Dart Transit Company v. Paccar, Inc. et al

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Dart Transit Co.,
Plaintiff,
v.
Paccar, Inc., et al.,
Defendants.
Case No. 24-cv-3686 (KMM/SGE)
ORDER
This matter is before the Court on Plaintiff Dart Transit Co.’s Motion for Leave to
Amend the Complaint (Dkt. 47). The Court heard oral argument on the motion December
11, 2025, and took the Motion under advisement. (See Dkt. 55.) For the reasons that follow,
the Court grants the motion in part and denies the motion in part.
BACKGROUND
Plaintiff Dart Transit Company is a trucking company that operates a fleet of
commercial trucks. Highway Sales, a long-time affiliate of Dart Transit, purchased 498
trucks from Defendant PACCAR, Inc., beginning in 2017. Each of these trucks had MX-
13 engines, and Dart Transit leased these trucks to use in its fleet. In connection with the
purchase of the trucks, PACCAR provided a Limited Warranty Agreement that included a
one-year contractual limitations period, a repair-or-replace exclusive remedy, and a
consequential-damages disclaimer. (Limited Warranty Agreement, Dkt. 17-1.)
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 1 of 12

2
Dart Transit filed the complaint in this matter on August 19, 2024, alleging that after
Highway Sales acquired the vehicles, the MX-13 engines suffered from multiple defects,
which rendered the vehicles frequently disabled and inoperable. (See generally Compl.,
Dkt. 1.) PACCAR moved to dismiss the Complaint. The Honorable Katherine M.
Menendez, United States District Judge for the District of Minnesota, granted-in-part and
denied-in-part PACCAR’s motion. As relevant to the instant motion, Judge Menendez
dismissed Dart Transit’s claim for damages that were otherwise disclaimed by the Limited
Warranty Agreement and dismissed Dart’s claim under the Minnesota Prevention of
Consumer Fraud Act. (Dkt. 30 at 14-20, 22-25.) This court entered a Pretrial Scheduling
Order on April 22, 2025. (Dkt. 36.) Pursuant to the ordered schedule, the deadline to amend
the pleadings was November 14, 2025.
On November 14, 2025, Dart Transit moved to amend the pleadings to (1) add
Highways Sales as a plaintiff and (2) revise the allegations in one paragraph of the
Complaint to clarify that there was no public awareness of the alleged engine defects at the
time of the purchase. Dart Transit argues that the proposed amendment is consistent with
its prior disclosures, Highway Sales has a real interest in this dispute and its participation
in this matter will promote judicial efficiency, and the motion is timely brought under the
Pretrial Scheduling Order. PACCAR opposes the motion, arguing that Dart Transit’s
proposed amendments are futile.
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 2 of 12

3
ANALYSIS
I. 	Legal Standard
The Federal Rules provide that courts should “freely give leave [to amend
pleadings] when justice so requires.” Fed. R. Civ. P. 15(a)(2). Under this liberal standard,
amendments should be denied only where there has been some undue delay, bad faith,
dilatory motive, repeated failure to cure deficiencies via previous amendments, undue
prejudice to the non-moving party, or futility. E.g., Sherman v. Winco Fireworks, Inc., 532
F.3d 709, 715 (8th Cir. 2008).
An amendment is futile where the proposed claim “could not withstand a motion to
dismiss under Rule 12(b)(6).” Silva v. Metropolitan Life Ins. Co., 762 F.3d 711, 719 (8th
Cir. 2014) (citation omitted). “To survive a motion to dismiss for failure to state a claim,
the complaint must show the plaintiff ‘is entitled to relief,’ Fed. R. Civ. P. 8(a)(2), by
alleging ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible
on its face.’” In re Pre-Filled Propane Tank Antitrust Litig., 860 F.3d 1059, 1063 (8th Cir.
2017) (en banc) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). On a motion to
dismiss, the court must take all of the plaintiff’s allegations as true, but “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do
not suffice.” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555
(2007)).
II. 	Adding Highway Sales as Plaintiff is Futile.
PACCAR argues that Dart Transit’s proposed addition of Highway Sales as a
plaintiff should be denied because any claim Highway Sales could have against PACCAR
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 3 of 12

