Court Opinion

ID: 5140272
Source: CourtListenerOpinion
Date Created: 2021-12-23 20:00:41.578018+00
Date Added: 2024-06-11T08:24:21.838364
License: Public Domain

USCA11 Case: 21-11491      Date Filed: 12/23/2021   Page: 1 of 9

                                           [DO NOT PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 21-11491
                   Non-Argument Calendar
                   ____________________

BLACK STONE AUTO EXPORT, INC.,
                                              Plaintiff-Appellant,
versus
HYUNDAI MOTOR AMERICA (INC),

                                            Defendant-Appellee.

                   ____________________

          Appeal from the United States District Court
             for the Northern District of Georgia
              D.C. Docket No. 1:20-cv-02458-CC
                   ____________________
USCA11 Case: 21-11491         Date Filed: 12/23/2021    Page: 2 of 9

2                      Opinion of the Court                 21-11491

Before BRANCH, LUCK, and EDMONDSON, Circuit Judges.

PER CURIAM:

       Black Stone Auto Export, Inc. (“Plaintiff”) appeals the dis-
trict court’s dismissal -- pursuant to Fed. R. Civ. P. 12(b)(6) -- of
Plaintiff’s amended complaint against Hyundai Motor America,
Inc. (“Hyundai”). No reversible error has been shown; we affirm.
      In September 2015, Hyundai issued a safety recall on certain
2011 and 2012 Hyundai Sonatas due to a manufacturing defect in
the engines (“Engine Recall”). Hyundai’s recall notice -- sent pur-
suant to the National Traffic and Motor Vehicle Safety Act, 49
U.S.C. § 30100 et seq. (“Safety Act”) -- stated that Hyundai would
inspect and repair the recalled Sonatas.
       Following the Engine Recall, Plaintiff (a used-car dealer) be-
gan purchasing Hyundai Sonatas covered by the recall. Plaintiff
would transport the recalled Sonatas to Hyundai for repair at
Hyundai’s expense. After Hyundai returned the repaired Sonatas
to Plaintiff, Plaintiff would sell the repaired cars to its customers.
       In September 2018, Hyundai notified Plaintiff about a
change in its method of remedying the Engine Recall. Instead of
repairing the recalled Sonatas, Hyundai planned to provide com-
pensation for each recalled Sonata in an amount equal to the Kelley
Blue Book value of an equivalent vehicle in good condition.
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21-11491                 Opinion of the Court                            3

       Between September 2018 and April 2019, Hyundai compen-
sated Plaintiff for 37 recalled Sonatas at a price based on this Kelley
Blue Book value.
       On 10 April 2019, Hyundai notified Plaintiff about another
modification to its compensation procedure. Under the revised
procedure, Plaintiff was required to provide a vehicle registration
and Vehicle Identification Number for each Sonata Plaintiff sub-
mitted for compensation. Hyundai later refused to compensate
Plaintiff for seven recalled Sonatas due to Plaintiff’s failure to pro-
vide the newly-required documentation.
        In February 2020, Plaintiff filed this civil action in state court.
Hyundai removed the case to federal district court based on diver-
sity jurisdiction.
       In its amended complaint, Plaintiff asserted against Hyundai
claims for breach of contract and for promissory estoppel. Accord-
ing to Plaintiff, Hyundai’s September 2018 announcement that
Hyundai planned to provide compensation (instead of repair) for
the recalled Sonatas constituted a “legal offer” to form a contract
“independent of and outside the framework of the . . . Safety Act.”
Plaintiff says it accepted Hyundai’s purported offer through con-
duct -- by submitting 37 recalled Sonatas to Hyundai for compen-
sation in the amount equal to the Kelley Blue Book value of an
equivalent car in good condition. Plaintiff says Hyundai’s later re-
fusal to compensate Plaintiff for seven additional Sonatas under
these same terms constituted a breach of contract. About its claim
for promissory estoppel, Plaintiff says it relied reasonably -- and to
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4                          Opinion of the Court                      21-11491

