UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


Ardalan Sadeghi-A,                    Case No. 19-cv-2373 (MJD/ECW)      

          Plaintiff,                                                     

     v.                                     ORDER                        

Daimler Trucks North America LLC and                                     
Freightliner Custom Chassis Corporation,                                 

          Defendants.                                                    


    This matter is before the Court on Plaintiff Ardalan Sadeghi-A’s (“Sadeghi-A” or 
“Plaintiff”) Amended Motion for Leave to Amend Complaint (Dkt. 34) (“Motion to 
Amend”).1  For the reasons below, the Court grants the Motion to Amend.   
                      I.   BACKGROUND                                    
A.   Operative Complaint                                                  
    This action was removed to U.S. District Court for the District of Minnesota on 
August 28, 2019.  (Dkt. 1.)  Sadeghi-A alleges, in part, the following in the operative 
Complaint.  (See Dkt. 1-1.)                                               

1    Sadeghi-A’s motion is “Amended” because he had previously filed a motion to 
amend, on September 1, 2020.  (Dkt. 28.)  “Based upon the production of additional 
evidence and deposition testimony that had not been incorporated into the originally-filed 
proposed amended complaint, Plaintiff has revised the proposed amended complaint.”  
(Dkt. 34.)  The Court denied the September 1 motion to amend as moot in view of the 
“Amended” Motion on October 1, 2020.  (Dkt. 41.)  The Court has only considered the 
“Amended” motion filed on September 18, 2020 and refers to it as the “Motion to 
Amend.”                                                                   
    Sadeghi-A purchased a Newmar2 London Aire recreational vehicle motorhome 
(the “Motorcoach” or “Motorhome”) on August 1, 2016 from Steinbring Motorcoach Inc. 
in Minnesota.  (Dkt. 1-1 ¶¶ 1, 5.)  Defendant Daimler Trucks North America LLC 
(“Daimler”) and Defendant Freightliner Customer Chassis Corporation (“Freightliner”) 

(collectively, “Defendants”) manufacture and sell motor home chassis to customers and 
dealers, which are an integrated part of motor homes sold to customers.  (Id. ¶¶ 2-3.)  
“Defendants designed, manufactured and warranted the chassis and related components 
of the Motorcoach, including specification and installation of the axle structures,” and a 
manufacturer’s express written warranty issued by Defendants was included in Sadeghi-

A’s purchase of the Motorcoach.  (Id. ¶¶ 6-7.)  “Since April 2015, Defendants have been 
aware of problems with design, manufacturing and/or installation of the tag axle on many 
of the chassis used for recreational vehicles and buses as it issued a service bulletin that 
Newmar described as applicable to a tag axle alignment concern for which it would assist 
customers in resolving the issue with Freightliner.”3  (Id. ¶ 7.)  “Defendants did not 

disclose the [tag axle] issue or the service bulletin to Plaintiff.”  (Id.) 


2    Newmar is the make of the Motorcoach.  (Dkt. 1-1 ¶ 5; id. at 23; Dkt. 34-1 ¶ 5; id. 
at 31; Dkt. 40 at 14 (“Defendant Freightliner . . . manufactured and supplied the subject 
chassis to Newmar; Newmar then manufactured the motorhome on a later date and 
distributed it to its own dealership network.”).)  As will be later described, Newmar 
issues “Technical Information Bulletins” or “Product Information Bulletins” regarding 
defects or problems in its motorhomes requiring service.  (See Dkt. 34-1 ¶¶ 21, 26; id. at 
67, 72.)                                                                  

3    “A tag axle is a non-driven, continuous weight-bearing axle.”  (Dkt. 34-1 at 37.)  
The tag axle at issue in this case is a “passive steer tag axle,” “a third most rearward axle 
designed to carry more vehicle weight and that allows the wheels on the passive steer 
axle to turn but does not have a direct steering input.”  (Id. ¶ 8.)      
    The Complaint further alleges that the Motorcoach “has been the subject of several 
problems covered by warranty,” and “[t]he problems . . . substantially, individually and 
together, impaired and continue to impair the value and use of the Motorcoach.”  (Id. 
¶ 8.)  The problems include “intermittent and unpredictable significant pulling to the left 

which increases the safety risk at higher rates of speed and is unrepairable by alignments; 
excessive vibration; [and] premature, uneven and unsafe tire wear.”  (Id.)  Sadeghi-A 
“reported the defects and nonconformities and presented the Motorcoach to Defendants, 
its agents and authorized dealerships and repair facilities on many” occasions from 
August 2016 to March 2019.  (Id. ¶ 9.)  “The defects and warranty nonconformities . . . 

have not been corrected and remain a substantial impairment.”  (Id.)  “Defendants[’] 
repeated approach . . . has been to treat the problem as a need for an alignment and 
perform an alignment in an attempt to ‘force’ the Motorcoach to drive straight,” but 
“[t]his has not been and cannot be successful in repairing the Motorcoach because the 
defective condition is a design, manufacturing and installation flaw that caused” 

problems that persist “regardless of how many times or how aggressively an alignment 
tries to overcompensate for such defective underlying conditions.”  (Id. ¶ 10.) 
    “At the time Plaintiff purchased the Motorcoach, Defendants were aware of the 
axle-related defects or with proper diligence should have been aware of the axle-related 
defects affecting the Motorcoach and did not disclose these true facts to Plaintiff, instead 

representing that the Motorcoach was free of defects and would drive true and proper.”  
(Id. ¶ 12.)  “Each time Defendants and their authorized service representatives 
represented that the Motorcoach needed an alignment as referenced in paragraph nine [in 
the Complaint], they knew or with reasonable diligence should have known the true 
nature of the axle problems but failed to disclose and concealed the true nature of the 
problem.”  (Id. ¶ 13.)                                                    
    Sadeghi-A “relied upon the concealment [of the axle-related defects] in purchasing 

the Motorcoach” and “would not have purchased the Motorcoach or would have 
purchased a motorhome with a different manufacturer’s chassis” “[i]f Defendants had 
disclosed the axle-related defects.”  (Id. ¶ 12.)  He also “relied upon Defendants’ 
misrepresentations in accepting their repeated false attempts to repair and continuing to 
maintain ownership in an attempt to resolve the problem with Defendants.”  (Id. ¶ 13.) 

    Based on the allegations in the Complaint—which have not been recounted here in 
their entirety—Sadeghi-A asserted five counts: (1) Violation of Minnesota Lemon Law, 
Minn. Stat. § 325F.665; (2) Violation of Magnuson-Moss Warranty Act, 

, et seq.; (3) Breach of Express Warranty, based on the express written warranty 
provided by Defendants; (4) Violations of Minn. Stat. § 325G.17-.20, which are 

Minnesota’s statutes applicable to consumer warranties; and (5) Violations of Minn. Stat. 
§ 325F.69, Minnesota’s Consumer Fraud Act.  (Id. ¶¶ 17-46.)  Sadeghi-A requested relief 
of “(A) Awarding Plaintiffs damages for the violation of Minnesota law; (B) Granting 
injunctive relief to prohibit any conduct that violates Minnesota’s Consumer Fraud Act; 
[and] (C) Awarding Plaintiff his attorneys’ fees and costs.”  (Id. at 18-19.)4   

    Defendants filed an Answer to the Complaint on August 30, 2019.  (Dkt. 7.) 


4    Unless otherwise noted, all page numbers refer to the CM/ECF pagination. 
B.   Proposed Amended Complaint                                           
    Sadeghi-A moved to amend the Complaint on September 18, 2020.  (Dkt. 34.)  
The parties submitted memoranda (Dkts. 35, 40), and the Court held oral argument on 
October 1, 2020 (Dkt. 41).  After the hearing, on October 8, 2020, Sadeghi-A filed a 

letter “submit[ting] . . . authorities limited to questions [the Court] raised at the motion 
hearing.”  (Dkt. 42 at 1.)                                                
    The changes in the Proposed Amended Complaint generally add factual  
allegations regarding Defendants’ development and testing of the type of tag axle that 
was incorporated into Sadeghi-A’s Motorcoach and Defendants’ knowledge of and lack 

of disclosure regarding defects in the tag axle, as well as several new counts.  (See 
generally Dkt. 34-2 (redlined Proposed Amended Complaint).)  According to Sadeghi-A, 
the new allegations are based on documents produced and deposition testimony, in mid-
August 2020 and on September 10, 2020, respectively, by third-party Hendrickson USA, 
LLC, which designed and supplied the tag axle to Defendants.  (Dkt. 34-1 ¶¶ 9, 42-43; 

Dkt. 35 at 1, 4.)  Sadeghi-A alleges, in part, the following in the Proposed Amended 
Complaint.  (See generally Dkt. 34-1.)                                    
    1.   Defendants’ Development of and Knowledge of Defects in the USB Tag 
         Axle                                                            
    The tag axle at issue in this case is “a passive steer tag axle” and “was given the 
brand name ‘Ultra-Steer B Series’ or ‘USB.’”  (Id. ¶¶ 7-8.)  The USB tag axle was in 
development as of 2014 and tested through at least January 2015.  (See id. ¶¶ 9-11.)  In 
December 2014, “before testing was even complete on the prototype USB tag axle, an 
article was published in RV Pro magazine,” in which Freightliner representatives 
“emphasized the features of the USB tag axle” and made certain representations about the 
performance of the USB tag axle.  (Id. ¶ 10; see id. at 48-53, Ex. D (RV Pro article).)  
According to the Proposed Amended Complaint, Freightliner also posted a video to 
YouTube at the same time “in which it makes false representations” about the USB tag 

axle’s performance.  (Id. ¶ 10.)                                          
    “During testing of the USB tag axle on the only test vehicle on which it was 
installed, in January of 2015, a control arm fastener bolt broke.  Numerous other 
instances during testing revealed malfunction of the mechanism that allows the wheels to 
turn or holds them straight.”  (Id. ¶ 11.)5                               

    “Defendants’ production of the USB tag axles on recreational vehicle chassis 
commenced in April of 2015.  After that time and before August of 2015, reports were 
received by Hendrickson that it raised upon inquiry to Defendants about the USB tag 
axles being off-center.”  (Id. ¶ 12.)  “Third-party subpoenaed documents and publicly 
available documents show a substantial volume of complaints after the USB tag axle 

went into production and continues through the present time frame.”  (Id.; see also id. 
¶ 22 (“Before and after August of 2016, Defendants have received but withheld from 
disclosure in this lawsuit, customer complaints, warranty claims and out-of-warranty 
‘goodwill’ claims related to the USB tag axle defects causing the drivability problems.”).)  
Sadeghi-A identifies early August 2015 as the time when Defendants, along with 



5    It is not clear from the Proposed Amended Complaint who performed this testing.  
(See Dkt. 34-1 ¶ 11.)                                                     
Hendrickson, “first became aware of the design mechanical basis for the problem causing 
customer complaints”:                                                     
    The reports caused Defendants and Hendrickson in early August 2015, to 
    analyze the USB tag axle to determine what was causing the drivability 
    problems.  Defendants discovered that a lateral shifting of the USB tag axle 
    that was not part of the design and was causing the USB tag axle to shift off-
    center was the anomaly that was the starting point for the problem.  

(Id. ¶ 13.)                                                               
    Further, by August 2015, Defendants were aware of the following:     
    Defendants were aware that the USB tag axle design and its manufacturing 
    process was causing USB tag axles to be installed on chassis off-center . . . .  
    When  a  post-manufacturing,  pre-delivery  alignment  was  performed  on 
    chassis with an off-center USB tag axle, the alignment results could show as 
    within the range of acceptable tolerance when in fact it was not . . . thereby 
    causing chassis to be delivered to endstage builders out of alignment, unable 
    to hold alignment and/or with false alignment readings.              

(Id. ¶ 14.)                                                               
    In addition to being delivered out of alignment, Defendants knew that “the USB 
tag axle defects [] could not be remedied but had to be redesigned and replaced.”  (Id. 
¶ 28; see also id. ¶ 27 (Defendants “knew that the defect could not be repaired 
since it was being redesigned and replaced.”).)  With regard to Sadeghi-A’s Motorcoach, 
“Defendants communicated with each authorized service repair facility each time it was 
presented for warranty repair by Plaintiff and authorized the purported repair attempts on 
the Motorcoach.”  (Id. ¶ 29.)  “Defendants[’] repeated approach and instruction to 
authorized repair facilities . . . has been to falsely treat the problem as a need for an 
alignment and attempt to perform an alignment,” despite knowing “that this cannot be 
successful in repairing the Motorcoach because [of] the USB tag axle defects that caused 
the USB tag axle to be . . . unable to achieve proper alignment regardless of how 
many times or how aggressively an alignment tries to overcompensate for such defective 
underlying conditions.”  (Id.; see also id. ¶ 52 (“Defendants and [Freightliner’s Dealer 

Operations and Litigation Administrator] Mr. Rostenbach knew the USB tag axle was 
broke[n], that it was not and could not be brought within specification, and that the repair 
or replacement it needed was not routine maintenance, and that the USB tag axle defects 
which had been known since at least August of 2015 could not be repaired.”).) 
    “Defendants’ design engineer”6 informed Hendrickson by email on April 6, 2016 

“that they were ‘receiving reports from sales and service that the tag alignment issue is 
causing issues at dealers.  The offset to the left due to improper assembly and alignment 
is causing lost sales.’”  (Id. ¶ 15.)  “Defendants also admitted that for the year since 
production began that ‘Nothing to date has corrected the issue.’”  (Id.)  According to 
Sadeghi-A, “Defendants implored Hendrickson that the axle needed to be redesigned,” 

“[n]ot because of the effect on safety but because of the impact on profitability.”  (Id.)  
Defendants and Hendrickson worked on redesigning the USB tag axle starting in April 
2016 and had done so by October 2016.  (Id. ¶¶ 17-18.)                    



6    It is unclear which Defendant employed this design engineer.  The Proposed 
Amended Complaint names Todd Traynham as “Defendants’ engineer who designed the 
USB tag axle integration to the chassis” (id. ¶ 20), and other allegations refer to 
Traynham as “the design engineer” or “Defendants’ design engineer” (id. ¶¶ 21, 40, 43).  
Another allegation states that Mr. Traynham works for Freightliner.  (Id. ¶ 40.)  
Traynham was deposed in June 2020.  (Id. ¶ 42.)                           
    Sadeghi-A also alleges that the USB tag axle defects had an effect on the safety of 
vehicles containing the USB tag axle and that Defendants were aware of the safety issue.  
(See, e.g., id. ¶ 19 (“The drivability problems caused by the USB tag axle defects relate to 
the stability and control of the Motorhome and implicated safety.”)7; id. ¶ 20 

(Defendants’ engineer stated on November 2, 2016 that the tag axle’s effects “makes this 
a safety relevant issue for [Freightliner]”); id. ¶ 23 (“Because Defendants were aware of 
the USB tag axle defects since 2015 and that it . . . posed a substantial risk to safe 
operation of the vehicles on which they were installed . . . “); id. ¶ 54 (“The detrimental 
impact of the USB tag axle defects on the safety of the Motorcoach was revealed in an 

inspection in May of 2020 . . . .”).)                                     
    “Defendants’ [sic] continued manufacturing and delivering chassis containing the 
USB tag axle without disclosure or resolution of the defect or its effect on recreational 
vehicles drivability, stability, control or safety, through April of 2016.”  (Id. ¶ 15.)  
Sadeghi-A’s “Motorcoach was manufactured by Defendants on April 15, 2016,” with the 

USB tag axle as originally designed installed.  (Id. ¶ 16.)  “Although Defendants had 
been redesigning the USB tag axle during much of 2016, Defendants continued to 
manufacture and sell the defective USB tag axles until at least March of 2017 when it 

7    Sadeghi-A defines the “drivability problems” as “the pulling, wandering, vibrating 
dogtracking, [and] premature and abnormal tire wear,” all of which are caused by the 
USB tag axle defects and “compounded by the other Motorcoach defects.”  (Dkt. 34-1 
¶ 19.)  Sadeghi-A attaches and “incorporates[s]” his expert’s disclosure and opinions in 
his Proposed Amended Complaint, which include “opinions as to the defective design, 
component stackup, manufacturing and servicing of the USB tag axle,” as well as to 
“additional defects in the Motorcoach chassis . . . that relate to the USB tag axle defects 
but are part of other systems” and are referred to as the “other Motorcoach defects.”  (Id.; 
id. at 54-65, Ex. E (Expert Witness Report of Robert McElroy, Ph. D.).)   
started production of the new design which eliminated the defective components . . . .”  
(Id. ¶ 39.)                                                               
    2.   Defendants’ Nondisclosure of Defects of the USB Tag Axle        
    “With full knowledge of the USB tag axle defects that caused the drivability 
problems affecting vehicle performance and safety, Defendants concealed and did not 

disclose the USB tag axle defects directly to Plaintiff, government regulators or any 
customers.”  (Id. ¶ 24.)  Sadeghi-A alleges as follows:                   
    Because Defendants were aware of the USB tag axle defects since 2015 and 
    that it involved defects that were inconsistent with the design intent, were 
    hidden material defects, for which Defendants had greater and complete 
    knowledge and posed a substantial risk to safe operation of the vehicles on 
    which they were installed, Defendants had a duty to disclose such defects 
    and to disclose such defects to Plaintiff.                           

(Id. ¶ 23.)                                                               
    On August 9, 2016, “Newmar published . . . an information bulletin with 
[Freightliner] . . . [that] contained vague and misleading information it received from 
Defendants.”  (Id. ¶ 26; id. at 71-94, Ex. G.)  Regarding this information bulletin 
(“Product Information Bulletin 458” or “PIB 458”), Sadeghi-A alleges:     
    Defendants knew that the information it provided to Newmar for publication 
    was not complete or accurate because it did not explain the specific defect or 
    condition, it provided deficient and improper instructions that purported to 
    provide a repair solution when the instructions admittedly did not correct but 
    actually perpetuated the original defective manufacturing process, and it 
    misrepresented the population of units affected by the defect by not including 
    all vehicles potentially affected by the defective design and manufacturing 
    which was ongoing and unresolved.                                    

(Id. ¶ 26.)  “Defendants engaged in this artifice . . . when it knew that the defect could not 
be repaired since it was being redesigned and replaced, when it knew that the repair 
instructions it published did not address the defective condition and when it knew that 
more units were affected . . . .”  (Id. ¶ 27.)  “Instead of fully, accurately and timely 
disclosing to Newmar and all of Defendants’ customers who had purchased chassis with 
a USB tag axle, . . . Defendants failed to directly disclose at all and withheld information 

from its customer network and the ultimate consumer purchasers, the actual USB tag axle 
defects . . . .”  (Id. ¶ 28.)                                             
    When Sadeghi-A’s Motorcoach was presented for warranty repair, “Defendants[’] 
repeated approach and instruction to authorized repair facilities . . . has been to falsely 
treat the problem as a need for an alignment and attempt to perform an alignment,” 

despite knowing “that this cannot be successful.”  (Id. ¶ 29.)  Sadeghi-A presented his 
Motorcoach for repair at various authorized repair facilities, and communicated otherwise 
with Defendants, at various times from at least August 2016 through June 2019, but 
neither Defendants nor any of the authorized repair facilities disclosed the USB tag axle 
defects to Sadeghi-A, despite Defendants’ awareness of the defects.  (See id. ¶¶ 29-38, 

40-41, 50-52.)  The Proposed Amended Complaint states that Sadeghi-A complained 
about the difficulty in driving and maintaining control of the Motorcoach to Newmar and 
Freightliner “right after delivery” and states that on August 16, 2016 “Defendants’ 
authorized service facility Truck Centers, Inc. inspected the Motorcoach for repair and 
was in communication with [Freightliner] but neither Defendants nor Truck Center 

disclosed the USB tag axle defects to Plaintiff in connection with this warranty repair 
effort.”  (Id. ¶ 30.)  The Proposed Amended Complaint identifies other communications 
with Defendants or their representatives, including “Defendants’ head Service Manager 
David Hoover” on August 23, 2016; Truck Centers in November 2016; “Defendants’ 
authorized repair facility Young Truck” on November 23, 2016; and “Defendants’ 
employee Aaron Hesch” on November 30, 2016 (who drove the Motorcoach and  
witnessed the vehicle pulling).  (Id. ¶¶ 31-33, 35, 37.)  Sadeghi-A also “directly notified 

upper level management at Daimler and [Freightliner] and Defendants’ general counsel” 
of the “unrepaired defective conditions” in “January through March 2017,” including 
corresponding with the Chief Executive Officer of Daimler in January 2017.  (Id. ¶ 38; id. 
at 43-47, Ex. C (letter to Daimler CEO)8.)                                
    3.   Defendants’ Intent and Sadeghi-A’s Reliance                     
    “Defendants[’] failure to provide a timely, accurate, full and complete description 

of the USB tag axle defects on his Motorcoach was intended to and caused Plaintiff to 
enter into a purchase and on August 1, 2016, take delivery of the Motorcoach containing 
the USB tag axle defects.”  (Id. ¶ 25.)  Further, “Defendants’ inability or unwillingness to 
repair the Motorcoach and its refusal to disclose and attempt to cover-up the USB tag 
axle defects . . . was intended to induce Plaintiff and other customers to accept false 

repair attempts and to avoid lost sales . . . .”  (Id. ¶ 49.)             
    “Plaintiff was not aware of the USB tag axle defects, did not have access to the 
information Defendants had and would not have purchased the Motorhome or would 
have purchased one with a different manufacturer’s chassis if he had known about the 
USB tag axle defects.”  (Id. ¶ 25.)  “Plaintiff relied upon Defendants’ pretend compliance 


8    The first page of the letter precedents the Exhibit C slip sheet.  (Dkt. 34-1 at 43-
44.)                                                                      
with its warranty obligations, even though it was really concealing from Plaintiff the USB 
tag axle defects.  Plaintiff continued to seek repair and a remedy but was misled by 
Defendants . . . .”  (Id. ¶ 53.)                                          
    4.   Amendments to Counts                                            
    Based on the proposed factual allegations, Sadeghi-A asserts two new and one 

new-in-part claims.  The first four counts—for Violation of Minnesota Lemon Law, 
Violation of Magnuson-Moss Warranty Act, Breach of Express Warranty, and Violations 
of Minn. Stat. Sec. 325G.17-.20—are unchanged in the Proposed Amended Complaint, 
except for the amount of damages claimed in each count.  (See id. ¶¶ 57-79; Dkt. 34-2 
¶¶ 57-79 (redlined Proposed Amended Complaint).)                          

    Count V is a new count for Common Law Fraud.  (See Dkt. 34-1 ¶¶ 80-91; Dkt. 
34-2 ¶¶ 80-91 (redlined Proposed Amended Complaint).)  In this count, Sadeghi-A 
alleges as follows:                                                       
         81.  At the time that Defendants manufactured and delivered the 
    chassis for the Motorcoach, Defendants knew that it had the USB tag axle 
    defects that caused the drivability problems.                        

         82.  Because  of  the  known  material  and  hidden  defects;   
    Defendants’ clear, greater and specialized knowledge of these facts from 
    customer complaints and its own investigation of the defects, communication 
    with  the  supplier  and  redesign  of  the  defective  components;  because 
    Defendants disclosed vague and misleading half-truths about the defect; 
    because of the risk they pose to the safe operation of the vehicle and under 
    regulatory obligations to report and disclose; Defendants had a duty to 
    disclose the USB tag axle defects.                                   

         83.  Defendants  did  not  disclose  known  defects  in  the  design, 
    manufacturing or installation of the axle structures to Plaintiff at or before he 
    took delivery and do not disclose them to other purchasers in order to induce 
    purchasing of chassis and to sell chassis with the defective axle structure. 
    84.  Defendants also failed to timely, fully and accurately disclose 
and misrepresented the specific defective conditions as a vague tag axle 
alignment concerns when it provided information to Newmar that they knew 
and intended would be published to customers that might be affected by the 
problem, including when Plaintiff discovered and relied upon it in and after 
November 2016.                                                       

    85.  Defendant failed to disclose and misrepresented the accurate 
and complete population of vehicles affected by the defective condition 
which actually spanned a two-year production period and included Plaintiff’s 
Motorcoach.                                                          

    86.  Defendants failed to disclose and misrepresented the USB tag 
axle defects as needing routine alignment maintenance each time it was 
presented  for  repair  by  Plaintiff  when  Defendants  knew  it  needed  a 
replacement of defective components and were unwilling to repair it. 

    87.  Defendants failed to disclose and misrepresented that the USB 
tag axle defects each time it was returned to Plaintiff after it was presented 
for repair because the defective condition was not repaired or replaced and 
the Motorcoach was not aligned to within specification because the USB tag 
axle components were not properly adjusted and could not be adjusted to a 
proper position and achieve a true alignment thereby rendering the alignment 
printouts false.                                                     

    88.  Defendants misrepresented to Plaintiff that he was entitled to 
and receiving fair and objective warranty treatment when they knew that they 
could not and were unwilling to repair or replace the defective components 
and failed to disclose that he was subject to extraordinary treatment to avoid 
repairing or replacing the defective components.                     

    89.  Defendants’ concealment and misrepresentations were made   
with knowledge of their falsity.  Defendants intended to deceive Plaintiff to 
induce his and others’ purchasing of vehicles on which its USB tag axle was 
installed, to induce payments for routine maintenance and out-of-pocket 
repair attempts, to avoid its obligation to repair or replace his Motorcoach or 
the USB tag axle and to avoid the responsibility to recall or repair/replace 
other vehicles on which the USB tag axle has been installed.         

    90.  Plaintiff  reasonably  relied  upon  Defendants’  failures  to 
disclose and misrepresentations in purchasing the Motorcoach, in attempting 
to  have  it  repaired  and  in  continuing  to  attempt  to  obtain  repair  or 
replacement during the warranty period.  Plaintiff would not have purchased 
the Motorhome or would have purchased a motorhome with a different   
    manufacturer’s chassis if the defect had been disclosed and would have 
    demanded replacement of the tag axle or immediately returned it if the defect 
    and not expended money on repair attempts and trying to determine the true 
    problem if the defects and their unrepairability had been disclosed. 

