Fabian v. Fulmer Helmets, Inc.

• Decision Date: 23 December 2010
• Docket Number: No. 10-5009,10-5009
• Citation: 628 F.3d 278
• Parties: Robert FABIAN, Plaintiff-Appellant, v. FULMER HELMETS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

628 F.3d 278

Robert FABIAN, Plaintiff-Appellant,

v.FULMER HELMETS, INC., Defendant-Appellee.

No. 10-5009.

United States Court of Appeals, Sixth Circuit.

Argued: Oct. 19, 2010.

Decided and Filed: Dec. 23, 2010.

ARGUED:Michael J. Wall, Branstetter, Stranch & Jennings, PLLC, Nashville, Tennessee, for Appellant.Oscar C. Carr, III, Glankler Brown, PLLC, Memphis, Tennessee, for Appellee.ON BRIEF:James G. Stranch, III, J. Gerard Stranch, IV, Steven J. Simerlein, Branstetter, Stranch & Jennings, PLLC, Nashville, Tennessee, for Appellant.Oscar C. Carr, III, Glankler Brown, PLLC, Memphis, Tennessee, for Appellee.

Before: MOORE, SUTTON and FRIEDMAN,^* Circuit Judges.

OPINION

SUTTON, Circuit Judge.

Robert Fabian, a representative of a yet-to-be-certified class, seeks recovery from a helmet manufacturer for misrepresenting the safety of its helmets.The district court granted the defendant's motion to dismiss the suit, holding that Fabian's complaint fails to state a cognizable claim.Because Fabian's factual allegations, when construed in his favor, state a plausible claim for relief, we reverse.

I.

Tucked within the Department of Transportation is the National Highway Traffic Safety Administration (NHTSA), which regulates the performance of motorcycle helmets (among other vehicle products) under the National Traffic and Motor Vehicle Safety Act of 1966. 49 U.S.C. § 30101 et seq.In accordance with the Safety Act, NHTSA promulgated StandardNo. 218, which spells out the testing procedures that helmets sold in the United States must satisfy.49 C.F.R. § 571.218.One of these procedures is an "impact attenuation test," which involves the dropping of a helmet from a minimum height of six feet onto an anvil to measure the effect of the impact on the helmet.Id. at S7.1.Another test applies force to a helmet's chin strap to determine whether the helmet will remain in place during a crash.Seeid. at S7.3.

Standard 218 relies on self-certification, which means that companies test and certify their own helmets rather than having NHTSA do it for them.When helmets pass the test, the companies place a "DOT" label on them.49 C.F.R. § 571.218 at S5.6.1(e). NHTSA enforces these requirements by randomly purchasing helmets, employing independent companies to run compliance tests on them and publishing the results.

Headquartered in Memphis, Tennessee, Fulmer Helmets designs, manufactures and distributes the AF-50 Trooper motorcycle helmet.The AF-50 helmet comes in at least two sizes: small and large.

In 2000, NHTSA selected the large AF-50 helmet for testing.The helmet passed each component of the test.In 2002, NHTSA selected the small AF-50 for testing and it failed two components of the test.It failed the impact attenuation test (because the helmet's absorption of impact, measured in time, exceeded the regulatory requirement of 2.0 milliseconds by 0.2 milliseconds), and it failed the labeling requirement (because the "DOT" symbol appeared an eighth of an inch too high from the bottom of the helmet).Fulmer Helmets did not issue a recall, take any action to inform purchasers or retailers that it had failed the test, or fix or remove the DOT symbol.

On July 22, 2004, Fabian bought two large Fulmer AF-50 helmets.In 2007, Fabian sold one of the helmets to a friend, who later died of severe brain trauma in a motorcycle crash while wearing the helmet.

In April 2009, Fabian filed a complaint against Fulmer Helmets in Tennessee state court, which was later removed to federal court on diversity grounds.The federal complaint alleged (1) fraudulent misrepresentation, (2) negligent misrepresentation, (3) breach of the implied warranty of merchantability and (4) unjust enrichment.Fabian claimed he had "relied on Fulmer's material misrepresentations that such helmets were 'DOT approved,' " causing him to purchase an "unsafe,""inferior-quality" helmet that created a "heightened risk of serious physical injury or death."R.5 ¶¶ 3, 4, 23.Fabian sought class certification for all persons who had purchased the AF-50 since the failed 2002 test, while excluding "anyone seeking to recover for physical injuries suffered due to the failure of the subject helmets."R.5 ¶ 24.Fabian asked for damages in the form of a refund and disgorgement of profits.

Fulmer Helmets filed a Rule 12(b)(6) motion to dismiss the case for these reasons, among others: (1) Fabian failed to state a claim as a matter of law; (2) the Safety Act preempted the lawsuit; and (3) Tennessee's statute of limitations barred the claims.

