Diaz v. FCA U.S. LLC

• Decision Date: 02 September 2022
• Docket Number: Civil Action 21-cv-00906-EJW
• Parties: GUSTAVO DIAZ, et al. individually and on behalf of all others similarly situated, Plaintiffs, v. FCA U.S. LLC, Defendant.
• Court: U.S. District Court — District of Delaware

GUSTAVO DIAZ, et al. individually and on behalf of all others similarly situated, Plaintiffs, v. FCA U.S. LLC, Defendant.

Civil Action No. 21-cv-00906-EJW

United States District Court, D. Delaware

September 2, 2022

Russell D. Paul, Abigail J. Gertner, Amey J. Park, BERGER MONTAGUE PC, Philadelphia, PA; Cody R. Padgett, Laura E Goolsby, Tarek H. Zohdy, CAPSTONE LAW APC, Los Angeles, CA Steven Calamusa, Geoff Stahl, GORDON & PARTNERS, Palm Beach Gardens, FL - Attorneys for Plaintiffs

Patrick Brannigan, ECKERT SEAMANS CHERIN & MELLOTT LLC, Wilmington, DE; Stephen A. D'Aunoy, Thomas L. Azar, Scott H. Morgan, THOMPSON COBURN LLP, St. Louis, Mo -Attorneys for Defendant

JURY TRIAL DEMANDED

MEMORANDUM OPINION AND ORDER

WALLACH, CIRCUIT JUDGE:

Plaintiffs are residents of California, Florida, and New York, and bring a putative consumer class action on behalf of themselves, a proposed class (the “Class”) comprised of “all persons in the United States . . . who purchased or leased 2014-2019 model year Dodge Challengers and Chargers equipped with the V8 engine” (a “Class Vehicle”),^[1] and, in the alternative, a number of proposed sub-classes comprised of residents of California, Florida, and New York who purchased or leased a Class Vehicle.^[2] Complaint ¶ 1 (D.I. 1). Before the court is Defendant FCA U.S. LLC's (“FCA” or “Defendant”) Motion to Dismiss Plaintiffs' Complaint in its entirety under Federal Rule of Civil Procedure (“Rule”) 12(b)(6), for failure to state a claim on which relief can be granted. Motion to Dismiss (D.I. 15, 16).

Plaintiffs' Complaint contains fourteen counts under federal and state law, alleging misconduct by FCA relating to a defective aspect of the Class Vehicles.^[3] Specifically, Plaintiffs allege that every Class Vehicle has a “rear differential^[4] that is defective in design, manufacturing, materials, and/or workmanship.” Complaint ¶ 4. According to Plaintiffs, this defect (the “Differential Defect” or the “Defect”) “was latent, but existed at the time that the Class Vehicles left FCA's possession and control and was present at the time of sale or lease of the Class Vehicles.” Id. Further, Plaintiffs assert that the Defect exists because

the rear differential is not adequately designed and/or manufactured for the torque loads of the engines and transmissions exerted during acceleration. Accordingly, the high torque loads degrade the differential, causing the rear differential and its internal components including, but not limited to, the ring gear, pinion gear[,] differential housing and/or axles to fail.

Id.

For the reasons that follow, Defendant's Motion to Dismiss is granted, and Plaintiffs' Complaint is dismissed in its entirety without prejudice.

BACKGROUND

I. Parties

A. Named Plaintiffs

The named Plaintiffs in this action are Gustavo Diaz, a citizen of California who purchased a new Class Vehicle; Joseph Santos, a citizen of California who purchased a new Class Vehicle; Christian Gibson, a citizen of Florida who purchased a new Class Vehicle; Gerald Sinclair, a citizen of Florida who purchased a used Class Vehicle; Marvin Leon Veal, a citizen of Florida who purchased a new Class Vehicle; and Domenick Scorziello, a citizen of New York who purchased a new Class Vehicle. Complaint ¶¶ 26, 27, 45, 46, 73, 74, 89, 90, 108, 109, 129, 130. All named Plaintiffs purchased their Class Vehicles from FCA-authorized dealerships in the state in which they reside. Id. ¶¶ 27, 46, 74, 90, 109, 130.

B. Defendant

Defendant FCA is a Delaware limited liability company with its principal place of business in Michigan.^[5] Id. ¶ 145. It “designs, manufactures, markets, distributes, services, repairs, sells, and leases passenger vehicles, including the Class Vehicles, nationwide.” Id. FCA has a “performance automobile division” called SRT, through which it “designed, manufactured, imported, distributed, offered for sale, sold, and leased” the Class Vehicles. Id. ¶¶ 146-47.

According to Plaintiffs, “FCA has a nationwide dealership network and operates offices and facilities throughout the United States,” from which Plaintiffs purchased their Class Vehicles. Id. ¶ 148. FCA governs services and repairs at its authorized dealerships “through service manuals, technical service bulletins (‘TSBs'), and other documents FCA also develops and disseminates the owners' manuals, warranty booklets, maintenance schedules, advertising such as vehicle brochures, and other promotion materials relating to Class Vehicles through the dealership network [including Monroney Stickers].” Id. ¶¶ 148-49.

