CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 1 of 33 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA SCENIC BOUNDARIES TRANS. INC., a Wisconsin corporation, Plaintiff, v. CATERPILLAR, INC., a Delaware corporation, Defendant. __________________________________________/ CLASS ACTION COMPLAINT Plaintiff, Scenic Boundaries Trans. Inc. (“Scenic Boundaries,” or “Plaintiff”) brings this class action on behalf of itself and a putative class of similarly situated entities who purchased or leased a vehicle with a 2007, 2008, 2009 or 2010 (“2007-10”) Caterpillar, Inc. 1 C-13 or C-15 heavy duty on-highway diesel engine (collectively “MY 22007 CAT Engine”) in Minnesota (together, the “Class”). As and for its causes of action, Plaintiff, on behalf of itself and those similarly situated, states as follows: 1. The MY2007 CAT engine contains exhaust emission controls to reduce diesel engine exhaust emissions in compliance with the EPA’s 2007 Heavy Duty On Highway 1 2 Defendant Caterpillar, Inc. is collectively referred to herein as “Caterpillar” or “CAT.” MY = Model Year CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 2 of 33 Scenic Boundaries v. Caterpillar Page 2 Emissions Standard (“EPA 2007 Emission Standard” or “2007 Standard”). In order to meet the EPA 2007 Emission Standard applicable to heavy duty, on-highway diesel engines, Caterpillar designed, manufactured, sold for profit, and warranted MY2007 CAT Engines with an exhaust emission control system containing integrated components intended to reduce air pollutants, in particular, oxides of nitrogen (NOx) and particulate matter (PM), to levels not to exceed those set by the 2007 Standard. The exhaust emission control system employed by CAT (known as the “Caterpillar Regeneration System” or “CRS”) consists of three primary elements with supporting components and control software: (i) the Diesel Particulate Filter (DPF); (ii) the Aftertreatment Regeneration Device (ARD); and (iii) the Electronic Control Module (ECM). 2. Plaintiff’s claim is that Defendant’s CRS is defective in material and/or workmanship causing the vehicle to not function as required under all operating conditions, on a consistent and reliable basis, even after repeated emissions warranty repairs and replacements. These repeated warranty repairs and replacements failed to repair or correct the CRS defect resulting in damages, including diminished value of the vehicles powered by MY2007 CAT Engines, and the costs to re-power the vehicles with diesel engines that are compliant with the 2007 EPA Emission Standards. JURISDICTION, VENUE, AND PARTIES 3. This class action is within the original jurisdiction of this Court pursuant to 28 U.S.C. §1332(a) and 28 U.S.C. §1332(d)(2) (the Class Action Fairness Act). The amount in controversy in this class action exceeds five million dollars ($5,000,000.00), exclusive of interest and costs. 4. Venue in this District satisfies the requirements of 28 U.S.C. §1391(b)(1-2) because a substantial amount of the events and occurrences giving rise to the claim occurred in 2 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 3 of 33 Scenic Boundaries v. Caterpillar Page 3 this District, or a substantial part of the property that is the subject of this action is situated in this District. 5. Plaintiff Scenic Boundaries is a Wisconsin Corporation with its principal place of business located at 605 Old Military Road, Sandstone, Minnesota. Scenic Boundaries is in the business of providing vehicles for the transportation of goods for hire. Scenic Boundaries purchased at least six vehicles containing a MY2007 CAT Engine. 6. Defendant Caterpillar, Inc. is a Delaware Corporation with its principal place of business located at 100 NE Adams Street, Peoria, Illinois 61629, and is registered to conduct business in Minnesota. Caterpillar designed, manufactured, distributed, delivered, supplied, inspected, marketed, leased and/or sold for profit, and warranted the MY2007 CAT Engine and in particular the exhaust emission control, the CRS, to be free of defects in material and workmanship. THE EPA DIESEL EMISSIONS REGULATORY REGIME 7. The Clean Air Act (“the Act”), 42 USCA ¶¶ 7521-7551, provides the framework for the regulation of emissions from motor vehicles and engines operated in the United States. Section 7521(a)(1) provides that the Environmental Protection Agency shall by regulation “prescribe…standards applicable to the emissions of any air pollutant from any class or Class of new motor vehicles or new vehicle engines…whether such vehicles and engines are designed as complete systems or incorporate devices to prevent or control such pollution.” Section 7521(a)(3)(A)(i) provides that “regulations under paragraph (1) of this subsection applicable to emissions of hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter from Class or categories of heavy duty vehicles or engines manufactured during or after the model year 1983 shall contain standards which reflect the highest degree of emissions reduction 3 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 4 of 33 Scenic Boundaries v. Caterpillar Page 4 achievable through the application of technology which the Administrator determines will be available for the model year to which such standard apply.” 8. Section 7521(m) of the Act provides for regulations regarding the use of emission control diagnostics (referred to as “On Board Diagnostics” or “OBD”) capable of “(A) accurately identifying … emission-related systems deterioration or malfunction, including, at a minimum, the catalytic converter and oxygen sensor, which could cause or result in failure of the vehicles to comply with emissions standards…(B) alerting the vehicle’s owner or operator to the likely need for emission-related components or systems maintenance…(C) storing and retrieving fault codes…and (D) providing access to stored information in the manner specified by the administrator.” 3 9. Section 7541(a)(1) of the Act requires that the “[M]anufacturer of each new motor vehicle and new motor engine shall warrant to the ultimate purchaser and each subsequent purchaser that such vehicle or engine is (A) designed, built, and equipped so as to conform at the time of sale with all applicable regulations under section 7521 of this title, and (B) free of defects in materials and workmanship which cause such vehicle or engine to fail to conform with applicable regulations for its useful life (as determined under section 7521(d) of this title).” 10. In compliance with the mandate of the Act, on January 18, 2001 the Environmental Protection Agency issued its Final Rule-Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements (Final Rule), effective March 1, 2001. 4 The Final Rule states: 3 Subsection (m) provides for OBD on light duty vehicles, but the subsection further states: “The Administrator may, in the Administrator’s discretion, promulgate regulations requiring manufacturers to install such on board diagnostic systems on heavy duty vehicles and engines.” 40 CFR §86.007-17. 4 The 2007 EPA Emission Standard for 2007 and after Heavy-Duty Diesel Engines is at 40 CFR §86.007-11. 4 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 5 of 33 Scenic Boundaries v. Caterpillar Page 5 “We are establishing a comprehensive national control program that will regulate the heavy-duty vehicle and its fuel as a single system. As a part of this program, new emissions standards will begin to take effect in model year 2007, and will apply to heavy-duty highway engines and vehicles. These standards are based upon the use of high efficiency catalytic exhaust emissions control devices or comparably effective advanced technologies. Because these devices are damaged by sulfur, we are also reducing the level of sulfur in highway diesel fuel significantly by mid-2006.” Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Rules and Regulations, Final Rule p. 5002. 11. The EPA standard heavy-duty, on-highway, diesel emission standard (referred to herein as the “2007 EPA Emission Standard”) was promulgated in 2001 so as to “provide engine manufacturers with the lead time needed to effectively phase-in the exhaust emissions control technology that will be used to achieve the emission benefits of the new standard.” Id. at 5002. 12. In promulgating the 2007 EPA Emission Standard, the Agency found: “We estimate that heavy duty trucks and buses today account for about one-third of nitrogen oxides emissions and one-quarter of particulate matter emissions from mobile sources…This program will reduce particulate matter and oxides of nitrogen emissions from heavy duty engines by 90 percent and 95 percent below current standard levels respectively.” Id. at 5002 13. The 2007 EPA Emission Standard regulated both diesel vehicle/engine emissions standards and diesel fuel standards simultaneously, as a single system: “These options will ensure that there is widespread availability and supply of low sulfur diesel fuel from the very beginning of the program, and will provide engine manufacturers with the lead time needed to efficiently phase-in the exhaust emissions technology that will be used to achieve the emissions benefits of the new standards.” Id. at 5002. 14. The 2007 EPA Emission Standard sets not-to-exceed standards for Oxides of Nitrogen (“NOx”); Non-Methane Hydrocarbons (“NMHC”); Non-Methane Hydrocarbon Equivalent; Carbon Monoxide; and Particulate (“PM”). 5 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 6 of 33 Scenic Boundaries v. Caterpillar Page 6 15. The Act requires the EPA to set standards which “reflect the greatest degree of emissions reductions achievable through the application of technology… available for the model year to which the standard applies.” Act, Sec. 7521(a)(3). In this regard, the EPA concluded in the Final Rule that: • “[T]he development of diesel emissions control technology has advanced in recent years so that very large emission reductions (in excess of 90%) are possible. Especially through the use of catalytic emission control devices installed in the vehicle exhaust system and integrated with the engine controls. These devices are often referred to as ‘exhaust emission control’ or ‘aftertreatment’ devices…To meet the new standards, application of high-efficiency exhaust emission controls for both PM and NOx will be needed.” Id. at 5007. • “[S]everal exhaust emission control devices have been or are being developed to control harmful diesel exhaust pollutants. Of these we believe the catalyzed diesel particulate filter and the NOx absorber are the most likely candidates to be used to meet the very low diesel exhaust emission standards adopted today.” Id. at 5036. • “Like the new PM standard, the new NOx standard is projected to require the addition of a highly efficient NOx emission control system to diesel engines which, with the help from the PM trap will need to be optimized to control NMHC emissions.” Id. at 5036. • “Un-catalyzed diesel particulate filters will not be able to meet the 0.01 g/bhp-hr PM standard finalized today as they are only moderately effective at controlling the SOF fraction of the particulate. In addition, they require active regeneration technology which must be engaged frequently making the systems expensive to operate (increasing fuel consumption) and less reliable.” Id. at 5047. • “Diesel particulate filters (PM traps) function to control diesel PM through mechanical filtration of PM from the diesel exhaust stream and then oxidation of the stored PM (trap regeneration). Through oxidation in the catalyzed diesel particulate filter the stored carbonaceous PM is converted to CO2 and released into the atmosphere. Failure to oxidize the stored PM leads to accumulation in the trap, eventually causing the trap to become so full that it severely restricts exhaust flow through the device, leading to trap or vehicle failure…Therefore in order to ensure passive regeneration of the diesel particulate filters, significant amounts of platinum group metals (primarily platinum) are being used to washcoat formulations of advanced diesel particulate filters.” Id. at 5057. • “All of the NOx exhaust emission control technologies discussed previously in Section III are expected to utilize platinum to oxidize NO to NO2 to improve 6 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 7 of 33 Scenic Boundaries v. Caterpillar Page 7 NOx reduction efficiency of the catalysts at low temperatures or as in the case of a NOx absorber, as an essential part of the process of NOx storage.” Id. at 5059. • “We therefore anticipate that catalyzed diesel particulate filters can be integrated with new diesel engines with only a minimal amount of engine development. We do not anticipate that additional hardware beyond the diesel particulate filter itself and an exhaust pressure sensor for OBD will be required to meet the PM standard.” Id. at 5091. • “Testing at NVFEL shows yet another engineering path to optimizing the NOx control system external to the combustion system. This approach segregates the exhaust into separate streams external to the engine and manipulates exhaust conditions by changing exhaust mass flow (through valves) and by adding supplemental fuel with an electronic injector.” Id. 5052. 16. The Final Rule contemplated exhaust emission control necessary for compliance with the emission standards to be a “complete emission control system” integrated with on-board diagnostics: 5 17. • “The Complete System: We expect that the technologies described above would be integrated into a complete emission control system as described in the final RIA. The engine-out emissions will be balanced with the exhaust emission control package in such a way that the results are the most beneficial from a cost, fuel, economy, emissions standpoint.” Id. at 5054. • “The manufacturers are expected to take a system approach to the problem of optimizing the engine and exhaust control systems to realize the best overall performance possible.” Id. at 5090. “Reliability” of the exhaust emission control system is defined in the Final Rule as “the expectation that emission control technologies must continue to function as required under all operating conditions for the life of the vehicle.” Id. at 5056. 5 Regulatory Impact Analysis EPA420—00-010, July 2000, p. 21: Because these future emission control strategies will rely on electronic controls for adequate performance, EPA expects that the best available on-board diagnostics will be implemented to ensure that these strategies remain effective in-use.” 7 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 8 of 33 Scenic Boundaries v. Caterpillar Page 8 18. “Aftertreatment” refers to the treatment of exhaust, i.e., pollutant reduction after the exhaust leaves the engine. “Regeneration” is the “burning off of collected PM (oxidation of the stored PM releasing CO2).” Id. at 5047. CATERPILLAR’S EXHAUST EMISSION (“AFTERTREATMENT”) CONTROL SYSTEM 19. After the EPA’s implementation of the Final Rule in January 2001, CAT made the business decision to investigate, design, manufacture, and sell for profit heavy-duty diesel engines that complied with all of the requirements of the 2007 EPA Emission Standard. 20. On information and belief, in October 2003 CAT’s Aftertreatment Technologies Group initiated the technology development of exhaust emission controls for its heavy duty onhighway diesel engines to conform to 2007 EPA Emissions Standards. 21. CAT launched a designated project to design an engine-independent (meaning independent of engine NOx and PM output), self-regenerating, Diesel Particulate Filter. The directive for the project was to provide a PM aftertreatment solution for 2007 diesel engines within performance and cost constraints. 