Bodine v. Graco, Inc.
| Decision Date | 24 July 2008 |
| Docket Number | No. 06-16271.,06-16271. |
| Citation | 533 F.3d 1145 |
| Parties | Mayble C. BODINE, Plaintiff-Appellant, v. GRACO, INC.; Dan Marshall; Jane Doe Marshall, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Appeal from the United States District Court for the District of Arizona; Bernardo P. Velasco, Magistrate Judge, Presiding. D.C. No. CV-05-00434-BPV.
Before: HAWKINS, SIDNEY R. THOMAS, and RICHARD R. CLIFTON, Circuit Judges.
Does the Motor Vehicle Information and Cost Savings Act ("the Odometer Act" or "the Act"), 49 U.S.C. §§ 32701-32711, and its implementing regulations, 49 C.F.R. pt. 580, allow a private right of action where the fraud relates to something other than the vehicle's mileage—in this case, its accident history?
Two of our sister circuits have split on this issue. Owens v. Samkle Auto. Inc., 425 F.3d 1318, 1320 (11th Cir.2005) (per curiam) (); Ioffe v. Skokie Motor Sales, Inc., 414 F.3d 708, 709 (7th Cir.2005) (), cert. denied, 546 U.S. 1214, 126 S.Ct. 1432, 164 L.Ed.2d 133 (2006).
Finding the reasoning in Ioffe persuasive, we conclude that the private right of action under the Odometer Act is limited to allegations of fraud relating to a vehicle's mileage.
Mayble C. Bodine ("Bodine"), an elderly grandmother in the market for a truck for her grandson, purchased a used 2001 Dodge pick-up for $19,716.80 from Graco, Inc., and its owners ("Graco"). In the course of closing the transaction, Graco provided Bodine with an accurate odometer (mileage) statement but did not provide a copy of the vehicle's title. Despite Graco's assurances that the vehicle was in good condition, the title would have revealed it was anything but. In fact, the vehicle's title had been branded "Restored Salvage" in accordance with Arizona law.1 Bodine claims that Graco deliberately withheld the title in order to conceal that the vehicle had been severely damaged in an earlier collision. Had Graco made the mileage disclosure on the title, Bodine would have examined the title, noticed that it was branded "Restored Salvage," and would not have purchased the truck.
Bodine discovered the truck's branding after she subsequently received a copy of the vehicle registration. She also discovered the truck had mechanical problems rendering it dangerous to drive. Bodine asked Graco to take the truck back. Graco refused and denied any knowledge of its branded status, even though Graco in fact knew about that status when it sold Bodine the truck.
After Bodine filed her complaint in district court, the parties consented to have a magistrate judge hear the matter. Graco then filed a motion to dismiss for lack of jurisdiction under Rule 12(b)(1) of Civil Procedure, and the magistrate judge granted the motion.
Assuming, for the moment, that the court correctly held that a successful Odometer Act claim must include an allegation that the defendant intended to defraud as to mileage, the court nonetheless erred by treating this as a jurisdictional requirement, and not as an ingredient of the claim for relief.
The Supreme Court recently explained that "when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character." Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). The intent-to-defraud language is found in 49 U.S.C. § 32710(a), which is captioned "Violation and amount of damages." The jurisdiction-conferring language is found in a neighboring subsection, § 32710(b), which is captioned "Civil actions." Because § 32710(a) "does not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts," it was improper to dismiss this case on jurisdictional grounds.2 Arbaugh, 546 U.S. at 515, 126 S.Ct. 1235 (internal quotation marks omitted).
Although Graco incorrectly filed a motion to dismiss for lack of jurisdiction, its more general argument regarding the "with intent to defraud" provision is not necessarily flawed. We have the discretion to proceed with this appeal as if the district court granted a Rule 12(b)(6) motion, and we choose to do so here. See Moore v. United Kingdom, 384 F.3d 1079, 1090 (9th Cir.2004); Capital Tracing, Inc. v. United States, 63 F.3d 859, 861 n. 3 (9th Cir.1995). We have, therefore, drawn the facts of this case from the well-pleaded allegations of the complaint, which we accept as true. Broam v. Bogan, 320 F.3d 1023, 1026 n. 2 (9th Cir.2003).
