Beck v. FCA US LLC

• Citation: 273 F.Supp.3d 735
• Decision Date: 11 August 2017
• Docket Number: Case No. 17–cv–10267
• Parties: Donald J. BECK, Plaintiff, v. FCA US LLC, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

273 F.Supp.3d 735

Donald J. BECK, Plaintiff,

v.FCA US LLC, Defendant.

Case No. 17–cv–10267

United States District Court, E.D. Michigan, Southern Division.

Signed August 11, 2017

Dennis A. Lienhardt, Sharon S. Almonrode, E. Powell Miller, The Miller Law Firm, P.C., Rochester, MI, Joseph H. Meltzer, Peter A. Muhic, Tyler S. Graden, Kessler Topaz Meltzer & Check, LLP, Radnor, PA, for Plaintiff.

Amanda J. Hettinger, Kathy A. Wisniewski, Stephen A. D'Aunoy, Thompson Coburn LLP, Saint Louis, MO, Larry J. Saylor, Miller, Canfield, Detroit, MI, for Defendant.

OPINION & ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (Dkt. 24)

MARK A. GOLDSMITH, United States District Judge

In this putative class action, Plaintiff Donald J. Beck, a California resident, alleges that several of Defendant FCA US LLC's vehicles have a defective gearshift system, which inaccurately indicates that the vehicles are in the Park gear when, in fact, they are not. This has supposedly led to a number of rollaway incidents. FCA has filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Dkt. 24). The motion has been fully briefed, and a hearing was held on June 7, 2017. For the reasons stated below, the Court grants FCA's motion.¹

I. BACKGROUND

Beck brings this action on behalf of himself and all similarly situated persons who purchased or leased a model year 2013 through 2016 Dodge Ram 1500 or a model year 2014 through 2016 Dodge Durango (the "class vehicles"), all of which were designed, manufactured, and distributed by FCA. Compl. ¶¶ 1, 3, 21, 22 (Dkt. 1).

These class vehicles are equipped with a "shift-by-wire" transmission system, which does not use a mechanical linkage between the gear-shifting lever and the transmission. Id. ¶ 23; see also id. ¶ 4 ("[C]onventional ... gear shifters are ... tied to a cable that allows drivers to physically change gears when they so choose."). Rather, these systems use electronic signals and electronic modules to manipulate transmission gear changes. Id. ¶ 24. When the driver engages the control mechanism, electronic signals are sent to the electronic control module, which then shifts the transmission into the desired gear. Id. This type of transmission system helps save materials and manufacturing costs, as well as design space in the center console area. Id. ¶ 23.

Unlike an electronic "monostable shifter" (where the shifter lever is supposed to return to a single predetermined location after the desired gear is selected) or the more traditional feeling of a "polystable shifter" (where the shifter slides back and forth and rests in predetermined physical slots for the gears), the class vehicles are equipped with a "rotary shifter." Id. ¶¶ 25, 28, 30–31.² As the name implies, this system uses a rotary dial to cycle through the gears, sending an electronic signal that corresponds with the selected gear. Id. ¶¶ 5, 31. Once the driver has selected his or her desired gear, the corresponding letter above the rotary dial (either "P" for Park, "R" for Reverse, "N" for Neutral, or "D" for Drive) illuminates. Id. ¶ 32. The selected gear letter also appears on the "driver's informational display" on the vehicle's dashboard. Id. For illustrative purposes, the rotary shifters in the class vehicles look something like this:

Id. ¶ 33 (image of 2014 Dodge Durango rotary shifter).³

Beck alleges that the rotary shifter system in the class vehicles is defective for two reasons: (i) it "wrongly indicates [via the illuminated informational displays] that cars are in Park when they are not," and (ii) it "fails to include a safety override that would automatically put the vehicle in Park or engage a parking brake when a driver attempts to exit the vehicle when it is not in Park." Id. ¶ 5; see also id. ¶ 3 (FCA "designed and manufactured cars with rotary shifter systems that wrongly indicate cars are in Park when they are not and, also, fail to include any safety-override feature for preventing rollaway accidents caused by such misinformation.").⁴ According to Beck, these defects have "resulted in numerous accidents and vehicle rollaways as a result of drivers not knowing which gear their transmission is in and/or exiting their vehicle without the vehicle in Park." Id. ¶ 5.⁵

Beck points out that the National Highway Transportation Safety Administration's Office of Defects Investigation ("NHTSA–ODI") opened a preliminary evaluation on December 16, 2016, after having "identified 43 complaints alleging vehicle rollaway from a parked position in [the class vehicles]." ODI Resume, Ex. B to Compl. (Dkt. 1–3). According to the NHTSA–ODI, these reports "alleged that the unintended motion occurred after the driver moved the transmission gear selector to Park and exited the vehicle," and that 34 of the reports "alleged that the vehicle was moving while the shifter indicated that it was in the park position." Id. The NHTSA–ODI estimated the population of class vehicles at 1,000,000. Id. Beck has copied 15 of the consumer complaints into his complaint, which range in date from December 5, 2013 to November 15, 2016. See Compl. ¶ 55.