The district court granted Fulmer Helmets' motion to dismiss.It held that Fabian failed to state a claim because Fabian had purchased two large helmets, and only small helmets failed the 2002 test.The court reasoned that Fabian had not purchased "helmets similar in all respects to the helmets which allegedly failed the August 2002 testing forming the basis for [Fabian's] claims."R.24at 27.At the same time, however, the court rejected one of Fulmer Helmets' alternative arguments, holding that the Safety Act did not expressly or impliedly preempt Fabian's claims.It reasoned that the Act's savings clause carves state common law claims from the preemptive scope of the statute and that the state law claims would not "present an obstacle to the federal objective of 'self-certification.' "Id. at 24.Lastly, the court held that Tennessee's statute of limitations barred Fabian's claims for breach of implied warranties.

Fabian appeals the failure-to-state-a-claim ruling but not the breach-of-implied-warranties ruling.Fulmer Helmets challenges the preemption ruling.

II.

To survive a motion to dismiss, Fabian must plead "enough factual matter" that, when taken as true, "state[s] a claim to relief that is plausible on its face."Bell Atl. Corp. v. Twombly,550 U.S. 544, 556, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007).Plausibility requires showing more than the "sheer possibility" of relief but less than a "probab[le]" entitlement to relief.Ashcroft v. Iqbal,--- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868(2009).

In granting the motion to dismiss, the district court used the following chain of reasoning: (1) NHTSA performed a safety test on a large AF-50 helmet in 2000, and the helmet passed all components of the test; (2) NHTSA performed a safety test on a small AF-50 helmet in 2002, and the helmet failed at least one component of the test; and (3) because Fabian premises his claim on the purchase of large AF-50 helmets, his claim is implausible on its face given that Fulmer Helmets passeda 2000 NHTSA test on a large AF-50 helmet.

The problem with this chain of reasoning is that it turns on potential inferences, not necessary ones.There are at least two legitimate ways to think about the significance of the NHTSA tests, and they point in opposite directions when it comes to the merits of this lawsuit.One is that the difference between the 2000 and 2002 test results turns on differences between the performance of the small and large AF-50 helmets.If so, that would support the district court's ruling that the disparity between the size of the helmet bought and the size of the helmet tested is fatal to Fabian's claims.The other reasonable inference, however, is that helmets of the same model, even if differently sized, perform the same.Two differently sized helmets, for example, may be no more distinct as a matter of performance than two differently sized pairs of shoes or two differently sized pairs of pants.If so, the failed 2002 test potentially exposed a defect in all AF-50 helmets, no matter their size.

In the absence of further development of the facts, we have no basis for crediting one set of reasonable inferences over the other.Because either assessment is plausible, the Rules of Civil Procedure entitle Fabian to pursue his claim (at least with respect to this theory) to the next stage—to summary judgment or, if appropriate, a trial after the parties have engaged in any relevant discovery to support one or the other interpretation.So long as we can "draw the reasonable inference that the defendant is liable for the misconduct alleged,"Iqbal,129 S.Ct. at 1949, a plaintiff's claims must survive a motion to dismiss.That inference is reasonable here because "common sense,"id. at 1950, tells us that a mass-manufactured consumer product, whether it is shoes, pants or helmets, may utilize the same design (and carry the same flaw) regardless of its size.

Fulmer Helmets stresses that Fabian's large helmet has "passed all tests" and that the 2002 test is irrelevant.Fulmer HelmetsBr. 16.But that does not necessarily end the inquiry.The company may have changed its design or manufacturing process for all AF-50s between 2000 and 2002, giving rise to a defect in all of its helmets and negating the relevance of the successful 2000 test result.Or the same test conducted on two randomly selected helmets (otherwise exactly the same) might yield different outcomes due to nothing more than natural statistical variances.The successful 2000 test thus may reflect an aberration unrelated to helmet size, while the failed 2002 test may point to a real flaw in all AF-50s.Because Fabian has "nudged his claims ... across the line from conceivable to plausible,"Iqbal,129 S.Ct. at 1950-51, he deserves a shot at additional factual development, which is what discovery is designed to give him.

III.

Fulmer Helmets seeks to affirm the judgment on alternative grounds, namely that the Safety Act preempts Fabian's lawsuit.We disagree.

Although Fulmer Helmets' position is not a picture of clarity, the company seems to raise the following multi-step argument.Step one: the Safety Act contains several enforcement mechanisms, including recalls initiated by NHTSA or actions initiated by the Attorney General to enjoin violations of the Safety Act and to collect civil penalties for violations of the Act.Step two: the Safety Act contains no private enforcement...