         91.  As  a  direct  and  proximate  result  of  Defendants’     
    misrepresentations and failure to disclose, Plaintiff has suffered pecuniary 
    damages including the loss or diminution in value of the Motorhome, out of 
    pocket  expenditures  invested  into  the  Motorhome,  money  expended  on 
    damage caused to other parts of the Motorhome, attempting to obtain repairs, 
    expended on investigating the defects, expended on litigation, as well as, 
    time invested in all of the above and loss of use, enjoyment, aggravation 
    damages all in an amount to be determined at trial in excess of $75,000, 
    including any exemplary damages, civil penalties, attorneys’ fees and costs 
    as allowed by Minnesota law.                                         

(Dkt. 34-1 ¶¶ 80-91.)                                                     
    Count VI in the Proposed Amended Complaint is “Violations of Minn. Stat. Secs. 
325F.69 and 325D.44,” the latter of which—Minnesota’s Deceptive Trade Practices 
Act—was not included in the operative Complaint.  (Id. at 24; see also Dkt. 34-2 at 24.)  
This Count includes new allegations that “Defendants intended that Plaintiff and other 
customers rely upon its misrepresentations as published in RV Pro Magazine and on You 
Tube and marketing material” and that “[t]he represented beneficial attributes . . . of the 
USB tag axle were part of the reason Plaintiff purchased a chassis with the USB tag 
axle.”  (Dkt. 34-1 ¶ 96.)  Further, “Defendants intended that Plaintiff and other customers 
rely upon its non-disclosure of the USB tag axle defects to induce purchasing, its 
misleading half-truth PIB 458 and scheme to lull Plaintiff and other customers to accept 
false repair attempts and pay for false routine maintenance.”  (Id. ¶ 97.)  The Proposed 
Amended Complaint also alleges, “Defendants have willfully engaged in the false 
representations and non-disclosure and know that it is deceptive.”  (Id. ¶ 98.)  The 
operative Complaint alleges, “A public benefit will be fulfilled if Defendant is liable for 
and prohibited from concealing the defective axle structure of its chassis” (Dkt. 1-1 ¶ 45), 
while the Proposed Amended Complaint modifies that allegation by adding, “A public 
benefit will be fulfilled if Defendant is liable for and prohibited from making false 

representations about and concealing the USB tag axle defects.  The false representations 
remain published and the defective condition of the USB tag axle exists in” certain 
vehicles (id. ¶ 99).  The Proposed Amended Complaint further alleges, “As a direct and 
proximate result of the violations of Minn. Stat. Secs. 325F.69, 325D.44 and common 
law, Plaintiff is entitled to injunctive relief, compensatory and exemplary damages, civil 

penalties, attorneys’ fees and costs as allowed Minn. Stat. 8.31 and 325D.45.”  (Id. 
¶ 101.)                                                                   
    Count VII in the Proposed Amended Complaint is a new claim for Punitive 
Damages under 

.  (See Dkt. 34-2 at 26 (redline, showing as Count 
VI).)  This Count alleges, in part: “Defendants’ failure to disclose, as more fully pled in 

the previous count and in the factual allegations herein, and misleading of Plaintiff were 
in deliberate disregard of his and[,] since they were part of a broader scheme to conceal 
and mislead, other customers’ rights and safety.”  (Dkt. 34-1 ¶ 103.)  Specifically, 
“Defendants have known since 2015, that the USB tag axle defects create a high degree 
of probability that Plaintiff and other customers were fraudulently induced to purchase 

chassis with defective USB tag axles,” and “Defendants deliberately proceeded to not 
disclose and misrepresent the USB tag axle defects in conscious and intentional disregard 
or indifference of a high degree of probability of injury to Plaintiff’s and others’ rights.”  
(Id. ¶ 104.)  Similarly, “Defendants deliberately proceeded to not disclose and 
misrepresent the USB tag axle defects in conscious and intentional disregard or 
indifference of a high degree of probability of injury to Plaintiff’s and others’ safety.”  
(Id. ¶ 105.)  “After Plaintiff and other customers purchased chassis containing the USB 

tag axle defects, Defendants acted with deliberate disregard for the rights of Plaintiff and 
other customers” and “consciously or intentional[ly] disregarded or [were] indifferent to 
a high degree of probability that Plaintiff and other customers would continue to use 
chassis containing the USB tag axle defects and accept false repair attempts and incur 
out-of-pocket expenses on repair attempts and damages . . . to the detriment of their 

property rights.”  (Id. ¶ 106.)  Similarly, “[a]fter Plaintiff and other customers purchased 
chassis containing the USB tag axle defects, Defendants acted with deliberate disregard 
for the rights of Plaintiff and other customers” and “consciously or intentional[ly] 
disregarded or [were] indifferent to a high degree of probability of injury to Plaintiff’s 
and other customers’ safety caused by the drivability problems from continuing to use 

chassis containing the USB tag axle defects and accept false repair attempts.”  (Id. ¶ 107.)  
“Defendants’ failure to disclose the USB tag axle defects and their misleading 
representations . . . were authorized by Defendants and were undertaken or approved by 
employees in a managerial capacity with authority to establish policy and make planning 
level decisions and were acting in the scope of that employment; or were ratified and 

approved while knowing of its character and probable consequences.”  (Id. ¶ 108.)  
“Defendants’ misconduct sacrificed motor vehicle safety in order to avoid lost sales and 
enhance[e] profitability.  The misconduct and any concealment of it has persisted since 
August of 2015 and . . . still poses a high degree of hazard . . . .”  (Id. ¶ 109.)  Finally, 
“[i]n consideration of Defendants’ financial condition, and to deter the self-interested 
motivation of Defendants’ wanton, willful and reckless disregard of Plaintiff and others’ 
rights and safety, a substantial award of punitive damages is warranted.”  (Id. ¶ 110.) 

                    II.  LEGAL STANDARD                                  
    Rule 15 sets the general standard for amending pleadings in Federal court and 
provides that “[t]he court should freely give leave when justice so requires.”  Fed. R. Civ. 
P. 15(a)(2).  The determination as to whether to grant leave to amend is entrusted to the 
sound discretion of the trial court.  See, e.g., Niagara of Wisc. Paper Corp. v. Paper 

Indus. Union-Mgmt. Pension Fund, 

, 749 (8th Cir. 1986) (citation omitted).  
The Eighth Circuit has held that although amendment of a pleading “should be allowed 
liberally to ensure that a case is decided on its merits, there is no absolute right to 
amend.”  Ferguson v. Cape Girardeau Cty., 

, 650-51 (8th Cir. 1996) 
(citations omitted).                                                      

    Denial of leave to amend may be justified by “undue delay, bad faith on the part of 
the moving party, futility of the amendment or unfair prejudice to the opposing party.”  
Sanders v. Clemco Indus., 

 (8th Cir. 1987) (citing Foman v. Davis, 

 (1962)); see also Hillesheim v. Myron’s Cards and Gifts, Inc., 

 (8th Cir. 2018) (citation omitted) (“A district court’s denial of leave to amend a 

complaint may be justified if the amendment would be futile.”).  “Denial of a motion for 
leave to amend on the basis of futility means the district court has reached the legal 
conclusion that the amended complaint could not withstand a motion to dismiss under 
Rule 12(b)(6) of the Federal Rules of Civil Procedure.  Accordingly, in reviewing a 
denial of leave to amend we ask whether the proposed amended complaint states a cause 
of action under the Twombly pleading standard . . . .”  Zutz v. Nelson, 

, 850-
51 (8th Cir. 2010) (citation and marks omitted); see also In re Senior Cottages of Am., 

LLC, 

, 1001 (8th Cir. 2007) (“[W]hen a court denies leave to amend on the 
ground of futility, it means that the court reached a legal conclusion that the amended 
complaint could not withstand a Rule 12 motion.”).                        
    On a motion to dismiss filed pursuant to Rule 12(b)(6), the Court must take the 
well-pleaded allegations of a claim as true, and construe the pleading, and all reasonable 

inferences arising therefrom, most favorably to the pleader.  See Morton v. Becker, 

 (8th Cir. 1986).  To survive a motion to dismiss, a claim “must contain 
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its 
face.’”  Ashcroft v. Iqbal, 

 (2009) (quoting Bell Atl. Corp. v. Twombly, 

 (2007)).  A claim is facially plausible “when the plaintiff pleads 

factual content that allows the court to draw the reasonable inference that the defendant is 
liable for the misconduct alleged.”  

                                  
    Additionally, when a claim is for fraud, “a party must state with particularity the 
circumstances constituting fraud.”  Fed. R. Civ. P. 9(b).  But “[m]alice, intent, 
knowledge, and other conditions of a person’s mind may be alleged generally.”  

  “To 

satisfy the particularity requirement of Rule 9(b), the complaint must plead such facts as 
the time, place, and content of the defendant’s false representations, as well as the details 
of the defendant’s fraudulent acts, including when the acts occurred, who engaged in 
them, and what was obtained as a result.”  United States ex rel. Raynor v. Nat’l Rural 
Utils. Coop. Fin., Corp., 

 (8th Cir. 2012) (cleaned up).  “In other 
words, Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the 
first paragraph of any newspaper story.”  Freitas v. Wells Fargo Home Mortg., Inc., 

 (8th Cir. 2013) (cleaned up).  “The purpose of Rule 9(b) is to provide the 
defendant with notice of and a meaningful opportunity to respond specifically to charges 
of fraudulent conduct by apprising the defendant of the claims against it and the facts 
upon which the claims are based.”  In re Hardieplank Fiber Cement Siding Litig., No. 12-
md-2359, 

, at *6 (D. Minn. July 15, 2013) (citing Com. Prop. Invs., 

Inc. v. Quality Inns Int’l, Inc., 

 (8th Cir. 1995)).  “Conclusory allegations 
that a defendant’s conduct was fraudulent and deceptive are not sufficient to satisfy the 
rule.”  BJC Health Sys. v. Columbia Cas. Co., 

 (8th Cir. 2007) (cleaned 
up).  “But Rule 9(b) does not require that the exact particulars of every instance of fraud 
be alleged, so long as the complaint includes enough detail to inform the defendant of the 

core factual basis for the fraud claims.”  Ransom v. VFS, Inc., 

 
(D. Minn. 2013) (cleaned up).  Ultimately, “[t]he level of particularity required depends 
on the nature of a case.”  E-Shops Corp. v. U.S. Bank Nat’l Ass’n, 

 (8th 
Cir. 2012) (citing BJC Health Sys., 

).                     
                        III.  ANALYSIS                                   

    Sadeghi-A states that he “seeks leave to amend his complaint to specify in more 
detail the allegations of his fraud claims and to add a claim seeking punitive damages.”  
(Dkt. 35 at 1.)  Specifically, he states that discovery in August 2020 “yielded the 
particular facts . . . that permit pleading with greater specificity the true cause of the 
defect, that it was known by Defendants much earlier than Defendants acknowledged and 
that it is not just ‘confusion’ over how to align a couple of chassis,” and that Defendants’ 
concealment and misrepresentation “fraudulently-induced Plaintiff’s and other 

customers’ purchase of chassis with the USB tag axle defects and caused Plaintiff and 
other customers to continue to use, attempt to obtain repair and to be forced to pay for 
and drive chassis with the USB tag axle defects in deliberate disregard of their rights and 
safety.”  (Id. at 1-2.)  Defendants argue that the Motion to Amend should be denied 
because it is futile and does not plausibly state a claim for relief in several respects.  (Dkt. 

40 at 3, 12-13, 17, 30.)9                                                 
A.   Defendants’ “Design Defect” Arguments                                
    Much of Defendants’ opposition asserts that Sadeghi-A seeks to make “new 
design defect allegations” and that his new claims are premised on a design defect theory 
for which he cannot recover.  (Dkt. 40 at 3-4 (“These new design defect allegations are 
then incorporated in and underpin each of Plaintiff’s claims in the amended complaint.”); 

see also id. at 11 (“Plaintiff’s new design defect allegations seek to shoe-horn strict 
liability and negligence standards into a breach of warranty case by imposing a duty on 
Defendants to both replace—and, evidently, cease production and disclose to all actual 
and potential customers—an allegedly poor design.”); id. at 18 (“Plaintiff’s fraudulent 
omission claim is simply a strict liability design defect claim re-packaged as fraud.”).)  


9    Defendants do not oppose the Motion on any grounds other than futility (see Dkt. 
40), and the Motion to Amend is timely under the operative Second Amended Scheduling 
Order (see Dkt. 39 at 2).                                                 
The Court addresses Defendants’ “design defect” arguments in this Section before 
reaching the specific claims that Sadeghi-A seeks to add in his Proposed Amended 
Complaint.                                                                
    First, Defendants argue that “Plaintiff’s allegations against Defendants—and any 

duties owed by Defendants—derive from the warranties provided with respect to the 
subject chassis,” and the warranty “does not provide warranty coverage for alleged 
design defects.”  (Id. at 4-5; see also id. at 6 (“[T[hese allegations are also futile because 
a design defect claim is tort-based claim, and is not a cognizable claim in this breach of 
warranty case where duties arise only from contract.”); id. at 12 (“[I]f a product’s design 

causes it to have characteristics that are undesirable or unwanted—but which do not 
cause injury to person or property—a buyer’s remedy, if any, is found in warranty and 
contract law.”).)  Sadeghi-A set forth his warranty claims separately from his new 
allegations and claims for common law fraud, violation of Minnesota’s Deceptive Trade 
Practices Act, and punitive damages.  (Compare Dkt. 34-1 ¶¶ 62-79, with id. ¶¶ 80-110.)  

Defendants cite no authority for the proposition that Sadeghi-A is precluded from 
bringing those new claims based on knowledge of a design defect and failure to disclose 
the defect simply because his warranty claims may not be based on a design defect.  
Further, Defendants’ description of his Sadeghi-A’s claims as “repackage[ed]” warranty 
claims (see, e.g., Dkt. 40 at 22) to support their futility argument is itself a “repackaging” 

of those non-warranty claims as warranty claims.  Sadeghi-A has separately alleged 
claims for common law fraud, violation of Minnesota’s Deceptive Trade Practices Act, 
and punitive damages, and those claims must be evaluated as he alleged them, not as 
Defendants characterize them.10                                           
    Second, Defendants argue that Sadeghi-A “has suffered no harm to his person, has 
suffered no harm to his ‘tangible person [sic] property other the goods,’ and has suffered 

no harm to his real property,” and so “[t]he economic loss doctrine therefore bars 
Plaintiff from utilizing product defect claims, such as a design defect theory, to recover 
damages for harm to the product itself.”  (Dkt. 40 at 7-8 (discussing 

).)  Defendants focus on the subdivision of the statute limiting product defect 
tort claims (id. at 7), which states, “A buyer may not bring a product defect tort claim 

against a seller for compensatory damages unless a defect in the goods sold or leased 
caused harm to the buyer’s tangible personal property other than the goods or to the 
buyer’s real property.”  

 subd. 3.  But, again, Sadeghi-A seeks to 
add claims for common law fraud, violation of Minnesota’s Deceptive Trade Practices 
Act, and punitive damages, and while he uses the word “defect” to refer to the problem 

with the USB tag axle, he has not styled any claim as a product defect tort or suggested 


10   Defendants make similar arguments when addressing the fraudulent nondisclosure 
claim, arguing, “With respect to alleged fraud during the post-sale service of the subject 
chassis, the amended complaint’s allegations confirm that this claim is simply a breach of 
warranty claim repackaged as fraud.”  (Dkt. 40 at 22.)  But again, this argument misses 
the key inquiry: if Sadeghi-A has adequately alleged a duty Defendants owed to him 
arising outside of the contract, as well as the other elements of fraud, then nothing 
prevents Sadeghi-A from asserting a fraud claim with his warranty claims.  See Blue 
Cross & Blue Shield of N.C. v. Rite Aid Corp., No. 20-CV-1731 (ECT/KMM), 

, at *14 (D. Minn. Feb. 9, 2021) (quoting AKA Dist. Co. v. Whirlpool Corp., 

 (8th Cir. 1998)) (“A fraud claim independent of the contract is 
actionable, but it must be based upon a misrepresentation that was outside of or collateral 
to the contract, such as many claims of fraudulent inducement.”).         
that he is putting forward a design defect theory.  Minnesota’s economic loss doctrine 
statute does not permit “a common law misrepresentation claim against a seller relating 
to the goods sold or leased unless the misrepresentation was made intentionally or 
recklessly.”   

 subd. 4.  Sadeghi-A contends that his fraud claim “is 

based upon intentional misrepresentation which is not prohibited by the economic loss 
doctrine.”  (Dkt. 35 at 16 (citing Johnson v. Bobcat Co., 

 (D. 
Minn. 2016)).).  Moreover, Defendants acknowledge this exception to the economic loss 
doctrine and implicitly concede that, if intentional misrepresentations are otherwise 
adequately alleged, the economic loss doctrine does not bar a claim for common law 

misrepresentation.  (Dkt. 40 at 8 n.2 (“Although Plaintiff attempts to plead around [

, subd. 4] by contending that his fraudulent misrepresentation claim is 
based upon intentional, not negligent, misrepresentations, for the reasons discussed below 
that amended claim fails as well.”.)                                      
    Third, Defendants argue that “the amended complaint’s design defect allegations 

are futile and do not support any cognizable claim for relief because Plaintiff’s lack of 
any personal injury renders tort-based design defect allegations inapplicable.”  (Id. at 8.)  
Defendants recite the elements of a design-defect claim in Minnesota, state that here the 
“alleged design defect did not cause injury to person or property,” and state that various 
courts “have repeatedly rejected similar ‘no-injury’ product defect cases where a plaintiff 

alleges that a product defect could cause physical injury, but instead has caused no harm 
other than alleged diminished value of the product itself.”11  (Id. at 8-9 (quoting Bilotta v. 
Kelley Co., Inc., 

, 623 n.3 (Minn. 1984), for design defect elements).)  
But, again, Sadeghi-A seeks to add claims for common law fraud, violation of 
Minnesota’s Deceptive Trade Practices Act, and punitive damages, and nowhere refers to 

a “design defect” or a claim styled as such.  Though some of the facts and legal issues in 
this case may be similar to those in a design defect case, the Court will evaluate the 
claims as they are alleged.                                               
    In sum, the Court does not agree that Sadeghi-A’s “new design defect allegations” 
are, in fact, design defect allegations, or that these allegations “seek to shoe-horn strict 

liability and negligence standards into a breach of warranty case.”  (Dkt. 40 at 11.)  The 


11   The Court considers whether Sadeghi-A has adequately alleged harm with respect 
to his fraud claim in Section III.B.5.  The Court notes that several of the cases Defendants 
cite as “‘no-injury’ product defect cases” (Dkt. 40 at 9-10) are inapposite here because 
they involve plaintiffs whose products did not manifest the purported defect and/or 
worked properly and as intended.  See Briehl v. Gen. Motors Corp., 

 
(8th Cir. 1999) (“In this case, the Plaintiffs have not alleged that their ABS brakes have 
malfunctioned or failed.  . . .  The Plaintiffs’ ABS brakes have functioned satisfactorily 
and at no time have the brakes exhibited a defect.”); Tietsworth v. Harley-Davidson, Inc., 

, 

, 

 (“The injury complained 
of here is diminution in value only—the plaintiffs allege that their motorcycles are worth 
less than they paid for them.  However, the amended complaint does not allege that the 
plaintiffs’ motorcycles have diminished value because their engines have failed, will fail, 
or are reasonably certain to fail as a result of the TC-88 cam bearing defect.”); Farsian v. 
Pfizer, Inc., 

 (11th Cir. 1996) (question certified to Supreme Court of 
Alabama addressed plaintiff whose implanted heart valve works properly); Martin v. 
Ford Motor Co., 

 (S.D. Tex. 1996) (plaintiff contended 
that a warning advising passengers to fasten the lap belt rendered the vehicles unsafe but 
failed to produce any evidence of injury at summary judgment).  Here, Sadeghi-A has 
alleged that his Motorcoach has manifested the USB tag axle defect and that the 
Motorcoach does not operate properly as a result of the defect.  (See, e.g., Dkt. 34-1 at 
¶¶ 19, 29, 44, 45.)                                                       
Court therefore turns to the question of whether Sadeghi-A has plausibly alleged his 
fraud, Minnesota Deceptive Trade Practices, and punitive damages claims.  
B.   Proposed Amended Complaint Count V – Common Law Fraud                
    Count V in the Proposed Amended Complaint is for “Common Law Fraud” and 

alleges that “Defendants had a duty to disclose the USB tag axle defects” and that 
Defendants “did not disclose” or “failed to disclose” information about the defects to 
Sadeghi-A, or other customers, at the time of Sadeghi-A’s purchase or afterward, 
including when Newmar published PIB 458 and when Sadeghi-A presented the  
Motorcoach for repair.  (Dkt. 34-1 at ¶¶ 82-87.)  Based on these allegations, and as 

confirmed by Sadeghi-A’s counsel at the hearing, the Court understands Sadeghi-A’s 
common law fraud claim to be based on fraudulent nondisclosure rather than affirmative 
misrepresentations.  The Court therefore does not address Defendants’ argument that the 
amendment does not plausibly allege a common law fraud claim for affirmative 
fraudulent misrepresentations.12                                          

    To state a claim for fraudulent nondisclosure, a plaintiff must allege a duty to 
disclose, i.e., “that the defendant had a legal or equitable obligation to communicate facts 
to a particular person and that person is entitled to the information,” as well as the other 


12   For example, Defendants argued that “Noticeably absent from the amended 
complaint is any allegation that Plaintiff ever saw the magazine article or the YouTube 
video, much less that Plaintiff relied upon the alleged misrepresentations contained 
therein and was induced to enter into a purchase agreement for his motorhome.”  (Dkt. 40 
at 15; see generally id. at 14-18.)  At the hearing, Sadeghi-A specified that he was not 
relying on the RV Pro article or YouTube video for his common law fraud claim, but 
argued those allegations are relevant to the statutory fraud and deceptive trade practices 
claims.                                                                   
elements of an ordinary fraud claim.  Zimmerschied v. JP Morgan Chase Bank, N.A., 

 (D. Minn. 2014) (cleaned up).  To state an ordinary fraud claim 
under Minnesota law, Sadeghi-A must allege: (1) a false representation by Defendants of 
a past or existing material fact susceptible of knowledge; (2) made with knowledge of the 

falsity of the representation or made without knowing whether it was true or false; 
(3) with the intention to induce Sadeghi-A to act in reliance thereon; (4) that the 
representation caused Sadeghi-A to act in reliance thereon; and (5) that Sadeghi-A 
suffered pecuniary damages as a result of the reliance.  Zimmerschied, 

 (citing Valspar Refinish, Inc. v. Gaylord’s Inc., 

 (Minn. 2009)). 

    Claims for fraudulent nondisclosure must comply with Rule 9(b)’s particularity 
requirements, and some courts have thus concluded that to state a claim for fraudulent 
nondisclosure, plaintiffs are generally required to allege as follows:    
    (1) the relationship or situation giving rise to the duty to speak, (2) the event 
    or events triggering the duty to speak, and/or the general time period over 
    which the relationship arose and the fraudulent conduct occurred, (3) the 
    general content of the information that was withheld and the reason for its 
    materiality, (4) the identity of those under a duty who failed to make such 
    disclosures, (5) what those defendant(s) gained by withholding information, 
    (6)  why  plaintiff’s  reliance  on  the  omission  was  both  reasonable  and 
    detrimental, and (7) the damages proximately flowing from such reliance. 

Id. at 596 (citations omitted).                                           
    The parties disagree as to whether the fraud claim in the Proposed Amended 
Complaint meets the particularity requirements and adequately states a claim for relief.  
(See Dkt. 35 at 14 (citing Zimmerschied, 49 F. Supp. at 596) (“The allegations of the 
proposed amended complaint satisfy these particularity requirements in the context of 
fraudulent nondisclosure claims”); Dkt. 40 at 18 (“Plaintiff has failed to adequately plead 
an actionable claim for fraudulent omission . . . .”).)  The Court will address each element 
of the fraud claim in turn.                                               
    1.   Duty to Disclose                                                
    With respect to a duty to disclose,                                  
    As a general rule, one party to a transaction has no duty to disclose material 
    facts to the other.  However, special circumstances may dictate otherwise.  
    For example: (a) One who speaks must say enough to prevent his words from 
    misleading the other party; (b) One who has special knowledge of material 
    facts to which the other party does not have access may have a duty to 
    disclose these facts to the other party; (c) One who stands in a confidential 
    or fiduciary relation to the other party to a transaction must disclose material 
    facts.                                                               

Zimmerschied, 49 F. Supp. at 595-96 (brackets omitted) (quoting Richfield Bank & Trust 
Co. v. Sjogren, 

, 

 (1976)); see also Blue Cross & 
Blue Shield of N.C. v. Rite Aid Corp., No. 20-CV-1731 (ECT/KMM), 

, 
at *11 (D. Minn. Feb. 9, 2021) (quoting Graphic Comm’cns Loc. 1B Health & Welfare 
Fund A v. CVS Caremark Corp., 

 (Minn. 2014)).  “These ‘examples 
. . . are not intended to be exclusive.’”  Blue Cross & Blue Shield of N.C., 

, at *11 (quoting Graphic Comm’cns Loc. 1B, 

).     
         a.   One Who Speaks Must Say Enough to Prevent His Words from   
              Misleading the Other Party                                 
    With respect to the first “special circumstance,” Sadeghi-A argues, “After Plaintiff 
received the unit, Defendants’ knowledge of the USB tag axle defects and its misleading 
communications as pled in paragraphs 26 through 28 [regarding Newmar’s PIB 458], 
obligated it to fully and accurately disclose the USB tag axle defects,” and “Defendants 
continued to mislead Plaintiff by not fully and accurately disclosing the known USB tag 
axle defects at each instance of inspection and repair by Defendants’ employees and 
agents at authorized repair facilities.”  (Dkt. 35 at 8-9.)  Defendants argue that “the only 
specific communication Plaintiff identities [sic] is a Technical Service Bulletin [PIB 458] 
published by the motorhome manufacturer Newmar after Plaintiff had already purchased 

his motorhome,” and further that Sadeghi-A does not allege “who at Freightliner was 
involved, that the person or persons knew of any alleged falsity or misrepresentation in 
the Newmar [PIB 458], or that they intended the bulletin to induce detrimental reliance in 
customers like Plaintiff.”  (Dkt. 40 at 26-27.)                           
    The Court concludes that Sadeghi-A has adequately alleged a duty to disclose 

based on the principle that one who speaks must say enough to prevent his words from 
misleading the other party, but only with respect to the time period after his initial 
purchase when he was in communication with Defendants and repair service facilities 
regarding the Motorcoach and when he became aware of Newmar’s PIB 458 in  
November 2016, because Sadeghi-A could not have been misled under this theory until 

he became aware of “words” attributable to Defendants.  See Zimmerschied, 49 F. Supp. 
at 595.                                                                   
    As to Newmar’s PIB 458, Sadeghi-A alleges that Newmar published the bulletin 
“with” Freightliner and that Newmar received the information for the bulletin from 
Defendants.  (Dkt. 34-1 ¶ 26.)  He further alleges that the information in the bulletin was 

“vague and misleading” and that “Defendants knew that the information it provided to 
Newmar for publication was not complete or accurate because it did not explain the 
specific defect or condition, it provided deficient and improper instructions that purported 
to provide a repair solution when the instructions admittedly did not correct but actually 
perpetuated the original defective manufacturing process.”  (Id.; see also id. ¶ 27 
(alleging that when Newmar’s PIB 458 was published, Defendants “knew that the defect 
could not be repaired since it was being redesigned and replaced, [and] knew that the 

repair instructions it published did not address the defective condition”); id. ¶ 28 
(similar).)13  When Sadeghi-A became aware of Newmar’s PIB 458 in November 2016, 
“[a]s instructed by the PIB, and unaware of the actual USB tag axle defects, Plaintiff 
continued to work with Newmar and Defendants to attempt to obtain repair of the 
drivability problems.”  (Id. ¶ 36.)  And in Count V of the Proposed Amended Complaint, 

Sadeghi-A alleges, “Defendants also failed to timely, fully and accurately disclose and 
misrepresented the specific defective conditions as a vague tag axle alignment concerns 
[sic] when it provided information to Newmar . . . , including when Plaintiff discovered 
and relied upon it in and after November 2016.”  (Id. ¶ 84.)              
    Similarly, Sadeghi-A alleges that Defendants, through their employees and agents, 

told him that the problems he was experiencing with the Motorcoach could be fixed or 
attempted to repair the problems, which misled him into believing that the problems 
could be fixed when, in fact, they could not, and Defendants knew they could not.  (See 

13   Defendants note that Sadeghi-A does not allege “who at Freightliner was 
involved.”  (Dkt. 40 at 27.)  The Proposed Amended Complaint identifies a specific 
publication and alleges that Defendants supplied the information for that publication.  
(See Dkt. 34-1 ¶¶ 26, 84.)  The Court finds those allegations sufficiently particular.  See 
Johnson, 

 (“Contrary to what Bobcat argues, Johnson does 
identify a specific promotional material: Bobcat’s own website.  He also alleges 
particularized content from the website . . . .  Altogether, these allegations satisfy 
Johnson’s pleading burden.  Bobcat has more than enough information to adequately 
respond and prepare a defense, which is the critical inquiry under Rule 9(b).”). 
Dkt. 34-1 ¶ ¶ 29-35, 37-38, 40-41, 45 (describing various instances of repair attempts by, 
inspections by, and communications with specific employees of Defendants or specific 
authorized repair facilities of Defendants which were in communication with 
Defendants).)  And in Count V of the Proposed Amended Complaint, Sadeghi-A alleges, 

“Defendants failed to disclose and misrepresented the USB tag axle defects as needing 
routine alignment maintenance each time it was presented for repair by Plaintiff when 
Defendants knew it needed a replacement of defective components and were unwilling to 
repair it,” and “Defendants failed to disclose and misrepresented that the USB tag axle 
defects each time it was returned to Plaintiff after it was presented for repair because the 

defective condition was not repaired or replaced and the Motorcoach was not aligned to 
within specification . . . .”  (Id. ¶¶ 86-87.)  Defendants argue that “the only specific 
communication Plaintiff identities [sic] is a Technical Service Bulletin published by the 
motorhome manufacturer Newmar after Plaintiff had already purchased his motorhome” 
(Dkt. 40 at 26-27), but Sadeghi-A has also identified several communications by 

employees of Defendants or authorized repair facilities that were in communication with 
Defendants by date and by name of employee or facility (see Dkt. 34-1 ¶¶ 30-32, 36-38, 
40-41, 45).  To the extent these statements were made by employees of the authorized 
repair facilities rather than by employees of Defendants themselves, Defendants have not 
argued that the statements made by individuals at the authorized repair centers are not 

attributable to them in connection with this “special circumstance.”      
    These allegations are enough to plausibly allege that Defendants knew that the 
defects could not be repaired, and generally had more information about the nature of the 
defects, but provided only partial and misleading information to Newmar for publication 
and to Sadeghi-A during the course of his repair attempts—either directly or through 
authorized repair centers—that indeed misled Sadeghi-A into pursuing repairs that would 
never work.  Sadeghi-A has sufficiently alleged that Defendants spoke but not enough to 

prevent their words from misleading him.  See In re Target Corp. Customer Data Sec. 
Breach Litig., 

 (D. Minn. 2014) (“Plaintiffs contend [for their 
negligent-misrepresentation-by-omission claim in data breach case] that Target knew 
facts about its ability to repel hackers that Plaintiffs could not have known, and that 
Target’s public representations regarding its data security practices were misleading.  