Beck experienced a rollaway incident himself. On June 22, 2015, he purchased a new 2015 Dodge Ram 1500 for personal use from a dealership in Carlsbad, California. Id. ¶ 18. At some point in time following the purchase, Beck alleges that, after he "pulled into his driveway and put the vehicle in 'Park,' ... [t]he vehicle started rolling backwards down the driveway before [he] could turn off the engine." Id. ¶ 19. As of the time the complaint was filed, Beck still owns the vehicle. Id. ¶ 18.

Beck alleges that FCA knew, or should have known, of the defective rotary shifter system and the associated safety risks through "pre-production testing, pre-production design failure mode effects analysis, production design failure mode effects analysis, early consumer complaints made to FCA's network of exclusive dealers and NHTSA, basic design guidelines, and Federal Motor Vehicle Safety Standards." Id. ¶ 50. Despite this knowledge, FCA failed to notify consumers of the defect or provide a remedy to protect consumers from the associated safety risks. Id. ¶¶ 9, 52, 59.

Beck further alleges that FCA "knowingly made misrepresentations and omissions about the quality, reliability, safety, characteristics and performance" of the class vehicles. Id. ¶ 74; see also id. ¶ 13 (misrepresenting the "standard, quality, or grade" of the class vehicles, and "knowingly ... omitted and/or concealed the existence of [the defect] to increase profits by selling additional" class vehicles). These purported misrepresentations appeared in numerous FCA advertising on its website. See generally id. ¶¶ 42–48.

Notably, Beck is not seeking damages for any sort of personal injury. See id. at 73–74 (request for relief). Nor is he seeking to represent any class members for claims of personal injury. See id. ¶ 77 ("Excluded from the Class are individuals who have personal injury claims resulting from the defectively designed Defective Shifter System in their Class Vehicles."). Instead, Beck is seeking only economic damages related to the allegedly defective rotary shifter system.

Beck claims that he and the class members were harmed by the defective rotary shifter system in two particular ways. First, "they did not receive the benefit of the bargain of the purchase or lease" of the class vehicles, which were "sold and leased as safe and reliable vehicles at premium prices." Id. ¶ 12; see also id. ¶ 3 ("[A]ll purchasers and lessees of [the class] vehicles paid more than the vehicle was actually worth" due to the "concealed and dangerous gearshift system defect that places drivers and occupants of the vehicles, as well as the public, at risk for serious injury or death."). Second, as a result of the NHTSA's announcement of its investigation, the class members each "own a vehicle that is diminishing in value at an increased rate each month and thus cannot be sold without incurring substantial losses." Id. ¶ 12; see also ¶ 15 ("Plaintiff and members of the Classes have been harmed and are entitled to ... damages for the benefit of the bargain they struck when purchasing their vehicles, [and] the diminished value of their vehicles...."). Beck claims that, had he and the class members known of the defect, they would have either (i) paid substantially less for the vehicles, (ii) required an immediate remedy that restored the vehicles to the conditions bargained for, or (iii) not purchased or leased the class vehicles. Id. ¶ 63.

On January 26, 2017, Beck filed the instant class-action complaint, asserting five claims: (i) violation of the Magnuson–Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 et seq. ; (ii) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. ; (iii) violation of California's Consumers Legal Remedies Act ("CLRA"), Cal Civ. Code § 1750 et seq. ; (iv) fraudulent concealment under California law; (v) breach of implied warranty of merchantability under California Commercial Code § 2314 (which is modeled on the Uniform Commercial Code); (vi) breach of express warranty under California Commercial Code § 2313 ; and (vii) violation of the Song–Beverly Consumer Warranty Act, Cal. Civ. Code § 1790 et seq.

II. STANDARDS OF DECISION

A motion that alleges lack of standing is properly characterized as a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1). See Stalley v. Methodist Healthcare, 517 F.3d 911, 916 (6th Cir. 2008) ("We review de novo a district court's dismissal of a case for lack of standing—lack of subject matter jurisdiction—under Fed. R. Civ. P. 12(b)(1)."). In considering whether to dismiss a complaint under Rule 12(b)(1) due to lack of subject-matter jurisdiction, the plaintiff bears the burden of proving the existence of subject-matter jurisdiction. Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1248 (6th Cir. 1996) ; Moir v. Greater Cleveland...