4
is subject to a 12-month limitation in the Limited Warranty Agreement, and this action was
first filed 15 months ago. Thus, any claim that Highway Sales could assert must have
accrued no less than 15 months ago and is therefore barred by the 12-month limitation.
PACCAR also argues that adding Highway Sales would be futile because the damages it
asserts are the same consequential damages that Judge Menendez dismissed as non-
recoverable. (See Dkt. 30 at 14-20.)
A. Proposed Amended Complaint Relates Back
PACCAR first argues that any claims Highway Sales might advance against it are
barred by the Limited Warranty Agreement, which provides that Plaintiffs have “12 months
from the accrual of the cause of action to commence any legal action arising from the
purchase or use of the Vehicle, or be barred forever.” (Limited Warranty Agreement, Dkt.
17-1, at 1.) Dart Transit’s motion to amend the Complaint and add Highway Sales as a
Plaintiff, filed on November 14, 2025, comes more than 15 months after the action
commenced. PACCAR argues that because it has been more than 15 months, any cause of
action Highway Sales might assert must have accrued more than 12 months ago and is thus
barred by the Limited Warranty Agreement.
Dart Transit served PACCAR with the summons and complaint on August 19, 2024,
which PACCAR later removed to this court. (See Dkt. 1-1, Summons and Complaint.) This
action therefore commenced on August 19, 2024. See Minn. R. Civ. P. 3.01(a); Plubell v.
Merck & Co., Inc., 434 F.3d 1070, 1072 (8th Cir. 2006) (state law determines when a suit
is commenced in state court). If Highways Sales were to file a new complaint, the Limited
Warranty Agreement would limit its claims to those arising in the 12 months before the
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 4 of 12

5
new complaint was filed. The issue, then, becomes whether the amendment relates back to
Dart Transit’s original Complaint or states a new cause of action.
Federal Rule of Civil Procedure 15(c) governs the relation back of amended
pleadings. The advisory committee notes to the 1966 amendments address whether an
amended pleading under the rule can add a new plaintiff:
The relation back of amendments changing plaintiffs is not expressly
treated in revised Rule 15(c) since the problem is generally easier.
Again the chief consideration of policy is that of the statute of
limitations, and the attitude taken in revised Rule 15(c) toward change
of defendants extends by analogy to amendments changing plaintiffs.
Fed. R. Civ. P. 15(c) advisory committee’s note on the 1966 amendment; see also Plubell,
434 F.3d at 1072 (analyzing under Missouri law); Crowder v. Gordons Transps., Inc., 387
F.2d 413, 418 (8th Cir. 1967). This doctrine “permits untimely claims to be deemed timely
when they relate back to an original, timely pleading.” Bennett v. Ecolab, Inc., Case no.
24-cv-546 (JMB/SGE), 2026 WL 810758, at *9 (D. Minn. Mar. 24, 2026); see also
Mandacina v. United States, 328 F.3d 995, 1000 (8th Cir. 2003) (“The relation back
doctrine allows untimely claims to be deemed timely by treating the claims as if they had
been filed when the timely claims were filed.” (emphasis added)).
When determining whether an amendment adding a new plaintiff relates back to the
original complaint, federal courts generally either interpret Rule 15(c)(3) or apply a
judicially created test. See Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1131-32
(11th Cir. 2004) (comparing both approaches). This Court will follow the Eighth Circuit’s
example in Plubell and apply the Rule 15(c)(3) approach “because the advisory
committee’s note indicates that the rule was intended to apply in situations where a new
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 5 of 12

6
plaintiff is added.” Plubell, 434 F.3d at 1072. Under that approach, an amendment relates
back if “the defendant knew or should have known that it would be called on to defend
against claims asserted by the newly-added plaintiff,” unless “the defendant would be
unfairly prejudiced in maintaining a defense against the newly-added plaintiff.” Cliff, 363
at 1132; see also SMS Fin., Ltd. Lib. Co. v. ABCO Homes, Inc., 167 F.3d 235, 244-45 (5th
Cir. 1999); Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 19 (2d Cir.
1997); Nelson v. County of Allegheny, 60 F.3d 1010, 1014-15 (3d Cir. 1995).
PACCAR concedes that the claims Highway Sales asserts in the Proposed Amended
Complaint are “the same express warranty claim as Dart [Transit], based on the same trucks
and the same factual predicate.” (Mem. in Opp. at 7.) The question is whether PACCAR
was put on notice of the claims that Highway Sales asserts in the Proposed Amended
Complaint. This Court finds that it was. Both the Complaint and Proposed Amended
Complaint set forth the same conduct by PACCAR as the basis of the claims. Furthermore,
Highway Sales is mentioned in both pleadings and the Limited Warranty Agreement itself.
Regardless of whether Highway Sales could have been included as a plaintiff from day
one, PACCAR knew or should have known that it might be called upon to defend against
claims by Highway Sales, particularly as they are the same claims that Dart asserts.
The next step to evaluate is whether PACCAR would be unfairly prejudiced if the
Proposed Amended Complaint relates back. Plubell, 434 F.3d at 1073. As previously stated,
the claims in the Complaint and the Proposed Amended Complaint are the same. PACCAR
knew when it was served with the original Complaint that it would have to defend against
a breach of warranty claim regarding the trucks Highway Sales purchased and Dart Transit
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 6 of 12

