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Canfield v. FCA U.S. LLC

United States District Court, D. Delaware

January 8, 2019

TIMOTHY CANFIELD, ANDREW CATTANO, JAMES LETT, DENNIS PECK, STEVEN SPRATLEY, SUSAN STEBBINS, and YVETTE TAYLOR, on behalf of themselves and all others Similarly situated, Plaintiffs,
v.
FCA U.S. LLC, Defendant.

          REPORT AND RECOMMENDATION

          SHERRY R. FALLON UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         Presently before the court in this putative class action suit concerning alleged defective tire components is a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6)[1] filed by defendant FCA U.S. LLC ("FCA US").[2] (D.I. 12) For the following reasons, I recommend granting-in-part and denying-in-part FCA US's motion.

         II. BACKGROUND

         A. The Parties

         FCA U.S. is a Delaware limited liability company headquartered in Auburn Hills, Michigan. (D.I. 11 at ¶ 20) The complaint alleges that FCA U.S. is the United States subsidiary of Italian multinational automaker Fiat S.p.A. (Id.) FCA U.S. designs, manufactures, and sells automobiles throughout the United States under various brand names, including the "Jeep," "Dodge," and "Chrysler" brands. (Id. at ¶ 24)

         Named plaintiff Timothy Canfield ("Canfield") is a citizen and resident of Marlette, Michigan. (Id. at ¶ 13) Named plaintiff Andrew Cattano ("Cattano") is a citizen and resident of Summit, New Jersey. (Id. at ¶ 14) Named plaintiff James Lett ("Lett") is a citizen and resident of North Ridgeville, Ohio. (Id. at ¶ 15) Named plaintiff Dennis Peck ("Peck") is a citizen and resident of Jackson, Michigan. (Id. at ¶ 16) Named plaintiff Steven Spratley ("Spratley") is a citizen and resident of Brooklyn, New York. (Id. at ¶ 17) Named plaintiff Susan Stebbins ("Stebbins") is a citizen and resident of Rahway, New Jersey. (Id. at ¶ 18) Named plaintiff Yvette Taylor ("Taylor") (together, with the other named plaintiffs, "plaintiffs") is a citizen and resident of Holyoke, Massachusetts. (Id. at¶ 19)

         B. Facts

         Plaintiffs allege that Chrysler Town & Country, Dodge Grand Caravan, Jeep Liberty, and Dodge Journey vehicles manufactured after June 10, 2009 ("Class Vehicles") are equipped with a defective component - a copper-bearing aluminum 2000 series metal alloy ("AL2000") valve stem and nut on vehicles equipped with a tire pressure monitoring system ("TPMS").[3] (Id. at ¶¶ 1, 5, 7, 24) Plaintiffs allege that the valve stems are defective because they are "subject to corrosion" when "exposed to corrosive elements like road salt." (Id. at ¶ 4) Plaintiffs allege that when a valve stem fails, "air can be rapidly released from the tire without warning," which poses a significant safety risk. (Id. at ¶¶ 4, 59)

         The vehicles come with a 3-year/36, 000 mile Basic Limited Warranty, a 3-year/unlimited-mileage Corrosion Warranty, a 5-year/100, 000 mile Outer-Body Corrosion Warranty, a 5-year/l00, 000 Powertrain Warranty, and a 8-year/1000, 000 mile Emissions Warranty. (D.I. 13, Ex. A)

         i. Canfield

          In January 2013, Canfield purchased a used 2010 Dodge Journey with 15, 000 miles from an undisclosed dealership in Caro, Michigan. (Id. at ¶ 93) In December 2015, at an undisclosed mileage, Canfield took his vehicle to a Walmart to have a valve stem replaced. (Id. at ¶ 97) In January 2016, at an undisclosed mileage, he took his vehicle to a Belle Tire to have a second valve stem replaced. (Id. at ¶ 98) In both instances, he sought a repair because the "TPMS light flashed on his dashboard," alerting him that a tire had low pressure, "before a nearly instantaneous air-out of one of his tires." (Id. at ¶ 96)