its detriment -- on Hyundai’s purported promise to compensate
Plaintiff for the recalled Sonatas at the Kelley Blue Book price.
         Hyundai moved -- pursuant to Fed. R. Civ. P. 12(b)(6) -- to
dismiss Plaintiff’s amended complaint for failure to state a claim.
The district court granted Hyundai’s motion. The district court
determined that Hyundai’s compensation procedure was a remedy
that fell within the scope of the recall remedies set forth by the
Safety Act. The district court concluded -- based on our decision in
Ayres v. GMC, 234 F.3d 514 (11th Cir. 2000) -- that Plaintiff could
not use private litigation to enforce or to compel a recall remedy
under the Safety Act. The district court thus determined that Plain-
tiff’s claims for breach of contract and for promissory estoppel were
both subject to dismissal. 1
       We review de novo a district court’s dismissal for failure to
state a claim, accepting all properly alleged facts as true and con-
struing them in the light most favorable to the plaintiff. See Butler
v. Sheriff of Palm Beach Cnty., 685 F.3d 1261, 1265 (11th Cir. 2012).
We do not accept as true legal conclusions couched as factual alle-
gations. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “[W]hether
a statute creates by implication a private right of action is a question
of statutory construction which we review de novo.” Love v. Delta

1 The district court also determined that Plaintiff’s breach-of-contract claim
failed because the purported contract lacked consideration. Because we affirm
the district court’s dismissal on grounds that Plaintiff has no private cause of
action to pursue its claims, we pass over the district court’s alternative inde-
pendent ground for dismissal.
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21-11491                Opinion of the Court                          5

Air Lines, 310 F.3d 1347, 1351 (11th Cir. 2002) (quotation and cita-
tion omitted).
     Under the Safety Act, a vehicle manufacturer must remedy
a manufacturing defect in one of these three ways:
       (i)     by repairing the vehicle;
       (ii)    by replacing the vehicle with an identical or
               reasonably equivalent vehicle; or
       (iii)   by refunding the purchase price, less a rea-
               sonable allowance for depreciation.

      49 U.S.C. § 30120(a)(1)(A). The vehicle manufacturer is free
to choose among these three remedies. See id.
        In Ayres, we addressed whether the Safety Act conferred a
private cause of action to enforce the Safety Act’s notification re-
quirements. Guided by the factors set forth in the Supreme Court’s
decision in Cort v. Ash, 422 U.S. 66 (1975), we concluded that the
answer was “no.” 234 F.3d at 523-24. In making that determina-
tion, we identified these circumstances as creating a “strong infer-
ence” that Congress had no intent to create a private cause of ac-
tion under the Safety Act: (1) the absence of statutory language or
legislative history supporting an inference of Congressional intent;
(2) the “extensive array of administrative remedies” available under
the statute, including participation by “interested parties”; (3) a spe-
cific statutory provision authorizing the Attorney General to bring
a civil action to enforce provisions of the Safety Act; and (4) the
express provision of a private cause of action for a vehicle
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6                       Opinion of the Court                 21-11491

distributor or dealer to enforce remedies under certain circum-
stances. See id. at 522-23. We also determined that “implying a
private cause of action would be inconsistent with the legislative
scheme of the Safety Act” and “would undermine the administra-
tive remedies” authorized by the statute. Id. at 524.
       Here, Hyundai’s decision to provide compensation for the
recalled Sonatas is a recall remedy that falls clearly within the scope
of the Safety Act. The Engine Recall notice said expressly that it
was being issued pursuant to the Safety Act. Hyundai owed a stat-
utory obligation under the Safety Act either to repair, to replace, or
to refund the price of these recalled vehicles. See 49 U.S.C.
§ 30120(a)(1)(A).
       Hyundai choose initially to satisfy its recall obligations by
repairing the affected Sonatas. That Hyundai later elected to pro-
vide compensation for the recalled Sonatas in lieu of repair is no
evidence that Hyundai sought to form an agreement “independent
of and outside of” its statutory obligations under the Safety Act.
Hyundai was free to choose among the three remedies set forth in
the Safety Act. See id. We need not accept as true Plaintiff’s legal
conclusion that Hyundai’s September 2018 announcement about
the compensation procedure constituted a “legal offer.” See Iqbal,
556 U.S. at 678. Nor do we accept as true Plaintiff’s unsupported
conclusory allegation that Hyundai provided compensation for the
recalled Sonatas “instead of . . . otherwise proceeding under the
remedies set forth in the Federal Safety Act.” See id.
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21-11491                Opinion of the Court                         7