Target takes issue with Plaintiffs’ allegations in this regard, but on a Motion to Dismiss, 
the Court must determine only whether the allegations are plausible.  The allegations 
meet that plausibility standard, and Plaintiffs have adequately pled a duty of care.”); 
Sorchaga v. Ride Auto, LLC, 

 (Minn. Ct. App. 2017) (“Sufficient 
evidence established that Ride Auto knew the truck required substantial engine repairs 

beyond replacing a faulty oxygen sensor.  Nevertheless, Ride Auto and its employees 
affirmatively represented to Sorchaga that the oxygen sensor was the cause of the check-
engine light.  Ride Auto misled Sorchaga when it failed to disclose the known engine 
problems with the truck.”), aff’d, 

 (Minn. 2018).           
         b.   One Who Has Special Knowledge of Material Facts to Which the 
              Other Party Does Not Have Access May Have a Duty to Disclose 
              These Facts to the Other Party                             
    With respect to the second “special circumstance” identified by the Minnesota 
Supreme Court, Sadeghi-A argues that he “has pled facts showing that Defendants had 
knowledge of the ‘USB tag axle defects’ which were material because they caused the 
‘drivability problems’ that affected vehicle safety” and that he “did not have access to the 
technical design flaw information, the affect this created in USB tag axle components 
relationship to each other, the problems this created in manufacturing and the inability to 

repair it in servicing.”  (Dkt. 35 at 7-8.)  Defendants argue, “This matter is not a rare case 
in which the specialized-knowledge exception duty to disclose should be extended and 
applied.  Plaintiff has alleged no facts supporting the imposition of a duty to disclose 
facts regarding a new design or an alleged design defect.”  (Dkt. 40 at 20.) 
    The Court concludes that Sadeghi-A has adequately alleged a duty to disclose 

based on the principle that one who has special knowledge of material facts to which the 
other party does not have access may have a duty to disclose these facts to the other 
party.  Sadeghi-A’s allegations in the Proposed Amended Complaint include many 
paragraphs describing Defendants’ knowledge of a defect in the USB tag axle that was 
not disclosed to Sadeghi-A or other customers, including that Defendants: “first became 

aware of the design mechanical basis for the problem causing customer complaints in 
early August 2015” (Dkt. 34-1 ¶ 13); “[b]y August of 2015, . . . were aware that the USB 
tag axle design and its manufacturing process was causing USB tag axles to be installed 
on chassis off-center” (id. ¶ 14); “had a meeting at [Freightliner] headquarters in Gafney, 
S.C., on April 21, 2016, to figure out how to resolve the problem caused by the defective 

USB tag axle design and manufacturing” (id. ¶ 17); and “[b]efore and after August of 
2016” received “customer complaints, warranty claims and out-of-warranty ‘goodwill’ 
claims related to the USB tag axle defects causing the drivability problems” (id. ¶ 22).  
Sadeghi-A also alleges that the defects were “hidden material defects” (id. ¶ 23; see also 
id. ¶ 82), that he (and other customers) did not have access to the information about the 
defects (id. ¶¶ 24, 25), and that he would not have purchased the Motorcoach and would 
not have pursued repair if he had known about the USB tag axle defects (id. ¶¶ 25, 36, 

90).  The allegations adequately allege that Defendants had material knowledge of 
problems with the USB tag axle and that customers, including Sadeghi-A, did not have 
access to that information.                                               
    Defendants note that the Minnesota Supreme Court has “rarely addressed” this 
particular theory of fraud and has only applied it in one case.  (Dkt. 40 at 20 (quoting 

Graphic Comm’cns Loc. 1B, 

).)  Defendants also argue that “extending a 
pre-sale duty to disclose information by Freightliner to unknown potential purchasers of 
motorhomes that might be equipped with Freightliner chassis is both unrealistic, and 
unsupported by the law.”  (Id. at 21 (citing cases).)  The Court has carefully considered 
Defendants’ pre-sale duty arguments, as well as the cases cited by Defendants, and finds 

that they do not render Plaintiff’s common law fraud claim futile at this stage in the 
proceedings.  The cases Defendants cite regarding a pre-sale duty between a 
manufacturer and “unknown potential purchasers” find no duty at the summary judgment 
stage, and, moreover, in several cases, the decision hinged not on the ultimate 
determination of whether the facts gave rise to a duty to disclose, but rather on a missing 

prerequisite to that duty, such as defendant’s special knowledge or plaintiff’s lack of 
access to the knowledge.  See In re Minn. Breast Implant Litig., 

 
(D. Minn. 1998) (summary judgment)14; Driscoll v. Standard Hardware, Inc., 

 (Minn. Ct. App. 2010) (affirming summary judgment of   
misrepresentation by omission claim because drill manufacturer did not have special 
knowledge of material facts at the time drill was purchased); Marvin Lumber & Cedar 

Co. v. PPG Indus., Inc., 

 (8th Cir. 2000) (affirming district court’s 
grant of summary judgment on contract claim based on statute of limitations where 
plaintiff alleged fraudulent concealment of defects, which would toll the statute of 
limitations, and concluding that “[a]t all times, Marvin had access to each of the very 
facts that establish Marvin’s breach of contract action, namely PILT’s alleged failure to 

prevent rot on Marvin’s products” and even where plaintiff “comes closest to alleging 
fraudulent concealment by asserting that PPG misled Marvin,” defendant had information 
of both “positive” and “less favorable” performance of its product, which “are not 
evidence of affirmative fraud”); Taylor Inv. Corp. v. Weil, 

 
(D. Minn. 2001) (granting summary judgment on common law and consumer fraud 

claims and noting, “[t]he fact that some of his other customers were experiencing 
difficulties with StarBuilder and that he personally had concerns about potential lawsuits 
. . . are not the types of special knowledge contemplated by the exception”). 
    Indeed, courts in this District have allowed fraudulent concealment claims to go 
forward with allegations similar to those here.  See, e.g., Blue Cross & Blue Shield of 


14   This case does not appear to have considered a “special knowledge of material 
facts” duty, as it only discusses “an obligation to disclose arises (1) where one party owes 
a fiduciary duty to the other; or (2) where the circumstances are such that failure to 
disclose renders misleading statements which have already been made.”  In re Minn. 
Breast Implant Litig., 

 (cleaned up).                
N.C., 

, at *11 (fraudulent concealment plausibly pleaded where 
plaintiffs alleged “‘Rite Aid had special knowledge of material facts, i.e., the accurate, 
non-inflated U&C prices, which the Plaintiffs did not have’”) (citation omitted); 
Podpeskar v. Makita U.S.A. Inc., 

 (D. Minn. 2017) (quoting 

Graphic Comm’cns Loc. 1B, 

) (“Podpeskar aims for the second 
exception, and alleges that Makita ‘had special knowledge of material facts to which 
[Podpeskar] and the [c]lass members did not have access, and, therefore, had a duty to 
disclose these facts to the other party so as to prevent its statements from being 
misleading.’  . . .  Here, Podpeskar satisfied [the pleading requirement to allege actual 

knowledge of fraudulent conduct] by alleging Makita had actual knowledge of its 
fraudulent conduct.  Specifically, Podpeskar alleged that Makita knew of the batteries’ 
defects and that a buyer could not reasonably learn of the defect until after purchase.  
Accepting those allegations as true, Makita was in a superior position to know about the 
defect in its batteries.  Thus, the Court will deny Makita’s motion with regard to 

Podpeskar’s fraud claims based on omissions and nondisclosures.”) (citations omitted); 
Johnson, 

 (“[T]he Court finds that Johnson’s complaint includes 
allegations sufficient to satisfy the second circumstance: that Bobcat had superior 
knowledge of material facts to which Johnson did not have access.  Johnson alleges that 
Bobcat, as the manufacturer, was in ‘a superior position to know the true facts about their 

product [and] . . . to know the actual design of the loader.’  He further alleges that he 
‘could not reasonably have been expected to learn or discover’ the misrepresentations at 
the time of purchase, in part because of ‘the manner in which the customers fill their fuel 
tanks.’  These allegations plausibly establish a duty of disclosure.”) (citations omitted); 
Cannon Techs., Inc. v. Sensus Metering Sys., Inc., 

 (D. Minn. 
2010) (“Cannon proceeds on the third prong, arguing that ‘Sensus fraudulently concealed 
special knowledge,’ namely, the 336 Capacitor was defective as used in the iCon Meter’s 

design and, hence, the meter ultimately would fail.  In the Court’s view, this was ‘special 
knowledge” Sensus was obligated to disclose, and which Cannon could not reasonably 
obtain.  . . .  If a jury were to credit Cannon’s version of events, it could conclude that (1) 
Sensus knew of the problem with the meter in November 2005, (2) Cannon was not 
aware of the problem and had no avenue to obtain that knowledge, and (3) Sensus failed 

to disclose the problem before selling additional meters to Cannon.  That is sufficient to 
support a finding of fraud.”) (citations omitted).                        
    Defendants argue that they had no relationship with Sadeghi-A prior to his 
purchase, and “Freightliner did not sell anything to Plaintiff, and was not a party to his 
vehicle purchase.”  (Dkt. 40 at 20-21.)  But based on the Court’s review of the case law, 

such a lack of a direct relationship does not preclude Sadeghi-A’s claim at this stage: a 
purchaser of a product may make a claim for fraudulent nondisclosure against a designer 
or manufacturer of the product where the purchaser did not buy directly from the designer 
or manufacturer.  See Podpeskar, 

 (claim by consumer, 
who purchased drill from a retailer, against designer, manufacturer, marketer, and seller 

of drills); Johnson, 

 (claim for fraud by omission by 
purchaser, who purchased compact skid-steer loader from authorized dealership, against 
manufacturer); Block v. Toyota Motor Corp., 

 (D. Minn. 
2011) (leave to amend complaint granted as to fraudulent concealment claim against 
defendants who participated in design, manufacture, or sale of vehicle at issue).  The 
Court therefore concludes that Sadeghi-A has adequately alleged a duty to disclose based 
on Defendants’ special knowledge of material facts about the USB tag axle defects to 

which Sadeghi-A did not have access.                                      
         c.   One Who Stands in a Confidential or Fiduciary Relation to the 
              Other Party to a Transaction Must Disclose Material Facts  
    With respect to the third “special circumstance” identified by the Minnesota 
Supreme Court, Sadeghi-A argues that Defendants had a legal and equitable duty to 
disclose, specifically, “[v]iewed from a purely legal perspective arising under Federal 
motor vehicle safety statutes and regulations, Defendants had a clear duty to disclose,” 
and “[a]nchored in the bedrock of safety, those obligations are also tethered by equitable 
taught-lines.”  (Dkt. 35 at 9.)  Defendants respond, “Plaintiff has asserted no duty under 

the first circumstance [of standing in a confidential or fiduciary relationship] and has 
made no allegations that Plaintiff and Defendants stood in a fiduciary relationship.”  
(Dkt. 40 at 19.)                                                          
    The Court concludes that Defendants had no duty to Sadeghi-A under this theory, 
as there is no confidential or fiduciary relationship plausibly alleged between these 

parties.  First, the Court notes that Sadeghi-A refers to a “legal and equitable duty” (Dkt. 
35 at 9), but that is the wording from the general rule that for a fraudulent nondisclosure 
claim, a plaintiff must allege “that the defendant had a legal or equitable obligation to 
communicate facts to a particular person,” Zimmerschied, 

 (internal 
quotation marks and citation omitted).  With respect to the third special circumstances 
that would create such a “legal or equitable obligation,” that of a “confidential or 
fiduciary relationship,” Sadeghi-A has not identified any such relationship. 
    Still, the Minnesota Supreme Court has stated that the three categories of special 
circumstances frequently cited in case law “‘are not intended to be exclusive.’”  Blue 

Cross & Blue Shield of N.C., 

, at *11 (quoting Graphic Comm’cns Loc. 
1B, 

).  Sadeghi-A seems to argue that Defendants’ reporting 
requirements under various federal statutes and regulations create “a clear duty to 
disclose” and contends that “Defendants’ knowledge that the defects related to stability, 
control and vehicle safety reflect a special or fiduciary relationship of a moral or personal 

nature because unwitting customers have placed their confidence and trust in a 
manufacturer’s superior position of expertise and knowledge in the design and 
manufacturing of the components and their represented performance capabilities can be 
relied upon as ensuring control, stability and safety of the vehicle.”  (Dkt. 35 at 9-10.)  
Sadeghi-A has not cited any case where a regulatory reporting requirement created a 

confidential or fiduciary relationship between a manufacturer and purchasers for purposes 
of a common law fraud claim under Minnesota law.15  The Court declines to do so here, 


15   Sadeghi-A cites In re Porsche Cars North America, Inc., 

 (S.D. Ohio 2012), for the proposition that “[a] manufacturer who knows that its 
product is defective and that it affects vehicle safety is obligated to tell the affected 
customers and federal regulators.”  (Dkt. 35 at 10.)  That case addressed a claim under 
California Consumer Legal Remedies Act and is not persuasive as to the argument that a 
regulatory reporting requirement with respect to a governmental agency, assuming one 
exists, creates a fiduciary or confidential relationship between consumers and a 
manufacturer with respect to this Minnesota common law fraud claim.  See 

.                                                                
and finds that Sadeghi-A has not stated a plausible claim for common law fraud based on 
such a relationship.                                                      
                             * * *                                       
    To summarize, the Court concludes that Sadeghi-A has sufficiently alleged a 

fraudulent nondisclosure claim based on (1) Defendants’ obligation to, having spoken, 
say enough to prevent their words from misleading Sadeghi-A, but only with respect to 
the time period after Sadeghi-A’s initial purchase when he was in communication with 
Defendants and repair service facilities regarding the Motorcoach and when he became 
aware of Newmar’s PIB 458 in November 2016; and (2) Defendants’ special knowledge 

of material facts about the USB tag axle defects to which Sadeghi-A did not have access.  
The Court turns to the remaining elements of a fraudulent nondisclosure claim. 
    2.   False Representation and Knowledge of Falsity                   
    Defendants’ only argument regarding falsity and knowledge of falsity was that, as 
of the time the RV Pro article and YouTube video were published in December 2014, 
Defendants could not have known the tag axle was defective because the chassis 

development and testing was incomplete.  (Dkt. 40 at 17; see also Dkt. 34-1 ¶ 11 
(alleging USB tag axle broke during testing in January 2015 and further testing revealed 
malfunctions).)  Defendants made this argument when arguing that Plaintiff could not 
state a common law claim for affirmative fraudulent misrepresentations and claims under 
Minn. Stat. §§ 325F.69 and 325D.44.  (Dkt. 40 at 17.)  Plaintiff has stated he is not 

asserting a common law fraud claim based on affirmative misrepresentations, so the 
Court need not address this argument in this context.16  Further, Defendants have not 
argued that Sadeghi-A did not sufficiently allege that the tag axle was defective, that they 
knew of the tag axle defect as of the date of his purchase in August 2016 or when he 
sought repair and maintenance of the Motorhome yet failed to disclose it, or that they 

knew that the alleged drivability issues resulting from the tag axle defect could not be 
cured by alignment.  (See id.)  The Court concludes that Sadeghi-A has adequately 
alleged that Defendants did not disclose information about the tag axle defect and that 
such information was material (see, e.g., Dkt. 34-1 ¶¶ 15, 23-26), as well as that 
Defendants knew of the tag axle defect at least as of the date of his purchase of the 

Motorhome (see, e.g., Dkt. 34-1 ¶¶ 13-15, 23, 27-29).                     
    3.   Intent                                                          
    Regarding Defendants’ intent to induce Sadeghi-A to act in reliance on 
Defendants’ omissions, Sadeghi-A argues, “The allegations sufficiently plead facts that 
establish Defendants did not disclose the USB tag axle defects in order to avoid any lost 
sales, including Plaintiff[’]s.”  (Dkt. 35 at 12.)  Defendants argue that Sadeghi-A does not 

allege sufficient facts giving rise to a plausible inference of fraudulent intent in the 
context of arguing that he has not adequately alleged a claim for affirmative fraudulent 
misrepresentations but do not otherwise specifically address intent.  (See Dkt. 40 at 17.) 
    The Proposed Amended Complaint alleges that “Defendants’ true intention for not 
disclosing the issue became apparent on April 6, 2016, when” an email from Defendants’ 

design engineer stated that sales were being lost due to the alignment issues (Dkt. 34-1 

16   The Court addresses this argument in Section III.C.1.                
¶ 15); that “Defendants [sic] failure to provide a timely, accurate, full and complete 
description of the USB tag axle defects on his Motorcoach was intended to and caused 
Plaintiff to enter into a purchase” (id. ¶ 25); that “Defendants’ inability or unwillingness 
to repair the Motorcoach and its refusal to disclose and attempt to cover-up the USB tag 

axle defects . . . was intended to induce Plaintiff and other customers to accept false 
repair attempts and to avoid lost sales” (id. ¶ 49); and that “Defendants intended to 
deceive Plaintiff to induce his and others’ purchasing of vehicles on which its USB tag 
axle was installed, to induce payments for routine maintenance and out-of-pocket repair 
attempts, to avoid its obligation to repair or replace . . . “ (id. ¶ 89).  Mindful that intent 

“may be alleged generally,” though allegations cannot be conclusory, the Court 
concludes that Sadeghi-A has sufficiently alleged Defendants’ intent.  See Fed. R. Civ. P. 
9(b); Bhatia v. 3M Co., 

 (D. Minn. 2018) (citing Dunnigan 
v. Fed. Home Loan Mortg. Corp., 

, 740-41 (D. Minn. 2016)) 
(plaintiffs must allege facts that give rise to a strong inference of fraudulent intent). 

    4.   Reliance                                                        
    Regarding Defendants’ nondisclosure causing Sadeghi-A to act in reliance on 
defendants’ omissions, Sadeghi-A argues, “Plaintiff would not have purchased the 
Motorcoach or would have purchased one with a different manufacturer’s chassis if he 
had known about the USB tag axle defect.”  (Dkt. 35 at 13.)  Defendants argue, “Plaintiff 
makes no plausible allegations that Defendants’ failure to disclose to him the ‘true 

nature’ of the alleged design defect . . . caused Plaintiff to change his position to his 
detriment,” and “Plaintiff’s reliance allegations . . . are indistinguishable from his breach 
of warranty claims, and do not plausibly alleged actual detrimental reliance and 
damages.”  (Dkt. 40 at 27-28.)                                            
    With respect to reliance, Sadeghi-A alleges that “Defendants[‘] failure to provide a 
timely, accurate, full and complete description of the USB tag axle defects on his 

Motorcoach . . . caused Plaintiff to enter into a purchase” (Dkt. 34-1 ¶ 25); that “Plaintiff 
. . . would not have purchased the Motorhome or would have purchased one with a 
different manufacturer’s chassis if he had known about the USB tag axle defects” (id.); 
that “[i]f Defendants had disclosed the USB tag axle defects he would not have engaged 
in the repair attempts or expended money in doing so and would have immediately 

returned the vehicle or demanded USB tag axle replacement” (id. ¶ 36); that “Plaintiff 
relied upon Defendants’ misrepresentations in accepting their repeated false attempts to 
repair and continuing to maintain ownership in an attempt to resolve the problem with 
Defendants” (id. ¶ 41); and that “Plaintiff discovered and relied upon [Newmar’s PIB 
458] in and after November 2016” (id. ¶ 84).  Additionally, Sadeghi-A alleges: 

    Plaintiff  reasonably  relied  upon  Defendants’  failures  to  disclose  and 
    misrepresentations in purchasing the Motorcoach, in attempting to have it 
    repaired and in continuing to attempt to obtain repair or replacement during 
    the warranty period.  Plaintiff would not have purchased the Motorhome or 
    would have purchased a motorhome with a different manufacturer’s chassis 
    if the defect had been disclosed and would have demanded replacement of 
    the tag axle or immediately returned it if the defect and not expended money 
    on repair attempts and trying to determine the true problem if the defects and 
    their unrepairability had been disclosed.                            

(Id. ¶ 90.)                                                               
    “Accepting these allegations as true, [Sadeghi-A] alleged that he relied on 
statements and omissions suggesting the product was not defective at the time of 
purchase,” as well as at the times of the repair attempts.  Podpeskar, 

.  Courts in this District have allowed claims with similar reliance allegations to go 
forward.  See 

 (“[T]he Court finds that Podpeskar sufficiently alleged reliance to move 
forward. Podpeskar alleged: he ‘reasonably relied upon the statements made by Makita 

on the [b]atteries’ packaging,’; ‘Makita also represented, through its omissions, that the 
[b]atteries were free of defects and would function properly,’; and that ‘he would not 
have purchased the [b]atteries or he would have either negotiated additional warranty 
coverage, negotiated a lower price to reflect the risk, or simply avoided the risk altogether 
by purchasing a different product’ if he had ‘known the [b]atteries were defective and 

would fail prematurely.’”) (citations to complaint omitted); Block, 

 
(“Plaintiff-Intervenors have pled reliance; they state that Lee would not have bought or 
driven the vehicle, and the passengers would not have ridden in the vehicle, had the 
Toyota Defendants made disclosures about known defects.”).                
    5.   Damages                                                         
    Regarding Defendants’ nondisclosure causing Sadeghi-A to act in reliance on 

Defendants’ omissions, Sadeghi-A argues, “The allegations sufficiently plead that 
Plaintiff purchased the Motorcoach with a defective USB tag axle that causes it to be 
valueless or severely diminished in value,” and “Defendants’ nondisclosure of the USB 
tag axle defect and misleading Plaintiff in an attempt to beguile Plaintiff with false repair 
attempts has caused Plaintiff to expend money, time and peace of mind he otherwise 

would not have.”  (Dkt. 35 at 14.)  Defendants argue, “Plaintiff makes no plausible 
allegations that Defendants’ failure to disclose to him the ‘true nature’ of the alleged 
design defect . . . caused Plaintiff to change his position to his detriment,” and “Plaintiff’s 
reliance allegations . . . are indistinguishable from his breach of warranty claims, and do 
not plausibly alleged actual detrimental reliance and damages.”  (Dkt. 40 at 27-28; see 
also id. at 28 (“The amended complaint provides no detailed or plausible allegations as to 

how Defendants’ failure to disclose the nature of the alleged design defect and to disclose 
a design change introduced in later model vehicles caused Plaintiff any additional or 
different pecuniary damage than he otherwise would have experienced absent such 
fraud.”).)                                                                
    With respect to damages, Sadeghi-A alleges,                          

    The Motorhome has been rendered valueless or severely diminished because 
    of the USB tag axle defects and other Motorcoach defects.  He is unable to 
    sell the Motorcoach without disclosing the impaired, dangerous condition.  
    Plaintiff has incurred out of pocket expenditures to pay for damages the 
    defects caused to other parts of the Motorcoach, expenditures that he has 
    been forced to pay and hundreds of hours of his own time in both service 
    attempts not covered by warranty and in an attempt to determine what is 
    really wrong with his Motorcoach and the USB tag axle and in pursuing 
    litigation . . . .  Plaintiff has also lost the use for a substantial period of time 
    and been substantially inconvenienced and aggravated while cooperating in 
    repair attempts and in investigating and litigating the USB tag axle defects, 
    as well as, the loss of enjoyment of the Motorcoach and aggravation and 
    distress.                                                            

(Dkt. 34-1 ¶ 55; see also id. ¶ 91 (“As a direct and proximate result of Defendants’ 
misrepresentations and failure to disclose, Plaintiff has suffered pecuniary damages 
including the loss or diminution in value of the Motorhome, out of pocket expenditures 
invested into the Motorhome, money expended on damage caused to other parts of the 
Motorhome, attempting to obtain repairs, expended on investigating the defects, 
expended on litigation, as well as, time invested in all of the above and loss of use, 
enjoyment, aggravation damages. . . .”).)17                               
    Given the Court’s conclusion in Section III.A that Minnesota’s Economic Loss 
Doctrine statute does not foreclose damages based on the value of the product in a case 

such at this, where intentional misrepresentation is alleged, and that Sadeghi-A alleges 
other damages—out-of-pocket expenses and loss of use and enjoyment—the Court 
concludes that Sadeghi-A has sufficiently alleged injury caused by Defendants’ alleged 
nondisclosures.  See Dunnigan, 184 F. Supp. 3d at 740 (citing Martino-Catt v. E.I. 
duPont de Nemours & Co., 

 (S.D. Iowa 2003)) (“Dunnigan also 

generally alleges she incurred ‘out-of-pocket expenses’ as a result of Freddie Mac’s 
misrepresentations.  Again, this is enough to survive a motion to dismiss.”) (citation to 
complaint omitted).                                                       
    In sum, having considered all of the allegations in the Proposed Amended 
Complaint, the Court concludes that the allegations supporting Count V, “Common Law 

Fraud,” sufficiently state a claim for fraudulent nondisclosure under Minnesota law and 
Sadeghi-A may amend his complaint accordingly.                            