         ii. Cattano

         In 2010, Cattano purchased a 2010 Jeep Liberty with undisclosed miles from a Chrysler dealership in Summit, New Jersey. (Id. at ¶ 99) On May 23, 2015, Cattano was driving his vehicle on the highway when the TPMS light came on. (Id. at ¶ 102) Almost instantaneously, his right rear tire had an air-out. (Id.) Cattano momentarily lost control of his car, but successfully pulled his vehicle over. (Id.) He observed that the TPMS module was missing, leaving a hole in the tire's sidewalk (Id.) Eventually, on an undisclosed date and at an undisclosed mileage, Cattano took his vehicle to an undisclosed mechanic who recommended replacing and then replaced four valve stems on his vehicle because the TPMS valve stems on his other three tires had begun to crack. (Id. at ¶ 103)

         iii. Lett

         In March 2010, Lett purchased a new 2010 Chrysler Town & Country with undisclosed miles from a Chrysler dealership in Avon Lake, Ohio. (Id. at ¶ 105) In June 2014, Lett's wife was driving the vehicle when a tire suffered an air-out at an undisclosed mileage. (Id. at ¶ 107) Lett's wife initially lost control of the vehicle, but successfully pulled the vehicle over. (Id.) Upon inspecting the blown out tire, Lett observed a corroded valve stem, which Lett had replaced on an undisclosed date and at an undisclosed mileage. (Id.) In the summer of 2015, Lett replaced four valve stems on his vehicle after observing that three were cracked and one was corroded. (Id. at ¶ 108)

         iv. Peck

          In approximately June 2010, Peck purchased a new 2010 Dodge Journey with undisclosed miles from a Chrysler dealership in Clinton, Michigan. (Id. at ¶ 109) On March 3, 2015, at an undisclosed mileage, Peck was driving when he heard a loud noise and saw that the vehicle's TPMS warning light had come on. (Id. at ¶ 112) Initially, Peck "felt the car pull to the left," but he successfully pulled the vehicle to the side of the road. (Id.) He then observed that the TPMS module was missing and left a hole in the tire. (Id.) As a result, Peck had a tire and TPMS valve stem replaced. (Id. at ¶ 113)

         v. Spratley

         In an undisclosed month in 2012, Spratley purchased a certified, pre-owned 2010 Chrysler Town & Country with "about 65, 000 miles" from a Chrysler dealership in Jersey City, New Jersey. (Id. at ¶ 114) In early 2015, at an undisclosed mileage, Spratley took his vehicle to an undisclosed mechanic after experiencing a leak in the tire. (Id. at ¶ 117) The mechanic noted two cracked valve stems, which Spratley had replaced. (Id. at ¶¶ 117-118)

         vi. Stebbins

         In August 2012, Stebbins purchased a used 2010 Dodge Journey with 37, 000 miles from an undisclosed seller in New Jersey. (Id. at ¶ 119) On November 23, 2014, at an undisclosed mileage, Stebbins saw the vehicle's TPMS warning light come on and experienced an air-out of a tire. (Id. at ¶ 122) She momentarily lost control of her vehicle, but successfully pulled the vehicle over. (Id.) Stebbins observed that the TPMS module was missing and left a hole in her tire. (Id.) Stebbins's car was serviced at International Tire and Parts, where she had two tires and three TPMS valve stems replaced. (Id. at ¶ 123)

         vii. Taylor

         In November 2010, Taylor purchased a used 2010 Dodge Grand Caravan with undisclosed miles from a third-party in Holyoke, Massachusetts. (Id. at ¶ 124) On December 8, 2014, Taylor paid $140.43 for her mechanic at D.E. Bourque & Sons, Inc. Automotive Service & Sales to investigate her under-inflated tire and replace her leaking TPMS. (Id. at ¶ 128) She returned to her mechanic on February 5, 2015 and paid $134.49 to investigate another under-inflated tire and replace another TPMS. (Id. at ¶ 129) She visited her mechanic again on April 27, 2016 and paid $259.76 for her mechanic to remove and replace TPMS on her rear passenger side and front driver side tires. (Id. at ¶ 130) On all three visits, Taylor's mechanic informed her that the TPMS was corroded and causing her tire to lose air. (Id. at ¶¶ 128-130)

         C. Procedural History

         On October 12, 2017, plaintiffs initiated this action by filing a class action complaint in the Superior Court of Delaware. (D.I. 1, Ex. A) On December 12, 2017, FCA U.S. removed the action to this court pursuant to 28 U.S.C. §§ 1441 and 1446. (D.I. 1) On January 18, 2018, FCA U.S. moved to dismiss the original complaint pursuant to Rule 12(b)(6). (D.I. 6) On February 1, 2018, plaintiffs filed an amended complaint ("FAC") in response to the motion. (D.I. 11) On February 15, 2018, FCA U.S. filed the current motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (D.I. 12) The court heard oral argument on May 8, 2018.

