15 1. The Fiat Chrysler Defendants ................................................................. 136 2. The VM Motori Defendants .................................................................... 137 16 3. The Bosch Defendants ............................................................................ 137 17 B. The EcoDiesel® RICO Enterprise Sought to Increase Defendants’ Profits and Revenues. ..................................................................................................... 138 18 C. Mail And Wire Fraud .......................................................................................... 142 19 NATIONWIDE COUNT II FRAUD (Common Law) .................................................. 149 20 A. Affirmative Misrepresentation ............................................................................ 149 B. Fraudulent Concealment: Fuel Economy and Performance Representations ..... 150 21 C. Fraudulent Concealment: Installing and Concealing the Defeat Devices ........... 151 22 NATIONWIDE COUNT III IMPLIED AND WRITTEN WARRANTY Magnuson - Moss Warranty Act (15 U.S.C. §§ 2301, et seq.) ........................... 153 23 1. Alabama .................................................................................................. 155 24 BREACH OF EXPRESS WARRANTY (Ala. Code §§ 7-2-313 and 7-2A-210) .......... 155 25 BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY (Ala. Code §§ 7-2-314 and 7-2A-212) .................................................................................. 156 26 2. Alaska ...................................................................................................... 157 27 BREACH OF EXPRESS WARRANTY (Alaska Stat. Ann. §§ 45.02.313 and 45.12.210) ........................................................................................................... 157 28 SECOND AMENDED CONSOLIDATED CONSUMER - ii - CLASS ACTION COMPLAINT 1528982.7 CASE NO. 3:17-MD-02777-EMC Case 3:17-md-02777-EMC Document 310 Filed 05/16/18 Page 4 of 452 1 TABLE OF CONTENTS (continued) 2 Page 3 BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY (Alaska Stat. Ann. §§ 45.02.314 and 45.12.212) ............................................................. 159 4 3. Arizona .................................................................................................... 160 5 BREACH OF EXPRESS WARRANTY (Ariz. Rev. Stat. §§ 47-2313 and 47- 2A210) ................................................................................................................ 160 6 BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY (Ariz. Rev. Stat. §§ 47-2314 and 47-2A212) ........................................................................