The only written (express) warranty at issue here^[6] is FCA's three-year/36,000 mile “Basic Limited Warranty” that came with each Class Vehicle, covering “the cost of all parts and labor needed to repair any item on your vehicle when it left the manufacturing plant that is defective in material, workmanship or factory preparation.” Complaint ¶¶ 295-96; see also, e.g., Motion to Dismiss Ex. A at 5.

II. General Allegations Regarding Plaintiffs' Purchases of Class Vehicles

Plaintiffs allege that they purchased their Class Vehicles as performance vehicles, and have been harmed by the Differential Defect, which causes the Class Vehicles to “not live up to expectations to provide safe, reliable transportation for a normal vehicle, much less the quality necessary for a performance vehicle.” See, e.g., Complaint ¶ 177; see also id. ¶ 15 (“Plaintiffs and members of the Classes relied on FCA's representations that the Class Vehicles were properly engineered and equipped to handle high performance driving, including track and drag racing use, as well as ordinary, public road driving.”).

There are a number of allegations common to the named Plaintiffs, who reside in California, Florida, and New York. Specifically, all named Plaintiffs allege that they purchased their Class Vehicles “primarily for personal, family, or household use,” and that they still own their (allegedly defective) Class Vehicles. Id. ¶¶ 28, 29, 47, 48, 75, 76, 91, 92, 110, 111, 131, 132.

“Passenger safety and reliability were important factors” in all named Plaintiffs' purchase decisions. Id. ¶¶ 33, 52, 80, 96, 115, 136.

Unbeknownst to Plaintiffs at the time of purchase, however, each “Class Vehicle was equipped with a rear differential that was defective and not robust enough for the horsepower and torque loads of the driveline.”^[7] Id. ¶¶ 30, 49, 77, 93, 112, 133.

According to Plaintiffs, FCA knew of the Differential Defect at the time of Plaintiffs' purchases, but did not disclose it to any of them, which resulted in Plaintiffs making purchases “on the reasonable but mistaken belief that [their Class Vehicles] would be safe and reliable on public roadways, . . . and capable of track use,” which they were not. Id. ¶¶ 32, 51, 79, 95, 114, 135.

In addition to information about the Class Vehicles' capabilities that each Plaintiff alleges he obtained or reviewed during the purchase process, Plaintiffs allege that “FCA also produced and distributed uniform marketing materials about the Class Vehicles to dealerships with the expectation that this information would be passed [on to] the consumer through dealer interactions.” Id. ¶¶ 33, 34, 52, 53, 80, 81, 96, 97, 115, 116, 136, 137. “None of the information provided,” however, “disclosed any defects in the rear differential or drivetrain system or that the Class Vehicles were not capable of safe driving on public roadways and track use.” See, e.g., id. ¶ 35. If Plaintiffs had been aware of the Differential Defect, each alleges that “he would not have purchased his Class Vehicle or would have paid less.” Id. ¶¶ 35, 54, 82, 98, 117, 138. Plaintiffs claim that, as of the time of their filing this action, they have “received no notification from FCA about any potential repair or aftermarket modification that would repair the Drivetrain or the Differential Defect and render the Class Vehicle[s] safe to drive on public roadways, or during occasional track use, that would also be compliant with FCA's express warranties.”^[8] Id. ¶¶ 39, 67, 83, 102, 123, 139.

Accordingly, because Plaintiffs aver that “[t]he Differential Defect can cause unexpected failures that significantly impair the safety, reliability, and operability of the Class Vehicles to such an extent that they are rendered unfit for the ordinary purpose of driving on public roadways,” they have “lost confidence” in their Class Vehicles, consider themselves “unable to rely on [Defendant's] advertising or labeling in the future,” and do not plan to purchase Class Vehicles again although they “would like to.” Id. ¶¶ 41-43, 69-71, 85-87, 104-06, 125-27, 141-43.

III. Injury Allegations Specific to Named Plaintiffs

Plaintiffs summarize the injuries suffered by themselves and other putative Class members as follows:

As a direct and proximate result of FCA's concealment of, and failure to disclose, the Differential Defect, Plaintiffs and Class members: (1) overpaid for the Class Vehicles because the Defect significantly diminishes the value of the Vehicles; (2) have Vehicles that suffer premature differential failures; (3) have and/or must expend significant money to have their Vehicles (inadequately) repaired; and (4) are not able to use their Vehicles for their intended purpose and in the manner FCA advertised[.]

Complaint ¶ 21.

Plaintiffs Diaz, Santos, Sinclair, and Veal allege facts-detailed below-purporting to show the damages they allegedly suffered due to having to repair, or attempt to repair, their Class Vehicles. Plaintiffs Gibson (Florida) and Scorziello (New York)^[9] do not allege that they experienced any actual issues driving their Class Vehicles, and do not allege that they sought or obtained any repairs on account of the alleged Defect. Se...