         D. Related Case

         On August 3, 2016, plaintiffs Spratley, Canfield, Cattano, Lett, Peck, Stebbins, and Taylor filed a complaint in the United States District Court for the Southern District of New York against FCA US.[4] (D.I. 17 at 2) On January 23, 2017, the Southern District of New York transferred the case sua sponte to the United States District Court for the Northern District of New York. (Id.) On September 12, 2017, the Northern District of New York dismissed plaintiffs' claims for lack of personal jurisdiction with the exception of one plaintiff, Thomas Hromowyk ("Mr. Hromowyk"), who is not a named plaintiff in the case at bar. See Spratley v. FCA US, 2017 WL 4023348 (N.D.N.Y. Sept. 12, 2017). The case remains pending before the Northern District of New York, as to Mr. Hromowyk's claims. See id.

         III. LEGAL STANDARD

         Rule 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Umland v. Planco Fin. Servs., 542 F.3d 59, 64 (3d Cir. 2008).

         To state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Although detailed factual allegations are not required, the complaint must set forth sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). A claim is facially plausible when the factual allegations allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 663; Twombly, 550 U.S. at 555-56.

         When determining whether dismissal is appropriate, the court must take three steps.[5] See Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must identify the elements of the claim. Iqbal, 556 U.S. at 675. Second, the court must identify and reject conclusory allegations. Id. at 678. Third, the court should assume the veracity of the well-pleaded factual allegations identified under the first prong of the analysis, and determine whether they are sufficiently alleged to state a claim for relief. Id.; see also Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). The third prong presents a context-specific inquiry that "draw[s] on [the court's] experience and common sense." Iqbal, 556 U.S. at 663-64; see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). As the Supreme Court instructed in Iqbal, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'show[n]' - 'that the pleader is entitled to relief" Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).

         IV. DISCUSSION

         A. Statutes of Limitations

         As a preliminary matter, FCA U.S. argues that the claims at bar were filed on October 12, 2017 - the date the complaint was filed in Superior Court. (D.I. 13 at 8-10) Plaintiffs contend that their complaint was re-filed in accordance with 28 U.S.C. § 1367(d), which provides for tolling of plaintiffs' state law claims. (D.I. 17 at 2) Therefore, according to plaintiffs, the operative date for the filing of their claims was August 3, 2016, the date they filed the complaint in the Southern District of New York. (Id.)

         Section 1367(d) provides that: "[t]he period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period." 28 U.S.C. § 1367(d). However, the Northern District of New York dismissed plaintiffs' claims for lack of personal jurisdiction. See Spratley, 2017 WL 4023348, at *6, 8-9. Relevant case authorities establish that the tolling provision set forth in § 1367(d) does not preserve claims dismissed for lack of personal jurisdiction (as well as improper venue). See, e.g., Malone v. Bayerische Hypo-Und Vereins Bank, 2010 WL 391826, at *8 & n.10 (S.D.N.Y. Feb. 4, 2010), aff'd sub nom. Malone v. Bayerische Hypo-Und Vereins Bank, AG, 425 Fed.Appx. 43 (2d Cir. 2011) (citing Zychek v. Kimball Int'l Mktg. Inc., 2006 WL 1075452, at *3 (D. Idaho Apr. 21, 2006) ("The dismissal of all claims (federal and state)... was not pursuant to 28 U.S.C. § 1367. Therefore, the Plaintiff cannot rely on 28 U.S.C. § 1367(d) to toll the statute of limitations."); Parrish v. HBO & Co., 85 F.Supp.2d 792, 796-97 (S.D. Ohio 1999) ("[T]he court concludes that, for § 1367(d) to be applicable, the supplemental claim brought pursuant to § 1367(a) must have been dismissed by the court pursuant to § 1367(c).")); Flores v. Predco Servs. Corp., 2011 WL 883640, at *l-2 & n.5 (D.N.J. Mar. 11, 2011) (noting that at oral argument, the court ruled 28 U.S.C. § 1367(d) did not apply following the trial court's granting of defendants' motion to dismiss. The motion to dismiss was premised on lack of personal jurisdiction and was granted without a written opinion). Therefore, the court recommends that the applicable filing date is the date of the complaint in the instant action filed in the Delaware Superior Court - October 12, 2017.