7
later leased. PACCAR will face no prejudice by having to continue to defend the same
claims. Indeed, PACCAR does not argue that it would face prejudice. (See Mem. in Opp.)
PACCAR notes that Highway Sales is a close affiliate of Dart Transit and that its existence
and involvement in the transactions has been well-known to all parties from the beginning
of this action.
Accordingly, the court determines that the conduct alleged by Plaintiffs in the
Proposed Amended Complaint arises out of the same conduct, transaction or occurrence
set forth in the original pleadings. Because the claims are the same in both pleadings,
PACCAR is not unfairly prejudiced by the addition of Highway Sales as a plaintiff. Under
the Rule 15(c)(3) test, the Proposed Amended Complaint relates back to the original
Complaint, and Highway Sales’ claims against PACCAR are not time-barred by the 12-
month limitation in the Limited Warranty Agreement.
B. Direct or Consequential Damages
PACCAR also argues that amending the complaint would be futile because the
damages that Highway Sales alleges under the Proposed Amended Complaint are the same
consequential damages that Judge Menendez determined were unrecoverable pursuant to
the Limited Warranty Agreement.
According to the Proposed Amended Complaint, under the financing arrangements
used to purchase the vehicles, Highway Sales bears the obligation at the end of the lease
“to pay any residual-value deficiency if the sale proceeds from the Vehicles are less than
the stated TRAC amount or residual value.” (Proposed Am. Compl. ¶ 48.) In other words,
at the end of the lease, if the sale value of the vehicle is less than a contractually
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 7 of 12

8
predetermined amount, then Highway Sales will pay to cover the difference. And because
the complained-of defects “depressed the resale value of the Vehicles,” the gap that
Highway Sales was obligated to cover increased. The Proposed Amended Complaint adds
as damages “TRAC residual-value deficiencies, i.e., the difference between (a) the TRAC
amount or stated residual value in the applicable lease schedules, and (b) the sale proceeds
obtained at the end of the lease term.” (Proposed Am. Compl. ¶ 61.)
Dart Transit argues that the residual-value deficiencies are direct damages because
they reflect a difference in the value of the goods that were promised and the value of the
goods that were delivered. This, however, conflicts with Minnesota’s definition of
consequential damages in its version of the UCC. See Minn. Stat. § 336.2-715(2)(a)-(b).
The first type of consequential damages “include[s] . . . any [unmitigated] loss[es]
resulting from a seller’s failure to live up to “general or particular requirements” that the
“seller at the time of contracting had reason to know.” Id. § 336.2-715(2)(a). The second
type is any “injury to person to property proximately resulting from any breach of
warranty.” Id. § 336.2-715(2)(b). These damages are “the consequence of special
circumstances known to or reasonably supposed to have been contemplated by the parties
when the contract was made.” Kleven v. Geigy Acric. Chems., 227 N.W.2d 566, 569 (Minn.
1975). Direct damages, by contrast, are direct because they “arise out of the breach itself.”
Id.; accord Minn. Stat. § 336.2-714(1)-(2) (noting the measure of direct damages “is the
difference at the time and place of acceptance between the value of the goods accepted and
the value they would have had . . . if they had been as warranted”).
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 8 of 12

