Kuns v. Ford Motor Co.

• Decision Date: 21 February 2013
• Docket Number: Case No. 3:11 CV 1540.
• Citation: 926 F.Supp.2d 976
• Parties: Nancy L. KUNS, Plaintiff, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

926 F.Supp.2d 976

Nancy L. KUNS, Plaintiff,

v.FORD MOTOR COMPANY, Defendant.

Case No. 3:11 CV 1540.

United States District Court,

N.D. Ohio,

Western Division.

Feb. 21, 2013.

Dennis E. Murray, Jr., Margaret M. Murray, Murray & Murray, Sandusky, OH, for Plaintiff.

Janet L. Conigliaro, Dykema Gossett, Ann Arbor, MI, Elizabeth B. Wright, Eric S. Daniel, Jennifer Mingus Mountcastle, Thompson Hine, Cleveland, OH, for Defendant.

MEMORANDUM OPINION

KATZ, District Judge.

This matter is before the court on defendant Ford Motor Company's motion for summary judgment (Doc. 22.), which the Court grants, and Ms. Kuns' motion to amend the complaint to cure jurisdictional defects (Doc. 32), which the Court also grants.

Ms. Kuns purchased a new 2010 Mercury Mariner from a Ford dealer in Vermillion, Ohio. The following winter, when a family member closed the rear liftgate, the glass in it shattered. Ms. Kuns had the rear glass replaced at an independent automotive glass installer shortly thereafter, having her insurance pay for the bulk of the cost, and paying the $250 deductible herself. A month later, the glass shattered again when another family member closed the liftgate. Following this breakage, Ms. Kuns took the car back to the dealer. Initially, the Ford dealer refused to replace the glass, but Ms. Kuns persisted in demanding that they remedy the problem and the dealership eventually relented and put in a new and redesigned window assembly. Unbeknownst to Ms. Kuns at the time her windows broke, Ford had become aware that the way in which the liftgate closure was designed could cause glass stress and breakage in this model of car. Ford corrected the design problem in production vehicles, and issued instructions to its dealerships to replace broken windows free of charge in certain circumstances.

Ms. Kuns brought this matter alleging that Ford violated the Magnuson–Moss Warranty Act (MMWA) and breached both express and implied warranties. Ford moved for summary judgment, which Ms. Kuns opposes. As a threshold matter, the Court questioned its subject matter jurisdiction under both the MMWA and the Class Action Fairness Act.

I. Jurisdiction

On December 11, 2012, the Court reviewed its own subject matter jurisdiction, sua sponte; observed that the complaint lacked allegations necessary to find jurisdiction; and gave both parties time to brief the question. (Doc. 30.) Defendant Ford Motor Company filed a brief (Doc. 31), and plaintiff Nancy L. Kuns filed both a motion to amend the original complaint (Doc. 32) and a brief responding to Ford's filing (Doc. 33). Both parties argue in favor of this court's jurisdiction.

Federal question jurisdiction appeared to be lacking because Ms. Kuns' only federal claim is a violation of the Magnuson–Moss Warranty Act, 15 U.S.C. § 2301, et seq. and that statute requires that class actions have at least one hundred named plaintiffs to be brought in federal court. § 2310(d)(3). The general federal jurisdiction statute, 28 U.S.C. § 1331, does not provide the Court with jurisdiction to decide a claim arising under a federal statute that has its own specific—and more restrictive—jurisdictional requirements. (Doc. 30 at 2 (citing Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 78 L.Ed. 1248 (1934) (“Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined.”)).) The parties' briefs do not lead the Court to think it misconstrued the statute or that it otherwise has federal question jurisdiction. This moots the parties' arguments about the well-pleaded complaint rule and jurisdiction when federal law completely preempts state law and turns the Court's focus to jurisdiction arising under the Class Action Fairness Act (28 U.S.C. § 1332(d)).

The MMWA allows consumers to bring class actions, but it limits jurisdiction to either “any court of competent jurisdiction in any State or the District of Columbia,” 15 U.S.C. § 2310(d)(1)(A), or a federal district court where the action includes one hundred or more named plaintiffs, § 2310(d)(3)(C). Under the Act, “[no] claim shall be cognizable” where it is brought as a class action in a district court and contains fewer than one hundred named plaintiffs. § 2310(d)(3). Nevertheless, a number of courts have found that the later-passed Class Action Fairness Act can render a district court a “court of competent jurisdiction” and permit it to retain jurisdiction where the CAFA requisites are met but the MMWA requisites are not. Keegan v. Am. Honda Motor Co., Inc., 838 F.Supp.2d 929, 954 (C.D.Cal.2012) (Assembling cases and noting, “[t]hese cases hold that where the party invoking federal jurisdiction is able to meet his or her burden of proving jurisdiction under CAFA, the absence of at least one hundred named plaintiffs does not prevent the plaintiff from asserting claims under the Magnuson–Moss Warranty Act.”); accord9 Bus. & Com. Litig. Fed. Cts. § 101:135 (3d ed.). The parties have not cited—and the Court cannot otherwise find—an indication that the Sixth Circuit Court of Appeals has considered this question and limited MMWA class actions to just those meeting the text of the statute rather than those that meet the CAFA requirements, so the Court can retain jurisdiction if Ms. Kuns meets the CAFA requirements.

