Bledsoe v. FCA U.S. LLC
| Decision Date | 31 March 2022 |
| Docket Number | 4:16-CV-14024-TGB-RSW |
| Parties | JAMES BLEDSOE, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. FCA U.S. LLC, a Delaware corporation, and CUMMINS INC., an Indiana corporation, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS AGAINST PLAINTIFFS BLEDSOE, ERBEN, FORSHAW WITBERG, AND CHOUFFET
Plaintiffs in this proposed putative class action allege that Defendant FCA's 2007-2012 Dodge Ram 2500 and 3500 diesel trucks (the “Trucks” or “Affected Vehicles”), equipped with 6.7-liter Turbo Diesel engines manufactured by Defendant Cummins Inc., emit nitrogen oxides (“NOx”) at levels that exceed federal and state emissions standards as well as the expectations of reasonable consumers. Plaintiffs allege that they purchased their trucks on the basis of advertising from Defendants that touted the trucks as more fuel efficient and environmentally friendly than other diesel trucks. Plaintiffs allege that despite marketing the trucks as containing “clean diesel engines, ” Defendants knew the trucks discharged emissions at levels greater than what a reasonable customer would expect based on the alleged representations. In Plaintiff's operative Second Consolidated and Amended Class Action Complaint (“SCAC”), they allege violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO Act”), the Magnuson Moss Warranty Act (“MMWA”), and consumer protection breach of contract, and fraudulent concealment laws of 50 states as well as the District of Columbia. Defendants FCA and Cummins moved to dismiss (ECF Nos. 67, 68), and this Court entered an Order granting Defendants' motions as they relate to the MMWA but denying as they pertain to all other claims. ECF No. 97.
Pending before the Court is Defendant FCA's Motion for Judgment on the Pleadings as to Plaintiffs, Bledsoe, Erben, Forshaw, Witberg, and Chouffet (“Select Plaintiffs”), pursuant in part, to Fed.R.Civ.P. 12(c), for failure to plead facts supporting a basis to hold FCA liable. Specifically, FCA argues (1) because FCA as an entity did not exist at the time the vehicles of the Select Plaintiffs were manufactured and sold, the claims relating to the vehicles of the Select Plaintiffs could not involve any conduct committed by FCA; (2) the SCAC does not allege in any manner that FCA should be subject to successor liability for the conduct of Chrysler, LLC, which was the manufacturer that made and sold the Select Plaintiffs' vehicles; and, (3) an Order entered by the United States Bankruptcy Court for the Southern District of New York bars Select Plaintiffs from bringing fraud-based claims against FCA and attaining the type of relief they seek.
For the reasons outlined below, the Court will GRANT FCA's Motion for Judgment on the Pleadings and enter judgment in favor of FCA on the claims of Plaintiffs Bledsoe, Erben, Forshaw, Witberg, and Chouffet. Accordingly, Select Plaintiffs will be removed from the putative class as potential class representatives.
Plaintiffs seek to bring claims on behalf of themselves and a nationwide class of all persons or entities in the United States who, as of November 1, 2016, owned or leased a 2007 to 2012 Dodge Ram 2500 or Dodge Ram 3500 pickup truck equipped with a Cummins 6.7-Liter diesel engine (“the Trucks”).
Plaintiffs also seek to establish sub-classes representing owners and/or lessees of the Trucks in all 50 states and the District of Columbia, alleging deceptive advertising, breach of contract, and fraudulent concealment claims under the laws of those respective states.
FCA is a limited liability company organized and existing under the laws of the State of Delaware. SCAC, ¶ 56. FCA did not exist until April 28, 2009. FCA is a motor vehicle “Manufacturer” and a licensed “Distributor” of new, previously untitled Chrysler, Dodge, Jeep, and Ram brand motor vehicles. After its formation, FCA agreed to purchase certain assets of the bankrupt entity Old Carco LLC (f/k/a Chrysler LLC) ECF No. 171, PageID.18039. The purchase of the bankrupt estate required court approval. Id. The official “Closing Date” for the purchase was June 10, 2009, when the United States Bankruptcy Court for the Southern District of New York (“the Bankruptcy Court”) granted final approval of the asset purchase in the form of a “Sale Order.” Id. at 18038-39 (citing In re Old Carco LLC (f/k/a Chrysler LLC), Case No. 09-50002 (Bankr. S.D.N.Y. June 10, 2009), (ECF No. 171-3)).