9
In her Order, Judge Menendez discussed the UCC and its approach to consequential-
damages exclusions like the one at issue in this case. At oral argument for the instant
motion, Dart Transit directed this Court to Peterson v. Bendix Home Systems, 318 N.W.2d
50 (Minn. 1982), as support that the residual-value deficiency damages the Proposed
Amended Complaint identifies constitute direct damages. But Peterson answers a different
question. That court addressed the effect of Minnesota’s Comparative Fault Statute on a
plaintiff’s ability to recover direct and consequential damages, not whether certain
damages are direct or consequential. Id. at 54-55.
A better guide to types of damages under Minnesota law is Far East Aluminium
Works Co. Ltd. v. Viracon, Inc., 27 F.4th 1361 (8th Cir. 2022). In that case, Far East
purchased windows with special coating from Viracon, and the contract for sale “shifted
most of the risk to Far East.” Id. at 1364. This contract included a clause that Viracon
“SHALL NOT BE LIABLE UNDER ANY CIRCUMSTANCES FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY
KIND.” Id. Over time, the special coating on the windows began to fail, and Far East had
to pay the cost of replacing the windows, removing them, and reinstalling new ones. Id.
The Eighth Circuit determined that although the cost of getting replacement windows were
direct damages, the costs of removing defective windows and installing new ones were
“the sort of additional, foreseeable losses that arise out of the contract’s ‘particular
requirements,’ which brings them squarely within Minnesota’s definition of consequential
damages.” Id. at 1365 (quoting Minn. Stat. § 336.2-715(2)(a)). Because the damages were
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 9 of 12

10
consequential, the limitation clause in the sales contract prevented Far East from recovering
them.
The same logic leads this Court to determine that the residual-value deficiency
damages in the Proposed Amended Complaint are consequential damages. The residual-
value deficiency damages—the gap between the sale proceeds for the vehicles and an
agreed-upon TRAC residual value—are the sort of additional, foreseeable losses that arise
out of the particular requirements of Highway Sales’ leases for the vehicles. These are
consequential damages, and Judge Menendez determined in her February 25, 2026 Order
that consequential damages are barred by the Limited Warranty Agreement. (Dkt. 30.)
Judge Menendez ultimately found that the exclusion in the Limited Warranty Agreement
is not unconscionable and is therefore enforceable, and that Dart Transit had not alleged
any facts that would void the contract’s disclaimer of consequential damages. The same
barrier makes the proposed amendments adding allegations of residual-value deficiency
damages futile.
Without allegations of damages in the form of residual-value deficiencies, the
Proposed Amended Complaint fails to allege that Highway Sales suffered damages. The
Limited Warranty Agreement limits remedies to “THE REPAIR OR REPLACEMENT OF
‘WARRANTABLE FAILURES’” at authorized dealers. (Limited Warranty Agreement,
Dkt. 17-1 at 1.) The Proposed Amended Complaint does not allege that Highway Sales
paid for repairs that the Limited Warranty Agreement covered or suffered any other direct
damages. The only damages that the Proposed Amended Complaint alleges Highway Sales
suffered are consequential damages, which are barred by the Limited Warranty Agreement.
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 10 of 12

11
Thus, the Proposed Amended Complaint does not allege that Highway Sales suffered any
damages that it is entitled to recover. Accordingly, the Court denies Dart Transit’s motion
to add Highway Sales as a plaintiff.
III. Amendment to Paragraph 60
Finally, Plaintiffs seek to revise Paragraph 60 to include allegations that the defects
in PACCAR’s engines were not publicly known when Plaintiffs purchased and leased the
Vehicles, and that current widespread knowledge of the defects has negatively impacted
the value of the vehicles, making them difficult to trade or sell. (Proposed Am. Compl.
¶ 60.) PACCAR argues that this amendment is futile because it “has nothing whatsoever to
do with the express warranty claim that survived dismissal” and it would “muddy the
record for appeal by unwinding a contradiction the Court rightly observed between what
Dart pled and what it later argued.” (Mem. in Opp. at 10.) The standard, however, asks
whether there has been undue delay, bad faith, dilatory motive, repeated failure to cure
deficiencies via previous amendments, undue prejudice to the non-moving party, or futility.
Sherman, 532 F.3d at 715. PACCAR has not demonstrated that any of the reasons to deny
the proposed amendment to Paragraph 60 exists. This motion was filed before the deadline
to amend pleadings, allowing the proposed amendment to Paragraph 60 would not revive
any of the claims that Judge Menendez dismissed, and the amendment would not impose
any undue prejudice on PACCAR. The Court determines that Dart’s motion will be granted
as it relates to the proposed amendment to Paragraph 60.
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 11 of 12

12
ORDER
Accordingly, based on the foregoing, and all the files, records, and proceedings
herein, IT IS HEREBY ORDERED THAT Dart Transit’s Motion (Dkt. 47) is
GRANTED-IN-PART and DENIED-IN-PART as set forth above.
Dated: April 6, 2026 	s/Shannon G. Elkins
SHANNON G. ELKINS
United States Magistrate Judge
CASE 0:24-cv-03686-KMM-SGE Doc. 60 Filed 04/06/26 Page 12 of 12