In re FCA US LLC Monostable Elec. Gearshift Litig.

• Decision Date: 15 November 2017
• Docket Number: Case Number 16–md–02744,MDL No. 2744
• Citation: 280 F.Supp.3d 975
• Parties: IN RE: FCA US LLC MONOSTABLE ELECTRONIC GEARSHIFT LITIGATION
• Court: U.S. District Court — Eastern District of Michigan

280 F.Supp.3d 975

IN RE: FCA US LLC MONOSTABLE ELECTRONIC GEARSHIFT LITIGATION

Case Number 16–md–02744

MDL No. 2744

United States District Court, E.D. Michigan, Southern Division.

Signed November 15, 2017

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS ALLEGING FAILURE TO STATE A CLAIM

DAVID M. LAWSON, United States District Judge

This is the third motion to dismiss filed by the defendant under Federal Rule of Civil Procedure 12(b) aimed at the first amended consolidated master class action complaint (FACMC) in this multidistrict litigation proceeding. The first two motions challenged subject matter and personal jurisdiction under Rules 12(b)(1) and (2), respectively. The present motion is based on Rule 12(b)(6), but it adopts the same reading of the FACMC that the Court rejected earlier as unfaithful to the plain text of that pleading. The motion here is necessarily more complex, however, because it addresses a complaint that alleges 86 counts under the laws of 18 states (although claims under only seven states' laws are currently live), plus a federal count under the Magnuson–Moss Warranty Act. Although the laws of some of the states interpose certain procedural obligations that a few of the plaintiffs failed to meet—necessitating dismissal of some counts—the faulty premise rejected by the Court in its previous opinion on the Rule 12(b)(1) motion dooms the defendant's principal arguments here, and therefore the Court will deny, for the most part, the motion to dismiss alleging failure to state a claim.

I. Facts and Proceedings

A. Summary of Pending Claims

This multidistrict case began with an October 5, 2016 order of the Judicial Panel on Multidistrict Litigation (JPML). The proceeding presently comprises 23 cases transferred or consolidated before this Court, from 17 districts including the Eastern District of Michigan. Eleven of those cases involve claims for economic losses only, and 12 include allegations of personal injuries resulting from "rollaway" accidents.

The FACMC [dkt. # 88], which was filed on March 24, 2017, collected the claims of 29 individual plaintiffs from 18 states. Since the FACMC was filed, some of the plaintiffs have dropped out and a few of the personal injury cases have settled. Claims for economic loss by 35 plaintiffs subsequently were transferred to or directly filed in this Court, and therefore have not yet been consolidated in the master pleading and are not directly subject to the present motion to dismiss. Nonetheless, the counts of the FACMC are representative of the claims in the more recent cases, and the defendant's arguments as to those actions likely would be the same.

The FACMC, as filed, sets forth 86 counts for violations of the federal Magnuson–Moss Warranty Act, 15 U.S.C. § 2301 et seq. , and for breaches of express and implied warranties, false or deceptive advertising, fraudulent concealment, and unjust enrichment, under the common law and consumer protection statutes of the various states. However, after the consolidated complaint was filed, the Court dismissed without prejudice the claims of 20 plaintiffs from several states who were named in a case transferred here from the Central District of California (the Goldsmith case, No. 16–13681 (E.D. Mich.) (a.k.a. Goldsmith v. FCA US, LLC , No. 16–01341 (C.D. Cal.); f/k/a Andollo v. FCA US, LLC ). Those 20 non-California plaintiffs have re-asserted their claims in other civil actions presently before the Court, but not before the defendant's Rule 12(b)(6) motion was argued. Therefore, as the plaintiffs note in their response to the motion to dismiss, after the dismissal of those 20 plaintiffs, the surviving claims pleaded in the consolidated master complaint involve only 11 plaintiffs from seven states:

• California (David Goldsmith, Michael Vincent Nathan, Jr., and Pascual Pietri) (Counts VI–XII)

• Massachusetts (Bernadine Hartt) (Counts XXI–XXIII)

• Missouri (Taylor Brooks) (Counts XXIX–XXXIII)

• Nebraska (Nina Walker) (Counts XXXIV–XXXVIII)

• New York (John Lynd and Janella Mack) (Counts XLIX–LIII)

• Pennsylvania (Timothy Weber and Bruce Vosburgh) (Counts LXVIII–LXXII)

• Wisconsin (Marc Hughes) (LXXXIII–LXXXVI)

The separately filed consolidated personal injury complaint [dkt. # 74] asserted consolidated claims on behalf of 12 personal injury plaintiffs (five remain). Since that consolidated complaint was filed, nine more plaintiffs' cases have been transferred to this Court.

