Class OK’d In Camry HVAC Odor Suit, But Not RICO Claims

Posted on December 08, 2021

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By Nathan Hale

Peter Prieto
Peter Prieto

Law360 (December 8, 2021, 9:21 PM EST) — Attorneys from Podhurst Orseck PA and Kessler Topaz Meltzer & Check LLP will serve as class counsel in a class action over allegedly defective ventilation systems in certain Toyota Camry models just certified by a federal court in Miami, but the class will be smaller than initially sought.

U.S. District Judge Federico A. Moreno limited the class to plaintiffs who purchased their cars at an authorized Toyota dealer — a decision that was in keeping with his Oct. 1 summary judgment decision adopting a magistrate’s similar recommendation to narrow the case.

But in his class certification order issued Monday night, he also declined to certify a class of Camry buyers across five southeast states based on claims under the Racketeer Influenced and Corrupt Organizations Act, and advanced only a class based on purchases in Florida and claims brought under the Florida Deceptive and Unfair Trade Practice Act.

Class counsel Peter Prieto of Podhurst and Joseph H. Meltzer of Kessler Topaz will still lead an estimated 91,000 consumers who bought 2012-2014 model year non-hybrid Camrys from authorized Toyota dealers in Florida, but that falls short of the 205,000 consumers in the two classes plaintiffs requested.

“We are pleased the court agreed that there is no legal or factual basis for a RICO claim against Toyota to proceed as a class action,” the automaker said through a spokesman. “Toyota believes that plaintiffs do not have any credible evidence to support their remaining claim, and we will continue to defend against it. We stand behind the efficacy and performance of our HVAC systems, and plaintiffs’ own testing showed that operation of their HVAC systems improved the air quality in their vehicles.”

The suit, which was filed in July 2018, alleges that Toyota Motor Corp. and its subsidiaries conspired with Southeast Toyota Distributors LLC, or SET, to sell or lease millions of Camrys that were equipped with defective heating, ventilation and air conditioning systems that retained moisture, leading to the growth of bacteria, mold and fungi that sometimes resulted in foul, noxious and toxic odors being emitted into the passenger compartments.

In the class certification order, the court found that the consumers satisfied requirements for numerosity and ascertainability, explaining that the case is ultimately a fraud case, not a product liability case, so differences in how the odor issues manifested themselves, if at all for individual class members, is irrelevant.

“Plaintiffs allege that defendants conspired to and succeeded at concealing a defect in their vehicles in order to defraud purchasers of the class vehicles. Their claims in general, under RICO and FDUTPA, require a showing that defendants engaged in a scheme to defraud and acted deceptively,” Judge Moreno said. “These legal wrongs, if committed, were complete at the time of purchase of the class vehicles, irrespective of which class members experienced HVAC odor.”

Where the plaintiffs got tripped up was in the court’s analysis of the commonality and predominance of the RICO claims across all class members.

While Judge Moreno sided with the plaintiffs on their argument that predominance for the RICO claim does not depend on the defendants having made a material representation or omission to every single class member, he said their misrepresentation theory still fails.

Even if Toyota and SET made misrepresentations to authorized dealers about the odors and HVAC systems, that does not necessarily mean every consumer overpaid as a result, he said, adding that the evidence the plaintiffs have presented suggests only that existing Camry owners were told a misrepresentation that the odor was normal.

“The problem for plaintiffs is that they have not offered any class wide evidence that defendants, or even dealerships, told half truths to class members before they purchased their vehicles,” he said. “Plaintiffs have only submitted evidence that would permit a jury to infer that class members who complained of odor to an authorized dealership were misled.”

The plaintiffs also failed to persuade the court that it should find a duty to disclose existed between Toyota, SET and the consumers, the order said.

In contrast, the class’ FDUTPA claims fared better in part because of that law’s standard of considering how a reasonable consumer would have acted, which the court found overcame several of the defendants’ arguments.

As part of the class certification order, the court also appointed remaining plaintiffs Javier Cardenas and Rodney Baker as class representatives, rejecting several arguments from the defendants against the typicality of their claims.

Counsel for the plaintiffs and SET did not immediately respond to requests for comment.

The proposed class is represented by Peter Prieto, John Gravante III, Matthew Weinshall and Alissa Del Riego of Podhurst Orseck PA, Joseph H. Meltzer, Melissa L. Troutner, Tyler S. Graden, and Natalie Lesser of Kessler Topaz Meltzer & Check LLP, and Paul R. Kiesel, Jeffrey A. Koncius and Nicole Ramirez of Kiesel Law LLP.

Toyota is represented by Robert M. Brochin, Brian M. Ercole, Melissa M. Coates, Matthew M. Papkin, J. Gordon Cooney Jr., David L. Schrader, Lisa R. Weddle and Mark Feller of Morgan Lewis & Bockius LLP.

Southeast Toyota is represented by Robert E. Sacks of Shapiro Blasi Wasserman & Hermann PA.

The case is Javier Cardenas et al. v. Toyota Motor Corp. et al., case number 1:18-cv-22798, in the U.S. District Court for the Southern District of Florida.

–Editing by Dave Trumbore.

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