22. CAT’s various development, design, engineering, manufacturing, and business teams participated in approval of the CRS ultimately employed in CAT’s MY2007 Engines. The CRS was branded by CAT as its ACERT Technology (ACERT is the acronym for Advanced Combustion Emissions Reduction Technology). 23. Contrary to the express expectation of the EPA Final Report for the use of DPF with precious metal catalysts, Caterpillar’s CRS employs an un-catalyzed (without precious metal catalysts), or insufficiently catalyzed, Diesel Particulate Filter (“DPF”) which can only regenerate a small amount of soot trapped by the DFP, periodically requiring active regeneration to increase exhaust temperatures needed to burn off of the filter. 8 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 9 of 33 Scenic Boundaries v. Caterpillar Page 9 24. To periodically achieve the increased temperatures necessary for regeneration in CAT’s base metal DPF, the CRS must utilize an Aftertreatment Regeneration Device (“ARD”) to provide additional heat (600-650 ˚C) to the engine’s exhaust. Compressed air and ultra-low sulfur diesel fuel enter the head of the ARD where they are mixed and ignited by the spark plug. Once ignited the mixture mixes with engine exhaust flow directed into the inlet of the DPF to enable regeneration (burning) of the soot trapped by the DPF. 25. The operation of the CRS, as necessary to meet the Clean Air Act On Board Diagnostic (“OBD”) requirements, uses monitoring and diagnostic sensors and Electronic Control Module (“ECM”) software to regulate and monitor the operation of the DPF and ARD so as to ensure that the engine exhaust has sufficiently reduced pollutants to the level mandated by the 2007 EPA Emissions Standard. 26. The ECM is a comprehensive, programmable engine monitoring system. It continuously monitors engine operating conditions, controls particulate emissions by the CRS, interfaces with the vehicles sensor inputs, and performs the fault detection and diagnostic reporting requirements for OBD. The ECM monitors all of the systems of the Engine, including the exhaust emissions controls- “Operating conditions of the Aftertreatment Regeneration Device (ARD)” and the “Operating conditions of The Diesel Particulate Filter.” In response to operating conditions, the ECM is programmed to provide one of the following levels of response to operating conditions: Warning; Derate; and Shutdown. “Warning” advises the driver that action must be taken or the ECM will proceed to shut down. “Derate” means that the ECM derates the engine’s performance (reduces horsepower) in order to get the driver’s attention so the driver can take action in order to avoid engine damage. “Shutdown” means that the ECM takes action 9 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 10 of 33 Scenic Boundaries v. Caterpillar Page 10 necessary to shut down the engine within a short period to allow the driver to get off the road. In all instances the event is logged and the vehicle requires immediate authorized maintenance. 27. The ECM’s software determines if the CRS is operating correctly, detects faults in CRS operation, activates diagnostic trouble codes, and controls engine operation including activating warning, derating, and shutdown functions. In much the same way as the engine automatically adapts to airflow needs by increasing or decreasing turbocharger boost—the ECM interfaces with the vehicle to receive sensor input, compare the input to programmed operational parameters, and provides output which is converted into mechanical responses. In particular, the ECM monitors the CRS aftertreatment and pressure sensors to determine when regeneration of the DPF is required, whether regeneration occurs, and whether warning, derating, and/or engine shutdown is necessary due to CRS failure. If working correctly, the result is an efficient integration of exhaust emission control under all operating conditions. The basis of Plaintiff’s claims is that the CRS did not and cannot function efficiently and reliably. 28. In addition to monitoring the efficient operation of the MY2007 CAT Engine’s various systems, the ECM logs and stores “Active Codes,” “Logged Diagnostic Codes,” and “Logged Event Codes” by the number of occurrences within a specified engine operating time (the cumulative time of engine operating hours), as well as other engine and CRS data. 29. The ECM has the ability to detect problems and initiate warning, derate, and shutdown responses where the specific fault detected is of such severity as to require action. Some codes indicate problems with the monitoring sensors themselves, and may not require any action; some may be intermittent, while others indicate undesirable operating conditions, like failure of the CRS to regenerate. When operating codes occur, the codes are “active,” meaning 10 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 11 of 33 Scenic Boundaries v. Caterpillar Page 11 that the condition giving rise to the code is currently existing and in need of further diagnosis and likely remediation. 30. The ECM fault detection function is quantified by a corresponding numeric “code” identified in the Caterpillar “Troubleshooting C-13 and C-15 On-highway Engines” manual. Some codes relate to the fault detection of the CRS, and others relate to other systems in the engine. When there is a fault detected related to the CRS it is designated by code within the group of codes relating to CRS. These can be precisely identified by the ECM logged diagnostic and event codes that relate to components, and operating conditions, of the CRS. Because the CRS is comprised of integrated components, each with sensors monitoring the critical aspects of their operation, there are fault codes designated to the various components of the CRS. When a fault in the operation of any part of the CRS threatens the integrity of the engine, the Engine Protection System shuts down the engine entirely. In particular code 1110-31 (“Engine Protection System has Shutdown Engine”), with code 3719 (“Diesel Particulate Filter Collects Excessive Soot”) indicates that the engine was shut down because the DPF has failed to properly regenerate after repeated attempts. 31. The ECM is responsible for both fault detection and fault reporting. As a result, when a vehicle is shut down, derated, or a warning lamp illuminated, as indicated previously, the ECM records and stores this information. When the vehicle is brought in for emissions warranty repair for a CRS failure, it can be identified by accessing the ECM stored data. 32. CAT’s propriety “Caterpillar Electronic Technician” (“Cat ET”) is used to perform diagnostic testing, and display status parameters, event codes, and diagnostic codes. In addition the ECM also broadcasts its Diagnostic Trouble Codes, via the Cat ET on data links directly to CAT. The Cat ET requires a license from an authorized Caterpillar dealer. The ECM 11 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 12 of 33 Scenic Boundaries v. Caterpillar Page 12 data links through the Cat ET and provides CAT with direct access to the data stored in every MY2007 CAT Engine, knowledge of CRS failure, cause of failure, and allows direct CAT participation in diagnosis and remediation. 33. The CRS is materially identical in all MY2007 CAT Engines, a schematic of which is attached hereto as Exhibit A. 34. The CRS provides two types of regeneration: passive regeneration-where the engine provides sufficient exhaust gas temperature for regeneration, and active regenerationwhere the engine does not provide sufficient exhaust temperature for passive regeneration; ARD operates to raise the temperature of the exhaust gas for regeneration. 