17   Defendants state that Sadeghi-A has suffered no damages beyond the loss of value 
of the Motorcoach itself.  (See, e.g., Dkt. 40 at 8 (“The economic loss doctrine therefore 
bars Plaintiff from utilizing product defect claims, such as a design defect theory, to 
recover damages for harm to the product itself.”), 11 (“Plaintiff seeks to impose such a 
duty in the absence of any injury other than alleged diminution in value of the subject 
chassis itself.”).)  But Sadeghi-A has clearly alleged that he incurred out-of-pocket 
expenditures.  (Dkt. 34-1 ¶¶ 55, 91.)  Even if the Court accepted Defendants’ argument, 
these out-of-pocket costs constitute damages beyond diminution in value.  
C.   Proposed Amended Complaint Count VI – Statutory Fraud Claims         
    Count VI in the Proposed Amended Complaint is for “Violations of Minn. Stat. 
Secs. 325F.69 and 325D.44.”  (Dkt. 34-1 at 24.)  The opening paragraphs of the Proposed 
Amended Complaint, specifically addressing Minnesota’s Consumer Fraud Act 

(“MCFA”), are unchanged from the original Complaint.  (Compare id. ¶¶ 93-94, with 
Dkt. 1-1 ¶¶ 41-42.)  Paragraph 95 of the Proposed Amended Complaint is worded 
differently and invokes both Minn. Stat. § 325F.69 and, newly, Chapter 325D, but is 
fairly similar to paragraph 43 of the original Complaint.  (Compare Dkt. 34-1 ¶ 95, with 
Dkt. 1-1 ¶ 43.)  Paragraph 44 of the original Complaint has been replaced by paragraphs 

96 through 98 of the Proposed Amended Complaint.  (Compare Dkt. 1-1 ¶ 44, with Dkt. 
34-1 ¶¶ 96-98.)                                                           
    New paragraphs 96 to 98 allege that: “Defendants intended that Plaintiff and other 
customers rely upon its misrepresentations as published in RV Pro Magazine and on You 
Tube and marketing material which . . . causes a likelihood of misunderstanding intended 

to induce purchasing,” and “[t]he represented beneficial attributes . . . were part of the 
reason Plaintiff purchased a chassis with the USB tag axle”; “Defendants intended that 
Plaintiff and other customers rely upon its non-disclosure of the USB tag axle defects to 
induce purchasing, its misleading half-truth PIB 458 and scheme to lull Plaintiff and 
other customers to accept false repair attempts and pay for false routine maintenance”; 

and “Defendants have willfully engaged in the false representations and non-disclosure 
and know that it is deceptive.”  (Dkt. 34-1 ¶¶ 96-98.)  Paragraph 99 of the Proposed 
Amended Complaint expands on the public benefit allegation in the original Complaint, 
adding a reference to “making false representations” (in addition to concealing) and 
stating that “[t]he false representations remain published and the defective condition of 
the USB tag axle exists in chassis manufactured with such axle from April of 2015 
through March of 2017 which may exceed one thousand vehicles.”  (Compare Dkt. 34-1 

¶ 99, with Dkt. 1-1 ¶ 45.)  And paragraph 101 of the Proposed Amended Complaint 
mostly parallels paragraph 46 of the original Complaint in alleging that Sadeghi-A is 
entitled to damages and injunctive relief, though the former alleges that such relief is 
based on “violations of Minn. Stat. Secs. 325F.69, 325D.44 and common law,” while the 
latter only invokes Minn. Stat. § 325F.69.  (Compare Dkt. 34-1 ¶ 101, with Dkt. 1-1 

¶ 46.)                                                                    
    Defendants mount a cursory challenge to Sadeghi-A’s proposed claims under 
Minn. Stat. §§ 325F.69 and 325D.44 when arguing the Proposed Amended Complaint 
does not state a claim for affirmative fraudulent misrepresentations.  (Dkt. 40 at 16 
(“Plaintiff’s proposed amended statutory claims under Minn. Stat. § 325F.69 and 

§ 325D.44 likewise fail for these same deficiencies.”).)  The Court addresses each statute 
separately below.                                                         
    1.   Minn. Stat. § 325F.69                                           
    The Court first addresses Minn. Stat. § 325F.69, Minnesota’s Consumer Fraud Act 
(“MCFA”).  According to the MCFA:                                         

    The act, use, or employment by any person of any fraud, false pretense, false 
    promise, misrepresentation, misleading statement or deceptive practice, with 
    the  intent  that  others  rely  thereon  in  connection  with  the  sale  of  any 
    merchandise, whether or not any person has in fact been misled, deceived, or 
    damaged thereby, is enjoinable . . . .                               
Minn. Stat. § 325F.69, subd. 1; see also Liberty Mut. Fire Ins. Co. v. Acute Care 
Chiropractic Clinic P.A., 

 (D. Minn. 2015).  The MCFA 
requires that a plaintiff plead false, deceptive, or misleading conduct by defendants.  See 
E-Shops, 

.  “Rule 9(b)’s heightened pleading requirement also applies to 

statutory fraud claims.”  

 (citing Trooien v. Mansour, 

 (8th Cir. 
2010)).  Although the Minnesota Attorney General has primary responsibility for 
enforcing the MCFA, see 

, subd. 1, a private party may “bring a civil 
action” to recover damages from violations of the MCFA, 

 § 8.31, subd. 3(a).18 
    The Court concludes that Sadeghi-A has sufficiently alleged violations of Minn. 

Stat. § 325F.69 in the Proposed Amended Complaint and has done so under multiple 
theories.  First, Sadeghi-A alleges violations of this statute in the original Complaint, and 
the proposed allegations generally expand on the original allegations, making the existing 
claim more detailed.  Defendants’ only argument specific to this statutory claim is that 
the “proposed amended statutory claims under Minn. Stat. § 325F.69 and § 325D.44 

likewise fail for these same deficiencies” Defendants assert with respect to the common 
law fraud claim, of failing to sufficiently allege reliance and causation.  (Dkt. 40 at 16.)  
But it is difficult to understand how Defendants viewed the less-detailed allegations as to 


18   To recover under the private attorney general statute, a plaintiff must additionally 
demonstrate that their action “benefits the public.”  Ly v. Nystrom, 

 
(Minn. 2000); Kinetic Co. v. Medtronic, Inc., 

 (D. Minn. 2009) 
(quoting Ly, 

); see also id. at 946 (“[T]he ‘public benefit’ requirement 
is not onerous.  For example, there is a public benefit in eliminating false or misleading 
advertising.”).  Defendants make no argument that Sadeghi-A has not adequately alleged 
a public benefit in his claim under Minn. Stat. § 325F.69 (see generally Dkt. 40), so the 
Court does not address this requirement in the context of the Motion to Amend. 
Minn. Stat. § 325F.69 in the original Complaint as unworthy of a Rule 12 challenge but 
now view these more detailed—indeed, more particular—allegations as insufficient under 
a Rule 12 standard.                                                       
    Second, the Court has concluded in Section III.B that the Proposed Amended 

Complaint’s common law fraudulent nondisclosure allegations are sufficient.  For the 
same reasons, the allegations in the Proposed Amended Complaint are sufficient for a 
fraudulent nondisclosure claim pursuant to Minn. Stat. § 325F.69.         
    Third, “[a] violation of sections 325G.17 to 325G.20 shall be treated as a violation 
of section 325F.69.”  Minn. Stat. § 325G.20.  Sadeghi-A alleges that Defendants violated 

those sections 325G.17 to 325G.20 in Count IV in both the original and Proposed 
Amended Complaint and that such a violation is also a violation of § 325F.69.  (See Dkt. 
34-1 ¶ 93 (“Defendants’ violation of Minn. Stat. Secs. 325G.17-.20, as a matter of law 
shall be also be [sic] treated as a violation of Minn. Stat. Sec. 325F.69, Minnesota’s 
Consumer Fraud Act.”); Dkt. 1-1 ¶ 41 (same).)  Defendants did not challenge the 

sufficiency of the allegations supporting Count IV for violation of Minn. Stat. 
§§ 325G.17-20 in the original Complaint or Proposed Amended Complaint.  This, along 
with Defendants’ failure to challenge Plaintiff’s claim under Minn. Stat. § 325F.69 in the 
original Complaint, undermines the strength of Defendants’ current challenge to the 
proposed claim under Minn. Stat. § 325F.69.                               

    Fourth, in addition to the fraudulent nondisclosure allegations, Sadeghi-A also 
alleges affirmative misrepresentations in support of his statutory fraud claims and 
specifically stated at the hearing that the allegations related to the RV Pro article and 
YouTube video are in support of the statutory claims.  (See Dkt. 34-1 ¶ 96.)  The Court 
concludes that this theory also sufficiently alleges a claim for violation of Minn. Stat. 
§ 325F.69.  The allegations related to the RV Pro article and YouTube video sufficiently 
allege the who, what, where, when, and how:  the who are the individuals at Defendants 

who supplied information for or worked on the article and video (as with Newmar’s PIB 
458, discussed supra at note 13, the identification of a specific article and video 
sufficiently puts Defendants on notice of whose conduct is at issue); the what is the 
representations in the article and video about the performance of the USB tag axle; the 
where is wherever those individuals were working at that time (which, again, is 

information in Defendants’ possession and which the allegations allow them to 
investigate); the when is both the time period of providing information and working on 
the article and video and, later, the time period of potential customers viewing the 
purported misrepresentations; and the how is by supplying the information that is 
represented in the article and video, which Sadeghi-A alleges was false or constituted 

misrepresentations.  (See Dkt. 34-1 ¶¶ 10, 96.)                           
    Defendants argue that the allegations with respect to affirmative    
misrepresentations do not sufficiently allege reliance and causation.  (Dkt. 40 at 16.)  
However, as Sadeghi-A noted at the hearing, the holding in the case Defendants cite on 
this point, Thompson v. American Tobacco Co., Inc., 

 (D. Minn. 

1999), was later rejected by the Minnesota Supreme Court in Group Health Plan, Inc. v. 
Philip Morris Inc., 

, (Minn. 2001).  In Group Health Plan, the Minnesota 
Supreme Court concluded “that the legislature has eliminated the requirement of pleading 
and proving traditional common law reliance as an element of a statutory  
misrepresentation in sales action” and that although “causation is a necessary element in 
a damages claim under the misrepresentation in sales statutes,” the language of 

, subd. 3a, does not “require a strict showing of direct causation, as would be 

required at common law,” but rather “some ‘legal nexus’ between the injury and the 
defendants’ wrongful conduct.”19  

 (rejecting “the view expressed in 
two federal court decisions [including Thompson] that our misrepresentation in sales laws 
require proof of individual reliance in all actions seeking damages”).  Here, Sadeghi-A’s 
allegations that Defendants knowingly made false representations in the RV Pro article 

and YouTube video—and those “false representations remain published” (Dkt. 34-1 
¶ 99)—and intended that Sadeghi-A and other customers rely on the article and video, 
and that the “represented beneficial attributes” were part of the reason Sadeghi-A himself 
purchased the Motorcoach with the USB tag axle, are enough to plausibly allege a 
violation of Minn. Stat. § 325F.69 based on affirmative misrepresentations (see id. ¶¶ 10, 

96, 98, 99).                                                              
    Defendants also argue that an affirmative misrepresentation claim under this 
statute is futile because Defendants did not know the tag axle was defective until at least 

19   Since then, at least one court in this District has recognized the Minnesota 
Supreme Court’s rejection of Thompson.  See, e.g., Luckey v. Alside, Inc., 

 (D. Minn. 2017) (“The Minnesota Supreme Court clarified, in Group 
Health Plan, that a plaintiff ultimately must prove ‘causation,’ or a ‘legal nexus’ between 
the offending conduct and the plaintiff’s damages, but that personal reliance by the 
plaintiff is not the only way to demonstrate the requisite legal nexus.  To the extent 
Alside argues that Plaintiffs must have personally perceived and relied on Alside’s 
alleged misrepresentations in order to state a claim under these statutes, the Court rejects 
this argument.”) (citations omitted).                                     
January 2015, after the RV Pro article and YouTube video were published in December 
2014.  (Dkt. 40 at 17.)  However, Sadeghi-A alleges that “Defendants intended that 
Plaintiff and other customers rely upon its misrepresentations as published in RV Pro 
Magazine and on You Tube and marketing material” (Dkt. 34-1 ¶ 96) and that “[t]he false 

representations remain published and the defective condition of the USB tag axle exists 
in” certain vehicles (id. ¶ 99).  Under these circumstances, the Court finds that the 
continued availability of the YouTube video, which could have been removed after 
Defendants learned of the tag axle defect, plausibly alleges that Defendants knew the 
representations in that video were false during its post-January 2015 availability.  

    2.   Minn. Stat. § 325D.44                                           
    Sadeghi-A also seeks to amend to add violations of Minn. Stat. § 325D.44, 
Minnesota’s Deceptive Trade Practices Act (“MDTPA”), to Count VI of the Proposed 
Amended Complaint.  (See Dkt. 34-1 at 24.)  MDTPA describes conduct that constitutes 
deceptive trade practices, including “caus[ing] likelihood of confusion or of 

misunderstanding as to . . . certification of goods or services,” “represent[ing] that goods 
or services have . . . characteristics, . . . , uses, benefits, or quantities that they do not 
have,” and “any other conduct which similarly creates a likelihood of confusion or 
misunderstanding.”  Minn. Stat. § 325D.44, subd. 1(2), (5), (13).  Like the MCFA, the 
MDTPA requires that a plaintiff plead false, deceptive, or misleading conduct by 

defendants, and Rule 9(b)’s heightened pleading requirement applies.  See E-Shops, 

.  Unlike the MCFA, the MDTPA itself creates a cause of action for 
consumers “likely to be damaged by a deceptive trade practice of another.”  See Minn. 
Stat. § 325D.45, subd. 1.20                                               
    Defendants’ arguments with respect to Minn. Stat. § 325D.44 are the same as 
those with respect to Minn. Stat. § 325F.69.  (Dkt. 40 at 16.)  Those arguments fail for the 

same reasons as stated above for Minn. Stat. § 325F.69.                   
                             * * *                                       
    In sum, having considered all of the allegations in the Proposed Amended 
Complaint, the Court concludes that the allegations supporting Count VI, “Violations of 
Minn. Stat. Secs. 325F.69 and 325D.44,” sufficiently state a claim, and Sadeghi-A may 

amend his complaint accordingly.                                          
D.   Proposed Amended Complaint Count VII – Punitive Damages              
    The final issue in the Motion to Amend is Sadeghi-A’s request to add a claim for 
punitive damages under 

.  Although Minnesota law prohibits a party 
from pleading a claim for punitive damages at the commencement of a lawsuit and 

provides a specific mechanism for amending the complaint in 

, this 
Court has previously examined whether Rule 15 or 

 applies to a 
motion to amend a complaint to include punitive damages and concluded that Rule 15 


20   “Relief is available under the MDTPA only to prevent future harm, not to 
compensate for past harm . . . .”  Anderson v. 1399557 Ontario Ltd., No. 18-CV-1672 
(PJS/LIB), 

, at *12 (D. Minn. Nov. 4, 2019); see also Johnson, 

 (“The sole statutory remedy for Johnson’s MDTPA claim is injunctive 
relief.”) (cleaned up).  Defendants make no argument as to whether Sadeghi-A has 
adequately alleged that he or anyone else is likely to suffer harm in the future (see 
generally Dkt. 40), so the Court does not address this requirement in the context of the 
Motion to Amend.                                                          
governs.  Dolphin Kickboxing Co. v. Franchoice, Inc., 

, 397-401 (D. 
Minn. 2020) (discussing that courts in the District of Minnesota “have historically 
applied the state statute, 

, rather than Rule 15, to motions to amend 
to add a claim for punitive damages, in diversity actions,” but “have recently taken 

another look at the practice . . . in view of the 2010 United States Supreme Court’s 
decision in Shady Grove Assocs., P.A. v. Allstate Ins. Co., 

 (2010),” and 
concluding that Rule 15 should apply).  The Court therefore applies the standard 
articulated in Section II.                                                
    The relevant legal basis for punitive damages under Minnesota law provides: 

    (a) Punitive damages shall be allowed in civil actions only upon clear and 
    convincing evidence that the acts of the defendant show deliberate disregard 
    for the rights or safety of others.                                  

    (b) A defendant has acted with deliberate disregard for the rights or safety of 
    others if the defendant has knowledge of facts or intentionally disregards 
    facts that create a high probability of injury to the rights or safety of others 
    and:                                                                 
         (1) deliberately proceeds to act in conscious or intentional    
         disregard of the high degree of probability of injury to the    
         rights or safety of others; or                                  

         (2) deliberately proceeds to act with indifference to the high  
         probability of injury to the rights or safety of others.        

, subd. 1.  Under these criteria, “[a] defendant operates with 
‘deliberate disregard’ by acting with intent or indifference to threaten the rights or safety 
of others.”  Gamma-10 Plastics, Inc. v. Am. President Lines, Ltd., 

 
(8th Cir. 1994).  As such, “the mere existence of negligence or of gross negligence does 
not rise to the level of willful indifference so as to warrant a claim for punitive 
damages.”21  Ulrich v. City of Crosby, 

 (D. Minn. 1994) (citations 
omitted); see also  Shank v. Carleton College, 16-CV-1154 (PJS/HB), 

, at *7 (D. Minn. Oct. 15, 2018) (same), aff’d, 

 (D. Minn. 2019); 
Berczyk v. Emerson Tool Co., 

 (D. Minn. 2003) (“A mere 

showing of negligence is not sufficient to sustain a claim of punitive damages.”) (cleaned 
up).  Moreover, plaintiffs must allege that defendants were aware of a high probability 
that their conduct would cause injury to plaintiffs.  See In re McNeilus Mfg. Explosion 
Coordinated Litig., No. 17-CV-5237-PJS-KMM, 

, at *4 (D. Minn. 
June 6, 2019).  Put another way, the Court looks to whether the allegations in a proposed 

amended complaint plausibly allege that defendants knew of facts, or intentionally 
disregarded facts, that created a high probability that defendants’ actions would harm the 
rights or safety of plaintiffs.                                           
    Sadeghi-A argues that “Defendants’ conduct shows that they acted with 
intentional disregard of the high degree of probability of injury to the rights or safety of 

Plaintiff and other customers” and that the Proposed Amended Complaint “alleges facts 
which plausibly establish this claim.”  (Dkt. 35 at 16-17.)  Defendants argue that the 
amendment is futile because, first, “the amended complaint’s fraud allegations do not 
state a plausible claim, and . . . [t]he proposed punitive damages claim amendment should 
therefore be denied as well, given the absence of a viable independent tort claim,” and, 


21   “Minnesota law defines gross negligence as ‘without even scant care but not with 
such reckless disregard of probable consequences as is equivalent to a willful and 
intentional wrong.’”  Greer v. Walsh Constr. Co., No. CV 15-465 (PAM/JSM), 

, at *8 (D. Minn. Feb. 23, 2016) (quoting State v. Chambers, 

 (Minn. 1999)).                                                        
second, that Sadeghi-A “has not pleaded plausible facts that could meet the substantive 
requirements of the Minnesota punitive damages statute.”  (Dkt. 40 at 30-31.)  The first 
argument is unpersuasive, given the Court’s conclusion that Sadeghi-A may amend the 
Complaint to include the common law fraud claim.  See Dolphin Kickboxing, 335 F.R.D. 

at 403 (collecting cases) (“[C]ourts have concluded that [punitive] damages are 
appropriate in the context of fraud.”).                                   
    As for Defendants’ second argument, Defendants specifically argue that the facts 
alleged, “even taken as true, do not elevate this matter beyond an ordinary breach of 
warranty case,” and that “[a]lthough Plaintiff attempts to enhance the seriousness of these 

allegations by asserting that the defect poses a potential safety hazard, Plaintiff has 
alleged no personal injury or actual harm to himself or any other person as a result of the 
alleged defect.”  (Id. at 31.)                                            
    The Court concludes that Sadeghi-A has plausibly alleged a claim for punitive 
damages.  As the Court has discussed with respect to the fraud claims, the Proposed 

Amended Complaint sufficiently alleges that Defendants had knowledge of facts about 
problems with the USB tag axle, including the effects the USB tag axle had on the 
operation of the vehicle, and either made misrepresentations or concealed those facts.  
(See Dkt. 34-1 ¶ 103.)  And the proposed allegations sufficiently allege that those facts 
“create a high probability of injury to the rights or safety of others.”  

, subd. 1(b).  Freightliner’s own employee stated that there was a safety issue.  
(Dkt. 34-1 ¶ 20.)  The Proposed Amended Complaint alleges that the USB tag axle 
creates various “drivability problems,” including alignment problems, resulting in 
damage to the Motorcoach, and it is alleged that such problems create safety risks.  (See, 
e.g., 

.)  And it is alleged that Defendants proceeded 
to act despite, or in conscious or intentional disregard of, their knowledge of the safety 
risks and the damage the defective tag axle could cause, by continuing to sell 

motorcoaches with the USB tag axle for a period of time and by not disclosing the defects 
to consumers, including Sadeghi-A.  (See, e.g., 

.)  
Assuming as true the allegations that Defendants knowingly made the misrepresentations 
and/or fraudulently concealed facts, when construed in the light most favorable to 
Sadeghi-A, these allegations set forth a plausible claim that Defendants consciously or 

with deliberate indifference (1) provided Sadeghi-A and other customers with inaccurate 
information about the USB tag axle, and/or (2) withheld accurate information about the 
USB tag axle from Sadeghi-A and other customers, in order to entice them into 
purchasing and keeping motorhomes with the USB tag axle, thereby creating a high 
probability that Defendants’ actions would harm Sadeghi-A and other customers’ rights 

with respect to their purchase and/or safety when operating the Motorcoach (in addition 
to the safety of others on the road with affected motorhomes).            
    Defendants argue, again, that this case is only a breach of warranty case.  (Dkt. 40 
at 31 (“All of these facts, even taken as true, do not elevate this matter beyond an 
ordinary breach of warranty case.”); 

 (“If punitive damages are permitted under 

these allegations, nearly every consumer product manufacturer could be subjected to 
punitive damages claims in ordinary breach of warranty cases each time a product design 
improvement is made.”).)  These statements are unpersuasive, as they ignore that if the 
Court allows amendment to add a common law fraud claim—which it now has—the case 
is not just an “ordinary breach of warranty case.”  Defendants also contend that Sadeghi-
A has not alleged that he or anyone else has actually been harmed.  (Dkt. 40 at 31-32.)  
Defendants do not cite any case where actual harm is required, and in Jensen v. Walsh, 

the Minnesota Supreme Court explained:                                    
    Without punitive damages, one who acts with deliberate disregard of the 
    rights or safety of others faces no greater penalty than a well-meaning but 
    negligent  offender.    It  is  therefore  appropriate,  in  determining  whether 
    punitive damages should be allowed, to focus on the wrongdoer’s conduct 
    rather than to focus on the type of damage that results from the conduct. 

, 251 (Minn. 2001).  “A plain reading of section 549.20 indicates that the 
legislature intended to allow punitive damages when there is clear and convincing 
evidence that a defendant acted with deliberate disregard for the rights or safety of others 
regardless of the nature of the resulting damage.”  Id.                   
    Here, Sadeghi-A alleged a disregard to the safety of others because: 
    Defendants have known since 2015, that the USB tag axle defects create a 
    high degree of probability that Plaintiff and other customers whose safety 
    could be injured because of the USB tag axle defects that could not be 
    repaired and that caused the drivability problems that affect safety, and 
    Defendants deliberately proceeded to not disclose and misrepresent the USB 
    tag axle defects in conscious and intentional disregard or indifference of a 
    high degree of probability of injury to Plaintiff’s and others’ safety. 

(Dkt. 34-1 ¶ 105.)  He further alleged actual harm to property rights in the form of “out-
of-pocket expenses on repair attempts and damages related to other parts of the 
Motorcoach and other expenses or losses to the detriment of their property rights” (id. 
¶ 106), that the Motorcoach’s tires were destroyed due to the tag axle issues (id. ¶ 48), 
and a traction control failure attributable to “steering/alignment,” which he attributes to 
the tag axle defect (id. ¶¶ 45-46, 48).  In view of these allegations, the Court finds the 
absence of any allegation of actual physical injury to Sadeghi-A or another person does 
not render his punitive damages claim futile.                             
    The cases Defendants cite are factually distinguishable.  (See Dkt. 40 at 32.)  In In 

re Bair Hugger Forced Air Warming Devices Products Liability Litigation, No. 
MDL152666JNEFLN, 

 (D. Minn. July 27, 2017), it appears that the 
plaintiffs made only conclusory allegations that the defendants had the knowledge of the 
relevant facts required by 

, subd. 1(b).  

, at *7 
(“[T]he Court is not bound to accept the conclusory statement that Defendants had 

knowledge of bacterial contamination or that there was a patient safety risk, nor is it 
bound to accept that Defendants willfully suppressed potentially harmful testing.  
Knowledge is an element of the cause of action, and Plaintiffs’ conclusory allegation that 
Defendants’ had the requisite knowledge, is a threadbare recital of the knowledge element 
of the statute.”).  Here, Sadeghi-A’s allegations about Defendants’ knowledge of the 

defect in the USB tag axle, and the alignment and other problems caused by the defect, as 
well as the safety risk posed by those problems, are more than conclusory: he has alleged 
specific statements by or to employees of Defendants, with dates, that demonstrate 
knowledge of the defect in the USB tag axle and its effect on vehicles and safety.  (See, 
e.g., Dkt. 34-1 ¶ 12-15, 20, 103-07.)  The In re Bair Hugger court also concluded that 

“[t]he arguments that Defendants secretly reduced the Bair Hugger filtration efficiency 
and failed to conduct a contamination study, does not allege factual content that allows 
the Court to draw a reasonable inference that Defendants are liable for knowing of or 
intentionally disregarding facts that make injury highly probable,” but instead “alleges 
only that Defendants may have been negligent.”  

, at *8.  This 
conclusion once again points to the lack of factual allegations supporting an inference of 
knowledge on the part of defendants about a problem with the product or safety risks, or 

even of the existence of the problem itself.  See 

 (allegations “do not permit a 
factfinder to infer that this filtration reduction resulted in an increased risk of surgical site 
infections or that Defendants knew that this risk could result from reducing the 
filtration”).  Sadeghi-A has pleaded non-conclusory factual allegations that problems 
with the USB tag axle existed, that Defendants knew about those problems, and that 

Defendants knew those problems had safety implications.                   
    And in Rogers v. Mentor Corp., No. 12-CV-2602 (SRN/SER), 

 
(D. Minn. May 15, 2018), the court allowed the amendment to add a claim for punitive 
damages in part because as of “a watershed moment,” when a physician terminated his 
consulting agreement with Mentor because he could no longer support the product, 

“Mentor knew of facts that created a high probability of injury to others and that 
continuing to sell and market ObTape despite knowing those facts constitutes a deliberate 
disregard for others’ rights or safety.”  

, at *12, aff’d sub nom. Urbieta 
v. Mentor Corp., No. CV 13-1927 ADM/LIB, 

 (D. Minn. July 19, 
2018).  Here, the allegations in the Proposed Amended Complaint include an analogous 

watershed moment as of at least November 2, 2016, when Freightliner engineer 
Traynham, who himself “designed the USB tag axle integration to the chassis,” stated 
that there was a safety issue with the USB tag axle.  (Dkt. 34-1 ¶ 20.)  The Court will not 
limit an amendment for punitive damages to only after this date, however, as the Rogers 
court did, because there are sufficient allegations in the Proposed Amended Complaint 
that plausibly allege that the relevant moment—when Defendants acquired the requisite 
knowledge of “facts that create a high probability of injury to the rights or safety,” 

, subd. 1(b)—was earlier.  (See Dkt. 34-1 ¶ 13 (“Defendants apparently first 
became aware of the design mechanical basis for the problem causing customer 
complaints in early August 2015.”), ¶ 15 (April 6, 2016 communications suggesting the 
problem was known—“the tag alignment issue”—and so far unsolved), ¶¶ 17-18 
(Defendants redesigned the USB tag axle from at least April 2016 to October 2016), 

¶ 109 (“The misconduct and any concealment of it has persisted since August of 2015 
. . . .”).)  At this stage of the case, with these allegations, it is premature to decide the 
exact date on which Defendants’ knowledge met the standard of 

, 
subd. 1(b).                                                               
    In sum, the Motion to Amend is granted with respect to punitive damages. 

                         IV.  ORDER                                      
    Based on the files, records, and proceedings herein, IT IS ORDERED THAT: 
    1.   Plaintiff Ardalan Sadeghi-A’s Amended Motion for Leave to Amend 
Complaint (Dkt. 34) is GRANTED.                                           
    2.   Plaintiff shall file his Amended Complaint on March 23, 2021, unless an 

appeal of this Order is sought.                                           
    3.   Defendants shall respond to the Amended Complaint in a manner consistent 
with the Federal Rules of Civil Procedure.                                

