Thorne v. Pep Boys Manny Moe & Jack Inc.

• Decision Date: 20 November 2020
• Docket Number: No. 20-1540,20-1540
• Citation: 980 F.3d 879
• Parties: Vickie THORNE, individually and on behalf of all others similarly situated, Appellant v. PEP BOYS MANNY MOE & JACK INC.
• Court: U.S. Court of Appeals — Third Circuit

980 F.3d 879

Vickie THORNE, individually and on behalf of all others similarly situated, Appellant

v.PEP BOYS MANNY MOE & JACK INC.

No. 20-1540

United States Court of Appeals, Third Circuit.

Argued September 22, 2020

Filed: November 20, 2020

Yifei Li, Brenden S. Thompson, Alexandra C. Warren, Cuneo Gilbert & LaDuca, 4725 Wisconsin Avenue, NW, Suite 200, Washington, DC 20016, Robert K. Shelquist [ARGUED], Lockridge Grindal Nauen, 100 Washington Avenue South, Suite 2200, Minneapolis, MN 55401, Counsel for Appellant

Kristen E. Dennison, C. Scott Toomey [ARGUED], Littleton Park Joyce Ughetta & Kelly, 201 King of Prussia Road, Suite 220, Radnor, PA 19087, Counsel for Appellee

Before: SMITH, Chief Judge, McKEE, and JORDAN, Circuit Judges

OPINION OF THE COURT

SMITH, Chief Judge.

However appropriate may have been Virginia Woolf's comparison of the unhappy Mrs. Dalloway to "a wheel without a tyre," Plaintiff Vickie Thorne considers herself aggrieved despite having equipped her car with two new tires.¹ Wheels are not an issue. What is at issue is a federal regulation that requires a tire dealer to help customers register their new tires with the manufacturer. That regulation was promulgated under the National Traffic and Motor Vehicle Safety Act of 1966, 49 U.S.C. § 30101, et seq . ("the Act"), and the Act's stated purpose is to reduce traffic accidents and their consequent human toll. Thorne's appeal turns on whether she can sue her tire dealer for ignoring its regulatory tire registration obligation.

The regulation prescribes three methods for tire dealers like Pep Boys Manny Moe & Jack Inc. to help register a buyer's tires. According to Thorne, Pep Boys failed to pursue any of the three when, or after, it sold her the tires. So she sued on behalf of a class of Pep Boys customers who similarly received no tire registration assistance. But Thorne's suit skidded to a halt when the District Court dismissed her complaint without leave to amend. The Court held that a dealer's failure to help register a buyer's tires in one of the three prescribed ways does not, by itself, create an injury in fact for purposes of Article III standing. We agree with that ratio decidendi but, because a district court has no jurisdiction to rule on the merits when a plaintiff lacks standing, we will vacate and remand for the District Court to dismiss Thorne's operative complaint without prejudice.

I. BACKGROUND

Congress passed the Act to "reduce traffic accidents and deaths and injuries resulting from traffic accidents." 49 U.S.C. § 30101 ; 80 Stat. 718. Congress later amended the Act to require that every tire dealer unaffiliated with a tire manufacturer "give a registration form (containing the tire identification number) to the first purchaser of a tire."² 49 U.S.C. § 30117(b)(2)(B). It also required a rulemaking to obligate dealers to keep certain records on tire sales, including each buyer's name and address and tire identification information. Id. § 30117(b)(3). Rulemaking merged these two requirements, providing three options for tire dealers to comply with their registration obligations:

(1) Give each buyer a registration form listing the tire identification number ("TIN") of each tire he or she bought and certain contact information of the dealer, for the buyer to then submit to the tire manufacturer;

(2) Record each buyer's name and address, the TIN of each tire he or she bought, and certain contact information for the dealer on a registration form, and mail it to the tire manufacturer at no charge to the buyer within 30 days; or

(3) Electronically submit to the tire manufacturer, by methods it has authorized, the same information in (2) at no charge to the buyer within 30 days.

See 49 C.F.R. § 574.8(a)(1)(i)–(iii).