35. In the event passive and active regeneration fails, the temperature of the DPF can rise to dangerous levels, as high as 900 ˚C (1652 ˚F) resulting in severe engine and exhaust emission control damages, fire, and/or explosion hazard. 36. Because of the significant hazard resulting from a CRS regeneration failure, the MY2007 CAT Engines contain a program called the “ARD Programmable Regeneration Monitoring System Status” which determines the engine’s response to this failure. The ECM activates the OBD to issue warning to the operator, or automatically derate, or shutdown the MY2007 CAT Engine. 37. In the event of derate or a shutdown, the vehicle is no longer able to operate safely on the highway until authorized maintenance is performed. 38. In the event of a CRS OBD warning, derate, or shutdown, the vehicle can no longer operate and must be taken in for repair at an authorized Caterpillar facility. This means that for a vehicle in operation, the goods and/or passengers must be provided with alternative 12 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 13 of 33 Scenic Boundaries v. Caterpillar Page 13 transportation, the vehicle towed in for repair, and the vehicle is then unusable for extended period of time. 39. When the MY2007 CAT Engine experiences an CRS failure and is taken in for repair, the CRS (“active code”) failure must be identified and the CRS returned to the operational parameters established by the ECM software sufficient to “clear the code” that caused the warning, derate, or shutdown. 40. CAT’s MY2007 Engines are defective in that the CRS repeatedly and frequently experience warning, derate, and shutdown commands issued by the ECM as a result of fault detection in the CRS, which cause the vehicles to require immediate authorized exhaust emission control diagnoses, and remediation during which time the vehicles are not capable for the transportation of good and/or passengers. 41. In performing emission system warranty repairs, CAT acknowledges that the CRS failures detected are defects in material and workmanship in the MY2007 CAT Engines because the emissions warranty repairs are performed. 42. However, the MY2007 Engines repeatedly experience CRS failures that are not corrected by the emission warranty work performed. These repeated and frequent CRS failures cause the vehicles to be unreliable for the transportation of good and/or passengers and which, in spite of numerous attempts, the CRS failures have not and cannot be corrected. The numerous and frequent CRS faults cause warning, derate, and shutdown that necessitate costly and time consuming emissions warranty repairs rendering them unreliable and unsafe for the transportation of good and/or passengers because the MY2007 CAT Engines do not and cannot effectively and reliably remove exhaust emission pollutants as required by the EPA 2007 Emissions Standards on a consistent and reliable basis. 13 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 14 of 33 Scenic Boundaries v. Caterpillar Page 14 PLAINTIFF’S AND THE CLASS’S EXPERIENCE WITH REPEATED FAILURES OF THE DEFECTIVE EXHAUST EMISSION CONTROLS 43. Not long after Plaintiff and Class members purchased or leased vehicles with MY2007 CAT Engines, and within the warranty period of their warranty and extended warranty, they began to experience numerous failures of the CRS to operate effectively and reliably. This caused Plaintiff and Class members to incur significant damages in the diminution of the value of their vehicles, but also in the cost of replacing the MY2007 CAT Engines with other EPA 2007 Emission Standard compliant heavy duty, on-highway, diesel engines. 44. Plaintiff’s MY2007 CAT Engines detected numerous and various faults in the operation of the CRS, which triggered warning, derating, and shut down necessitating delivery of the vehicle to an authorized CAT repair facility for emissions warranty work. 45. Scenic Boundaries purchased vehicles with a MY2007 CAT Engines. Scenic Boundaries used these vehicles in the operation of its business and experienced repeated after treatment and regeneration failures rendering its vehicles inoperable for the transportation of goods. Scenic Boundaries repeatedly took its vehicles to an authorized Caterpillar repair facility for remediation which remediation did not correct the defect in the MY2007 CAT Engine causing the vehicles to be unavailable for transportation. 46. In spite of repeated emissions warranty work on the CRS, Plaintiff and members of the putative class experienced repeated instances of warning lights illuminating, engine derating and shutdown, aftertreatment regeneration devices plugging and/or clogging, the ARD head failing, and DPF regeneration failure, as well as a myriad of system failures that prevented the engines from properly regenerating. 14 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 15 of 33 Scenic Boundaries v. Caterpillar Page 15 47. Despite Defendant’s numerous attempts to correct CRS failures, the MY2007 CAT Engine exhaust emission controls do not function as required under all operating conditions, and will not do so for the expected life of the vehicle. 48. Defendant represented to Plaintiff and Class members that each emission warranty repair would correct the defect; therefore, Plaintiff and Class members continue to experience defective exhaust emission control, when CAT knew, or should have known, that the CRS defect could not be corrected. 49. Plaintiff and Class members have suffered substantial financial losses and other damages as a result of Defendant's actions and the defective engines. 50. On information and belief, CAT discontinued manufacture of the MY2007 CAT Engines in 2009/10. CLASS ACTION ALLEGATIONS 51. Plaintiff brings this action pursuant to Federal Rule of Civil Procedure 23 on behalf of itself and the following Class, comprised of vehicle owners and lessees who purchased or leased a vehicle containing a MY2007 CAT Engine, as described herein. 52. Alternatively, Plaintiff brings this action pursuant to Federal Rule of Civil Procedure 23 on behalf of itself and the following Class, comprised of vehicle owners and lessees in the state of Minnesota who purchased or leased a vehicle containing a MY2007 CAT Engine, as described herein CLASS DEFINITION 53. The Class is defined as all persons and entities who purchased or leased a vehicle containing a MY2007 CAT Engine. 15 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 16 of 33 Scenic Boundaries v. Caterpillar Page 16 54. Plaintiff Scenic Boundaries is a member of the Class, and is a putative Class Representative. NUMEROSITY 55. Upon information and belief, Caterpillar sold thousands of MY2007 CAT Engines with its CRS exhaust emission controls. Therefore, the Class, which number in excess of 100 individual putative Class members as to each claim asserted, are sufficiently numerous so that the joinder of all members of the Class in a single action is impracticable. The precise number and identities of Class members are unknown to Plaintiff, but can be ascertained through reasonable discovery diligence and appropriate notice. COMMONALITY 56. There are numerous common questions of law and fact that predominate over any questions affecting only individual members of the Class. Among these common questions of law and fact are the following: a. Whether MY2007 CAT Engines are defective; b. Whether Defendant manufactured, warranted, distributed, delivered, supplied, inspected, marketed, leased, and/or sold MY2007 CAT Engines with CRS exhaust emission controls that, as a matter of course, experienced or caused repeated instances of engine derating, shutdown, aftertreatment regeneration devices plugging, the ARD head failing and/or clogging, as well as other CRS