Walsh v. Ford Motor Co.

• Decision Date: 14 March 1984
• Docket Number: Civ. A. No. 81-1998.
• Citation: 588 F. Supp. 1513
• Parties: John F. "Jack" WALSH, et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — District of Columbia

588 F. Supp. 1513

John F. "Jack" WALSH, et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant.

Civ. A. No. 81-1998.

United States District Court, District of Columbia.

March 14, 1984.

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Beverly C. Moore, Jr., Bethesda, Md., Landon Gerald Dowdey, Washington, D.C., Seymour Kurland, Barry F. Schwartz, Kenneth J. Warren, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for plaintiffs.

William T. Coleman, Jr., Richard Warmer, Carl R. Schenker, Jr., John H. Beisner, O'Melveny & Myers, Washington, D.C., for defendant.

MEMORANDUM OPINION

JUNE L. GREEN, District Judge.

This matter is before the Court on defendant's motion to dismiss, plaintiffs' opposition thereto, supplemental memoranda from both parties and oral argument on the motion. For the reasons stated below, the Court denies defendant's motion to dismiss second amended complaint.

This case has been before the Court since August 25, 1981. It involves an action for damages, declaratory and injunctive relief for breach of written and implied warranty, negligence, and strict liability for allegedly defective automatic transmissions in certain types of automobiles manufactured by defendant, Ford Motor Company ("Ford"). The complaint alleges that defendant's 1976-79, as well as certain 1980 model vehicles with FMX, C-3, C-4, or C-6 automatic transmissions, slipped into the reverse position after the driver had attempted to place the transmission in the park position. The second amended complaint includes 210 named plaintiffs described in some detail and 158 motor vehicles. The complaint alleges the existence of claims under the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq. ("Magnuson-Moss" or "the Act"), as well as various state statutes and common law. The Act permits "consumers" to sue in Federal court if they have been "damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under the Act, or under a written warranty, implied warranty, or service contract," 15 U.S.C. § 2310(d)(1), and they have satisfied certain strict jurisdictional requirements.

Since the inception of this suit in August 1981, the Court has endured endless motions by both parties, including at least three motions to amend the complaint and as many motions to dismiss. The following motions are presently before the Court: defendant's motion to dismiss second amended complaint, plaintiffs' motion for class certification and defendant's motion to dismiss implied warranty claims for lack of vertical privity. At this time, the Court will address Counts I and II of defendant's motion to dismiss second amended complaint which allege Magnuson-Moss warranty claims. This will require the Court to delve into the vertical privity issues in order to address properly the motion to dismiss. Counts III through V of the complaint are not addressed in this decision. The Court's prior ruling of December 22, 1982, shall stand as to those counts.

I. Background of this Litigation

On December 22, 1982, the Court issued a memorandum opinion which denied defendant's motion to dismiss the first amended complaint. See 1983-2 Trade Cas. ¶ 65,701 (1982). In that opinion, the Court concluded that plaintiffs had satisfied the 100-named plaintiff jurisdictional provisions of the Magnuson-Moss Act.

Finding it necessary to amend their first amended complaint, plaintiffs sought leave from the Court to file a second amended complaint. On May 23, 1983, the Court granted plaintiffs' motion. Ford had opposed that motion and noted that if the Court were to grant plaintiffs' motion for leave to file a second amended complaint, defendant would have to file another motion to dismiss in order to preserve its right of appeal.

On June 17, 1983, defendant filed its motion to dismiss the second amended complaint. The final briefing of this motion was to be completed on August 19, 1983. As early as February 1983, however, the Court had observed that there was substantial room for disagreement concerning some of the Court's determinations as outlined in the memorandum opinion of December 22, 1982. See Memorandum Order at 2, filed February 3, 1983. The Court subsequently concluded that it might be necessary to re-examine its 1982 decision and redetermine whether plaintiffs had satisfied the jurisdictional requirements under Magnuson-Moss. With that in mind, the Court requested an informal chambers conference to discuss, inter alia, the numerous motions that were before the Court and a possible extended briefing schedule and argument date for defendant's motion to dismiss the second amended complaint.