DATED:  March 8, 2021                   s/Elizabeth Cowan Wright          
                                       ELIZABETH COWAN WRIGHT            
                                       United States Magistrate Judge    

                UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


Ardalan Sadeghi-A,                    Case No. 19-cv-2373 (MJD/ECW)      

          Plaintiff,                                                     

     v.                                     ORDER                        

Daimler Trucks North America LLC and                                     
Freightliner Custom Chassis Corporation,                                 

          Defendants.                                                    


    This matter is before the Court on Plaintiff Ardalan Sadeghi-A’s (“Sadeghi-A” or 
“Plaintiff”) Amended Motion for Leave to Amend Complaint (Dkt. 34) (“Motion to 
Amend”).1  For the reasons below, the Court grants the Motion to Amend.   
                      I.   BACKGROUND                                    
A.   Operative Complaint                                                  
    This action was removed to U.S. District Court for the District of Minnesota on 
August 28, 2019.  (Dkt. 1.)  Sadeghi-A alleges, in part, the following in the operative 
Complaint.  (See Dkt. 1-1.)                                               

1    Sadeghi-A’s motion is “Amended” because he had previously filed a motion to 
amend, on September 1, 2020.  (Dkt. 28.)  “Based upon the production of additional 
evidence and deposition testimony that had not been incorporated into the originally-filed 
proposed amended complaint, Plaintiff has revised the proposed amended complaint.”  
(Dkt. 34.)  The Court denied the September 1 motion to amend as moot in view of the 
“Amended” Motion on October 1, 2020.  (Dkt. 41.)  The Court has only considered the 
“Amended” motion filed on September 18, 2020 and refers to it as the “Motion to 
Amend.”                                                                   
    Sadeghi-A purchased a Newmar2 London Aire recreational vehicle motorhome 
(the “Motorcoach” or “Motorhome”) on August 1, 2016 from Steinbring Motorcoach Inc. 
in Minnesota.  (Dkt. 1-1 ¶¶ 1, 5.)  Defendant Daimler Trucks North America LLC 
(“Daimler”) and Defendant Freightliner Customer Chassis Corporation (“Freightliner”) 

(collectively, “Defendants”) manufacture and sell motor home chassis to customers and 
dealers, which are an integrated part of motor homes sold to customers.  (Id. ¶¶ 2-3.)  
“Defendants designed, manufactured and warranted the chassis and related components 
of the Motorcoach, including specification and installation of the axle structures,” and a 
manufacturer’s express written warranty issued by Defendants was included in Sadeghi-

A’s purchase of the Motorcoach.  (Id. ¶¶ 6-7.)  “Since April 2015, Defendants have been 
aware of problems with design, manufacturing and/or installation of the tag axle on many 
of the chassis used for recreational vehicles and buses as it issued a service bulletin that 
Newmar described as applicable to a tag axle alignment concern for which it would assist 
customers in resolving the issue with Freightliner.”3  (Id. ¶ 7.)  “Defendants did not 

disclose the [tag axle] issue or the service bulletin to Plaintiff.”  (Id.) 


2    Newmar is the make of the Motorcoach.  (Dkt. 1-1 ¶ 5; id. at 23; Dkt. 34-1 ¶ 5; id. 
at 31; Dkt. 40 at 14 (“Defendant Freightliner . . . manufactured and supplied the subject 
chassis to Newmar; Newmar then manufactured the motorhome on a later date and 
distributed it to its own dealership network.”).)  As will be later described, Newmar 
issues “Technical Information Bulletins” or “Product Information Bulletins” regarding 
defects or problems in its motorhomes requiring service.  (See Dkt. 34-1 ¶¶ 21, 26; id. at 
67, 72.)                                                                  

3    “A tag axle is a non-driven, continuous weight-bearing axle.”  (Dkt. 34-1 at 37.)  
The tag axle at issue in this case is a “passive steer tag axle,” “a third most rearward axle 
designed to carry more vehicle weight and that allows the wheels on the passive steer 
axle to turn but does not have a direct steering input.”  (Id. ¶ 8.)      
    The Complaint further alleges that the Motorcoach “has been the subject of several 
problems covered by warranty,” and “[t]he problems . . . substantially, individually and 
together, impaired and continue to impair the value and use of the Motorcoach.”  (Id. 
¶ 8.)  The problems include “intermittent and unpredictable significant pulling to the left 

which increases the safety risk at higher rates of speed and is unrepairable by alignments; 
excessive vibration; [and] premature, uneven and unsafe tire wear.”  (Id.)  Sadeghi-A 
“reported the defects and nonconformities and presented the Motorcoach to Defendants, 
its agents and authorized dealerships and repair facilities on many” occasions from 
August 2016 to March 2019.  (Id. ¶ 9.)  “The defects and warranty nonconformities . . . 

have not been corrected and remain a substantial impairment.”  (Id.)  “Defendants[’] 
repeated approach . . . has been to treat the problem as a need for an alignment and 
perform an alignment in an attempt to ‘force’ the Motorcoach to drive straight,” but 
“[t]his has not been and cannot be successful in repairing the Motorcoach because the 
defective condition is a design, manufacturing and installation flaw that caused” 

problems that persist “regardless of how many times or how aggressively an alignment 
tries to overcompensate for such defective underlying conditions.”  (Id. ¶ 10.) 
    “At the time Plaintiff purchased the Motorcoach, Defendants were aware of the 
axle-related defects or with proper diligence should have been aware of the axle-related 
defects affecting the Motorcoach and did not disclose these true facts to Plaintiff, instead 

representing that the Motorcoach was free of defects and would drive true and proper.”  
(Id. ¶ 12.)  “Each time Defendants and their authorized service representatives 
represented that the Motorcoach needed an alignment as referenced in paragraph nine [in 
the Complaint], they knew or with reasonable diligence should have known the true 
nature of the axle problems but failed to disclose and concealed the true nature of the 
problem.”  (Id. ¶ 13.)                                                    
    Sadeghi-A “relied upon the concealment [of the axle-related defects] in purchasing 

the Motorcoach” and “would not have purchased the Motorcoach or would have 
purchased a motorhome with a different manufacturer’s chassis” “[i]f Defendants had 
disclosed the axle-related defects.”  (Id. ¶ 12.)  He also “relied upon Defendants’ 
misrepresentations in accepting their repeated false attempts to repair and continuing to 
maintain ownership in an attempt to resolve the problem with Defendants.”  (Id. ¶ 13.) 

    Based on the allegations in the Complaint—which have not been recounted here in 
their entirety—Sadeghi-A asserted five counts: (1) Violation of Minnesota Lemon Law, 
Minn. Stat. § 325F.665; (2) Violation of Magnuson-Moss Warranty Act, 

, et seq.; (3) Breach of Express Warranty, based on the express written warranty 
provided by Defendants; (4) Violations of Minn. Stat. § 325G.17-.20, which are 

Minnesota’s statutes applicable to consumer warranties; and (5) Violations of Minn. Stat. 
§ 325F.69, Minnesota’s Consumer Fraud Act.  (Id. ¶¶ 17-46.)  Sadeghi-A requested relief 
of “(A) Awarding Plaintiffs damages for the violation of Minnesota law; (B) Granting 
injunctive relief to prohibit any conduct that violates Minnesota’s Consumer Fraud Act; 
[and] (C) Awarding Plaintiff his attorneys’ fees and costs.”  (Id. at 18-19.)4   

    Defendants filed an Answer to the Complaint on August 30, 2019.  (Dkt. 7.) 


4    Unless otherwise noted, all page numbers refer to the CM/ECF pagination. 
B.   Proposed Amended Complaint                                           
    Sadeghi-A moved to amend the Complaint on September 18, 2020.  (Dkt. 34.)  
The parties submitted memoranda (Dkts. 35, 40), and the Court held oral argument on 
October 1, 2020 (Dkt. 41).  After the hearing, on October 8, 2020, Sadeghi-A filed a 

letter “submit[ting] . . . authorities limited to questions [the Court] raised at the motion 
hearing.”  (Dkt. 42 at 1.)                                                
    The changes in the Proposed Amended Complaint generally add factual  
allegations regarding Defendants’ development and testing of the type of tag axle that 
was incorporated into Sadeghi-A’s Motorcoach and Defendants’ knowledge of and lack 

of disclosure regarding defects in the tag axle, as well as several new counts.  (See 
generally Dkt. 34-2 (redlined Proposed Amended Complaint).)  According to Sadeghi-A, 
the new allegations are based on documents produced and deposition testimony, in mid-
August 2020 and on September 10, 2020, respectively, by third-party Hendrickson USA, 
LLC, which designed and supplied the tag axle to Defendants.  (Dkt. 34-1 ¶¶ 9, 42-43; 

Dkt. 35 at 1, 4.)  Sadeghi-A alleges, in part, the following in the Proposed Amended 
Complaint.  (See generally Dkt. 34-1.)                                    
    1.   Defendants’ Development of and Knowledge of Defects in the USB Tag 
         Axle                                                            
    The tag axle at issue in this case is “a passive steer tag axle” and “was given the 
brand name ‘Ultra-Steer B Series’ or ‘USB.’”  (Id. ¶¶ 7-8.)  The USB tag axle was in 
development as of 2014 and tested through at least January 2015.  (See id. ¶¶ 9-11.)  In 
December 2014, “before testing was even complete on the prototype USB tag axle, an 
article was published in RV Pro magazine,” in which Freightliner representatives 
“emphasized the features of the USB tag axle” and made certain representations about the 
performance of the USB tag axle.  (Id. ¶ 10; see id. at 48-53, Ex. D (RV Pro article).)  
According to the Proposed Amended Complaint, Freightliner also posted a video to 
YouTube at the same time “in which it makes false representations” about the USB tag 

axle’s performance.  (Id. ¶ 10.)                                          
    “During testing of the USB tag axle on the only test vehicle on which it was 
installed, in January of 2015, a control arm fastener bolt broke.  Numerous other 
instances during testing revealed malfunction of the mechanism that allows the wheels to 
turn or holds them straight.”  (Id. ¶ 11.)5                               

    “Defendants’ production of the USB tag axles on recreational vehicle chassis 
commenced in April of 2015.  After that time and before August of 2015, reports were 
received by Hendrickson that it raised upon inquiry to Defendants about the USB tag 
axles being off-center.”  (Id. ¶ 12.)  “Third-party subpoenaed documents and publicly 
available documents show a substantial volume of complaints after the USB tag axle 

went into production and continues through the present time frame.”  (Id.; see also id. 
¶ 22 (“Before and after August of 2016, Defendants have received but withheld from 
disclosure in this lawsuit, customer complaints, warranty claims and out-of-warranty 
‘goodwill’ claims related to the USB tag axle defects causing the drivability problems.”).)  
Sadeghi-A identifies early August 2015 as the time when Defendants, along with 



5    It is not clear from the Proposed Amended Complaint who performed this testing.  
(See Dkt. 34-1 ¶ 11.)                                                     
Hendrickson, “first became aware of the design mechanical basis for the problem causing 
customer complaints”:                                                     
    The reports caused Defendants and Hendrickson in early August 2015, to 
    analyze the USB tag axle to determine what was causing the drivability 
    problems.  Defendants discovered that a lateral shifting of the USB tag axle 
    that was not part of the design and was causing the USB tag axle to shift off-
    center was the anomaly that was the starting point for the problem.  

(Id. ¶ 13.)                                                               
    Further, by August 2015, Defendants were aware of the following:     
    Defendants were aware that the USB tag axle design and its manufacturing 
    process was causing USB tag axles to be installed on chassis off-center . . . .  
    When  a  post-manufacturing,  pre-delivery  alignment  was  performed  on 
    chassis with an off-center USB tag axle, the alignment results could show as 
    within the range of acceptable tolerance when in fact it was not . . . thereby 
    causing chassis to be delivered to endstage builders out of alignment, unable 
    to hold alignment and/or with false alignment readings.              

(Id. ¶ 14.)                                                               
    In addition to being delivered out of alignment, Defendants knew that “the USB 
tag axle defects [] could not be remedied but had to be redesigned and replaced.”  (Id. 
¶ 28; see also id. ¶ 27 (Defendants “knew that the defect could not be repaired 
since it was being redesigned and replaced.”).)  With regard to Sadeghi-A’s Motorcoach, 
“Defendants communicated with each authorized service repair facility each time it was 
presented for warranty repair by Plaintiff and authorized the purported repair attempts on 
the Motorcoach.”  (Id. ¶ 29.)  “Defendants[’] repeated approach and instruction to 
authorized repair facilities . . . has been to falsely treat the problem as a need for an 
alignment and attempt to perform an alignment,” despite knowing “that this cannot be 
successful in repairing the Motorcoach because [of] the USB tag axle defects that caused 
the USB tag axle to be . . . unable to achieve proper alignment regardless of how 
many times or how aggressively an alignment tries to overcompensate for such defective 
underlying conditions.”  (Id.; see also id. ¶ 52 (“Defendants and [Freightliner’s Dealer 

Operations and Litigation Administrator] Mr. Rostenbach knew the USB tag axle was 
broke[n], that it was not and could not be brought within specification, and that the repair 
or replacement it needed was not routine maintenance, and that the USB tag axle defects 
which had been known since at least August of 2015 could not be repaired.”).) 
    “Defendants’ design engineer”6 informed Hendrickson by email on April 6, 2016 

“that they were ‘receiving reports from sales and service that the tag alignment issue is 
causing issues at dealers.  The offset to the left due to improper assembly and alignment 
is causing lost sales.’”  (Id. ¶ 15.)  “Defendants also admitted that for the year since 
production began that ‘Nothing to date has corrected the issue.’”  (Id.)  According to 
Sadeghi-A, “Defendants implored Hendrickson that the axle needed to be redesigned,” 

“[n]ot because of the effect on safety but because of the impact on profitability.”  (Id.)  
Defendants and Hendrickson worked on redesigning the USB tag axle starting in April 
2016 and had done so by October 2016.  (Id. ¶¶ 17-18.)                    



6    It is unclear which Defendant employed this design engineer.  The Proposed 
Amended Complaint names Todd Traynham as “Defendants’ engineer who designed the 
USB tag axle integration to the chassis” (id. ¶ 20), and other allegations refer to 
Traynham as “the design engineer” or “Defendants’ design engineer” (id. ¶¶ 21, 40, 43).  
Another allegation states that Mr. Traynham works for Freightliner.  (Id. ¶ 40.)  
Traynham was deposed in June 2020.  (Id. ¶ 42.)                           
    Sadeghi-A also alleges that the USB tag axle defects had an effect on the safety of 
vehicles containing the USB tag axle and that Defendants were aware of the safety issue.  
(See, e.g., id. ¶ 19 (“The drivability problems caused by the USB tag axle defects relate to 
the stability and control of the Motorhome and implicated safety.”)7; id. ¶ 20 

(Defendants’ engineer stated on November 2, 2016 that the tag axle’s effects “makes this 
a safety relevant issue for [Freightliner]”); id. ¶ 23 (“Because Defendants were aware of 
the USB tag axle defects since 2015 and that it . . . posed a substantial risk to safe 
operation of the vehicles on which they were installed . . . “); id. ¶ 54 (“The detrimental 
impact of the USB tag axle defects on the safety of the Motorcoach was revealed in an 

inspection in May of 2020 . . . .”).)                                     
    “Defendants’ [sic] continued manufacturing and delivering chassis containing the 
USB tag axle without disclosure or resolution of the defect or its effect on recreational 
vehicles drivability, stability, control or safety, through April of 2016.”  (Id. ¶ 15.)  
Sadeghi-A’s “Motorcoach was manufactured by Defendants on April 15, 2016,” with the 

USB tag axle as originally designed installed.  (Id. ¶ 16.)  “Although Defendants had 
been redesigning the USB tag axle during much of 2016, Defendants continued to 
manufacture and sell the defective USB tag axles until at least March of 2017 when it 

7    Sadeghi-A defines the “drivability problems” as “the pulling, wandering, vibrating 
dogtracking, [and] premature and abnormal tire wear,” all of which are caused by the 
USB tag axle defects and “compounded by the other Motorcoach defects.”  (Dkt. 34-1 
¶ 19.)  Sadeghi-A attaches and “incorporates[s]” his expert’s disclosure and opinions in 
his Proposed Amended Complaint, which include “opinions as to the defective design, 
component stackup, manufacturing and servicing of the USB tag axle,” as well as to 
“additional defects in the Motorcoach chassis . . . that relate to the USB tag axle defects 
but are part of other systems” and are referred to as the “other Motorcoach defects.”  (Id.; 
id. at 54-65, Ex. E (Expert Witness Report of Robert McElroy, Ph. D.).)   
started production of the new design which eliminated the defective components . . . .”  
(Id. ¶ 39.)                                                               
    2.   Defendants’ Nondisclosure of Defects of the USB Tag Axle        
    “With full knowledge of the USB tag axle defects that caused the drivability 
problems affecting vehicle performance and safety, Defendants concealed and did not 

disclose the USB tag axle defects directly to Plaintiff, government regulators or any 
customers.”  (Id. ¶ 24.)  Sadeghi-A alleges as follows:                   
    Because Defendants were aware of the USB tag axle defects since 2015 and 
    that it involved defects that were inconsistent with the design intent, were 
    hidden material defects, for which Defendants had greater and complete 
    knowledge and posed a substantial risk to safe operation of the vehicles on 
    which they were installed, Defendants had a duty to disclose such defects 
    and to disclose such defects to Plaintiff.                           

(Id. ¶ 23.)                                                               
    On August 9, 2016, “Newmar published . . . an information bulletin with 
[Freightliner] . . . [that] contained vague and misleading information it received from 
Defendants.”  (Id. ¶ 26; id. at 71-94, Ex. G.)  Regarding this information bulletin 
(“Product Information Bulletin 458” or “PIB 458”), Sadeghi-A alleges:     
    Defendants knew that the information it provided to Newmar for publication 
    was not complete or accurate because it did not explain the specific defect or 
    condition, it provided deficient and improper instructions that purported to 
    provide a repair solution when the instructions admittedly did not correct but 
    actually perpetuated the original defective manufacturing process, and it 
    misrepresented the population of units affected by the defect by not including 
    all vehicles potentially affected by the defective design and manufacturing 
    which was ongoing and unresolved.                                    

(Id. ¶ 26.)  “Defendants engaged in this artifice . . . when it knew that the defect could not 
be repaired since it was being redesigned and replaced, when it knew that the repair 
instructions it published did not address the defective condition and when it knew that 
more units were affected . . . .”  (Id. ¶ 27.)  “Instead of fully, accurately and timely 
disclosing to Newmar and all of Defendants’ customers who had purchased chassis with 
a USB tag axle, . . . Defendants failed to directly disclose at all and withheld information 

from its customer network and the ultimate consumer purchasers, the actual USB tag axle 
defects . . . .”  (Id. ¶ 28.)                                             
    When Sadeghi-A’s Motorcoach was presented for warranty repair, “Defendants[’] 
repeated approach and instruction to authorized repair facilities . . . has been to falsely 
treat the problem as a need for an alignment and attempt to perform an alignment,” 

despite knowing “that this cannot be successful.”  (Id. ¶ 29.)  Sadeghi-A presented his 
Motorcoach for repair at various authorized repair facilities, and communicated otherwise 
with Defendants, at various times from at least August 2016 through June 2019, but 
neither Defendants nor any of the authorized repair facilities disclosed the USB tag axle 
defects to Sadeghi-A, despite Defendants’ awareness of the defects.  (See id. ¶¶ 29-38, 

40-41, 50-52.)  The Proposed Amended Complaint states that Sadeghi-A complained 
about the difficulty in driving and maintaining control of the Motorcoach to Newmar and 
Freightliner “right after delivery” and states that on August 16, 2016 “Defendants’ 
authorized service facility Truck Centers, Inc. inspected the Motorcoach for repair and 
was in communication with [Freightliner] but neither Defendants nor Truck Center 

disclosed the USB tag axle defects to Plaintiff in connection with this warranty repair 
effort.”  (Id. ¶ 30.)  The Proposed Amended Complaint identifies other communications 
with Defendants or their representatives, including “Defendants’ head Service Manager 
David Hoover” on August 23, 2016; Truck Centers in November 2016; “Defendants’ 
authorized repair facility Young Truck” on November 23, 2016; and “Defendants’ 
employee Aaron Hesch” on November 30, 2016 (who drove the Motorcoach and  
witnessed the vehicle pulling).  (Id. ¶¶ 31-33, 35, 37.)  Sadeghi-A also “directly notified 

upper level management at Daimler and [Freightliner] and Defendants’ general counsel” 
of the “unrepaired defective conditions” in “January through March 2017,” including 
corresponding with the Chief Executive Officer of Daimler in January 2017.  (Id. ¶ 38; id. 
at 43-47, Ex. C (letter to Daimler CEO)8.)                                
    3.   Defendants’ Intent and Sadeghi-A’s Reliance                     
    “Defendants[’] failure to provide a timely, accurate, full and complete description 

of the USB tag axle defects on his Motorcoach was intended to and caused Plaintiff to 
enter into a purchase and on August 1, 2016, take delivery of the Motorcoach containing 
the USB tag axle defects.”  (Id. ¶ 25.)  Further, “Defendants’ inability or unwillingness to 
repair the Motorcoach and its refusal to disclose and attempt to cover-up the USB tag 
axle defects . . . was intended to induce Plaintiff and other customers to accept false 

repair attempts and to avoid lost sales . . . .”  (Id. ¶ 49.)             
    “Plaintiff was not aware of the USB tag axle defects, did not have access to the 
information Defendants had and would not have purchased the Motorhome or would 
have purchased one with a different manufacturer’s chassis if he had known about the 
USB tag axle defects.”  (Id. ¶ 25.)  “Plaintiff relied upon Defendants’ pretend compliance 


8    The first page of the letter precedents the Exhibit C slip sheet.  (Dkt. 34-1 at 43-
44.)                                                                      
with its warranty obligations, even though it was really concealing from Plaintiff the USB 
tag axle defects.  Plaintiff continued to seek repair and a remedy but was misled by 
Defendants . . . .”  (Id. ¶ 53.)                                          
    4.   Amendments to Counts                                            
    Based on the proposed factual allegations, Sadeghi-A asserts two new and one 

new-in-part claims.  The first four counts—for Violation of Minnesota Lemon Law, 
Violation of Magnuson-Moss Warranty Act, Breach of Express Warranty, and Violations 
of Minn. Stat. Sec. 325G.17-.20—are unchanged in the Proposed Amended Complaint, 
except for the amount of damages claimed in each count.  (See id. ¶¶ 57-79; Dkt. 34-2 
¶¶ 57-79 (redlined Proposed Amended Complaint).)                          

    Count V is a new count for Common Law Fraud.  (See Dkt. 34-1 ¶¶ 80-91; Dkt. 
34-2 ¶¶ 80-91 (redlined Proposed Amended Complaint).)  In this count, Sadeghi-A 
alleges as follows:                                                       
         81.  At the time that Defendants manufactured and delivered the 
    chassis for the Motorcoach, Defendants knew that it had the USB tag axle 
    defects that caused the drivability problems.                        

         82.  Because  of  the  known  material  and  hidden  defects;   
    Defendants’ clear, greater and specialized knowledge of these facts from 
    customer complaints and its own investigation of the defects, communication 
    with  the  supplier  and  redesign  of  the  defective  components;  because 
    Defendants disclosed vague and misleading half-truths about the defect; 
    because of the risk they pose to the safe operation of the vehicle and under 
    regulatory obligations to report and disclose; Defendants had a duty to 
    disclose the USB tag axle defects.                                   

         83.  Defendants  did  not  disclose  known  defects  in  the  design, 
    manufacturing or installation of the axle structures to Plaintiff at or before he 
    took delivery and do not disclose them to other purchasers in order to induce 
    purchasing of chassis and to sell chassis with the defective axle structure. 
    84.  Defendants also failed to timely, fully and accurately disclose 
and misrepresented the specific defective conditions as a vague tag axle 
alignment concerns when it provided information to Newmar that they knew 
and intended would be published to customers that might be affected by the 
problem, including when Plaintiff discovered and relied upon it in and after 
November 2016.                                                       

    85.  Defendant failed to disclose and misrepresented the accurate 
and complete population of vehicles affected by the defective condition 
which actually spanned a two-year production period and included Plaintiff’s 
Motorcoach.                                                          

    86.  Defendants failed to disclose and misrepresented the USB tag 
axle defects as needing routine alignment maintenance each time it was 
presented  for  repair  by  Plaintiff  when  Defendants  knew  it  needed  a 
replacement of defective components and were unwilling to repair it. 

    87.  Defendants failed to disclose and misrepresented that the USB 
tag axle defects each time it was returned to Plaintiff after it was presented 
for repair because the defective condition was not repaired or replaced and 
the Motorcoach was not aligned to within specification because the USB tag 
axle components were not properly adjusted and could not be adjusted to a 
proper position and achieve a true alignment thereby rendering the alignment 
printouts false.                                                     

    88.  Defendants misrepresented to Plaintiff that he was entitled to 
and receiving fair and objective warranty treatment when they knew that they 
could not and were unwilling to repair or replace the defective components 
and failed to disclose that he was subject to extraordinary treatment to avoid 
repairing or replacing the defective components.                     

    89.  Defendants’ concealment and misrepresentations were made   
with knowledge of their falsity.  Defendants intended to deceive Plaintiff to 
induce his and others’ purchasing of vehicles on which its USB tag axle was 
installed, to induce payments for routine maintenance and out-of-pocket 
repair attempts, to avoid its obligation to repair or replace his Motorcoach or 
the USB tag axle and to avoid the responsibility to recall or repair/replace 
other vehicles on which the USB tag axle has been installed.         

    90.  Plaintiff  reasonably  relied  upon  Defendants’  failures  to 
disclose and misrepresentations in purchasing the Motorcoach, in attempting 
to  have  it  repaired  and  in  continuing  to  attempt  to  obtain  repair  or 
replacement during the warranty period.  Plaintiff would not have purchased 
the Motorhome or would have purchased a motorhome with a different   
    manufacturer’s chassis if the defect had been disclosed and would have 
    demanded replacement of the tag axle or immediately returned it if the defect 
    and not expended money on repair attempts and trying to determine the true 
    problem if the defects and their unrepairability had been disclosed. 