failures that prevented the engines from properly functioning; c. Whether Defendant breached its express Federal Emission Control Warranty (“Emissions Warranty”); d. Whether Defendant breached its implied warranties; e. Whether the Defendant’s CRS exhaust emission control was defective, which defect could not be corrected by the replacement of parts or components, or the employment of reasonable and customary labor; 16 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 17 of 33 Scenic Boundaries v. Caterpillar Page 17 f. Whether limitation of the Emissions Warranty to repair and replacement, in the presence of repeated CRS failures, which have not been and cannot be corrected by CAT, causes the emissions warranty to fail of its essential purpose; and g. Whether the Plaintiff and members of the putative class are entitled to recover compensatory damages for diminished value of their vehicles, or the cost to replace the MY2007 CAT Engine with another, reliable, heavy duty diesel engine which is EPA 2007 Emission Standard compliant, and/or other damages provable at trial. TYPICALITY 57. Plaintiff’s legal claims are typical of the legal claims of other members of the Class. Plaintiff has the same legal interests as other members of the Class and has no interests antagonistic to members of the Class they seek to represent. 58. Plaintiff and each Class member leased or owned at least one vehicle with a MY2007 CAT Engine. Each Plaintiff has experienced repeated and frequent failures of the CRS exhaust emission control designed, manufactured, and warranted by CAT, and members of the Class have suffered similar repeated and frequent failures of the CRS causing them economic damages, despite being located in different geographic regions, operating in diverse climates, and driving on dissimilar roads. 59. Plaintiff and Class Members have sustained the same type of economic damage due to the MY2007 CAT Engine’s CRS. Thus, the legal remedies available to Plaintiff and Class Members are based upon the same uniform wrongful conduct by Defendant. ADEQUACY OF REPRESENTATION 60. Plaintiff is an adequate representative of the Class, and together with legal counsel, will fairly and adequately protect the interests of the Class. Plaintiff has no conflict with the Class they seek to represent and are committed to the vigorous prosecution of this action and have retained competent counsel experienced in litigation of this nature to represent it. 17 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 18 of 33 Scenic Boundaries v. Caterpillar Page 18 Plaintiff anticipates no difficulty in the management of this litigation as a class action. Moreover, Plaintiff’s interests are aligned with the Class Members and it is unlikely there will be a divergence of viewpoint. 61. Undersigned counsel are competent counsel experienced in class action litigation, mass torts, and litigation involving defective and harmful products. Plaintiff and counsel will fairly and adequately protect the interests of the class PREDOMINANCE AND SUPERIORITY 62. This class action is appropriate for certification because questions of law and fact common to the Members of the Class predominate over questions affecting only individual Members, and a class action is superior to other available methods for the fair and efficient adjudication of this controversy, since individual joinder of all Members of the Class is impracticable. In particular, whether MY2007 CAT Engine’s exhaust emission control, the CRS, is inherently defective – causing repeated instances of check engine lights illuminating, engine derating, shutdown, and aftertreatment regeneration devices plugging and/or clogging, as well as other issues that prevented the engines from properly regenerating – is the common issue for Plaintiff and each class member. Adjudicating this key issue, along with establishing the rights and obligations of the parties under Defendant’s uniform express Emissions Warranty, will benefit all members of the class and resolve a tremendously expensive common issue. 63. A class action is superior to other available methods for the fair and efficient adjudication of this controversy for the following reasons: a. Questions of law or fact common to the claims or defenses of the representative party and the class predominate over any question of law or fact affecting its individual members. 18 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 19 of 33 Scenic Boundaries v. Caterpillar Page 19 b. It is desirable to concentrate these claims in a single forum where inconsistent adjudications may be avoided, and consistent conduct may be determined and followed throughout all affected areas of the State. c. The members of the class are so numerous that separate joinder of each member is impracticable. d. Plaintiff is aware of no other litigation concerning this controversy already commenced by its class members. e. There are no difficulties likely to be encountered in the management of this class action, given the limited issue presented, and the simplicity of data retrieval for Defendant. 64. Should individual Class Members be required to bring separate actions, this Court would be confronted with a multiplicity of lawsuits regarding the defective nature of the CRS exhaust emissions control employed by the MY2007 CAT Engines. Such a multitude of suits would burden the court system while also creating the risk of inconsistent rulings and contradictory judgments. In contrast to proceeding on a case-by-case basis in which inconsistent results will magnify the delay and expense to all parties and the court system, this class action presents far fewer management difficulties while providing unitary adjudication, economies of scale, and comprehensive supervision by a single Court. 65. CAT’s proprietary information systems contain sufficient detailed information of the emissions warranty work performed on every MY2007 CAT Engines such that the members of the Class and SubClass are readily ascertainable and identifiable through reasonable diligence, records in Defendant’s possession, and appropriate notice. 66. The common questions set forth above predominate over Class Members’ individual issues. 19 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 20 of 33 Scenic Boundaries v. Caterpillar Page 20 67. A class action is superior to other methods of dispute resolution in this case. The Class members have an interest in class adjudication rather than individual adjudication because of the overlapping claims and rights. It is highly desirable to concentrate the resolution of these claims in this single forum because it would be difficult and highly unlikely that the affected Class members would protect their rights on their own without this class action case. Management of the class will be efficient and far superior to the management of hundreds of individual lawsuits. EQUITABLE ESTOPPELL, TOLLING/FRAUDULENT CONCEALMENT 68. Upon information and belief, Caterpillar has known of the defects in the MY 2007 Cat Engines for years and has concealed the defect from owners and/or buyers of the vehicles, has, upon inquiry, affirmatively misrepresented that the vehicles are defect free (despite Caterpillar knowing they are inherently defective) and/or has failed to alert owners and buyers of the defective nature of the MY 2007 CAT Engines. 69. Given Caterpillar’s failure to disclose this known but non-public information about the defective nature of the MY 2007 CAT Engines – information over which it had exclusive control – and because Plaintiff and Class Members therefore could not reasonably have known that the MY Cat Engines were defective, Caterpillar is estopped from relying and should not be allowed to rely on any exception regarding any statutes of limitation that might otherwise be applicable to the claims asserted herein. 