       On appeal, Plaintiff contends that Hyundai’s compensation
policy fell outside the recall remedies provided by the Safety Act
because the purchase price set by Hyundai (a price based on the
Kelley Blue Book value of an equivalent vehicle) did not conform
to the refund remedy authorized by the Safety Act (the actual pur-
chase price minus depreciation). We are unpersuaded.
       Hyundai’s compensation policy provided fair-market-value
money damages for the recalled Sonatas: a remedy consistent with
the recall remedy in section 30120(a)(1)(A)(iii), which provides for
a refund of “the purchase price, less a reasonable allowance for de-
preciation.” To the extent Hyundai’s compensation amount dif-
fered from the refund amount authorized by the Safety Act, that
issue presents a question of Hyundai’s compliance with the Safety
Act -- not a question about whether Hyundai provided compensa-
tion pursuant to the Safety Act. Given the factual allegations in
Plaintiff’s complaint and the pertinent statutory language, we can-
not conclude that the purported price discrepancy takes Hyundai’s
compensation procedure outside the scope of the Safety Act or oth-
erwise evidences an intent by Hyundai to offer a recall remedy
“above and beyond” Hyundai’s statutory obligations.
       The district court concluded correctly that Plaintiff’s at-
tempt to recover damages caused by Hyundai’s refusal to compen-
sate Plaintiff for seven of the recalled Sonatas constituted an at-
tempt to enforce a recall remedy under the Safety Act. The district
court also concluded correctly that -- because Plaintiff has no pri-
vate right of action to enforce the recall provisions of the Safety Act
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8                          Opinion of the Court                        21-11491

-- Plaintiff’s claims for breach of contract and for promissory estop-
pel were each subject to dismissal for failure to state a claim upon
which relief could be granted. 2
        On appeal, Plaintiff contends that Ayres is too different from
this case because Ayres addressed only whether a private cause of
action existed to enforce the Safety Act’s notification requirements
-- not the Safety Act’s recall remedies. We disagree. Although
Ayres involved a different provision of the Safety Act, the statutory
analysis in Ayres guides us on the recall-remedy provision at issue
in this appeal. The same factors identified in Ayres -- including the
availability of an “extensive array of administrative remedies,” a
provision authorizing the Attorney General to pursue civil enforce-
ment actions, and an express provision of a private cause of action
for distributors and dealers -- are also present in this case. See 49
U.S.C. § 30120(e) (providing an administrative remedy for com-
plaints --including by “[a]ny interested person” -- about a manufac-
turer’s non-compliance with the Safety Act’s recall remedies); id. §
30163 (addressing the Attorney General’s authority to bring a civil
action based on violations of the Safety Act); id. § 30116 (providing
a cause of action to vehicle distributors and dealers under certain
circumstances). As in Ayres, these circumstances support a “strong

2 We reject Plaintiff’s argument on appeal that the district court failed to ad-
dress adequately Plaintiff’s claim for promissory estoppel. The district court
determined that Plaintiff’s claims for breach of contract and for promissory
estoppel each failed for the same reason: the lack of a private right of action to
enforce the terms of the Safety Act.
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21-11491               Opinion of the Court                       9

inference” that Congress had no intention of creating a private
cause of action to enforce the Safety Act’s recall remedies.
        Given our consideration of Ayres, we accept that the Safety
Act confers no private cause of action to enforce the Safety Act’s
recall remedies. Plaintiff’s complaint was thus subject to dismissal
for failure to state a claim.
      AFFIRMED.