         91.  As  a  direct  and  proximate  result  of  Defendants’     
    misrepresentations and failure to disclose, Plaintiff has suffered pecuniary 
    damages including the loss or diminution in value of the Motorhome, out of 
    pocket  expenditures  invested  into  the  Motorhome,  money  expended  on 
    damage caused to other parts of the Motorhome, attempting to obtain repairs, 
    expended on investigating the defects, expended on litigation, as well as, 
    time invested in all of the above and loss of use, enjoyment, aggravation 
    damages all in an amount to be determined at trial in excess of $75,000, 
    including any exemplary damages, civil penalties, attorneys’ fees and costs 
    as allowed by Minnesota law.                                         

(Dkt. 34-1 ¶¶ 80-91.)                                                     
    Count VI in the Proposed Amended Complaint is “Violations of Minn. Stat. Secs. 
325F.69 and 325D.44,” the latter of which—Minnesota’s Deceptive Trade Practices 
Act—was not included in the operative Complaint.  (Id. at 24; see also Dkt. 34-2 at 24.)  
This Count includes new allegations that “Defendants intended that Plaintiff and other 
customers rely upon its misrepresentations as published in RV Pro Magazine and on You 
Tube and marketing material” and that “[t]he represented beneficial attributes . . . of the 
USB tag axle were part of the reason Plaintiff purchased a chassis with the USB tag 
axle.”  (Dkt. 34-1 ¶ 96.)  Further, “Defendants intended that Plaintiff and other customers 
rely upon its non-disclosure of the USB tag axle defects to induce purchasing, its 
misleading half-truth PIB 458 and scheme to lull Plaintiff and other customers to accept 
false repair attempts and pay for false routine maintenance.”  (Id. ¶ 97.)  The Proposed 
Amended Complaint also alleges, “Defendants have willfully engaged in the false 
representations and non-disclosure and know that it is deceptive.”  (Id. ¶ 98.)  The 
operative Complaint alleges, “A public benefit will be fulfilled if Defendant is liable for 
and prohibited from concealing the defective axle structure of its chassis” (Dkt. 1-1 ¶ 45), 
while the Proposed Amended Complaint modifies that allegation by adding, “A public 
benefit will be fulfilled if Defendant is liable for and prohibited from making false 

representations about and concealing the USB tag axle defects.  The false representations 
remain published and the defective condition of the USB tag axle exists in” certain 
vehicles (id. ¶ 99).  The Proposed Amended Complaint further alleges, “As a direct and 
proximate result of the violations of Minn. Stat. Secs. 325F.69, 325D.44 and common 
law, Plaintiff is entitled to injunctive relief, compensatory and exemplary damages, civil 

penalties, attorneys’ fees and costs as allowed Minn. Stat. 8.31 and 325D.45.”  (Id. 
¶ 101.)                                                                   
    Count VII in the Proposed Amended Complaint is a new claim for Punitive 
Damages under 

.  (See Dkt. 34-2 at 26 (redline, showing as Count 
VI).)  This Count alleges, in part: “Defendants’ failure to disclose, as more fully pled in 

the previous count and in the factual allegations herein, and misleading of Plaintiff were 
in deliberate disregard of his and[,] since they were part of a broader scheme to conceal 
and mislead, other customers’ rights and safety.”  (Dkt. 34-1 ¶ 103.)  Specifically, 
“Defendants have known since 2015, that the USB tag axle defects create a high degree 
of probability that Plaintiff and other customers were fraudulently induced to purchase 

chassis with defective USB tag axles,” and “Defendants deliberately proceeded to not 
disclose and misrepresent the USB tag axle defects in conscious and intentional disregard 
or indifference of a high degree of probability of injury to Plaintiff’s and others’ rights.”  
(Id. ¶ 104.)  Similarly, “Defendants deliberately proceeded to not disclose and 
misrepresent the USB tag axle defects in conscious and intentional disregard or 
indifference of a high degree of probability of injury to Plaintiff’s and others’ safety.”  
(Id. ¶ 105.)  “After Plaintiff and other customers purchased chassis containing the USB 

tag axle defects, Defendants acted with deliberate disregard for the rights of Plaintiff and 
other customers” and “consciously or intentional[ly] disregarded or [were] indifferent to 
a high degree of probability that Plaintiff and other customers would continue to use 
chassis containing the USB tag axle defects and accept false repair attempts and incur 
out-of-pocket expenses on repair attempts and damages . . . to the detriment of their 

property rights.”  (Id. ¶ 106.)  Similarly, “[a]fter Plaintiff and other customers purchased 
chassis containing the USB tag axle defects, Defendants acted with deliberate disregard 
for the rights of Plaintiff and other customers” and “consciously or intentional[ly] 
disregarded or [were] indifferent to a high degree of probability of injury to Plaintiff’s 
and other customers’ safety caused by the drivability problems from continuing to use 

chassis containing the USB tag axle defects and accept false repair attempts.”  (Id. ¶ 107.)  
“Defendants’ failure to disclose the USB tag axle defects and their misleading 
representations . . . were authorized by Defendants and were undertaken or approved by 
employees in a managerial capacity with authority to establish policy and make planning 
level decisions and were acting in the scope of that employment; or were ratified and 

approved while knowing of its character and probable consequences.”  (Id. ¶ 108.)  
“Defendants’ misconduct sacrificed motor vehicle safety in order to avoid lost sales and 
enhance[e] profitability.  The misconduct and any concealment of it has persisted since 
August of 2015 and . . . still poses a high degree of hazard . . . .”  (Id. ¶ 109.)  Finally, 
“[i]n consideration of Defendants’ financial condition, and to deter the self-interested 
motivation of Defendants’ wanton, willful and reckless disregard of Plaintiff and others’ 
rights and safety, a substantial award of punitive damages is warranted.”  (Id. ¶ 110.) 

                    II.  LEGAL STANDARD                                  
    Rule 15 sets the general standard for amending pleadings in Federal court and 
provides that “[t]he court should freely give leave when justice so requires.”  Fed. R. Civ. 
P. 15(a)(2).  The determination as to whether to grant leave to amend is entrusted to the 
sound discretion of the trial court.  See, e.g., Niagara of Wisc. Paper Corp. v. Paper 

Indus. Union-Mgmt. Pension Fund, 

, 749 (8th Cir. 1986) (citation omitted).  
The Eighth Circuit has held that although amendment of a pleading “should be allowed 
liberally to ensure that a case is decided on its merits, there is no absolute right to 
amend.”  Ferguson v. Cape Girardeau Cty., 

, 650-51 (8th Cir. 1996) 
(citations omitted).                                                      

    Denial of leave to amend may be justified by “undue delay, bad faith on the part of 
the moving party, futility of the amendment or unfair prejudice to the opposing party.”  
Sanders v. Clemco Indus., 

 (8th Cir. 1987) (citing Foman v. Davis, 

 (1962)); see also Hillesheim v. Myron’s Cards and Gifts, Inc., 

 (8th Cir. 2018) (citation omitted) (“A district court’s denial of leave to amend a 

complaint may be justified if the amendment would be futile.”).  “Denial of a motion for 
leave to amend on the basis of futility means the district court has reached the legal 
conclusion that the amended complaint could not withstand a motion to dismiss under 
Rule 12(b)(6) of the Federal Rules of Civil Procedure.  Accordingly, in reviewing a 
denial of leave to amend we ask whether the proposed amended complaint states a cause 
of action under the Twombly pleading standard . . . .”  Zutz v. Nelson, 

, 850-
51 (8th Cir. 2010) (citation and marks omitted); see also In re Senior Cottages of Am., 

LLC, 

, 1001 (8th Cir. 2007) (“[W]hen a court denies leave to amend on the 
ground of futility, it means that the court reached a legal conclusion that the amended 
complaint could not withstand a Rule 12 motion.”).                        
    On a motion to dismiss filed pursuant to Rule 12(b)(6), the Court must take the 
well-pleaded allegations of a claim as true, and construe the pleading, and all reasonable 

inferences arising therefrom, most favorably to the pleader.  See Morton v. Becker, 

 (8th Cir. 1986).  To survive a motion to dismiss, a claim “must contain 
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its 
face.’”  Ashcroft v. Iqbal, 

 (2009) (quoting Bell Atl. Corp. v. Twombly, 

 (2007)).  A claim is facially plausible “when the plaintiff pleads 

factual content that allows the court to draw the reasonable inference that the defendant is 
liable for the misconduct alleged.”  

                                  
    Additionally, when a claim is for fraud, “a party must state with particularity the 
circumstances constituting fraud.”  Fed. R. Civ. P. 9(b).  But “[m]alice, intent, 
knowledge, and other conditions of a person’s mind may be alleged generally.”  

  “To 

satisfy the particularity requirement of Rule 9(b), the complaint must plead such facts as 
the time, place, and content of the defendant’s false representations, as well as the details 
of the defendant’s fraudulent acts, including when the acts occurred, who engaged in 
them, and what was obtained as a result.”  United States ex rel. Raynor v. Nat’l Rural 
Utils. Coop. Fin., Corp., 

 (8th Cir. 2012) (cleaned up).  “In other 
words, Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the 
first paragraph of any newspaper story.”  Freitas v. Wells Fargo Home Mortg., Inc., 

 (8th Cir. 2013) (cleaned up).  “The purpose of Rule 9(b) is to provide the 
defendant with notice of and a meaningful opportunity to respond specifically to charges 
of fraudulent conduct by apprising the defendant of the claims against it and the facts 
upon which the claims are based.”  In re Hardieplank Fiber Cement Siding Litig., No. 12-
md-2359, 

, at *6 (D. Minn. July 15, 2013) (citing Com. Prop. Invs., 

Inc. v. Quality Inns Int’l, Inc., 

 (8th Cir. 1995)).  “Conclusory allegations 
that a defendant’s conduct was fraudulent and deceptive are not sufficient to satisfy the 
rule.”  BJC Health Sys. v. Columbia Cas. Co., 

 (8th Cir. 2007) (cleaned 
up).  “But Rule 9(b) does not require that the exact particulars of every instance of fraud 
be alleged, so long as the complaint includes enough detail to inform the defendant of the 

core factual basis for the fraud claims.”  Ransom v. VFS, Inc., 

 
(D. Minn. 2013) (cleaned up).  Ultimately, “[t]he level of particularity required depends 
on the nature of a case.”  E-Shops Corp. v. U.S. Bank Nat’l Ass’n, 

 (8th 
Cir. 2012) (citing BJC Health Sys., 

).                     
                        III.  ANALYSIS                                   

    Sadeghi-A states that he “seeks leave to amend his complaint to specify in more 
detail the allegations of his fraud claims and to add a claim seeking punitive damages.”  
(Dkt. 35 at 1.)  Specifically, he states that discovery in August 2020 “yielded the 
particular facts . . . that permit pleading with greater specificity the true cause of the 
defect, that it was known by Defendants much earlier than Defendants acknowledged and 
that it is not just ‘confusion’ over how to align a couple of chassis,” and that Defendants’ 
concealment and misrepresentation “fraudulently-induced Plaintiff’s and other 

customers’ purchase of chassis with the USB tag axle defects and caused Plaintiff and 
other customers to continue to use, attempt to obtain repair and to be forced to pay for 
and drive chassis with the USB tag axle defects in deliberate disregard of their rights and 
safety.”  (Id. at 1-2.)  Defendants argue that the Motion to Amend should be denied 
because it is futile and does not plausibly state a claim for relief in several respects.  (Dkt. 

40 at 3, 12-13, 17, 30.)9                                                 
A.   Defendants’ “Design Defect” Arguments                                
    Much of Defendants’ opposition asserts that Sadeghi-A seeks to make “new 
design defect allegations” and that his new claims are premised on a design defect theory 
for which he cannot recover.  (Dkt. 40 at 3-4 (“These new design defect allegations are 
then incorporated in and underpin each of Plaintiff’s claims in the amended complaint.”); 

see also id. at 11 (“Plaintiff’s new design defect allegations seek to shoe-horn strict 
liability and negligence standards into a breach of warranty case by imposing a duty on 
Defendants to both replace—and, evidently, cease production and disclose to all actual 
and potential customers—an allegedly poor design.”); id. at 18 (“Plaintiff’s fraudulent 
omission claim is simply a strict liability design defect claim re-packaged as fraud.”).)  


9    Defendants do not oppose the Motion on any grounds other than futility (see Dkt. 
40), and the Motion to Amend is timely under the operative Second Amended Scheduling 
Order (see Dkt. 39 at 2).                                                 
The Court addresses Defendants’ “design defect” arguments in this Section before 
reaching the specific claims that Sadeghi-A seeks to add in his Proposed Amended 
Complaint.                                                                
    First, Defendants argue that “Plaintiff’s allegations against Defendants—and any 

duties owed by Defendants—derive from the warranties provided with respect to the 
subject chassis,” and the warranty “does not provide warranty coverage for alleged 
design defects.”  (Id. at 4-5; see also id. at 6 (“[T[hese allegations are also futile because 
a design defect claim is tort-based claim, and is not a cognizable claim in this breach of 
warranty case where duties arise only from contract.”); id. at 12 (“[I]f a product’s design 

causes it to have characteristics that are undesirable or unwanted—but which do not 
cause injury to person or property—a buyer’s remedy, if any, is found in warranty and 
contract law.”).)  Sadeghi-A set forth his warranty claims separately from his new 
allegations and claims for common law fraud, violation of Minnesota’s Deceptive Trade 
Practices Act, and punitive damages.  (Compare Dkt. 34-1 ¶¶ 62-79, with id. ¶¶ 80-110.)  

Defendants cite no authority for the proposition that Sadeghi-A is precluded from 
bringing those new claims based on knowledge of a design defect and failure to disclose 
the defect simply because his warranty claims may not be based on a design defect.  
Further, Defendants’ description of his Sadeghi-A’s claims as “repackage[ed]” warranty 
claims (see, e.g., Dkt. 40 at 22) to support their futility argument is itself a “repackaging” 

of those non-warranty claims as warranty claims.  Sadeghi-A has separately alleged 
claims for common law fraud, violation of Minnesota’s Deceptive Trade Practices Act, 
and punitive damages, and those claims must be evaluated as he alleged them, not as 
Defendants characterize them.10                                           
    Second, Defendants argue that Sadeghi-A “has suffered no harm to his person, has 
suffered no harm to his ‘tangible person [sic] property other the goods,’ and has suffered 

no harm to his real property,” and so “[t]he economic loss doctrine therefore bars 
Plaintiff from utilizing product defect claims, such as a design defect theory, to recover 
damages for harm to the product itself.”  (Dkt. 40 at 7-8 (discussing 

).)  Defendants focus on the subdivision of the statute limiting product defect 
tort claims (id. at 7), which states, “A buyer may not bring a product defect tort claim 

against a seller for compensatory damages unless a defect in the goods sold or leased 
caused harm to the buyer’s tangible personal property other than the goods or to the 
buyer’s real property.”  

 subd. 3.  But, again, Sadeghi-A seeks to 
add claims for common law fraud, violation of Minnesota’s Deceptive Trade Practices 
Act, and punitive damages, and while he uses the word “defect” to refer to the problem 

with the USB tag axle, he has not styled any claim as a product defect tort or suggested 


10   Defendants make similar arguments when addressing the fraudulent nondisclosure 
claim, arguing, “With respect to alleged fraud during the post-sale service of the subject 
chassis, the amended complaint’s allegations confirm that this claim is simply a breach of 
warranty claim repackaged as fraud.”  (Dkt. 40 at 22.)  But again, this argument misses 
the key inquiry: if Sadeghi-A has adequately alleged a duty Defendants owed to him 
arising outside of the contract, as well as the other elements of fraud, then nothing 
prevents Sadeghi-A from asserting a fraud claim with his warranty claims.  See Blue 
Cross & Blue Shield of N.C. v. Rite Aid Corp., No. 20-CV-1731 (ECT/KMM), 

, at *14 (D. Minn. Feb. 9, 2021) (quoting AKA Dist. Co. v. Whirlpool Corp., 

 (8th Cir. 1998)) (“A fraud claim independent of the contract is 
actionable, but it must be based upon a misrepresentation that was outside of or collateral 
to the contract, such as many claims of fraudulent inducement.”).         
that he is putting forward a design defect theory.  Minnesota’s economic loss doctrine 
statute does not permit “a common law misrepresentation claim against a seller relating 
to the goods sold or leased unless the misrepresentation was made intentionally or 
recklessly.”   

 subd. 4.  Sadeghi-A contends that his fraud claim “is 

based upon intentional misrepresentation which is not prohibited by the economic loss 
doctrine.”  (Dkt. 35 at 16 (citing Johnson v. Bobcat Co., 

 (D. 
Minn. 2016)).).  Moreover, Defendants acknowledge this exception to the economic loss 
doctrine and implicitly concede that, if intentional misrepresentations are otherwise 
adequately alleged, the economic loss doctrine does not bar a claim for common law 

misrepresentation.  (Dkt. 40 at 8 n.2 (“Although Plaintiff attempts to plead around [

, subd. 4] by contending that his fraudulent misrepresentation claim is 
based upon intentional, not negligent, misrepresentations, for the reasons discussed below 
that amended claim fails as well.”.)                                      
    Third, Defendants argue that “the amended complaint’s design defect allegations 

are futile and do not support any cognizable claim for relief because Plaintiff’s lack of 
any personal injury renders tort-based design defect allegations inapplicable.”  (Id. at 8.)  
Defendants recite the elements of a design-defect claim in Minnesota, state that here the 
“alleged design defect did not cause injury to person or property,” and state that various 
courts “have repeatedly rejected similar ‘no-injury’ product defect cases where a plaintiff 

alleges that a product defect could cause physical injury, but instead has caused no harm 
other than alleged diminished value of the product itself.”11  (Id. at 8-9 (quoting Bilotta v. 
Kelley Co., Inc., 

, 623 n.3 (Minn. 1984), for design defect elements).)  
But, again, Sadeghi-A seeks to add claims for common law fraud, violation of 
Minnesota’s Deceptive Trade Practices Act, and punitive damages, and nowhere refers to 

a “design defect” or a claim styled as such.  Though some of the facts and legal issues in 
this case may be similar to those in a design defect case, the Court will evaluate the 
claims as they are alleged.                                               
    In sum, the Court does not agree that Sadeghi-A’s “new design defect allegations” 
are, in fact, design defect allegations, or that these allegations “seek to shoe-horn strict 

liability and negligence standards into a breach of warranty case.”  (Dkt. 40 at 11.)  The 


11   The Court considers whether Sadeghi-A has adequately alleged harm with respect 
to his fraud claim in Section III.B.5.  The Court notes that several of the cases Defendants 
cite as “‘no-injury’ product defect cases” (Dkt. 40 at 9-10) are inapposite here because 
they involve plaintiffs whose products did not manifest the purported defect and/or 
worked properly and as intended.  See Briehl v. Gen. Motors Corp., 

 
(8th Cir. 1999) (“In this case, the Plaintiffs have not alleged that their ABS brakes have 
malfunctioned or failed.  . . .  The Plaintiffs’ ABS brakes have functioned satisfactorily 
and at no time have the brakes exhibited a defect.”); Tietsworth v. Harley-Davidson, Inc., 

, 

, 

 (“The injury complained 
of here is diminution in value only—the plaintiffs allege that their motorcycles are worth 
less than they paid for them.  However, the amended complaint does not allege that the 
plaintiffs’ motorcycles have diminished value because their engines have failed, will fail, 
or are reasonably certain to fail as a result of the TC-88 cam bearing defect.”); Farsian v. 
Pfizer, Inc., 

 (11th Cir. 1996) (question certified to Supreme Court of 
Alabama addressed plaintiff whose implanted heart valve works properly); Martin v. 
Ford Motor Co., 

 (S.D. Tex. 1996) (plaintiff contended 
that a warning advising passengers to fasten the lap belt rendered the vehicles unsafe but 
failed to produce any evidence of injury at summary judgment).  Here, Sadeghi-A has 
alleged that his Motorcoach has manifested the USB tag axle defect and that the 
Motorcoach does not operate properly as a result of the defect.  (See, e.g., Dkt. 34-1 at 
¶¶ 19, 29, 44, 45.)                                                       
Court therefore turns to the question of whether Sadeghi-A has plausibly alleged his 
fraud, Minnesota Deceptive Trade Practices, and punitive damages claims.  
B.   Proposed Amended Complaint Count V – Common Law Fraud                
    Count V in the Proposed Amended Complaint is for “Common Law Fraud” and 

alleges that “Defendants had a duty to disclose the USB tag axle defects” and that 
Defendants “did not disclose” or “failed to disclose” information about the defects to 
Sadeghi-A, or other customers, at the time of Sadeghi-A’s purchase or afterward, 
including when Newmar published PIB 458 and when Sadeghi-A presented the  
Motorcoach for repair.  (Dkt. 34-1 at ¶¶ 82-87.)  Based on these allegations, and as 

confirmed by Sadeghi-A’s counsel at the hearing, the Court understands Sadeghi-A’s 
common law fraud claim to be based on fraudulent nondisclosure rather than affirmative 
misrepresentations.  The Court therefore does not address Defendants’ argument that the 
amendment does not plausibly allege a common law fraud claim for affirmative 
fraudulent misrepresentations.12                                          

    To state a claim for fraudulent nondisclosure, a plaintiff must allege a duty to 
disclose, i.e., “that the defendant had a legal or equitable obligation to communicate facts 
to a particular person and that person is entitled to the information,” as well as the other 


12   For example, Defendants argued that “Noticeably absent from the amended 
complaint is any allegation that Plaintiff ever saw the magazine article or the YouTube 
video, much less that Plaintiff relied upon the alleged misrepresentations contained 
therein and was induced to enter into a purchase agreement for his motorhome.”  (Dkt. 40 
at 15; see generally id. at 14-18.)  At the hearing, Sadeghi-A specified that he was not 
relying on the RV Pro article or YouTube video for his common law fraud claim, but 
argued those allegations are relevant to the statutory fraud and deceptive trade practices 
claims.                                                                   
elements of an ordinary fraud claim.  Zimmerschied v. JP Morgan Chase Bank, N.A., 

 (D. Minn. 2014) (cleaned up).  To state an ordinary fraud claim 
under Minnesota law, Sadeghi-A must allege: (1) a false representation by Defendants of 
a past or existing material fact susceptible of knowledge; (2) made with knowledge of the 

falsity of the representation or made without knowing whether it was true or false; 
(3) with the intention to induce Sadeghi-A to act in reliance thereon; (4) that the 
representation caused Sadeghi-A to act in reliance thereon; and (5) that Sadeghi-A 
suffered pecuniary damages as a result of the reliance.  Zimmerschied, 

 (citing Valspar Refinish, Inc. v. Gaylord’s Inc., 

 (Minn. 2009)). 

    Claims for fraudulent nondisclosure must comply with Rule 9(b)’s particularity 
requirements, and some courts have thus concluded that to state a claim for fraudulent 
nondisclosure, plaintiffs are generally required to allege as follows:    
    (1) the relationship or situation giving rise to the duty to speak, (2) the event 
    or events triggering the duty to speak, and/or the general time period over 
    which the relationship arose and the fraudulent conduct occurred, (3) the 
    general content of the information that was withheld and the reason for its 
    materiality, (4) the identity of those under a duty who failed to make such 
    disclosures, (5) what those defendant(s) gained by withholding information, 
    (6)  why  plaintiff’s  reliance  on  the  omission  was  both  reasonable  and 
    detrimental, and (7) the damages proximately flowing from such reliance. 

Id. at 596 (citations omitted).                                           
    The parties disagree as to whether the fraud claim in the Proposed Amended 
Complaint meets the particularity requirements and adequately states a claim for relief.  
(See Dkt. 35 at 14 (citing Zimmerschied, 49 F. Supp. at 596) (“The allegations of the 
proposed amended complaint satisfy these particularity requirements in the context of 
fraudulent nondisclosure claims”); Dkt. 40 at 18 (“Plaintiff has failed to adequately plead 
an actionable claim for fraudulent omission . . . .”).)  The Court will address each element 
of the fraud claim in turn.                                               
    1.   Duty to Disclose                                                
    With respect to a duty to disclose,                                  
    As a general rule, one party to a transaction has no duty to disclose material 
    facts to the other.  However, special circumstances may dictate otherwise.  
    For example: (a) One who speaks must say enough to prevent his words from 
    misleading the other party; (b) One who has special knowledge of material 
    facts to which the other party does not have access may have a duty to 
    disclose these facts to the other party; (c) One who stands in a confidential 
    or fiduciary relation to the other party to a transaction must disclose material 
    facts.                                                               

Zimmerschied, 49 F. Supp. at 595-96 (brackets omitted) (quoting Richfield Bank & Trust 
Co. v. Sjogren, 

, 

 (1976)); see also Blue Cross & 
Blue Shield of N.C. v. Rite Aid Corp., No. 20-CV-1731 (ECT/KMM), 

, 
at *11 (D. Minn. Feb. 9, 2021) (quoting Graphic Comm’cns Loc. 1B Health & Welfare 
Fund A v. CVS Caremark Corp., 

 (Minn. 2014)).  “These ‘examples 
. . . are not intended to be exclusive.’”  Blue Cross & Blue Shield of N.C., 

, at *11 (quoting Graphic Comm’cns Loc. 1B, 

).     
         a.   One Who Speaks Must Say Enough to Prevent His Words from   
              Misleading the Other Party                                 
    With respect to the first “special circumstance,” Sadeghi-A argues, “After Plaintiff 
received the unit, Defendants’ knowledge of the USB tag axle defects and its misleading 
communications as pled in paragraphs 26 through 28 [regarding Newmar’s PIB 458], 
obligated it to fully and accurately disclose the USB tag axle defects,” and “Defendants 
continued to mislead Plaintiff by not fully and accurately disclosing the known USB tag 
axle defects at each instance of inspection and repair by Defendants’ employees and 
agents at authorized repair facilities.”  (Dkt. 35 at 8-9.)  Defendants argue that “the only 
specific communication Plaintiff identities [sic] is a Technical Service Bulletin [PIB 458] 
published by the motorhome manufacturer Newmar after Plaintiff had already purchased 

his motorhome,” and further that Sadeghi-A does not allege “who at Freightliner was 
involved, that the person or persons knew of any alleged falsity or misrepresentation in 
the Newmar [PIB 458], or that they intended the bulletin to induce detrimental reliance in 
customers like Plaintiff.”  (Dkt. 40 at 26-27.)                           
    The Court concludes that Sadeghi-A has adequately alleged a duty to disclose 

based on the principle that one who speaks must say enough to prevent his words from 
misleading the other party, but only with respect to the time period after his initial 
purchase when he was in communication with Defendants and repair service facilities 
regarding the Motorcoach and when he became aware of Newmar’s PIB 458 in  
November 2016, because Sadeghi-A could not have been misled under this theory until 

he became aware of “words” attributable to Defendants.  See Zimmerschied, 49 F. Supp. 
at 595.                                                                   
    As to Newmar’s PIB 458, Sadeghi-A alleges that Newmar published the bulletin 
“with” Freightliner and that Newmar received the information for the bulletin from 
Defendants.  (Dkt. 34-1 ¶ 26.)  He further alleges that the information in the bulletin was 

“vague and misleading” and that “Defendants knew that the information it provided to 
Newmar for publication was not complete or accurate because it did not explain the 
specific defect or condition, it provided deficient and improper instructions that purported 
to provide a repair solution when the instructions admittedly did not correct but actually 
perpetuated the original defective manufacturing process.”  (Id.; see also id. ¶ 27 
(alleging that when Newmar’s PIB 458 was published, Defendants “knew that the defect 
could not be repaired since it was being redesigned and replaced, [and] knew that the 

repair instructions it published did not address the defective condition”); id. ¶ 28 
(similar).)13  When Sadeghi-A became aware of Newmar’s PIB 458 in November 2016, 
“[a]s instructed by the PIB, and unaware of the actual USB tag axle defects, Plaintiff 
continued to work with Newmar and Defendants to attempt to obtain repair of the 
drivability problems.”  (Id. ¶ 36.)  And in Count V of the Proposed Amended Complaint, 

Sadeghi-A alleges, “Defendants also failed to timely, fully and accurately disclose and 
misrepresented the specific defective conditions as a vague tag axle alignment concerns 
[sic] when it provided information to Newmar . . . , including when Plaintiff discovered 
and relied upon it in and after November 2016.”  (Id. ¶ 84.)              
    Similarly, Sadeghi-A alleges that Defendants, through their employees and agents, 

told him that the problems he was experiencing with the Motorcoach could be fixed or 
attempted to repair the problems, which misled him into believing that the problems 
could be fixed when, in fact, they could not, and Defendants knew they could not.  (See 

13   Defendants note that Sadeghi-A does not allege “who at Freightliner was 
involved.”  (Dkt. 40 at 27.)  The Proposed Amended Complaint identifies a specific 
publication and alleges that Defendants supplied the information for that publication.  
(See Dkt. 34-1 ¶¶ 26, 84.)  The Court finds those allegations sufficiently particular.  See 
Johnson, 

 (“Contrary to what Bobcat argues, Johnson does 
identify a specific promotional material: Bobcat’s own website.  He also alleges 
particularized content from the website . . . .  Altogether, these allegations satisfy 
Johnson’s pleading burden.  Bobcat has more than enough information to adequately 
respond and prepare a defense, which is the critical inquiry under Rule 9(b).”). 
Dkt. 34-1 ¶ ¶ 29-35, 37-38, 40-41, 45 (describing various instances of repair attempts by, 
inspections by, and communications with specific employees of Defendants or specific 
authorized repair facilities of Defendants which were in communication with 
Defendants).)  And in Count V of the Proposed Amended Complaint, Sadeghi-A alleges, 

“Defendants failed to disclose and misrepresented the USB tag axle defects as needing 
routine alignment maintenance each time it was presented for repair by Plaintiff when 
Defendants knew it needed a replacement of defective components and were unwilling to 
repair it,” and “Defendants failed to disclose and misrepresented that the USB tag axle 
defects each time it was returned to Plaintiff after it was presented for repair because the 

defective condition was not repaired or replaced and the Motorcoach was not aligned to 
within specification . . . .”  (Id. ¶¶ 86-87.)  Defendants argue that “the only specific 
communication Plaintiff identities [sic] is a Technical Service Bulletin published by the 
motorhome manufacturer Newmar after Plaintiff had already purchased his motorhome” 
(Dkt. 40 at 26-27), but Sadeghi-A has also identified several communications by 

employees of Defendants or authorized repair facilities that were in communication with 
Defendants by date and by name of employee or facility (see Dkt. 34-1 ¶¶ 30-32, 36-38, 
40-41, 45).  To the extent these statements were made by employees of the authorized 
repair facilities rather than by employees of Defendants themselves, Defendants have not 
argued that the statements made by individuals at the authorized repair centers are not 

attributable to them in connection with this “special circumstance.”      
    These allegations are enough to plausibly allege that Defendants knew that the 
defects could not be repaired, and generally had more information about the nature of the 
defects, but provided only partial and misleading information to Newmar for publication 
and to Sadeghi-A during the course of his repair attempts—either directly or through 
authorized repair centers—that indeed misled Sadeghi-A into pursuing repairs that would 
never work.  Sadeghi-A has sufficiently alleged that Defendants spoke but not enough to 

prevent their words from misleading him.  See In re Target Corp. Customer Data Sec. 
Breach Litig., 

 (D. Minn. 2014) (“Plaintiffs contend [for their 
negligent-misrepresentation-by-omission claim in data breach case] that Target knew 
facts about its ability to repel hackers that Plaintiffs could not have known, and that 
Target’s public representations regarding its data security practices were misleading.  