We review a Rule 12(b)(6) dismissal de novo. Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir.2007). While we may affirm on any ground supported by the record, McKesson HBOC, Inc. v. N.Y. State Common Ret. Fund, Inc., 339 F.3d 1087, 1090 (9th Cir.2003), we are to sustain a dismissal only if it is clear from the complaint "that no relief could be granted under any set of facts that could be proved consistent with the allegations." Synagogue v. United States, 482 F.3d 1058, 1060 (9th Cir. 2007) (internal quotation marks omitted).
Bodine's theory is that Graco was obligated to provide her with a title containing an accurate description of the vehicle's mileage, and that Graco failed in that obligation when it deliberately withheld the title in an effort to conceal the vehicle's collision history. Recognizing that Bodine's theory is exclusively concerned with the vehicle's title, and is in no way related to the representations about the truck's odometer, we turn to the language of the statute. See Knight v. Comm'r, ___ U.S. ___, 128 S.Ct. 782, 787, 169 L.Ed.2d 652 (2008).
The statutory scheme begins with a list of Congress's findings and purposes. 49 U.S.C. § 32701.
Congress finds that—
(1) buyers of motor vehicles rely heavily on the odometer reading as an index of the condition and value of a vehicle;
(2) buyers are entitled to rely on the odometer reading as an accurate indication of the mileage of the vehicle (3) an accurate indication of the mileage assists a buyer in deciding on the safety and reliability of the vehicle; and
(4) motor vehicles move in, or affect, interstate and foreign commerce.
Id. § 32701(a). The Odometer Act's purposes are "(1) to prohibit tampering with motor vehicle odometers; and (2) to provide safeguards to protect purchasers in the sale of motor vehicles with altered or reset odometers." Id. § 32701(b).
Congress effectuated these purposes by outlawing actions that would cause discrepancies between a vehicle's actual mileage and its odometer reading. The Act prohibits odometer3 tampering with intent "to change the mileage registered by the odometer." Id. § 32703(2). It also forbids advertising for sale, selling, using, installing, or having installed "a device that makes an odometer of a motor vehicle register a mileage different from the mileage the vehicle was driven, as registered by the odometer within the designed tolerance of the manufacturer of the odometer." Id. § 32703(1). It is also unlawful to, "with intent to defraud, operate a motor vehicle on a street, road, or highway if the person knows that the odometer of the vehicle is disconnected or not operating." Id. § 32703(3).
Regulating odometer tampering is Congress's first method of achieving the Act's goals; the second method seeks to empower consumers by providing them with accurate information at the time of a vehicle transfer.4 By regulation of the National Highway Traffic Safety Administration,5 "[i]n connection with the transfer of ownership of a motor vehicle, each transferor shall disclose the mileage to the transferee in writing on the title ...." 49 C.F.R. § 580.5(c) (emphasis added). "Title" is statutorily defined as "the certificate of title or other document issued by the State indicating ownership." 49 U.S.C. § 32702(7); see also 49 C.F.R. § 580.3. According to Bodine, Graco "did not make the mileage disclosure on the title as required by 49 C.F.R. § 580.5."
The Odometer Act provides different methods of enforcement. The Secretary of Transportation ("Secretary") can impose a civil penalty of up to $2,000 per violation of the Act or its regulations, and the Attorney General is tasked with enforcing such penalties in a civil action. 49 U.S.C. § 32709(a). The Attorney General or the chief law enforcement officer of a state can bring suit to enjoin violations of the Act and its regulations. Id. § 32709(c), (d)(1)(A). The Act provides a criminal penalty applicable to "[a] person that knowingly and willfully violates this chapter or a regulation prescribed ... under this chapter." Id. § 32709(b).
In addition to these public means of enforcement, the Act creates a private cause of action. The private cause of action has an independent liability provision: "A person that violates this chapter or a regulation prescribed or order issued under this chapter, with intent to defraud, is liable for 3 times the actual damages or $1,500, whichever is greater." 49 U.S.C. § 32710(a) (emphasis added).6 A private person that prevails in a civil action is entitled to attorney's fees and...
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