Widening the lens, the Act states how it interacts with other laws and is enforced. It preserves common-law causes of action, 49 U.S.C. § 30103(e), but does not confer an express private right of action. See, e.g. , Ayres v. Gen. Motors Corp. , 234 F.3d 514, 522–24 (11th Cir. 2000) ; Mulholland v. Subaru of Am., Inc. , 620 F. Supp. 2d 1261, 1265–66 (D. Colo. 2009). For administrative enforcement, the Act authorizes the Secretary of Transportation to decide whether a vehicle or vehicle equipment contains a safety-related defect or does not comply with minimum performance standards. See 49 U.S.C. §§ 30102(a)(10), 30118(a). Manufacturers must notify vehicle owners and dealers of any such defect or non-compliance, and the Secretary may sua sponte or on petition of an "interested person" hold a hearing on the sufficiency of notice. Id. § 30118(b), (e). "Interested person[s]" may participate in these hearings. Id. The Attorney General may also enforce the Act through a federal civil lawsuit to enjoin "a violation of this chapter or a regulation prescribed ... under this chapter." Id. § 30163(a). One who violates the Act, including the tire registration statute ( § 30117 ) "or a regulation prescribed thereunder, is liable to the United States Government for a civil penalty of not more than $21,000 for each violation." Id. § 30165(a)(1). Penalties for "a related series of violations" can reach $105 million. Id.

II. FACTS AND PROCEDURAL HISTORY

Thorne bought two tires from a Pep Boys store in Richmond, Virginia, in January of 2017. She claims that Pep Boys did not help register her tires with the manufacturer using any of the three prescribed methods.³

Thorne filed a class action complaint against Pep Boys in the Eastern District of Pennsylvania, alleging that Pep Boys violated its registration obligations under 49 C.F.R. § 574.8 and thus was liable to her on federal and state-law causes of action. Pep Boys moved to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The District Court determined that Thorne failed to allege a concrete injury in fact, dismissing her complaint without prejudice for lack of Article III standing.

Thorne then filed an amended class action complaint, bringing eight causes of action under federal warranty and state law.⁴ She sought money damages, restitution, injunctive relief, and attorneys' fees. Pep Boys, she alleged, deprived her of the benefit of the bargain when it sold her tires without helping to register them because unregistered tires are worth less than registered tires. Thorne alternatively alleged intangible harm because her unregistered tires increase the risk to her person or property if she is unreachable upon her tires' recall. She did not allege any performance problems, physical defects, or recall associated with her tires.

After Pep Boys again moved to dismiss, the District Court dismissed Thorne's amended complaint on Article III standing grounds. The District Court held that Thorne failed to sufficiently plead tangible financial harm because, as a matter of law, she did not bargain for compliance with the registration regulation. It also concluded that her alleged intangible harm was speculative and insufficiently concrete absent a recall of her tires. Citing Kamal v. J. Crew Grp., Inc. , 918 F.3d 102 (3d Cir. 2019), the District Court held that violation of 49 C.F.R. § 574.8's record-keeping requirement alone does not produce an injury in fact. This time, dismissal did not provide leave to amend.

III. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291 to review the dismissal of Thorne's amended complaint. A North Carolina resident, Thorne invoked 28 U.S.C. § 1332(d) to ground the District Court's exercise of diversity jurisdiction over her putative class action against Philadelphia-based Pep Boys.

But the District Court lacked jurisdiction if Thorne couldn't establish Article III standing. See In re Schering Plough Corp. Intron/Temodar Cons. Class Act. , 678 F.3d 235, 243 (3d Cir. 2012). Constitutional standing, which is properly tested under Rule 12(b)(1), may be challenged facially or factually. A facial challenge argues that the plaintiff's factual allegations cannot meet the elements of standing. Schering Plough , 678 F.3d at 243 ; see also In re Horizon Healthcare Servs. Inc. Data Breach Litig. , 846 F.3d 625, 632 (3d Cir. 2017). Because that was the nub of Pep Boys's Rule 12(b)(1) motion, we take Thorne's factual allegations as true, view them in her favor, and perform a plenary review of the dismissal. See Horizon , 846 F.3d at 632.

IV. ANALYSIS

Derived from separation-of-powers principles, the law of standing "serves to prevent the judicial process from being used to usurp the powers of the political branches." Clapper v. Amnesty Int'l USA , 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). Article III of our Constitution vests "[t]he judicial Power of the United States" in both the Supreme Court and "such inferior Courts as the Congress may from time to time ordain and establish." U.S. Const. art. III, § 1. This "judicial [p]ower" extends only to "Cases" and "Controversies." Id. art. III, § 2; see also Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). To assure that judges avoid rendering impermissible advisory opinions, parties seeking to invoke federal judicial power must first establish their standing to do so. Spokeo , 136 S. Ct. at 1547.

The familiar elements of Article III standing require a plaintiff to have "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Id. at 1547. Injury in fact is the " ‘foremost’ of standing's three elements"—and the one element at issue in this appeal. Id. (quoting Steel Co. v. Citizens for Better Environment , 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ). To plead an injury in fact, the party invoking federal jurisdiction must establish three sub-elements: first, the invasion of a legally protected interest; second, that the injury is both "concrete and particularized"; and third, that the injury is ...