Target takes issue with Plaintiffs’ allegations in this regard, but on a Motion to Dismiss, 
the Court must determine only whether the allegations are plausible.  The allegations 
meet that plausibility standard, and Plaintiffs have adequately pled a duty of care.”); 
Sorchaga v. Ride Auto, LLC, 

 (Minn. Ct. App. 2017) (“Sufficient 
evidence established that Ride Auto knew the truck required substantial engine repairs 

beyond replacing a faulty oxygen sensor.  Nevertheless, Ride Auto and its employees 
affirmatively represented to Sorchaga that the oxygen sensor was the cause of the check-
engine light.  Ride Auto misled Sorchaga when it failed to disclose the known engine 
problems with the truck.”), aff’d, 

 (Minn. 2018).           
         b.   One Who Has Special Knowledge of Material Facts to Which the 
              Other Party Does Not Have Access May Have a Duty to Disclose 
              These Facts to the Other Party                             
    With respect to the second “special circumstance” identified by the Minnesota 
Supreme Court, Sadeghi-A argues that he “has pled facts showing that Defendants had 
knowledge of the ‘USB tag axle defects’ which were material because they caused the 
‘drivability problems’ that affected vehicle safety” and that he “did not have access to the 
technical design flaw information, the affect this created in USB tag axle components 
relationship to each other, the problems this created in manufacturing and the inability to 

repair it in servicing.”  (Dkt. 35 at 7-8.)  Defendants argue, “This matter is not a rare case 
in which the specialized-knowledge exception duty to disclose should be extended and 
applied.  Plaintiff has alleged no facts supporting the imposition of a duty to disclose 
facts regarding a new design or an alleged design defect.”  (Dkt. 40 at 20.) 
    The Court concludes that Sadeghi-A has adequately alleged a duty to disclose 

based on the principle that one who has special knowledge of material facts to which the 
other party does not have access may have a duty to disclose these facts to the other 
party.  Sadeghi-A’s allegations in the Proposed Amended Complaint include many 
paragraphs describing Defendants’ knowledge of a defect in the USB tag axle that was 
not disclosed to Sadeghi-A or other customers, including that Defendants: “first became 

aware of the design mechanical basis for the problem causing customer complaints in 
early August 2015” (Dkt. 34-1 ¶ 13); “[b]y August of 2015, . . . were aware that the USB 
tag axle design and its manufacturing process was causing USB tag axles to be installed 
on chassis off-center” (id. ¶ 14); “had a meeting at [Freightliner] headquarters in Gafney, 
S.C., on April 21, 2016, to figure out how to resolve the problem caused by the defective 

USB tag axle design and manufacturing” (id. ¶ 17); and “[b]efore and after August of 
2016” received “customer complaints, warranty claims and out-of-warranty ‘goodwill’ 
claims related to the USB tag axle defects causing the drivability problems” (id. ¶ 22).  
Sadeghi-A also alleges that the defects were “hidden material defects” (id. ¶ 23; see also 
id. ¶ 82), that he (and other customers) did not have access to the information about the 
defects (id. ¶¶ 24, 25), and that he would not have purchased the Motorcoach and would 
not have pursued repair if he had known about the USB tag axle defects (id. ¶¶ 25, 36, 

90).  The allegations adequately allege that Defendants had material knowledge of 
problems with the USB tag axle and that customers, including Sadeghi-A, did not have 
access to that information.                                               
    Defendants note that the Minnesota Supreme Court has “rarely addressed” this 
particular theory of fraud and has only applied it in one case.  (Dkt. 40 at 20 (quoting 

Graphic Comm’cns Loc. 1B, 

).)  Defendants also argue that “extending a 
pre-sale duty to disclose information by Freightliner to unknown potential purchasers of 
motorhomes that might be equipped with Freightliner chassis is both unrealistic, and 
unsupported by the law.”  (Id. at 21 (citing cases).)  The Court has carefully considered 
Defendants’ pre-sale duty arguments, as well as the cases cited by Defendants, and finds 

that they do not render Plaintiff’s common law fraud claim futile at this stage in the 
proceedings.  The cases Defendants cite regarding a pre-sale duty between a 
manufacturer and “unknown potential purchasers” find no duty at the summary judgment 
stage, and, moreover, in several cases, the decision hinged not on the ultimate 
determination of whether the facts gave rise to a duty to disclose, but rather on a missing 

prerequisite to that duty, such as defendant’s special knowledge or plaintiff’s lack of 
access to the knowledge.  See In re Minn. Breast Implant Litig., 

 
(D. Minn. 1998) (summary judgment)14; Driscoll v. Standard Hardware, Inc., 

 (Minn. Ct. App. 2010) (affirming summary judgment of   
misrepresentation by omission claim because drill manufacturer did not have special 
knowledge of material facts at the time drill was purchased); Marvin Lumber & Cedar 

Co. v. PPG Indus., Inc., 

 (8th Cir. 2000) (affirming district court’s 
grant of summary judgment on contract claim based on statute of limitations where 
plaintiff alleged fraudulent concealment of defects, which would toll the statute of 
limitations, and concluding that “[a]t all times, Marvin had access to each of the very 
facts that establish Marvin’s breach of contract action, namely PILT’s alleged failure to 

prevent rot on Marvin’s products” and even where plaintiff “comes closest to alleging 
fraudulent concealment by asserting that PPG misled Marvin,” defendant had information 
of both “positive” and “less favorable” performance of its product, which “are not 
evidence of affirmative fraud”); Taylor Inv. Corp. v. Weil, 

 
(D. Minn. 2001) (granting summary judgment on common law and consumer fraud 

claims and noting, “[t]he fact that some of his other customers were experiencing 
difficulties with StarBuilder and that he personally had concerns about potential lawsuits 
. . . are not the types of special knowledge contemplated by the exception”). 
    Indeed, courts in this District have allowed fraudulent concealment claims to go 
forward with allegations similar to those here.  See, e.g., Blue Cross & Blue Shield of 


14   This case does not appear to have considered a “special knowledge of material 
facts” duty, as it only discusses “an obligation to disclose arises (1) where one party owes 
a fiduciary duty to the other; or (2) where the circumstances are such that failure to 
disclose renders misleading statements which have already been made.”  In re Minn. 
Breast Implant Litig., 

 (cleaned up).                
N.C., 

, at *11 (fraudulent concealment plausibly pleaded where 
plaintiffs alleged “‘Rite Aid had special knowledge of material facts, i.e., the accurate, 
non-inflated U&C prices, which the Plaintiffs did not have’”) (citation omitted); 
Podpeskar v. Makita U.S.A. Inc., 

 (D. Minn. 2017) (quoting 

Graphic Comm’cns Loc. 1B, 

) (“Podpeskar aims for the second 
exception, and alleges that Makita ‘had special knowledge of material facts to which 
[Podpeskar] and the [c]lass members did not have access, and, therefore, had a duty to 
disclose these facts to the other party so as to prevent its statements from being 
misleading.’  . . .  Here, Podpeskar satisfied [the pleading requirement to allege actual 

knowledge of fraudulent conduct] by alleging Makita had actual knowledge of its 
fraudulent conduct.  Specifically, Podpeskar alleged that Makita knew of the batteries’ 
defects and that a buyer could not reasonably learn of the defect until after purchase.  
Accepting those allegations as true, Makita was in a superior position to know about the 
defect in its batteries.  Thus, the Court will deny Makita’s motion with regard to 

Podpeskar’s fraud claims based on omissions and nondisclosures.”) (citations omitted); 
Johnson, 

 (“[T]he Court finds that Johnson’s complaint includes 
allegations sufficient to satisfy the second circumstance: that Bobcat had superior 
knowledge of material facts to which Johnson did not have access.  Johnson alleges that 
Bobcat, as the manufacturer, was in ‘a superior position to know the true facts about their 

product [and] . . . to know the actual design of the loader.’  He further alleges that he 
‘could not reasonably have been expected to learn or discover’ the misrepresentations at 
the time of purchase, in part because of ‘the manner in which the customers fill their fuel 
tanks.’  These allegations plausibly establish a duty of disclosure.”) (citations omitted); 
Cannon Techs., Inc. v. Sensus Metering Sys., Inc., 

 (D. Minn. 
2010) (“Cannon proceeds on the third prong, arguing that ‘Sensus fraudulently concealed 
special knowledge,’ namely, the 336 Capacitor was defective as used in the iCon Meter’s 

design and, hence, the meter ultimately would fail.  In the Court’s view, this was ‘special 
knowledge” Sensus was obligated to disclose, and which Cannon could not reasonably 
obtain.  . . .  If a jury were to credit Cannon’s version of events, it could conclude that (1) 
Sensus knew of the problem with the meter in November 2005, (2) Cannon was not 
aware of the problem and had no avenue to obtain that knowledge, and (3) Sensus failed 

to disclose the problem before selling additional meters to Cannon.  That is sufficient to 
support a finding of fraud.”) (citations omitted).                        
    Defendants argue that they had no relationship with Sadeghi-A prior to his 
purchase, and “Freightliner did not sell anything to Plaintiff, and was not a party to his 
vehicle purchase.”  (Dkt. 40 at 20-21.)  But based on the Court’s review of the case law, 

such a lack of a direct relationship does not preclude Sadeghi-A’s claim at this stage: a 
purchaser of a product may make a claim for fraudulent nondisclosure against a designer 
or manufacturer of the product where the purchaser did not buy directly from the designer 
or manufacturer.  See Podpeskar, 

 (claim by consumer, 
who purchased drill from a retailer, against designer, manufacturer, marketer, and seller 

of drills); Johnson, 

 (claim for fraud by omission by 
purchaser, who purchased compact skid-steer loader from authorized dealership, against 
manufacturer); Block v. Toyota Motor Corp., 

 (D. Minn. 
2011) (leave to amend complaint granted as to fraudulent concealment claim against 
defendants who participated in design, manufacture, or sale of vehicle at issue).  The 
Court therefore concludes that Sadeghi-A has adequately alleged a duty to disclose based 
on Defendants’ special knowledge of material facts about the USB tag axle defects to 

which Sadeghi-A did not have access.                                      
         c.   One Who Stands in a Confidential or Fiduciary Relation to the 
              Other Party to a Transaction Must Disclose Material Facts  
    With respect to the third “special circumstance” identified by the Minnesota 
Supreme Court, Sadeghi-A argues that Defendants had a legal and equitable duty to 
disclose, specifically, “[v]iewed from a purely legal perspective arising under Federal 
motor vehicle safety statutes and regulations, Defendants had a clear duty to disclose,” 
and “[a]nchored in the bedrock of safety, those obligations are also tethered by equitable 
taught-lines.”  (Dkt. 35 at 9.)  Defendants respond, “Plaintiff has asserted no duty under 

the first circumstance [of standing in a confidential or fiduciary relationship] and has 
made no allegations that Plaintiff and Defendants stood in a fiduciary relationship.”  
(Dkt. 40 at 19.)                                                          
    The Court concludes that Defendants had no duty to Sadeghi-A under this theory, 
as there is no confidential or fiduciary relationship plausibly alleged between these 

parties.  First, the Court notes that Sadeghi-A refers to a “legal and equitable duty” (Dkt. 
35 at 9), but that is the wording from the general rule that for a fraudulent nondisclosure 
claim, a plaintiff must allege “that the defendant had a legal or equitable obligation to 
communicate facts to a particular person,” Zimmerschied, 

 (internal 
quotation marks and citation omitted).  With respect to the third special circumstances 
that would create such a “legal or equitable obligation,” that of a “confidential or 
fiduciary relationship,” Sadeghi-A has not identified any such relationship. 
    Still, the Minnesota Supreme Court has stated that the three categories of special 
circumstances frequently cited in case law “‘are not intended to be exclusive.’”  Blue 

Cross & Blue Shield of N.C., 

, at *11 (quoting Graphic Comm’cns Loc. 
1B, 

).  Sadeghi-A seems to argue that Defendants’ reporting 
requirements under various federal statutes and regulations create “a clear duty to 
disclose” and contends that “Defendants’ knowledge that the defects related to stability, 
control and vehicle safety reflect a special or fiduciary relationship of a moral or personal 

nature because unwitting customers have placed their confidence and trust in a 
manufacturer’s superior position of expertise and knowledge in the design and 
manufacturing of the components and their represented performance capabilities can be 
relied upon as ensuring control, stability and safety of the vehicle.”  (Dkt. 35 at 9-10.)  
Sadeghi-A has not cited any case where a regulatory reporting requirement created a 

confidential or fiduciary relationship between a manufacturer and purchasers for purposes 
of a common law fraud claim under Minnesota law.15  The Court declines to do so here, 


15   Sadeghi-A cites In re Porsche Cars North America, Inc., 

 (S.D. Ohio 2012), for the proposition that “[a] manufacturer who knows that its 
product is defective and that it affects vehicle safety is obligated to tell the affected 
customers and federal regulators.”  (Dkt. 35 at 10.)  That case addressed a claim under 
California Consumer Legal Remedies Act and is not persuasive as to the argument that a 
regulatory reporting requirement with respect to a governmental agency, assuming one 
exists, creates a fiduciary or confidential relationship between consumers and a 
manufacturer with respect to this Minnesota common law fraud claim.  See 

.                                                                
and finds that Sadeghi-A has not stated a plausible claim for common law fraud based on 
such a relationship.                                                      
                             * * *                                       
    To summarize, the Court concludes that Sadeghi-A has sufficiently alleged a 

fraudulent nondisclosure claim based on (1) Defendants’ obligation to, having spoken, 
say enough to prevent their words from misleading Sadeghi-A, but only with respect to 
the time period after Sadeghi-A’s initial purchase when he was in communication with 
Defendants and repair service facilities regarding the Motorcoach and when he became 
aware of Newmar’s PIB 458 in November 2016; and (2) Defendants’ special knowledge 

of material facts about the USB tag axle defects to which Sadeghi-A did not have access.  
The Court turns to the remaining elements of a fraudulent nondisclosure claim. 
    2.   False Representation and Knowledge of Falsity                   
    Defendants’ only argument regarding falsity and knowledge of falsity was that, as 
of the time the RV Pro article and YouTube video were published in December 2014, 
Defendants could not have known the tag axle was defective because the chassis 

development and testing was incomplete.  (Dkt. 40 at 17; see also Dkt. 34-1 ¶ 11 
(alleging USB tag axle broke during testing in January 2015 and further testing revealed 
malfunctions).)  Defendants made this argument when arguing that Plaintiff could not 
state a common law claim for affirmative fraudulent misrepresentations and claims under 
Minn. Stat. §§ 325F.69 and 325D.44.  (Dkt. 40 at 17.)  Plaintiff has stated he is not 

asserting a common law fraud claim based on affirmative misrepresentations, so the 
Court need not address this argument in this context.16  Further, Defendants have not 
argued that Sadeghi-A did not sufficiently allege that the tag axle was defective, that they 
knew of the tag axle defect as of the date of his purchase in August 2016 or when he 
sought repair and maintenance of the Motorhome yet failed to disclose it, or that they 

knew that the alleged drivability issues resulting from the tag axle defect could not be 
cured by alignment.  (See id.)  The Court concludes that Sadeghi-A has adequately 
alleged that Defendants did not disclose information about the tag axle defect and that 
such information was material (see, e.g., Dkt. 34-1 ¶¶ 15, 23-26), as well as that 
Defendants knew of the tag axle defect at least as of the date of his purchase of the 

Motorhome (see, e.g., Dkt. 34-1 ¶¶ 13-15, 23, 27-29).                     
    3.   Intent                                                          
    Regarding Defendants’ intent to induce Sadeghi-A to act in reliance on 
Defendants’ omissions, Sadeghi-A argues, “The allegations sufficiently plead facts that 
establish Defendants did not disclose the USB tag axle defects in order to avoid any lost 
sales, including Plaintiff[’]s.”  (Dkt. 35 at 12.)  Defendants argue that Sadeghi-A does not 

allege sufficient facts giving rise to a plausible inference of fraudulent intent in the 
context of arguing that he has not adequately alleged a claim for affirmative fraudulent 
misrepresentations but do not otherwise specifically address intent.  (See Dkt. 40 at 17.) 
    The Proposed Amended Complaint alleges that “Defendants’ true intention for not 
disclosing the issue became apparent on April 6, 2016, when” an email from Defendants’ 

design engineer stated that sales were being lost due to the alignment issues (Dkt. 34-1 

16   The Court addresses this argument in Section III.C.1.                
¶ 15); that “Defendants [sic] failure to provide a timely, accurate, full and complete 
description of the USB tag axle defects on his Motorcoach was intended to and caused 
Plaintiff to enter into a purchase” (id. ¶ 25); that “Defendants’ inability or unwillingness 
to repair the Motorcoach and its refusal to disclose and attempt to cover-up the USB tag 

axle defects . . . was intended to induce Plaintiff and other customers to accept false 
repair attempts and to avoid lost sales” (id. ¶ 49); and that “Defendants intended to 
deceive Plaintiff to induce his and others’ purchasing of vehicles on which its USB tag 
axle was installed, to induce payments for routine maintenance and out-of-pocket repair 
attempts, to avoid its obligation to repair or replace . . . “ (id. ¶ 89).  Mindful that intent 

“may be alleged generally,” though allegations cannot be conclusory, the Court 
concludes that Sadeghi-A has sufficiently alleged Defendants’ intent.  See Fed. R. Civ. P. 
9(b); Bhatia v. 3M Co., 

 (D. Minn. 2018) (citing Dunnigan 
v. Fed. Home Loan Mortg. Corp., 

, 740-41 (D. Minn. 2016)) 
(plaintiffs must allege facts that give rise to a strong inference of fraudulent intent). 

    4.   Reliance                                                        
    Regarding Defendants’ nondisclosure causing Sadeghi-A to act in reliance on 
defendants’ omissions, Sadeghi-A argues, “Plaintiff would not have purchased the 
Motorcoach or would have purchased one with a different manufacturer’s chassis if he 
had known about the USB tag axle defect.”  (Dkt. 35 at 13.)  Defendants argue, “Plaintiff 
makes no plausible allegations that Defendants’ failure to disclose to him the ‘true 

nature’ of the alleged design defect . . . caused Plaintiff to change his position to his 
detriment,” and “Plaintiff’s reliance allegations . . . are indistinguishable from his breach 
of warranty claims, and do not plausibly alleged actual detrimental reliance and 
damages.”  (Dkt. 40 at 27-28.)                                            
    With respect to reliance, Sadeghi-A alleges that “Defendants[‘] failure to provide a 
timely, accurate, full and complete description of the USB tag axle defects on his 

Motorcoach . . . caused Plaintiff to enter into a purchase” (Dkt. 34-1 ¶ 25); that “Plaintiff 
. . . would not have purchased the Motorhome or would have purchased one with a 
different manufacturer’s chassis if he had known about the USB tag axle defects” (id.); 
that “[i]f Defendants had disclosed the USB tag axle defects he would not have engaged 
in the repair attempts or expended money in doing so and would have immediately 

returned the vehicle or demanded USB tag axle replacement” (id. ¶ 36); that “Plaintiff 
relied upon Defendants’ misrepresentations in accepting their repeated false attempts to 
repair and continuing to maintain ownership in an attempt to resolve the problem with 
Defendants” (id. ¶ 41); and that “Plaintiff discovered and relied upon [Newmar’s PIB 
458] in and after November 2016” (id. ¶ 84).  Additionally, Sadeghi-A alleges: 

    Plaintiff  reasonably  relied  upon  Defendants’  failures  to  disclose  and 
    misrepresentations in purchasing the Motorcoach, in attempting to have it 
    repaired and in continuing to attempt to obtain repair or replacement during 
    the warranty period.  Plaintiff would not have purchased the Motorhome or 
    would have purchased a motorhome with a different manufacturer’s chassis 
    if the defect had been disclosed and would have demanded replacement of 
    the tag axle or immediately returned it if the defect and not expended money 
    on repair attempts and trying to determine the true problem if the defects and 
    their unrepairability had been disclosed.                            

(Id. ¶ 90.)                                                               
    “Accepting these allegations as true, [Sadeghi-A] alleged that he relied on 
statements and omissions suggesting the product was not defective at the time of 
purchase,” as well as at the times of the repair attempts.  Podpeskar, 

.  Courts in this District have allowed claims with similar reliance allegations to go 
forward.  See 

 (“[T]he Court finds that Podpeskar sufficiently alleged reliance to move 
forward. Podpeskar alleged: he ‘reasonably relied upon the statements made by Makita 

on the [b]atteries’ packaging,’; ‘Makita also represented, through its omissions, that the 
[b]atteries were free of defects and would function properly,’; and that ‘he would not 
have purchased the [b]atteries or he would have either negotiated additional warranty 
coverage, negotiated a lower price to reflect the risk, or simply avoided the risk altogether 
by purchasing a different product’ if he had ‘known the [b]atteries were defective and 

would fail prematurely.’”) (citations to complaint omitted); Block, 

 
(“Plaintiff-Intervenors have pled reliance; they state that Lee would not have bought or 
driven the vehicle, and the passengers would not have ridden in the vehicle, had the 
Toyota Defendants made disclosures about known defects.”).                
    5.   Damages                                                         
    Regarding Defendants’ nondisclosure causing Sadeghi-A to act in reliance on 

Defendants’ omissions, Sadeghi-A argues, “The allegations sufficiently plead that 
Plaintiff purchased the Motorcoach with a defective USB tag axle that causes it to be 
valueless or severely diminished in value,” and “Defendants’ nondisclosure of the USB 
tag axle defect and misleading Plaintiff in an attempt to beguile Plaintiff with false repair 
attempts has caused Plaintiff to expend money, time and peace of mind he otherwise 

would not have.”  (Dkt. 35 at 14.)  Defendants argue, “Plaintiff makes no plausible 
allegations that Defendants’ failure to disclose to him the ‘true nature’ of the alleged 
design defect . . . caused Plaintiff to change his position to his detriment,” and “Plaintiff’s 
reliance allegations . . . are indistinguishable from his breach of warranty claims, and do 
not plausibly alleged actual detrimental reliance and damages.”  (Dkt. 40 at 27-28; see 
also id. at 28 (“The amended complaint provides no detailed or plausible allegations as to 

how Defendants’ failure to disclose the nature of the alleged design defect and to disclose 
a design change introduced in later model vehicles caused Plaintiff any additional or 
different pecuniary damage than he otherwise would have experienced absent such 
fraud.”).)                                                                
    With respect to damages, Sadeghi-A alleges,                          

    The Motorhome has been rendered valueless or severely diminished because 
    of the USB tag axle defects and other Motorcoach defects.  He is unable to 
    sell the Motorcoach without disclosing the impaired, dangerous condition.  
    Plaintiff has incurred out of pocket expenditures to pay for damages the 
    defects caused to other parts of the Motorcoach, expenditures that he has 
    been forced to pay and hundreds of hours of his own time in both service 
    attempts not covered by warranty and in an attempt to determine what is 
    really wrong with his Motorcoach and the USB tag axle and in pursuing 
    litigation . . . .  Plaintiff has also lost the use for a substantial period of time 
    and been substantially inconvenienced and aggravated while cooperating in 
    repair attempts and in investigating and litigating the USB tag axle defects, 
    as well as, the loss of enjoyment of the Motorcoach and aggravation and 
    distress.                                                            

(Dkt. 34-1 ¶ 55; see also id. ¶ 91 (“As a direct and proximate result of Defendants’ 
misrepresentations and failure to disclose, Plaintiff has suffered pecuniary damages 
including the loss or diminution in value of the Motorhome, out of pocket expenditures 
invested into the Motorhome, money expended on damage caused to other parts of the 
Motorhome, attempting to obtain repairs, expended on investigating the defects, 
expended on litigation, as well as, time invested in all of the above and loss of use, 
enjoyment, aggravation damages. . . .”).)17                               
    Given the Court’s conclusion in Section III.A that Minnesota’s Economic Loss 
Doctrine statute does not foreclose damages based on the value of the product in a case 

such at this, where intentional misrepresentation is alleged, and that Sadeghi-A alleges 
other damages—out-of-pocket expenses and loss of use and enjoyment—the Court 
concludes that Sadeghi-A has sufficiently alleged injury caused by Defendants’ alleged 
nondisclosures.  See Dunnigan, 184 F. Supp. 3d at 740 (citing Martino-Catt v. E.I. 
duPont de Nemours & Co., 

 (S.D. Iowa 2003)) (“Dunnigan also 

generally alleges she incurred ‘out-of-pocket expenses’ as a result of Freddie Mac’s 
misrepresentations.  Again, this is enough to survive a motion to dismiss.”) (citation to 
complaint omitted).                                                       
    In sum, having considered all of the allegations in the Proposed Amended 
Complaint, the Court concludes that the allegations supporting Count V, “Common Law 

Fraud,” sufficiently state a claim for fraudulent nondisclosure under Minnesota law and 
Sadeghi-A may amend his complaint accordingly.                            



