Werwinski v. Ford Motor Co.
Decision Date | 15 April 2002 |
Docket Number | No. 00-4323.,00-4323. |
Citation | 286 F.3d 661 |
Parties | Robert N. WERWINSKI, Jr.; Elizabeth C. Werwinski; Jean C. Cook; Donna Coffey; Joseph Coffey; Joan McIlhenny; Doris E. Zaharchuk; James Dunlap, on behalf of themselves and all others similarly situated, v. FORD MOTOR COMPANY, Jean C. Cook, Donna Coffey, Joseph Coffey, Joan McIlhenny, Doris E. Zaharchuk and James Dunlap, on behalf of themselves and all others similarly situated, Appellants. |
Court | U.S. Court of Appeals — Third Circuit |
Joseph C. Kohn, Martin J. D'Urso (argued), David J. Cohen, Diana Liberto, Hilary Cohen, Kohn, Swift & Graf, P.C., Philadelphia, PA, for Appellants.
Lynn E. Parseghian, Brian C. Anderson, Martha Dye, Srikanth Srinivasan (argued), O'Melveny & Myers, LLP, Washington, DC, Robert Toland, II, Campbell, Campbell, Edwards & Conroy, Wayne, PA, for Appellee.
Hugh F. Young, Jr., Product Liability Advisory Council, Inc., Reston, VA, Christopher Scott D'Angelo, Janelle E. Fulton Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, for Amicus Curiae Product Liability Council, Inc.
Before SCIRICA, GREENBERG, and BRIGHT,* Circuit Judges.
This appeal arises out of a putative class action against Ford Motor Company relating to two allegedly defective components in the transmissions installed in Ford vehicles during the 1990-1995 model years. Asserting that Ford knew about the defective parts since at least 1991, appellants sued for breach of express warranty, breach of implied warranty, fraudulent concealment, and violations of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), Pa. Stat. Ann. tit. 73, §§ 201-1 et seq. (West 1993). The district court, after denying appellants' motion to remand the case to the state court in which they had originated it, granted Ford's motion for judgment on the pleadings as to all of appellants' claims. For the reasons set forth below, we will affirm the district court's orders.
Eight plaintiffs who bought or leased Ford automobiles manufactured between 1991 and 1995, six of whom appeal, 3 filed the complaint in this case alleging that the transmissions in their vehicles contained two defective parts: (1) aluminum (rather than steel) forward clutch pistons ("FCPs") that crack prematurely, and (2) inadequately lubricated planetary gears ("RPGs"). Appellants assert that both defects can cause transmission failures, including "sudden acceleration, delayed forward or reverse engagement, sudden shifts into reverse, and a total loss of acceleration or forward movement." Br. of Appellants at 5. According to the complaint, each of the appellants experienced transmission failure and incurred substantial repair costs before his or her automobile had reached 80,000 miles.1
Appellants assert that Ford's Technical Service Bulletins demonstrate that the company has known about the FCP defects since at least 1991. They maintain that Ford redesigned the FCPs twice before finally deciding in 1994 to manufacture them with steel instead of aluminum. Appellants similarly allege that Ford has been aware of the RPGs' lubrication defect since at least 1990. Even after redesigning the RPGs in 1990 and 1992, however, Ford has been unable to correct the lubrication problem. Despite its awareness of these malfunctioning components, Ford never warned the overwhelming majority of car owners about the transmission defects. According to appellants, Ford not only concealed this material information from consumers as it continued to market and sell automobiles with defective transmissions, but it addressed the problem by cutting its 6-year/60,000 mile power train warranty for its 1991 models to a 3-year/36,000 mile warranty for its 1992 models.