At that meeting, the parties agreed to submit additional briefing papers on the motion to dismiss. By order filed September 29, 1983, the Court directed plaintiffs to submit any additional briefing papers on the motion to dismiss by October 13, 1983. The Court further ordered defendant to file any additional papers by October 24, 1983. The hearing date for the motion to dismiss was later set for November 2, 1983.

Prior to oral argument, the Court issued a memorandum opinion dated October 28, 1983, staying plaintiff's motion to add parties to the second amended complaint. The Court imposed the stay on plaintiffs' motion in order to focus on the issues already before it, namely the motion to dismiss.

Since the hearing, both counsel have filed additional briefing papers on the motion to dismiss. In mid-January, the parties requested further opportunity to submit additional memoranda. The Court has denied those requests because it was determined that additional briefing could not be helpful to the Court.

During the course of the additional briefing, plaintiffs' counsel has indicated that it is somehow inappropriate for this Court to reconsider its prior rulings. First, it is evidently clear that the Court has the plenary power to reconsider any prior interlocutory judgments when it believes that its prior decision may have been incorrect or at least deserved careful re-examination and evaluation. See John Simmons Co. v. Grier Brothers Co., 258 U.S. 82, 88, 42 S.Ct. 196, 198, 66 L.Ed. 475 (1922) (an interlocutory decree may be modified or rescinded by the court at any time before final judgment). Further, the Court must review carefully its prior decisions if it believes that those decisions are incorrect. See In re Multi-Piece Rim Products Liability Litigation, 653 F.2d 671, 678 (D.C. Cir.1981).

The Court finds that plaintiffs have satisfied the strict jurisdictional requirements of the Act. Therefore, their Magnuson-Moss warranty claims in Counts I and II of the complaint have survived Ford's motion to dismiss. The Court outlines in detail its reasons for this conclusion below.

II.

Plaintiffs' complaint includes two counts based on warranty claims under the Act. It alleges that Ford breached the implied warranty of merchantable quality and its written warranty to all plaintiffs and potentially similarly situated class members. Jurisdiction for these claims is based on section 110(d) of the Act, 15 U.S.C. § 2310(d)(3), which provides:

No claim shall be cognizable in a suit brought in an appropriate district court of the United States

(A) if the amount in controversy of any individual claim is less than the sum or value of $25;

(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or

(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.

15 U.S.C. § 2310(d)(3).

Defendant has moved to dismiss the Magnuson-Moss claims arguing that plaintiffs have failed to satisfy the strict jurisdictional, 100-named plaintiff requirement of the Act. It argues that because of the unique 100-named plaintiff requirement for class actions, plaintiffs must do more than merely assemble 100 individuals for subject-matter jurisdiction to attach in Federal court. It argues that each plaintiff, in order to be counted toward meeting the 100-named plaintiff requirement, must be able to state a claim for relief.

In opposition, plaintiffs argue that the Court should not take a "merits inquiry" to determine whether it has jurisdiction. Instead, they argue, the Court must look to the doctrine outlined in Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946). In that decision, the United States Supreme Court noted that:

the failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of action on which relief could be granted is a question of law and just as issues of fact it must be decided after and not before the court has assumed jurisdiction over the controversy. If the court does later exercise its jurisdiction to determine that the allegations in the complaint do not state a ground for relief, then dismissal of the case would be on the merits, not for want of jurisdiction.

Id. at 682, 66 S.Ct. at 776 (citations omitted).

Contrary to plaintiffs' assertion, the reasoning of Bell v. Hood is not applicable in the present case. Bell v. Hood was interpreting the broad general Federal question jurisdictional statute, the predecessor to Title 28, United States Code, Section 1331. Although it is true that a Federal court may not make a merits inquiry where jurisdiction is based solely on section 1331, that condition is not universally true when other jurisdictional statutes apply. There can be no argument that other jurisdictional statutes, including 28 U.S.C. §§ 1343, 1350, 1361, require a Federal court to make a merits inquiry before asserting subject matter jurisdiction under those provisions. See Mount Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 278-79, 97 S.Ct. 568, 571-72, 50 L.Ed.2d 471 (1977) (if a court were...