B. Factual Background

This case concerns alleged design defects in certain cars made by defendant FCA US, LLC (commonly referred to as Fiat Chrysler Automotive, or FCA) between 2012 and 2015. The FACMC alleges the various liability theories noted above on behalf of the named plaintiffs and all other persons in the United States "who purchased, leased or own a 2012–2014 Chrysler 300, 2012–2014 Dodge Charger, or 2014–2015 Jeep Grand Cherokee equipped with a monostable electronic gearshift supplied by ZF Friedrichshaffen AG" (the so-called "monostable shifter" or "defective shifter"). This shifter design does not use a lever that moves physically to different positions, but instead is pushed in a direction by the driver, and then springs back to its original position after a gear is selected. The only indication that the car has changed gears or is in a particular gear is from lighted indicators on the dashboard and shifter that change to display letters such as "D" for "Drive" or "P" for "Park." Unlike some other vehicles with similar gearshift designs made by FCA's competitors, the cars at issue in this lawsuit also do not have any mechanism to automatically shift the car to "Park" when the driver exits the car while it is in another gear.

As noted above, the defendant has recycled its arguments from the Rule 12(b)(1) motion based on its view that the plaintiffs claim that the vehicles are defective only because they do not include an auto-park feature—which was neither promised nor paid for—and little more. That assertion misrepresents the substance of the FACMC. To assess the defendant's Rule 12(b)(6) motion, it is necessary to review the pleading in some detail.

1. Design Defects

The plaintiffs allege that the monostable shifter design is defective and unsafe in two ways: (1) it gives insufficient indications to a driver about whether an intended gear selection was completed, and what gear the car is in; and (2) it can cause the car to shift into a gear other than the one that was selected, or to shift spontaneously out of "Park" and into a gear that allows the car to move. The plaintiffs assert that the danger posed by those defects is aggravated by the fact that the cars do not have any safety override or auto-park feature to automatically shift the transmission to "Park" if the driver side door is opened when the engine is running.

As stated in the FACMC, "the lack of a physical gear level for PRND and the Defective Shifter's return to its predetermined location has led to hundreds of reports of Class Vehicles rolling away when drivers thought their vehicles were in Park." The defendant acknowledged in its own recall notices the risk that, because "[g]ear-selection is conveyed to the driver by ... indicator lights, not gear-selector position ... drivers may draw erroneous conclusions about the status of their vehicles." FACMC ¶¶ 119–20. The plaintiffs assert that "[t]he Defective Shifter's use of solely visual cues to alert drivers to the Class Vehicles' gear position is ineffective because drivers may not realize that they have not pushed the gear lever forward or backward enough to engage their desired gear." They say that "[b]ecause there is no tactile feedback informing a driver whether the shifter lever has physically moved and is resting in P, R, N or D, drivers may think they have pushed the shifter lever forward enough to engage the Park gear and may exit the vehicle when it is not actually in Park." Id. ¶ 124. They also allege that "[t]he Defective Shifter's sole reliance on visual feedback to convey gear selection has been dangerously ineffective." And they allege that the defendant knew as much because "consumer complaints beginning at least as early as 2013 ... document Class Vehicle owners' and lessees' inability to determine whether their vehicle is in the desired gear resulting in hundreds of rollaways, accidents and injuries." Id. ¶ 125. The plaintiffs further assert that "numerous complaints to [the National Highway Transportation Safety Administration (NHTSA) ] allege that once a driver puts a Class Vehicle into Park, the vehicle can move into another gear on its own." Ibid.

The plaintiffs allege that "[u]nlike other automobile manufacturers, FCA did not implement a safety override feature that would prevent Class Vehicles from moving when the vehicles are not in Park and a driver opens the driver door and disengages pressure on the gas or brake pedals to exit the vehicle." "The lack of a fail-safe feature is especially problematic because the engine stop button in the Class Vehicles is programmed to not function when drivers attempt to shut off the engine while the vehicle is not in Park." FACMC ¶¶ 121, 126.

The potential problems that this combination of features could cause were summarized by NHTSA in a report that followed its investigation of the rollaway incidents:

The Office of Defects Investigation (ODI) opened Preliminary Evaluation PE15–030 on August 30, 2015 to investigate 14 complaints alleging incidents of rollaway after intended shifts to Park in Model Year (MY) 2014 and 2015 Jeep Grand Cherokee vehicles. The MY 2014–2015 Grand Cherokee vehicles are equipped with Monostable electronic ("E-shift") gearshift assemblies supplied by ZF Group (ZF). The E-shift system operates electronically and the gear requested by the driver is transmitted from the shifter via the CAN Bus to the Transmission Control Module which makes the requested shift. The Monostable gearshift does not move into a detent but springs

...