On January 20, 2000, appellants filed their putative class action in the Philadelphia County Court of Common Pleas. Ford promptly removed the case to the district court on the basis of diversity of citizenship following which appellants moved to remand the case, arguing that the amount-in-controversy jurisdictional threshold exceeding $75,000 had not been satisfied. On April 11, 2000, the district court denied appellants' motion for remand and thus retained jurisdiction over the case. In its order, the district court first indicated that Pennsylvania courts "have found that the amount in controversy in a suit under the UTPCPL is the purchase price of the car." Werwinski v. Ford Motor Co., No. Civ. A. 00-943, 2000 WL 375260, at *3 (E.D.Pa. Apr.11, 2000). Finding that a jury reasonably could conclude that appellants were entitled to recover the purchase price of their automobiles to make them whole, the court started with a base of $15,000 in damages. See id. After trebling the compensatory damages to $45,000 pursuant to the UTPCPL, the court next determined that reasonable attorney's fees could range between $5,000 and $10,000, thus pushing the amount to over $50,000. See id. Finally, recognizing that the UTPCPL provides courts with discretionary authority to impose punitive damages, the district court concluded that "[b]ased on Plaintiffs' allegations, a reasonable jury could award punitive damages that would easily place the amount in controversy above $75,000." Id. at *4.2
On May 24, 2000, Ford filed a motion for judgment on the pleadings. After the motion was briefed fully, the district court entered an order granting the motion with respect to the claims of all parties except the Werwinskis' claim for breach of express warranty. Of concern on this appeal, the district court dismissed the fraudulent concealment and UTPCPL claims under the economic loss doctrine because "recovery in tort is barred in product liability actions between commercial enterprises where the only damage alleged is to the product itself, even if the defect posed a potential risk of injury." Werwinski v. Ford Motor Co., No. Civ. A. 00-943, 2000 WL 1201576, at *4 (E.D.Pa. Aug.15, 2000). In coming to this conclusion, the district court determined that the economic loss doctrine is not limited to transactions between commercial enterprises, but extends to transactions between manufacturers and individual consumers as well. See id. at *5. Furthermore, the district court predicted that the Supreme Court of Pennsylvania would conclude that the economic loss doctrine applies to claims for intentional fraud in addition to claims for negligence, strict liability, and negligent misrepresentation. See id. Finally, the district court observed that Pennsylvania's two-year statute of limitations for common law fraud actions barred the fraud claims of several appellants. See id. at *6 n. 5.
Eventually, the Werwinskis settled their case with Ford and dismissed all of their claims with prejudice.3 On December 12, 2000, the district court entered final judgment for Ford. Three days later, appellants filed a timely notice of appeal challenging both the district court's order denying remand and its order disposing of the case on the merits.
The district court exercised removal jurisdiction over this putative class action based upon diversity of the parties. See 28 U.S.C. §§ 1332(a)(1), 1441(b). The district court entered final judgment in the case on December 12, 2000, and appellants filed a timely notice of appeal, and thus we have appellate jurisdiction pursuant to 28 U.S.C. § 1291.
We exercise plenary review over the district court's order denying appellants' motion for remand, see Lazorko v. Pa. Hosp., 237 F.3d 242, 247 (3d Cir.2000), cert. denied, 533 U.S. 930, 121 S.Ct. 2552, 150 L.Ed.2d 719 (2001), and its order granting Ford's motion for judgment on the pleadings, see Churchill v. Star Enters., 183 F.3d 184, 189 (3d Cir.1999).
Appellants raise several issues on appeal. First, they contend that the district court erred in denying their motion to remand because the amount-in-controversy requirement for diversity jurisdiction had not been met for any of their claims. Second, they argue that the district court erroneously applied the economic loss doctrine to their fraudulent concealment and UTPCPL claims. Finally, appellants submit that the district court erred in ruling that the Pennsylvania statute of limitations barred certain of their fraudulent concealment claims. See infra note 9.
A district court has subject matter jurisdiction over state law claims if there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000 for each plaintiff. See 28 U.S.C. § 1332. Appellants argue that the district court should not have exercised removal jurisdiction because the $75,000 threshold has not been satisfied. In particular, they contend that the court erred when calculating the amounts in controversy by taking into account the purchase price of their vehicles, rather than just the repair costs for their transmissions.
A district court's determination as to the amount in controversy must be based on the "plaintiff's complaint at the time the petition for removal was filed." Steel Valley Auth. v. Union Switch Div., 809 F.2d 1006, 1010 (3d Cir.1987). The court must measure the amount "not ... by the low end of an open-ended claim, but rather by a reasonable reading of the value of the rights being litigated." Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir.1993). However, "claims of several plaintiffs, if they are separate and distinct, cannot be aggregated for purposes of determining the amount in controversy." Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 218 (3d Cir.1999) (internal quotation marks omitted). See also Zahn v. Int'l Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 512, 38 L.Ed.2d 511 (1973). Only claims, whether related or unrelated, of a single plaintiff...
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