CAFA's requirement of minimal diversity is not in question in this matter, but the allegation of the amount in controversy is. Where a plaintiff claims damages in excess of the threshold, only a legal certainty that these are unattainable deprives a court of jurisdiction. Schultz v. Gen. R.V. Ctr., 512 F.3d 754, 756 (6th Cir.2008). However, Ms. Kuns' complaint does not allege that it meets the $5,000,000 CAFA threshold, except to say, “[t]his Court has jurisdiction pursuant to the Class Action Fairness Act by virtue of 28 U.S.C. § 1332(d).” (Compl., Doc. 1 at ¶ 6.) The complaint only alleges Ms. Kuns paid a $250 deductible and the class which she would represent includes more than ten thousand members. ( Id. at ¶¶ 11, 20.) Because of this, the complaint's face does not allege sufficient damages. This alone does not preclude jurisdiction, however, because Ms. Kuns asks for other damages such as diminution in value and revocation of acceptance. Where the recovery amount is unspecified, courts apply a preponderance of the evidence standard to determine if the complaint states a claim that, more likely than not, meets the threshold. Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir.1993)abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010). Ford argues that the Court has jurisdiction because Ms. Kuns seeks the remedy of revocation of acceptance. Ford contends the Court should apply the formula found in Golden v. Gorno Bros., Inc., 410 F.3d 879, 883 (6th Cir.2005), which, it says, produces an amount in controversy of $4,849.65, and, since Ms. Kuns' complaint alleges the class exceeds 10,000 members, the $5,000,000 CAFA threshold is met. (Doc. 31.)

Both state law and the MMWA provide a remedy against a manufacturer, but courts have consistently held that the specific remedy of revocation of acceptance is valid only against the seller of an item, not the manufacturer. Voytovich v. Bangor Punta Operations, Inc., 494 F.2d 1208, 1211 (6th Cir.1974) (limiting both revocation of acceptance and rescission to actions against the seller, not the manufacturer); Henderson v. Chrysler Corp., 191 Mich.App. 337, 477 N.W.2d 505, 508 (1991) (Michigan law limits the UCC remedy of revocation of acceptance to just the seller, not the manufacturer, because, “revocation is inextricably connected to the contractual relationship between a buyer and a seller.”); Aluminum Line Prods. Co. v. Rolls–Royce Motors, Inc., 98 Ohio App.3d 759, 649 N.E.2d 887, 894 (1994) (revocation of acceptance is not a proper remedy against a manufacturer except where the dealer acted as the manufacturer's agent, negotiating terms on its behalf, rather than as a reseller of its product); Hines v. Mercedes–Benz USA, LLC, 358 F.Supp.2d 1222, 1234 n. 3 (N.D.Ga.2005) (assembling cases); accord77A C.J.S. Sales § 592. But see Gochey v. Bombardier, Inc., 153 Vt. 607, 572 A.2d 921, 923 (1990) (acknowledging that most states disallow revocation against a manufacturer, but agreeing with the three minority states that do allow it). Because the Court cannot find support for revocation of acceptance as a valid remedy against a manufacturer, it cannot find that CAFA's threshold is met using this formula.¹

While the face of the original complaint lacks allegations sufficient to find jurisdiction under the MMWA or CAFA, Ms. Kuns has filed a motion to amend the complaint and attached a proposed amended complaint. (Doc. 32.) Seeing neither an objection nor obvious prejudice, the Court will allow the amendment. Fed.R.Civ.P. 15(a).

The amended complaint grants the Court jurisdiction because it clarifies that the size of the class at the time of the original complaint was over 860,000 members, which, more likely than not, makes the amount in controversy exceed the threshold. “Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.” 28 U.S.C. § 1653. This statute allows amendment of lacking jurisdictional allegations only where jurisdiction actually existed at the time of the complaint. Newman–Green, Inc. v. Alfonzo–Larrain, 490 U.S. 826, 831, 109 S.Ct. 2218, 104 L.Ed.2d 893 (1989). Although commonly used to correct questions of citizenship, it applies to insufficient allegations of the amount in controversy also. E.g. Hart v. Schering–Plough Corp., 253 F.3d 272, 274 (7th Cir.2001) (“Much pain could have been avoided had Hart's complaint correctly identified the stakes. But the fact remains that the amount in controversy on the date of filing was $91,910.42.”)...