70. Caterpillar has been on notice of the defects in the MY 2007 CAT Engines since at the latest 2008. So, equitable tolling and/or equitable estoppel precludes Caterpillar from asserting that they were not aware of the defects in the MY 2007 CAT Engines. Further, CAT has never publicly disclosed the defect to Class members. On information and belief, when CAT 20 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 21 of 33 Scenic Boundaries v. Caterpillar Page 21 has settled allegations with large fleet dealers or other well financed entities relating to defects with MY 2007 CAT engines, CAT requires a non-disclosure/confidentiality agreement that continues to suppress disclosure of the true nature of the defect and CAT’s knowledge. 71. Pursuant to the doctrines of Equitable Tolling, Equitable Estoppel and/or Fraudulent Concealment, the period for bringing claims shall not be barred due to the statute of limitations or statute of repose. With respect to each and every cause of action and/or Count asserted herein, Plaintiff expressly pleads Equitable Tolling, Equitable Estoppel and/or Fraudulent Concealment and their application thereto. COUNT I BREACH OF EXPRESS EMISSION CONTROL SYSTEM WARRANTY (On behalf of Scenic Boundaries and the Class) 72. Plaintiff adopts and incorporates herein the allegations set forth above. 73. CAT is required by the Clean Air Act to provide an Emission Control Systems Warranty for all MY2007 CAT Engines, a copy of which is attached hereto as Exhibit B. 74. The Federal emissions warranty covers emission related parts and components including the Electronic Control System; Exhaust Aftertreatment System; Clean Gas Induction System; Aftertreatment Regeneration Device; and all miscellaneous valves, switches, clamps, connectors, tubing, and sealing devices used in the systems. 75. According to the terms of its Emissions Warranty, CAT must, within the warranty period, or extended warranty period if applicable, provide new, remanufactured, or repaired parts and/or components, approved pursuant to EPA Regulations, required to correct the defect, as well as ‘reasonable and customary’ labor required to make the warranty repair. 21 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 22 of 33 Scenic Boundaries v. Caterpillar Page 22 76. Under this warranty, CAT warranted to all owners and users of its MY2007 CAT Engines that all emissions related parts and components were designed, built, and equipped so as to conform to the EPA 2007 Emission Standard. 77. Caterpillar expressly warranted to Plaintiff and to Class members that the exhaust emissions controls of its MY2007 CAT Engines to be free from defects in material and workmanship and in the event a defect manifested, CAT was obligated to correct the defect. 78. Contrary to this warranted representation, the exhaust emission controls, the CRS, was defective in that it repeatedly and frequently failed to function properly in reducing emission pollutants on a reliable and dependable basis, resulting in repeated fault detection, and failures of the Exhaust Aftertreatment System, the Aftertreatment Regeneration Device, and the Electronic Control System covered by the Emissions Warranty. The faults resulted in warning, derating, and shutdown, requiring authorized and expensive maintenance to remediate the active fault codes before the vehicles could be used for on highway transport, which defects CAT was unable to correct in spite of repeated and numerous attempts. 79. Defendant knew, or should have known, that the CRS employed by MY2007 CAT Engine was defective, and that its defects could not be corrected, especially in light of the EPA Final Report finding that exhaust emission controls, at least as of 2000, using base metal catalyzed (non-precious metal catalysts) Diesel Particulate Filters requiring periodic, active regeneration were unreliable. Final Report, p. 5047. 80. By failing to correct the defects, in spite of repeated, frequent attempts, Defendant has breached the express Emissions Control System Warranty. 22 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 23 of 33 Scenic Boundaries v. Caterpillar Page 23 81. By virtue of repeated and frequent presentation of the Plaintiff’s vehicles to authorized CAT repair facilities, Defendant was notified of the defects in the exhaust emission controls and failed to correct them. 82. By failing to provide an exhaust emission control capable of meeting the 2007 EPA Emission Standard on a reliable basis, CAT’s Emission Warranty limitation to repair and replace, but not correct, the CRS, for a period limited by the warranty, and extended warranty, have caused a failure of the essential purpose of the emission warranty to provide a reliable emission technology capable of functioning as required under all operating conditions for the reasonably expected life of the vehicle. 83. As a direct and proximate result of Defendant's breach of express Emissions Warranty, Plaintiff and Class members have suffered financial loss in the form of diminished value of their vehicles, and the cost to re-power the vehicles with diesel engines having reliable exhaust emissions controls. COUNT II BREACH OF IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE (On behalf of Scenic Boundaries and the Class) 84. Plaintiff adopts and incorporates herein the allegations set forth above. 85. Defendant manufactured only heavy duty diesel engines and not the vehicles in which they are installed. Defendant directly sold and marketed its MY2007 CAT Engine to vehicle manufactures, like those from whom Plaintiff and Class owned and/or leased their vehicles, for the intended purpose of installing those engines in vehicles, owned or operated by Plaintiff and the Class, to be used for on-highway use. CAT knew that the MY2007 CAT Engines would and did pass unchanged from the vehicle manufacturer to Plaintiff and Class. 23 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 24 of 33 Scenic Boundaries v. Caterpillar Page 24 86. CAT knew that all emission warranty work would, and could, only be performed by an authorized CAT repair facility under direct supervision of CAT and employing the Cat ET and with a direct data link to CAT. 87. CAT knew that the CRS was an exhaust emission control designed and manufactured by CAT for use in the MY2007 CAT Engine and that the MY2007 CAT Engine could only use the CRS to meet the 2007 EPA Emission Standard for exhaust emission control. 88. CAT knew that the MY2007 CAT Engine fault detection functions and fault codes were proprietary to CAT and could only be accessed by the Cat ET, such that the OBD and fault code clearing could only be performed by direct contact with CAT and its authorized warranty repair facilities. 89. CAT included the Emission Warranty, as required by the Act and the 2007 EPA Emission Standard to the Operating Manual, for each vehicle powered by the MY2007 CAT Engine. 90. CAT knew that the CRS was programmed to disable the operation of the engine until fault detection codes were cleared by direct contact with CAT and its authorized warranty repair facilities; that such direct contact would be required each time there was a CRS warning, derating, or shutdown; and that only CAT or its authorized warranty repair facility could repair the CAT CRS. 91. CAT knew that on highway transportation required the exhaust emission controls to reliably function under all operating conditions to transport vehicles to and from their destinations. 92. CAT knew that the exhaust emissions control employed by the MY2007 CAT Engines, the CRS, would render the vehicles inoperable in the case of CRS failure so that a 24 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 25 of 33 Scenic Boundaries v. Caterpillar Page 25 warning, derating, or shutdown issued by the CRS ECM would place those vehicles in the unsafe circumstance of being stranded, and place the vehicle operator in the position of not being able to ensure that they would reach their destination and return. 