Flynn v. Fca U.S. LLC
| Decision Date | 05 July 2018 |
| Docket Number | Case No. 15-cv-0855-MJR-DGW |
| Parties | BRIAN FLYNN, GEORGE BROWN, KELLY BROWN, and MICHAEL KEITH, on behalf of themselves and all others similarly situated, Plaintiffs, v. FCA US LLC doing business as CHRYSLER GROUP LLC, and HARMAN INTERNATIONAL INDUSTRIES, INC. Defendants. |
| Court | U.S. District Court — Southern District of Illinois |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT AND PLAINTIFFS' MOTION TO CERTIFY CLASS
INTRODUCTION
In 2015, Plaintiffs Brian Flynn, Michael Keith, and George and Kelly Brown filed this putative class action against Defendants FCA US LLC ("FCA") and Harman International Industries, Inc. ("Harman") alleging a number of claims related to design flaws in the Uconnect system, which was manufactured by Harman and installed in certain 2013-2015 Chrysler vehicles.1 According to Plaintiffs, the Uconnect is an infotainment system that allows integrated control over phone, navigation, and entertainment functions in certain vehicles, and its design and installation makes it vulnerable to hackers seeking to take remote control of one of the affected vehicles, as reported in a 2015 WIRED magazine article. Although the article contributed to a voluntary recall by Chrysler, Plaintiffs maintain that the affected vehicles still have a number of unremedied vulnerabilities and design defects that could allow hackers to access critical and non-critical systems in the vehicles.
Before the Court are Defendants' motions for summary judgment and Plaintiffs' motion to certify class. Plaintiffs moved to certify several classes, including nationwide and state-based classes. (Doc. 266). FCA and Harman both responded to the motion (Docs. 318, 321), and Plaintiffs replied to both responses (Docs. 338, 339). The Court held a hearing on the motion on January 11, 2018, after which Defendants renewed a standing challenge made in the early stages of this litigation and sought permission for an interlocutory appeal (Docs. 344, 345, 378). The Seventh Circuit denied the petition for leave to file an interlocutory appeal on May 4, 2018. (Doc. 388). Defendants petitioned for rehearing, and their request was denied on June 29, 2018.
Before briefing was complete on the motion to certify class, Defendants filed seven motions for summary judgment. FCA filed four motions (Docs. 256, 257, 264, and 267) along with briefs in support thereof, and Harman filed three (Docs. 346, 348, and350).2 Plaintiffs responded to all seven motions (Docs. 297, 298, 299, 305, 365, 366, 367), and Defendants filed replies to each response (Docs. 288, 289, 290, 291, 375, 376, 377). With the prolific briefing complete, the motions for summary judgment and the motion to certify class are ripe for ruling, and the Court considers each in turn.
Plaintiffs bring suit against Harman and FCA on a number of implied warranty and fraud claims alleging that two Uconnect infotainment systems, the 8.4A and 8.4AN, which were manufactured by Harman and incorporated into certain vehicles (the "class vehicles") by FCA, were installed in such a way that the systems are unreasonably and unsafely vulnerable to hacking by third-parties. In essence, this case contemplates (1) whether the class vehicles are defective; (2) whether Defendants knew they were defective and, if so, when; and (3) whether they withheld or concealed information about the alleged defects from consumers. All the vehicles purchased or leased by the named plaintiffs were equipped with either a Uconnect 8.4A or 8.4AN.
Brian Flynn is an Illinois consumer who purchased a new 2014 Jeep Grand Cherokee from Federico Chrysler Dodge Jeep RAM in Wood River, Illinois. He seeks to certify a nationwide or, in the alternative, an Illinois-based Magnuson-Moss Warranty Act class on the theory that the cybersecurity defects in the class vehicles run afoul ofthe implied warranty of merchantability. To that end, he also seeks to certify an Illinois class on a common law implied warranty of merchantability claim.
In addition, Flynn brings common law fraudulent concealment and fraudulent omission claims on behalf of a nationwide or an Illinois class of consumers, alleging that FCA and Harman concealed and suppressed information about the severity of the cybersecurity defects in the class vehicles. In doing so, Flynn contends that FCA and Harman also engaged in deceptive or unfair business practices in connection with the sale of his vehicle in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) when they concealed or omitted material facts about the cybersecurity of the class vehicles and made affirmative statements about the safety of the vehicles. Flynn also pursues an unjust enrichment claim on behalf of a nationwide or Illinois class against both FCA and Harman.