As threshold matter, FCA points out that the SCAC cannot allege conduct by FCA occurring in connection with the Select Plaintiffs' vehicles because these vehicles were all purchased before FCA's purchase of the bankruptcy estate was approved. Moreover, the SCAC does not specifically allege that FCA is the successor in interest to Chrysler, LLC. The core of FCA's argument, however, is that in the Sale Order, the Bankruptcy Court ruled that FCA would have no liabilities for any claims which existed against Chrysler except for those liabilities which it expressly assumed. ECF No. 171-3, PageID.18100-101 ¶ 35. Thus, Defendant FCA alleges the “Sale Order expressly and unequivocally bars all claims against FCA U.S. ‘related to the production of vehicles prior to the Closing Date,' except for those expressly assumed by FCA US.” ECF No. 171, PageID.18039.
The material term of the Sale Order provides as follows:
Except for the Assumed Liabilities expressly set forth in the Purchase Agreement or described therein or Claims against any Purchased Company, none of the Purchaser, its successor or assigns or any of their respective affiliates shall have any liability for any Claim that (a) arose prior to the Closing Date, (b) relates to the production of vehicles prior to the Closing Date or (c) otherwise is assertable against the Debtors or is related to the Purchased Assets prior to the Closing Date. The Purchaser shall not be deemed, as a result of any action taken in connection with the Purchase Agreement or any of the transactions or documents ancillary thereto or contemplated thereby or the acquisition of the Purchased Assets to: (a) be a legal successor, or otherwise be deemed a successor to the Debtors (other than with respect to any obligations arising under the Assumed Agreements; from and after the Closing); (b) have, de facto, or otherwise, merged with or into the Debtors; or (c) be a mere continuation or substantial continuation of the Debtors or the enterprise of the Debtors. Without limiting the foregoing, the Purchaser shall not have any successor, derivative or vicarious liabilities of any kind or character for any Claims, including, but not limited to, on any theory of successor or transferee liability, de facto merger or continuity, environmental, labor and employment, products or antitrust liability, whether known or unknown as of the Closing, now existing or thereafter arising, asserted or unasserted, fixed or contingent, liquidated or unliquidated. Id.
(emphasis added). ECF No. 171-3, PageID.18100-101 ¶ 35
Accordingly, FCA claims the Sale Order bars the following Select Plaintiffs (Bledsoe, Erben, Forshaw, Witberg, and Chouffet) from bringing a claim because they purchased their vehicles prior to the Closing Date. As FCA summarizes in its motion, citing to paragraphs in the SCAC:
Bledsoe purchased a model-year 2007 Dodge Ram 2500 truck in September 2007. SCAC, ¶ 41. Erben purchased a model-year 2008 Dodge Ram 2500 truck in May 2008. Id. at ¶ 46. Forshaw purchased a model year 2007 Dodge Ram 3500 truck in April 2008. Id. at ¶ 49. Witberg purchased a model-year 2008 Dodge Ram 2500 truck in July 2008. Id. at ¶ 50. Chouffet purchased a model-year 2009 Dodge Ram 2500 truck in May 2009. Id. at ¶ 53.
ECF No. 171, PageID.18048. In addition, FCA also points out that Plaintiffs claims are all grounded in fraud, which the Sale Order unequivocally precludes for pre-bankruptcy vehicles purchased prior to June 10, 2009.
In response, Plaintiffs argue that on two separate occasions-in its 2017 and 2019 motions to dismiss-FCA previously urged the Court to dismiss the claims of certain plaintiffs based on Chrysler's bankruptcy in 2009. See ECF Nos. 27, 68. And in its Orders deciding both motions, because this Court did not explicitly accept FCA's arguments, the case of the law doctrine precludes FCA from presenting the same argument, in the same action, again.
In a motion for judgment on the pleadings under Fed.R.Civ.P. 12(c), district courts must take as true “all well-pleaded material allegations of the pleadings of the opposing party.” JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007) (quoting Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 479 F.2d 578 (6th Cir. 1973)). A motion for judgment on the pleadings uses the same standard as for a motion to dismiss under Rule 12(b)(6). Warriors Sports, Inc. v. National Collegiate Athletic Ass'n., 623 F.3d 281, 284-85 (6th Cir. 2010).
The motion may be granted “only if the moving party is nevertheless clearly entitled to judgment.” Id. But courts “need not accept as true legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir. 1999). “A Rule 12(c) motion ‘is granted when no material issue of fact exists and the party making the motion is entitled to judgment as a matter of law.'” Paskvan v. City of Cleveland Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir. 1991).
Where as here, the motion is filed by the defendant, “[t]he court must construe the complaint in a light most favorable to the plaintiff.” Lowden v. Cty. of Clare, 709 F.Supp.2d 540, 545 (E.D....
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