93. CAT knew that its MY2007 CAT Engines would be used to power vehicles for the transportation of goods and/or passengers and that an unreliable exhaust emission control, and its CRS in particular, would place those goods and/or passengers in the unsafe condition of abandonment due to CRS failure. 94. CAT knew that the CRS failures detected by the monitoring function of the ECM would render the vehicles inoperable until the diagnostic codes triggering the warning, derate, or shutdown were “cleared” by the Cat ET, and only the Cat ET. 95. CAT knew and required that the Cat ET necessary to clear the engine warning, shutdown, and derate codes be inaccessible to Plaintiff and Class, other than through a licensed authorized CAT dealer. 96. CAT knew that its CRS was unique to the MY2007 CAT Engines, that other reliable exhaust emissions controls could not be used on the MY2007 CAT Engines, and that all repairs to and diagnosis of the CRS required the intervention of CAT. 97. The CAT Emission Warranty does not disclaim any implied warranties. 98. Defendant was notified of the defects of the MY2007 CAT Engine exhaust emission controls, but has failed to correct them. 99. As a direct and proximate result of Defendant’s breach of the implied warranty of fitness for particular purpose, Plaintiff and Class members have suffered financial loss and other damages, including the diminished value of their vehicles, and the cost to re-power the vehicles with diesel engines having reliable exhaust emissions controls. 25 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 26 of 33 Scenic Boundaries v. Caterpillar Page 26 COUNT III BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY (On behalf of Scenic Boundaries and the Class) 100. Plaintiff adopts and incorporates herein the allegations set forth above. 101. Defendant knew, or should have known, that base metal catalysts, or a catalyst insufficient to regenerate the anticipated soot load in the DPF without periodic active regeneration, would require high exhaust temperatures to effectively oxidize pollutants collected in the DPF. Precious metal DPFs were known to provide a continuous regeneration at lower exhaust temperatures on a reliable basis. Nevertheless CAT for its own business purpose, and for its own profit, failed to use known, reliable exhaust emission controls in the MY2007 CAT Engines. 102. The CRS exhaust emission controls of the MY2007 CAT Engines rendered the Engines, and therefore the vehicles powered by those engines, unfit, inherently unsound for use in on-highway transportation, that they would not pass without objection in the trade; that they were not fit for the ordinary purpose for which they were used; that they would not operate on a reliable basis for the reasonable life of the engine; and were unmerchantable. 103. Consequently, CAT breached the implied warranty of merchantability, to wit: it failed to use reliable exhaust emissions controls that would reduce exhaust emissions to the EPA Standard for the anticipated life of the vehicles of 1,000,000 miles and/or 10 years. 104. CAT impliedly warranted that the repairs and component replacements to the exhaust emission controls would correct the defect in its CRS in a good and workmanlike manner; however, MY2007 CAT Engine exhaust emission controls have failed to be corrected because the CRS is incapable of reliable functioning. 26 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 27 of 33 Scenic Boundaries v. Caterpillar Page 27 105. CAT was notified of the defects of the engines' emissions and/or regeneration systems, but has failed to correct them. 106. As a direct and proximate result of CAT’s breach of the implied warranty of merchantability, Plaintiff and Class members have suffered financial loss and other damages, including the diminished value of their vehicles, and the cost to re-power the vehicles with diesel engines having reliable exhaust emissions controls. COUNT IV DECLARATORY JUDGMENT (28 U.S.C. § 2201) (On behalf of Scenic Boundaries and the Class) 107. Plaintiff adopts and incorporates herein the allegations set forth above. 108. Defendant drafted the Emission Warranty referred to above without negotiation with Plaintiff or the Class. 109. The Emission Control Systems Warranty for all MY2007 CAT Engines warranted that the emission system be free of defects in material and workmanship and imposed upon Defendant the obligation to correct the defects. 110. There is a real and actual controversy regarding the meaning and impact of the language in Defendant’s warranty. 111. In order to resolve this controversy, Plaintiff requests that, pursuant to 28 U.S.C. § 2201, this Court declare the respective rights and duties of the parties with respect to the warranty rights in this matter and, in particular, that the Court declare: a. That the MY2007 CAT Engines are defective in material and workmanship in that its emission system was not designed, built and equipped to conform at the time of sale with applicable regulations regarding emissions standards without causing repeated and frequently after treatment failures resulting in derate and shutdown commands with the vehicles losing power, and/or shutdown, and becoming inoperable for the transportation of goods and/or passengers; 27 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 28 of 33 Scenic Boundaries v. Caterpillar Page 28 b. That the MY2007 CAT Engines’ emissions systems could not and cannot be corrected through repair and/or replacement of parts or components; c. That the defects in the Engines are material and require disclosure to all owners and lessees of vehicles equipped with the MY2007 CAT Engine; d. That the defects in the MY2007 CAT Engines’ emissions systems could not and cannot be corrected through repair and/or replacement of parts or components is material and requires disclosure to all owners and lessees of vehicles equipped with the MY2007 CAT Engine; e. That the defects in the MY2007 CAT Engines’ emissions systems are warrantable under the Engine and Emissions warranties issued by the Defendant and require remediation by the replacement of the entire emissions system that is not defective; f. That all persons, entities, and users of the MY2007 CAT Engines are to be provided with the best practicable notice of the defect, and that the defect has not and cannot be corrected by repairs or replacement of existing emissions components, which cost shall be borne by Defendant; g. That Defendant Caterpillar knew or should have known that the emissions system of the MY2007 CAT Engine was defective, and that such defect could not and cannot be correct by the repair or replacement of existing components when Defendant first manufactured the Engines, any and all disclaimers and limitations contained in the engine and Emissions warranties is invalid and unenforceable; h. That Defendant Caterpillar establish and inspection and recall program to be communicated to the Class which will require Defendant to replace the existing emissions systems of the MY2007 CAT Engines, with an emissions system that conforms to application emissions regulations and is not defective; i. That the MY2007 CAT Engine is not of good and merchantable quality-fit and safe for its ordinary intended use; j. That the Emissions Warranty failed of its essential purpose; further, that any limitations or exclusions be hereby declared null and void; and k. That Defendant’s repair and replacement of existing emissions systems components did not correct, and is not a correction of, the defects in the MY2007 CAT Engine. 