Volvo's offer to refund purchase price of 'underperforming' hybrid SUV nixed class action vs automaker

By Scott Holland | Oct 18, 2016

Volvo will not have to face a class action complaint about its hybrid vehicles after a federal judge in Chicago agreed to dismiss a lawsuit which demanded Volvo refund tens of thousands of dollars to everyone who purchased one of the automaker’s hybrid SUVs, which plaintiffs alleged underperformed its advertised battery-only driving range. 

On Oct. 13, Judge Harry D. Leinenweber granted Volvo Cars of North America’s motion to dismiss a class action complaint filed April 21. Plaintiffs Xavier and Khadija Laurens said Volvo’s twin-engine gas-electric Volvo XC90 T8 — for which they paid an extra $20,000 compared to the gas-only model — drastically underperformed the advertised 25-mile range on a full battery charge. 

Formal allegations in the complaint included counts of violation of the Illinois Consumer Fraud Act, common law fraud, breach of express warranty and unjust enrichment. The complaint, filed April 21, noted Volvo changed its advertising to promote a 17-mile range, but said “the only apparent method to even come close to the 17-mile range is to drive the T8 at 40 miles an hour on the highway — with all the safety features disabled.” 

According to Leinenweber’s opinion, on June 8 Volvo offered a full refund of the purchase price if the Laurenses returned the T8, noting, “The offer was unconditional and did not require the dismissal of the case against it, nor to sign a release, or perform any act other than to return the vehicle.” This offer came before Xavier Laurens filed an amended complaint adding his wife, Khadija, in whose name the vehicle was titled. The Laurenses rejected Volvo’s offer. 

Volvo XC90  

In moving for dismissal, Volvo cited a 1994 Seventh Circuit Court of Appeals decision in Holstein v. City of Chicago, in which the justices upheld a trial court’s dismissal of a co-plaintiff’s claim because the city had already offered to refund him the expenses incurred when his car was improperly towed. 

Leinenweber also invoked a 1991 Seventh Circuit opinion, Rand v. Monsanto Co., in which the justices wrote “Once the defendant offers to satisfy the plaintiff’s entire demand, there is no dispute over which to litigate, and a plaintiff who refuses to acknowledge this loses outright … because he has no remaining stake.” 

The Laurenses argued Volvo’s offer amounted to a rescission, which they specifically didn’t request in their amended complaint — they asked only for the $20,000 difference. Yet Leinenweber noted accepting the full refund would have given them the money to buy a gas-only T8 and still keep $20,000. Further, in Xavier’s original complaint, “he did ask for rescission.” 

“For some reason, after it was pointed out in a previous motion that the actual purchaser of the T8 was Khadija and not Xavier, the plaintiffs amended the complaint adding Khadija as additional plaintiff and deleting the request for rescission and instead requested payment of the $20,000 difference,” the judge wrote. 

Leinenweber further wrote that Volvo’s offer, while slightly different from what had been requested, still was sufficient to moot the lawsuit, notably because the class had not been certified, which changes mootness rules. 

The Laurenses also requested an injunction to keep Volvo from advertising a range the T8 could not meet, but Leinenweber noted they “are certainly not in danger of once again being duped by Volvo. There is no need for an injunction to protect them.” 

Also, because Leinenweber determined Volvo offered proper compensation, the Laurenses are unable to prove entitlement to punitive damages. 

The Laurenses were represented in the matter by attorneys with the firm of Siprut P.C., Chicago. 

Volvo was defended by the firm of Reed Smith LLP, of Chicago.

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Reed Smith LLP Reed Smith LLP Siprut P.C.

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