George and Kelly Brown are Missouri consumers who purchased, through a special pricing program, a 2014 Jeep Cherokee from Dave Sinclair Chrysler Jeep Dodge in Pacific, Missouri. The Browns were subject to arbitration on their warranty claims and opted not to pursue them. Instead, they join Flynn in bringing a fraudulent concealment and fraudulent omission claim and an unjust enrichment claim on behalf of a nationwide class. They also allege that FCA and Harman violated the Missouri Merchandising Practice Act, Missouri's unfair and deceptive practices act, and seek to bring an unjust enrichment claim on behalf of a Missouri class if a nationwide class is not certified.
Michael Keith is a Michigan consumer who leased a 2014 Dodge Ram 1500 and a 2014 Jeep Cherokee from Lakeshore Chrysler in Montague, Michigan. He also leased a 2015 Dodge Challenger from K&M Dodge in Grand Rapids, Michigan. He brings an MMWA implied warranty of merchantability claim on behalf of either a nationwide or a Michigan class against FCA and Harman. He joins Flynn and the Browns in the proposed nationwide class fraudulent concealment and fraudulent omission claim and the nationwide class unjust enrichment claim. Keith also alleges that Harman and FCA violated the Michigan Consumer Protection Act and were unjustly enriched by his leasing of defective vehicles.
Harman and FCA maintain that the class vehicles are safe and not defective. They maintain that the vehicles have never been hacked outside of a controlled environment and that hacking the class vehicles now, after a 2015 recall campaign, is a remote risk, too remote to support Plaintiffs' claims of any overpayment or diminution in value damages. As Defendants moved for summary judgment on the named plaintiffs' claims before a class was certified, the Court considers their motions before considering Plaintiffs' motion to certify class. See Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 941-42 (7th Cir. 1995) ).
Federal Rule of Civil Procedure 56 governs motions for summary judgment. Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. Archdiocese of Milwaukee v. Doe, 743 F.3d 1101, 1105 (7th Cir. 2014), citing FED. R. CIV. P. 56(a). Accord Anderson v. Donahoe, 699 F.3d 989, 994 (7th Cir. 2012). A genuine issue of material fact remains "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Accord Bunn v. Khoury Enterpr., Inc., 753 F.3d 676, 681-82 (7th Cir. 2014).
In assessing a summary judgment motion, the district court views the facts in the light most favorable to, and draws all reasonable inferences in favor of, the nonmoving party. Anderson v. Donahoe, 699 F.3d 989, 994 (7th Cir. 2012); Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011). As the Seventh Circuit has explained, as required by Rule 56(a), "we set forth the facts by examining the evidence in the light reasonably most favorable to the non-moving party, giving [him] the benefit of reasonable, favorable inferences and resolving conflicts in the evidence in [his] favor." Spaine v. Community Contacts, Inc., 756 F.3d 542 (7th Cir. 2014).
FCA's first motion for summary judgment raises two issues: first, that Plaintiffs have no evidence of a defect and, second, that they have no evidence of damages. As to whether Plaintiffs have evidence of a defect in the class vehicles, the Court finds thatthere is a genuine issue of material fact. Plaintiffs present evidence of cybersecurity weaknesses, including various documents uncovered during discovery and the expert testimony of Marc Rogers. When considered in the light most favorable to Plaintiffs, this is sufficient to demonstrate a genuine dispute between the parties as to whether the class vehicles have defects. Similarly, the parties have a genuine dispute as to whether the alleged defects were remedied by FCA's voluntary recall or whether they require additional measures to protect the vehicles from an unreasonable risk of hacking.
As to evidence of damages, despite FCA's arguments to the contrary, the parties dispute whether the defects alleged by Plaintiffs have been repaired sufficiently. While FCA cites case law from district courts around the country that may suggest that overpayment damages are inappropriate where a defect has been fixed, here there is a dispute of material fact as to the effectiveness of Chrysler's software-related recall. Plaintiffs provide evidence that the design and installation of the Uconnect devices themselves, rather than the software operating the devices, is defective and that fixing the software may not have fixed the alleged defects. Accordingly, the Court finds that genuine disputes...
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