28 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 29 of 33 Scenic Boundaries v. Caterpillar Page 29 112. A valid case or controversy exists sufficient for this court to declare the rights and remedies of the parties in that Plaintiff is unsure of their rights against Defendant pursuant to the written warranties, the applicability, validity and enforceability of any disclaimers and limitations of those warranties. 113. This controversy is ripe for determination at this time because Defendant has not sufficiently or adequately corrected the defects in the 2007-9 CAT C-13 emissions systems, cannot correct the defects, while the Plaintiff, and the class continue to have repeated and frequent emissions and aftertreatment failures and are submitted their vehicles to Defendant’s authorized technicians for warranty remediation. COUNT V VIOLATION OF MINNESOTA UNIFORM DECEPTIVE TRADE PRACTICES ACT (MINN. STAT.. § 325D.43, et. seq.) (On behalf of Scenic Boundaries and the Class) 114. Plaintiff adopts and incorporates herein the allegations set forth above. 115. Defendant engaged in conduct that violates the Minnesota Deceptive Trade Practices Act, MINN. STAT. § 325D.44, et seq. The violations include the following: a. Defendant violated MINN. STAT. § 325D.44(5) by representing the MY2007 CAT Engine as having characteristics, uses, and benefits of safe and mechanically sound vehicles while knowing that the statements were false and the MY2007 CAT Engine and 2007-9 CAT C-13 emissions systems contained the defects; b. Defendant violated MINN. STAT. § 325D.44(7) by representing the MY2007 CAT Engine and 2007-9 CAT C-13 emissions systems as a nondefective product of a particular standard, quality, or grade while knowing the statements were false and the MY2007 CAT Engine and 2007-9 CAT C-13 emissions systems contained defects; c. Defendant violated MINN. STAT. § 325D.44(9) by advertising, marketing, and selling the MY2007 CAT Engine and 2007-9 CAT C-13 emissions systems as reliable and without a known defect while knowing those claims were false; and, 29 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 30 of 33 Scenic Boundaries v. Caterpillar Page 30 d. Defendant violated MINN. STAT. § 325D.44(13) by creating a likelihood of confusion and/or misrepresenting the safety of the MY2007 CAT Engine and 2007-9 CAT C-13 emissions systems. 116. Defendant’s deceptive scheme was carried out in Minnesota and affected Plaintiff and the other Class members. 117. Defendant also failed to advise the public about what it knew about the defects in the exhaust emissions control employed by the MY2007 CAT Engines and that the CRS would render the vehicles inoperable in the case of CRS failure so that a warning, derating, or shutdown issued by the CRS ECM would place those vehicles in the unsafe circumstance of being stranded, and place the vehicle operator in the position of not being able to ensure that they would reach their destination and return. 118. As a direct and proximate result of Defendant’s deceptive conduct and violation of MINN. STAT. § 325D.44, et seq., Plaintiff and the other Class members have sustained and will continue to sustain economic losses and other damages for which they are entitled to compensatory and equitable damages and declaratory relief in an amount to be proven at trial. COUNT VI VIOLATION OF MINNESOTA PREVENTION OF CONSUMER FRAUD ACT (MINN. STAT. § 325F.68, et seq.) (On behalf of Scenic Boundaries and the Class) 119. Plaintiff adopts and incorporates herein the allegations set forth above. 120. Plaintiff and Defendant are “persons” within the meaning of the Minnesota Prevention of Consumer Fraud Act. 121. Defendant’s conduct violated the Minnesota Prevention of Consumer Fraud Act for one or more of the following reasons, inter alia: a. Defendant concealed from Plaintiff and the Class the material facts that the Engines were defective; and 30 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 31 of 33 Scenic Boundaries v. Caterpillar Page 31 b. Defendant misrepresented the features and functionality of the MY2007 CAT Engine with the intent that Plaintiff and the other Class members rely on such representations in their decision regarding the purchase or lease of the vehicles containing such engines. 122. Plaintiff and the other Class members did, in fact, rely on Defendant’s representations and silence as to known defects with the CRS employed by the MY2007 CAT Engine in connection with their decision regarding the purchase, lease, and/or use of the vehicles in which the MY2007 CAT Engine were installed. 123. Had Defendant disclosed all material information regarding the defective Engines to Plaintiff and the Class, they would not have decided to purchase or lease the vehicles or would have paid less. 124. Through these misleading and deceptive statements and false promises, Defendant violated MINN. STAT. § 325F.69 and proximately caused Plaintiff and the Class to suffer losses in the form of added expense to continuously remove, replace or repair the defective Engines, the loss of the use of the Engines, towing and repair and other related expenses, and diminution of value, inter alia, and are entitled to recover such damages. 125. The Minnesota Prevention of Consumer Fraud Act applies to Defendant’s transactions with Plaintiff and the other Class members because Defendant’s deceptive scheme was carried out in Minnesota and affected them. 126. As a direct and proximate result of Defendant’s deceptive conduct and violation of MINN. STAT. § 325F.69, Plaintiff and the other Class members have sustained and will continue to sustain economic losses and other damages for which they are entitled to compensatory and equitable damages and declaratory relief in an amount to be proven at trial. 31 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 32 of 33 Scenic Boundaries v. Caterpillar Page 32 PRAYER FOR RELIEF WHEREFORE Plaintiff, on behalf of all others similarly situated and the Class, demand: a. An order certifying the case as a class action; b. An order appointing Plaintiff as the Class Representative of the Class; c. An order appointing undersigned counsel and their firms as Class Counsel; d. All compensatory damages; e. Pre-judgment and post-judgment interest, as applicable, at the maximum rate allowable at law; f. An award of attorneys’ fees to class counsel based upon a common fund theory as allowed by law, for the benefits conferred upon the Class and/or as allowed by contract or statute; g. The costs and disbursements incurred by Plaintiff and Class Members in connection with this action, including reasonable attorneys’ fees based on the benefits conferred upon the Class, a common fund, statutory, and/or contractual basis; h. An award of taxable costs; and i. Such other and further relief under all applicable state law and any other relief the Court deems just and appropriate. 32 CASE 0:14-cv-01352-MJD-JSM Document 1 Filed 04/30/14 Page 33 of 33 Scenic Boundaries v. Caterpillar Page 33 DEMAND FOR JURY TRIAL Plaintiff individually, and on behalf of the Class Members, hereby demands a trial by jury as to all issues so triable as a matter of right. Dated: April 30, 2014 Respectfully submitted, ___s/Garrett D. Blanchfield_____________ Garrett D. Blanchfield, #209855 Roberta A. Yard, #322295 REINHARDT WENDORF & BLANCHFIELD E-1250 First National Bank Building 332 Minnesota Street St. Paul, MN 55101 Telephone: 651-287-2100 Facsimile: 651-287-2103 Richard J. Burke Jamie E. Weiss COMPLEX LITIGATION GROUP LLC 513 Central Ave., Suite 300 Highland Park, IL 60035 Telephone: (847) 433-4500 Facsimile: (847) 433-2500 Jonathan Shub SEEGER WEISS LLP 1515 Market Street, Suite 1380 Philadelphia, Pennsylvania 19102 33
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