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Johannessohn v. Polaris Industries, Inc.

United States District Court, D. Minnesota

June 27, 2017

RILEY JOHANNESSOHN; DANIEL C. BADILLA; JAMES KELLY; RONALD KRANS; KEVIN R. WONDERS; WILLIAM BATES; and JAMES PINION, individually and on behalf of others similarly situated, Plaintiffs,
v.
POLARIS INDUSTRIES, INC., Defendant.

          Douglas J. McNamara, Theodore J. Leopold, and Andrew N. Friedman, COHEN MILSTEIN SELLERS & TOLL PLLC; Karen Hanson Riebel and Kate M. Baxter- Kauf, LOCKRIDGE GRINDAL NAUEN PLLP; Steven Calamusa and Robert E. Gordon, GORDON & DONER, for plaintiffs.

          Robert L. Wise, Nathan J. Marcusen, Paul G. Cereghini, and Isaac W. Messmore, BOWMAN AND BROOKE LLP, for defendant.

          ORDER

          Patrick J. Schiltz United States District Judge

         This case arises out of an alleged design defect in four-wheel all-terrain vehicles (“ATVs”) manufactured by defendant Polaris Industries, Inc. (“Polaris”). Plaintiffs bring this action on behalf of themselves and a putative class of purchasers, asserting various consumer-protection claims and a claim for breach of the implied warranty of merchantability.

         This matter is before the Court on Polaris's motion to dismiss plaintiffs' consumer-protection claims and demand for punitive damages. For the reasons that follow, the motion is granted in part and denied in part. Specifically, the Court dismisses Count I to the extent that it asserts a claim under Minn. Stat. § 325F.67; Count II to the extent that it asserts a claim of fraud under Cal. Bus. & Prof. Code § 17200; Count III in its entirety; Count V in its entirety; and plaintiffs' demand for punitive damages. The motion is denied in all other respects.

         I. BACKGROUND

         Polaris is a manufacturer of boats, snowmobiles, and recreational ATVs. Am. Compl. ¶ 19. Polaris makes several different models of ATVs sold under the name “Sportsman.” Am. Compl. ¶ 20. Polaris has 1, 800 dealers in North America. Am. Compl. ¶ 19. In 2015, Polaris had overall sales of $4.7 billion and net profit of $455 million. Am. Compl. ¶ 19.

         Plaintiffs are seven individuals living, respectively, in Minnesota, California, Florida, Illinois, Missouri, New York, and North Carolina. Am. Compl. ¶¶ 8-14. Plaintiffs allege that they purchased new Sportsman ATVs in 2015 and 2016, and that their ATVs were manufactured between 2009 and 2016. Am. Compl. ¶¶ 1, 8-14. Plaintiffs allege that their Sportsman ATVs are defectively designed because the exhaust pipe is routed next to the rider's leg and then directly under the rider's seat toward the right rear tire. Am. Compl. ¶ 2. As a result, plaintiffs say, riders are exposed to temperatures of up to nearly 250 degrees Fahrenheit. Am. Compl. ¶¶ 2, 24. According to plaintiffs, the heat not only can cause injury to the rider, but also can cause components such as the seat, seat base, fender, foot well, and side covers to melt. Am. Compl. ¶ 2, 26.

         Plaintiffs seek to represent a nationwide class of consumers who purchased Sportsman ATVs between October 4, 2010 and October 4, 2016. Am. Compl. ¶ 64. Alternatively, if the Court finds that Minnesota law does not apply to all purchases of Sportsman ATVs in the United States, plaintiffs seek to represent seven subclasses of Sportsman purchasers, one for each of their states of residence. Am. Compl. ¶ 65. Plaintiffs assert claims under the consumer-protection laws of their states[1] as well as a claim for breach of the implied warranty of merchantability. Plaintiffs' consumer- protection claims are largely premised on their allegation that Polaris failed to disclose the defect.

         II. ANALYSIS

         A. Standard of Review

         In reviewing a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a court must accept as true all of the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Aten v. Scottsdale Ins. Co., 511 F.3d 818, 820 (8th Cir. 2008). Although the factual allegations need not be detailed, they must be sufficient to “raise a right to relief above the speculative level . . . .” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint must “state a claim to relief that is plausible on its face.” Id. at 570.

         Ordinarily, if the parties present, and the court considers, matters outside of the pleadings, a Rule 12(b)(6) motion must be treated as a motion for summary judgment. Fed.R.Civ.P. 12(d). But the court may consider materials that are necessarily embraced by the complaint as well as any exhibits attached to the complaint without converting the motion into one for summary judgment. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003). In this case, the parties have submitted materials outside of the pleadings, but the Court has not considered those materials, and thus the Court will not convert the motion into one for summary judgment.

         B. Sufficiency of Allegations

         1. Knowledge

         Polaris first argues that all of plaintiffs' consumer-protection claims fail because plaintiffs have not plausibly pleaded that Polaris knew of the alleged defect before plaintiffs purchased their ATVs. To support its argument, Polaris cites Fed.R.Civ.P. 9(b), which requires that fraud be pleaded with particularity.

         Rule 9(b) does not apply to allegations of knowledge, however. Instead, Rule 9(b) explicitly exempts knowledge and other states of mind from its ambit: “Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b) (emphasis added). As a result, allegations of knowledge are subject only to the pleading standards of Rule 8(a)(2) as interpreted ...


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