17   Defendants state that Sadeghi-A has suffered no damages beyond the loss of value 
of the Motorcoach itself.  (See, e.g., Dkt. 40 at 8 (“The economic loss doctrine therefore 
bars Plaintiff from utilizing product defect claims, such as a design defect theory, to 
recover damages for harm to the product itself.”), 11 (“Plaintiff seeks to impose such a 
duty in the absence of any injury other than alleged diminution in value of the subject 
chassis itself.”).)  But Sadeghi-A has clearly alleged that he incurred out-of-pocket 
expenditures.  (Dkt. 34-1 ¶¶ 55, 91.)  Even if the Court accepted Defendants’ argument, 
these out-of-pocket costs constitute damages beyond diminution in value.  
C.   Proposed Amended Complaint Count VI – Statutory Fraud Claims         
    Count VI in the Proposed Amended Complaint is for “Violations of Minn. Stat. 
Secs. 325F.69 and 325D.44.”  (Dkt. 34-1 at 24.)  The opening paragraphs of the Proposed 
Amended Complaint, specifically addressing Minnesota’s Consumer Fraud Act 

(“MCFA”), are unchanged from the original Complaint.  (Compare id. ¶¶ 93-94, with 
Dkt. 1-1 ¶¶ 41-42.)  Paragraph 95 of the Proposed Amended Complaint is worded 
differently and invokes both Minn. Stat. § 325F.69 and, newly, Chapter 325D, but is 
fairly similar to paragraph 43 of the original Complaint.  (Compare Dkt. 34-1 ¶ 95, with 
Dkt. 1-1 ¶ 43.)  Paragraph 44 of the original Complaint has been replaced by paragraphs 

96 through 98 of the Proposed Amended Complaint.  (Compare Dkt. 1-1 ¶ 44, with Dkt. 
34-1 ¶¶ 96-98.)                                                           
    New paragraphs 96 to 98 allege that: “Defendants intended that Plaintiff and other 
customers rely upon its misrepresentations as published in RV Pro Magazine and on You 
Tube and marketing material which . . . causes a likelihood of misunderstanding intended 

to induce purchasing,” and “[t]he represented beneficial attributes . . . were part of the 
reason Plaintiff purchased a chassis with the USB tag axle”; “Defendants intended that 
Plaintiff and other customers rely upon its non-disclosure of the USB tag axle defects to 
induce purchasing, its misleading half-truth PIB 458 and scheme to lull Plaintiff and 
other customers to accept false repair attempts and pay for false routine maintenance”; 

and “Defendants have willfully engaged in the false representations and non-disclosure 
and know that it is deceptive.”  (Dkt. 34-1 ¶¶ 96-98.)  Paragraph 99 of the Proposed 
Amended Complaint expands on the public benefit allegation in the original Complaint, 
adding a reference to “making false representations” (in addition to concealing) and 
stating that “[t]he false representations remain published and the defective condition of 
the USB tag axle exists in chassis manufactured with such axle from April of 2015 
through March of 2017 which may exceed one thousand vehicles.”  (Compare Dkt. 34-1 

¶ 99, with Dkt. 1-1 ¶ 45.)  And paragraph 101 of the Proposed Amended Complaint 
mostly parallels paragraph 46 of the original Complaint in alleging that Sadeghi-A is 
entitled to damages and injunctive relief, though the former alleges that such relief is 
based on “violations of Minn. Stat. Secs. 325F.69, 325D.44 and common law,” while the 
latter only invokes Minn. Stat. § 325F.69.  (Compare Dkt. 34-1 ¶ 101, with Dkt. 1-1 

¶ 46.)                                                                    
    Defendants mount a cursory challenge to Sadeghi-A’s proposed claims under 
Minn. Stat. §§ 325F.69 and 325D.44 when arguing the Proposed Amended Complaint 
does not state a claim for affirmative fraudulent misrepresentations.  (Dkt. 40 at 16 
(“Plaintiff’s proposed amended statutory claims under Minn. Stat. § 325F.69 and 

§ 325D.44 likewise fail for these same deficiencies.”).)  The Court addresses each statute 
separately below.                                                         
    1.   Minn. Stat. § 325F.69                                           
    The Court first addresses Minn. Stat. § 325F.69, Minnesota’s Consumer Fraud Act 
(“MCFA”).  According to the MCFA:                                         

    The act, use, or employment by any person of any fraud, false pretense, false 
    promise, misrepresentation, misleading statement or deceptive practice, with 
    the  intent  that  others  rely  thereon  in  connection  with  the  sale  of  any 
    merchandise, whether or not any person has in fact been misled, deceived, or 
    damaged thereby, is enjoinable . . . .                               
Minn. Stat. § 325F.69, subd. 1; see also Liberty Mut. Fire Ins. Co. v. Acute Care 
Chiropractic Clinic P.A., 

 (D. Minn. 2015).  The MCFA 
requires that a plaintiff plead false, deceptive, or misleading conduct by defendants.  See 
E-Shops, 

.  “Rule 9(b)’s heightened pleading requirement also applies to 

statutory fraud claims.”  

 (citing Trooien v. Mansour, 

 (8th Cir. 
2010)).  Although the Minnesota Attorney General has primary responsibility for 
enforcing the MCFA, see 

, subd. 1, a private party may “bring a civil 
action” to recover damages from violations of the MCFA, 

 § 8.31, subd. 3(a).18 
    The Court concludes that Sadeghi-A has sufficiently alleged violations of Minn. 

Stat. § 325F.69 in the Proposed Amended Complaint and has done so under multiple 
theories.  First, Sadeghi-A alleges violations of this statute in the original Complaint, and 
the proposed allegations generally expand on the original allegations, making the existing 
claim more detailed.  Defendants’ only argument specific to this statutory claim is that 
the “proposed amended statutory claims under Minn. Stat. § 325F.69 and § 325D.44 

likewise fail for these same deficiencies” Defendants assert with respect to the common 
law fraud claim, of failing to sufficiently allege reliance and causation.  (Dkt. 40 at 16.)  
But it is difficult to understand how Defendants viewed the less-detailed allegations as to 


18   To recover under the private attorney general statute, a plaintiff must additionally 
demonstrate that their action “benefits the public.”  Ly v. Nystrom, 

 
(Minn. 2000); Kinetic Co. v. Medtronic, Inc., 

 (D. Minn. 2009) 
(quoting Ly, 

); see also id. at 946 (“[T]he ‘public benefit’ requirement 
is not onerous.  For example, there is a public benefit in eliminating false or misleading 
advertising.”).  Defendants make no argument that Sadeghi-A has not adequately alleged 
a public benefit in his claim under Minn. Stat. § 325F.69 (see generally Dkt. 40), so the 
Court does not address this requirement in the context of the Motion to Amend. 
Minn. Stat. § 325F.69 in the original Complaint as unworthy of a Rule 12 challenge but 
now view these more detailed—indeed, more particular—allegations as insufficient under 
a Rule 12 standard.                                                       
    Second, the Court has concluded in Section III.B that the Proposed Amended 

Complaint’s common law fraudulent nondisclosure allegations are sufficient.  For the 
same reasons, the allegations in the Proposed Amended Complaint are sufficient for a 
fraudulent nondisclosure claim pursuant to Minn. Stat. § 325F.69.         
    Third, “[a] violation of sections 325G.17 to 325G.20 shall be treated as a violation 
of section 325F.69.”  Minn. Stat. § 325G.20.  Sadeghi-A alleges that Defendants violated 

those sections 325G.17 to 325G.20 in Count IV in both the original and Proposed 
Amended Complaint and that such a violation is also a violation of § 325F.69.  (See Dkt. 
34-1 ¶ 93 (“Defendants’ violation of Minn. Stat. Secs. 325G.17-.20, as a matter of law 
shall be also be [sic] treated as a violation of Minn. Stat. Sec. 325F.69, Minnesota’s 
Consumer Fraud Act.”); Dkt. 1-1 ¶ 41 (same).)  Defendants did not challenge the 

sufficiency of the allegations supporting Count IV for violation of Minn. Stat. 
§§ 325G.17-20 in the original Complaint or Proposed Amended Complaint.  This, along 
with Defendants’ failure to challenge Plaintiff’s claim under Minn. Stat. § 325F.69 in the 
original Complaint, undermines the strength of Defendants’ current challenge to the 
proposed claim under Minn. Stat. § 325F.69.                               

    Fourth, in addition to the fraudulent nondisclosure allegations, Sadeghi-A also 
alleges affirmative misrepresentations in support of his statutory fraud claims and 
specifically stated at the hearing that the allegations related to the RV Pro article and 
YouTube video are in support of the statutory claims.  (See Dkt. 34-1 ¶ 96.)  The Court 
concludes that this theory also sufficiently alleges a claim for violation of Minn. Stat. 
§ 325F.69.  The allegations related to the RV Pro article and YouTube video sufficiently 
allege the who, what, where, when, and how:  the who are the individuals at Defendants 

who supplied information for or worked on the article and video (as with Newmar’s PIB 
458, discussed supra at note 13, the identification of a specific article and video 
sufficiently puts Defendants on notice of whose conduct is at issue); the what is the 
representations in the article and video about the performance of the USB tag axle; the 
where is wherever those individuals were working at that time (which, again, is 

information in Defendants’ possession and which the allegations allow them to 
investigate); the when is both the time period of providing information and working on 
the article and video and, later, the time period of potential customers viewing the 
purported misrepresentations; and the how is by supplying the information that is 
represented in the article and video, which Sadeghi-A alleges was false or constituted 

misrepresentations.  (See Dkt. 34-1 ¶¶ 10, 96.)                           
    Defendants argue that the allegations with respect to affirmative    
misrepresentations do not sufficiently allege reliance and causation.  (Dkt. 40 at 16.)  
However, as Sadeghi-A noted at the hearing, the holding in the case Defendants cite on 
this point, Thompson v. American Tobacco Co., Inc., 

 (D. Minn. 

1999), was later rejected by the Minnesota Supreme Court in Group Health Plan, Inc. v. 
Philip Morris Inc., 

, (Minn. 2001).  In Group Health Plan, the Minnesota 
Supreme Court concluded “that the legislature has eliminated the requirement of pleading 
and proving traditional common law reliance as an element of a statutory  
misrepresentation in sales action” and that although “causation is a necessary element in 
a damages claim under the misrepresentation in sales statutes,” the language of 

, subd. 3a, does not “require a strict showing of direct causation, as would be 

required at common law,” but rather “some ‘legal nexus’ between the injury and the 
defendants’ wrongful conduct.”19  

 (rejecting “the view expressed in 
two federal court decisions [including Thompson] that our misrepresentation in sales laws 
require proof of individual reliance in all actions seeking damages”).  Here, Sadeghi-A’s 
allegations that Defendants knowingly made false representations in the RV Pro article 

and YouTube video—and those “false representations remain published” (Dkt. 34-1 
¶ 99)—and intended that Sadeghi-A and other customers rely on the article and video, 
and that the “represented beneficial attributes” were part of the reason Sadeghi-A himself 
purchased the Motorcoach with the USB tag axle, are enough to plausibly allege a 
violation of Minn. Stat. § 325F.69 based on affirmative misrepresentations (see id. ¶¶ 10, 

96, 98, 99).                                                              
    Defendants also argue that an affirmative misrepresentation claim under this 
statute is futile because Defendants did not know the tag axle was defective until at least 

19   Since then, at least one court in this District has recognized the Minnesota 
Supreme Court’s rejection of Thompson.  See, e.g., Luckey v. Alside, Inc., 

 (D. Minn. 2017) (“The Minnesota Supreme Court clarified, in Group 
Health Plan, that a plaintiff ultimately must prove ‘causation,’ or a ‘legal nexus’ between 
the offending conduct and the plaintiff’s damages, but that personal reliance by the 
plaintiff is not the only way to demonstrate the requisite legal nexus.  To the extent 
Alside argues that Plaintiffs must have personally perceived and relied on Alside’s 
alleged misrepresentations in order to state a claim under these statutes, the Court rejects 
this argument.”) (citations omitted).                                     
January 2015, after the RV Pro article and YouTube video were published in December 
2014.  (Dkt. 40 at 17.)  However, Sadeghi-A alleges that “Defendants intended that 
Plaintiff and other customers rely upon its misrepresentations as published in RV Pro 
Magazine and on You Tube and marketing material” (Dkt. 34-1 ¶ 96) and that “[t]he false 

representations remain published and the defective condition of the USB tag axle exists 
in” certain vehicles (id. ¶ 99).  Under these circumstances, the Court finds that the 
continued availability of the YouTube video, which could have been removed after 
Defendants learned of the tag axle defect, plausibly alleges that Defendants knew the 
representations in that video were false during its post-January 2015 availability.  

    2.   Minn. Stat. § 325D.44                                           
    Sadeghi-A also seeks to amend to add violations of Minn. Stat. § 325D.44, 
Minnesota’s Deceptive Trade Practices Act (“MDTPA”), to Count VI of the Proposed 
Amended Complaint.  (See Dkt. 34-1 at 24.)  MDTPA describes conduct that constitutes 
deceptive trade practices, including “caus[ing] likelihood of confusion or of 

misunderstanding as to . . . certification of goods or services,” “represent[ing] that goods 
or services have . . . characteristics, . . . , uses, benefits, or quantities that they do not 
have,” and “any other conduct which similarly creates a likelihood of confusion or 
misunderstanding.”  Minn. Stat. § 325D.44, subd. 1(2), (5), (13).  Like the MCFA, the 
MDTPA requires that a plaintiff plead false, deceptive, or misleading conduct by 

defendants, and Rule 9(b)’s heightened pleading requirement applies.  See E-Shops, 

.  Unlike the MCFA, the MDTPA itself creates a cause of action for 
consumers “likely to be damaged by a deceptive trade practice of another.”  See Minn. 
Stat. § 325D.45, subd. 1.20                                               
    Defendants’ arguments with respect to Minn. Stat. § 325D.44 are the same as 
those with respect to Minn. Stat. § 325F.69.  (Dkt. 40 at 16.)  Those arguments fail for the 

same reasons as stated above for Minn. Stat. § 325F.69.                   
                             * * *                                       
    In sum, having considered all of the allegations in the Proposed Amended 
Complaint, the Court concludes that the allegations supporting Count VI, “Violations of 
Minn. Stat. Secs. 325F.69 and 325D.44,” sufficiently state a claim, and Sadeghi-A may 

amend his complaint accordingly.                                          
D.   Proposed Amended Complaint Count VII – Punitive Damages              
    The final issue in the Motion to Amend is Sadeghi-A’s request to add a claim for 
punitive damages under 

.  Although Minnesota law prohibits a party 
from pleading a claim for punitive damages at the commencement of a lawsuit and 

provides a specific mechanism for amending the complaint in 

, this 
Court has previously examined whether Rule 15 or 

 applies to a 
motion to amend a complaint to include punitive damages and concluded that Rule 15 


20   “Relief is available under the MDTPA only to prevent future harm, not to 
compensate for past harm . . . .”  Anderson v. 1399557 Ontario Ltd., No. 18-CV-1672 
(PJS/LIB), 

, at *12 (D. Minn. Nov. 4, 2019); see also Johnson, 

 (“The sole statutory remedy for Johnson’s MDTPA claim is injunctive 
relief.”) (cleaned up).  Defendants make no argument as to whether Sadeghi-A has 
adequately alleged that he or anyone else is likely to suffer harm in the future (see 
generally Dkt. 40), so the Court does not address this requirement in the context of the 
Motion to Amend.                                                          
governs.  Dolphin Kickboxing Co. v. Franchoice, Inc., 

, 397-401 (D. 
Minn. 2020) (discussing that courts in the District of Minnesota “have historically 
applied the state statute, 

, rather than Rule 15, to motions to amend 
to add a claim for punitive damages, in diversity actions,” but “have recently taken 

another look at the practice . . . in view of the 2010 United States Supreme Court’s 
decision in Shady Grove Assocs., P.A. v. Allstate Ins. Co., 

 (2010),” and 
concluding that Rule 15 should apply).  The Court therefore applies the standard 
articulated in Section II.                                                
    The relevant legal basis for punitive damages under Minnesota law provides: 

    (a) Punitive damages shall be allowed in civil actions only upon clear and 
    convincing evidence that the acts of the defendant show deliberate disregard 
    for the rights or safety of others.                                  

    (b) A defendant has acted with deliberate disregard for the rights or safety of 
    others if the defendant has knowledge of facts or intentionally disregards 
    facts that create a high probability of injury to the rights or safety of others 
    and:                                                                 
         (1) deliberately proceeds to act in conscious or intentional    
         disregard of the high degree of probability of injury to the    
         rights or safety of others; or                                  

         (2) deliberately proceeds to act with indifference to the high  
         probability of injury to the rights or safety of others.        

, subd. 1.  Under these criteria, “[a] defendant operates with 
‘deliberate disregard’ by acting with intent or indifference to threaten the rights or safety 
of others.”  Gamma-10 Plastics, Inc. v. Am. President Lines, Ltd., 

 
(8th Cir. 1994).  As such, “the mere existence of negligence or of gross negligence does 
not rise to the level of willful indifference so as to warrant a claim for punitive 
damages.”21  Ulrich v. City of Crosby, 

 (D. Minn. 1994) (citations 
omitted); see also  Shank v. Carleton College, 16-CV-1154 (PJS/HB), 

, at *7 (D. Minn. Oct. 15, 2018) (same), aff’d, 

 (D. Minn. 2019); 
Berczyk v. Emerson Tool Co., 

 (D. Minn. 2003) (“A mere 

showing of negligence is not sufficient to sustain a claim of punitive damages.”) (cleaned 
up).  Moreover, plaintiffs must allege that defendants were aware of a high probability 
that their conduct would cause injury to plaintiffs.  See In re McNeilus Mfg. Explosion 
Coordinated Litig., No. 17-CV-5237-PJS-KMM, 

, at *4 (D. Minn. 
June 6, 2019).  Put another way, the Court looks to whether the allegations in a proposed 

amended complaint plausibly allege that defendants knew of facts, or intentionally 
disregarded facts, that created a high probability that defendants’ actions would harm the 
rights or safety of plaintiffs.                                           
    Sadeghi-A argues that “Defendants’ conduct shows that they acted with 
intentional disregard of the high degree of probability of injury to the rights or safety of 

Plaintiff and other customers” and that the Proposed Amended Complaint “alleges facts 
which plausibly establish this claim.”  (Dkt. 35 at 16-17.)  Defendants argue that the 
amendment is futile because, first, “the amended complaint’s fraud allegations do not 
state a plausible claim, and . . . [t]he proposed punitive damages claim amendment should 
therefore be denied as well, given the absence of a viable independent tort claim,” and, 


21   “Minnesota law defines gross negligence as ‘without even scant care but not with 
such reckless disregard of probable consequences as is equivalent to a willful and 
intentional wrong.’”  Greer v. Walsh Constr. Co., No. CV 15-465 (PAM/JSM), 

, at *8 (D. Minn. Feb. 23, 2016) (quoting State v. Chambers, 

 (Minn. 1999)).                                                        
second, that Sadeghi-A “has not pleaded plausible facts that could meet the substantive 
requirements of the Minnesota punitive damages statute.”  (Dkt. 40 at 30-31.)  The first 
argument is unpersuasive, given the Court’s conclusion that Sadeghi-A may amend the 
Complaint to include the common law fraud claim.  See Dolphin Kickboxing, 335 F.R.D. 

at 403 (collecting cases) (“[C]ourts have concluded that [punitive] damages are 
appropriate in the context of fraud.”).                                   
    As for Defendants’ second argument, Defendants specifically argue that the facts 
alleged, “even taken as true, do not elevate this matter beyond an ordinary breach of 
warranty case,” and that “[a]lthough Plaintiff attempts to enhance the seriousness of these 

allegations by asserting that the defect poses a potential safety hazard, Plaintiff has 
alleged no personal injury or actual harm to himself or any other person as a result of the 
alleged defect.”  (Id. at 31.)                                            
    The Court concludes that Sadeghi-A has plausibly alleged a claim for punitive 
damages.  As the Court has discussed with respect to the fraud claims, the Proposed 

Amended Complaint sufficiently alleges that Defendants had knowledge of facts about 
problems with the USB tag axle, including the effects the USB tag axle had on the 
operation of the vehicle, and either made misrepresentations or concealed those facts.  
(See Dkt. 34-1 ¶ 103.)  And the proposed allegations sufficiently allege that those facts 
“create a high probability of injury to the rights or safety of others.”  

, subd. 1(b).  Freightliner’s own employee stated that there was a safety issue.  
(Dkt. 34-1 ¶ 20.)  The Proposed Amended Complaint alleges that the USB tag axle 
creates various “drivability problems,” including alignment problems, resulting in 
damage to the Motorcoach, and it is alleged that such problems create safety risks.  (See, 
e.g., 

.)  And it is alleged that Defendants proceeded 
to act despite, or in conscious or intentional disregard of, their knowledge of the safety 
risks and the damage the defective tag axle could cause, by continuing to sell 

motorcoaches with the USB tag axle for a period of time and by not disclosing the defects 
to consumers, including Sadeghi-A.  (See, e.g., 

.)  
Assuming as true the allegations that Defendants knowingly made the misrepresentations 
and/or fraudulently concealed facts, when construed in the light most favorable to 
Sadeghi-A, these allegations set forth a plausible claim that Defendants consciously or 

with deliberate indifference (1) provided Sadeghi-A and other customers with inaccurate 
information about the USB tag axle, and/or (2) withheld accurate information about the 
USB tag axle from Sadeghi-A and other customers, in order to entice them into 
purchasing and keeping motorhomes with the USB tag axle, thereby creating a high 
probability that Defendants’ actions would harm Sadeghi-A and other customers’ rights 

with respect to their purchase and/or safety when operating the Motorcoach (in addition 
to the safety of others on the road with affected motorhomes).            
    Defendants argue, again, that this case is only a breach of warranty case.  (Dkt. 40 
at 31 (“All of these facts, even taken as true, do not elevate this matter beyond an 
ordinary breach of warranty case.”); 

 (“If punitive damages are permitted under 

these allegations, nearly every consumer product manufacturer could be subjected to 
punitive damages claims in ordinary breach of warranty cases each time a product design 
improvement is made.”).)  These statements are unpersuasive, as they ignore that if the 
Court allows amendment to add a common law fraud claim—which it now has—the case 
is not just an “ordinary breach of warranty case.”  Defendants also contend that Sadeghi-
A has not alleged that he or anyone else has actually been harmed.  (Dkt. 40 at 31-32.)  
Defendants do not cite any case where actual harm is required, and in Jensen v. Walsh, 

the Minnesota Supreme Court explained:                                    
    Without punitive damages, one who acts with deliberate disregard of the 
    rights or safety of others faces no greater penalty than a well-meaning but 
    negligent  offender.    It  is  therefore  appropriate,  in  determining  whether 
    punitive damages should be allowed, to focus on the wrongdoer’s conduct 
    rather than to focus on the type of damage that results from the conduct. 

, 251 (Minn. 2001).  “A plain reading of section 549.20 indicates that the 
legislature intended to allow punitive damages when there is clear and convincing 
evidence that a defendant acted with deliberate disregard for the rights or safety of others 
regardless of the nature of the resulting damage.”  Id.                   
    Here, Sadeghi-A alleged a disregard to the safety of others because: 
    Defendants have known since 2015, that the USB tag axle defects create a 
    high degree of probability that Plaintiff and other customers whose safety 
    could be injured because of the USB tag axle defects that could not be 
    repaired and that caused the drivability problems that affect safety, and 
    Defendants deliberately proceeded to not disclose and misrepresent the USB 
    tag axle defects in conscious and intentional disregard or indifference of a 
    high degree of probability of injury to Plaintiff’s and others’ safety. 

(Dkt. 34-1 ¶ 105.)  He further alleged actual harm to property rights in the form of “out-
of-pocket expenses on repair attempts and damages related to other parts of the 
Motorcoach and other expenses or losses to the detriment of their property rights” (id. 
¶ 106), that the Motorcoach’s tires were destroyed due to the tag axle issues (id. ¶ 48), 
and a traction control failure attributable to “steering/alignment,” which he attributes to 
the tag axle defect (id. ¶¶ 45-46, 48).  In view of these allegations, the Court finds the 
absence of any allegation of actual physical injury to Sadeghi-A or another person does 
not render his punitive damages claim futile.                             
    The cases Defendants cite are factually distinguishable.  (See Dkt. 40 at 32.)  In In 

re Bair Hugger Forced Air Warming Devices Products Liability Litigation, No. 
MDL152666JNEFLN, 

 (D. Minn. July 27, 2017), it appears that the 
plaintiffs made only conclusory allegations that the defendants had the knowledge of the 
relevant facts required by 

, subd. 1(b).  

, at *7 
(“[T]he Court is not bound to accept the conclusory statement that Defendants had 

knowledge of bacterial contamination or that there was a patient safety risk, nor is it 
bound to accept that Defendants willfully suppressed potentially harmful testing.  
Knowledge is an element of the cause of action, and Plaintiffs’ conclusory allegation that 
Defendants’ had the requisite knowledge, is a threadbare recital of the knowledge element 
of the statute.”).  Here, Sadeghi-A’s allegations about Defendants’ knowledge of the 

defect in the USB tag axle, and the alignment and other problems caused by the defect, as 
well as the safety risk posed by those problems, are more than conclusory: he has alleged 
specific statements by or to employees of Defendants, with dates, that demonstrate 
knowledge of the defect in the USB tag axle and its effect on vehicles and safety.  (See, 
e.g., Dkt. 34-1 ¶ 12-15, 20, 103-07.)  The In re Bair Hugger court also concluded that 

“[t]he arguments that Defendants secretly reduced the Bair Hugger filtration efficiency 
and failed to conduct a contamination study, does not allege factual content that allows 
the Court to draw a reasonable inference that Defendants are liable for knowing of or 
intentionally disregarding facts that make injury highly probable,” but instead “alleges 
only that Defendants may have been negligent.”  

, at *8.  This 
conclusion once again points to the lack of factual allegations supporting an inference of 
knowledge on the part of defendants about a problem with the product or safety risks, or 

even of the existence of the problem itself.  See 

 (allegations “do not permit a 
factfinder to infer that this filtration reduction resulted in an increased risk of surgical site 
infections or that Defendants knew that this risk could result from reducing the 
filtration”).  Sadeghi-A has pleaded non-conclusory factual allegations that problems 
with the USB tag axle existed, that Defendants knew about those problems, and that 

Defendants knew those problems had safety implications.                   
    And in Rogers v. Mentor Corp., No. 12-CV-2602 (SRN/SER), 

 
(D. Minn. May 15, 2018), the court allowed the amendment to add a claim for punitive 
damages in part because as of “a watershed moment,” when a physician terminated his 
consulting agreement with Mentor because he could no longer support the product, 

“Mentor knew of facts that created a high probability of injury to others and that 
continuing to sell and market ObTape despite knowing those facts constitutes a deliberate 
disregard for others’ rights or safety.”  

, at *12, aff’d sub nom. Urbieta 
v. Mentor Corp., No. CV 13-1927 ADM/LIB, 

 (D. Minn. July 19, 
2018).  Here, the allegations in the Proposed Amended Complaint include an analogous 

watershed moment as of at least November 2, 2016, when Freightliner engineer 
Traynham, who himself “designed the USB tag axle integration to the chassis,” stated 
that there was a safety issue with the USB tag axle.  (Dkt. 34-1 ¶ 20.)  The Court will not 
limit an amendment for punitive damages to only after this date, however, as the Rogers 
court did, because there are sufficient allegations in the Proposed Amended Complaint 
that plausibly allege that the relevant moment—when Defendants acquired the requisite 
knowledge of “facts that create a high probability of injury to the rights or safety,” 

, subd. 1(b)—was earlier.  (See Dkt. 34-1 ¶ 13 (“Defendants apparently first 
became aware of the design mechanical basis for the problem causing customer 
complaints in early August 2015.”), ¶ 15 (April 6, 2016 communications suggesting the 
problem was known—“the tag alignment issue”—and so far unsolved), ¶¶ 17-18 
(Defendants redesigned the USB tag axle from at least April 2016 to October 2016), 

¶ 109 (“The misconduct and any concealment of it has persisted since August of 2015 
. . . .”).)  At this stage of the case, with these allegations, it is premature to decide the 
exact date on which Defendants’ knowledge met the standard of 

, 
subd. 1(b).                                                               
    In sum, the Motion to Amend is granted with respect to punitive damages. 

                         IV.  ORDER                                      
    Based on the files, records, and proceedings herein, IT IS ORDERED THAT: 
    1.   Plaintiff Ardalan Sadeghi-A’s Amended Motion for Leave to Amend 
Complaint (Dkt. 34) is GRANTED.                                           
    2.   Plaintiff shall file his Amended Complaint on March 23, 2021, unless an 

appeal of this Order is sought.                                           
    3.   Defendants shall respond to the Amended Complaint in a manner consistent 
with the Federal Rules of Civil Procedure.                                

DATED:  March 8, 2021                   s/Elizabeth Cowan Wright          
                                       ELIZABETH COWAN WRIGHT            
                                       United States Magistrate Judge