         i. Counts II and III (Ohio Law)

         Counts II and III of the FAC allege causes of action by Lett on behalf of the Ohio Class for deceptive and unfair conduct[6] in violation of the Ohio Consumer Sales Practices Act ("OCSPA"), Ohio Rev. Code Ann. § 1345.01, et seq. (D.I. 11 at¶¶ 156-186) Plaintiffs assert that FCA U.S. violated the OCSPA by "knowingly placing into the stream of commerce Class Vehicles equipped with defective TPMS valve stems that result in, among other problems, sudden and unexpected tire air-outs," and "concealing the defect in the Class Vehicles [and] failing to inform Plaintiff Lett and the other Ohio Class members of this defect." (Id. at ¶¶ 160-61, 176-77)

         Claims brought under the OCSPA "may not be brought more than two years after the occurrence of the violation which is the subject of suit." Ohio Rev. Code Ann. § 1345.10(C). Lett claims to have purchased his new 2010 Chrysler Town & Country in March 2010. (D.I. 11 at ¶ 105) Because this action was not filed until October 12, 2017, FCA U.S. contends that Lett's claims in Counts II and III are time-barred by the applicable statute of limitations. (D.I. 13 at 8-9) Plaintiffs contend that Lett's claims under the OCSPA are timely. (D.I. 17 at 7) Lett does not allege any further acts or omissions by FCA U.S. beyond his claims related to an omission at the time of sale, but instead contends continuing violations are not time-barred based on allegations that FCA U.S. did not recall, replace, or reimburse him for allegedly defective valve stems after his purchase, and within the last two years. (Id. at 7-8)

         When a party seeks damages under the OCSPA, the two-year limitations period is "absolute, and the discovery rule does not apply." Zaremba v. Marvin Lumber & Cedar Co., 458 F.Supp.2d 545, 552 (N.D. Ohio 2006) (citing Lloyd v. Buick Youngstown GMC, 686 N.E.2d 350 (Ohio Ct. App. 1996)); see also Quetot v. M&M Homes, Inc., 2013 WL 793219, at *3 (Ohio Ct. App. Feb. 25, 2013) ("No discovery rule applies to claims for monetary damages under the [OCSPA]."). The statute of limitations under the OCSPA applies to "an unfair or deceptive act or practice in connection with a consumer transaction . . . whether it occurs before, during, or after the transaction." Ohio Rev. Code Ann. § 1345.02(A).

         Plaintiffs argue that "[i]n the case of remedial legislation such as the [OCSPA], the term 'occurrence of the violation,' where the violation is a continuing or episodic one, will denote the time when the violation ceases," and cites RY/EH, Inc. v. Arthur Treacher's, Inc., 685 N.E.2d 316, 318 (Ohio Ct. App. 1996) as support. (D.I. 17 at 7) (internal quotation marks and emphasis omitted) However, Treacher's makes no such holding, and that case does not examine the OCSPA, but rather interprets the Ohio Business Opportunity Purchasers Protection Act, Ohio Rev. Code Ann. § 1334.01, et seq., which provides remedies to those who have been misled by dishonest or negligent franchisors. See Treacher's, 685 N.E.2d at 318-19. The statute of limitations begins to run from the date of the occurrence of the violation, which is not necessarily the date of any underlying transaction. See Ohio Rev. Code Ann. §§ 1345.01(A), 1345.10(C); Varavvas v. Mullet Cabinets, Inc., 923 N.E.2d 1221, 1225 (Ohio Ct. App. 2009). Ohio courts have rejected arguments similar to plaintiffs' argument that, as long as FCA U.S. or a defendant failed to act in accordance with its alleged representations, the statute of limitations did not begin to run. See Montoney v. Lincoln Logs, Ltd., 2007 WL 155451, at *12 (Ohio Ct. App. Jan. 23, 2007); see also Varavvas, 923 N.E.2d at 1226 (holding that limitations period began at time of sale, not when seller failed to fix defect). Otherwise, there would be an open ended limitations period in those instances where a seller fails to remedy the original alleged violation.

         Therefore, the statute of limitations began to run in March 2010, at the time of purchase. As such, I recommend that plaintiffs' claims under Counts II and III be dismissed as time-barred by the applicable two-year statute of limitation under the OCSPA.

         ii. Counts IV and V (Michigan Law)

         Counts IV and V of the FAC assert causes of action by Canfield[7] and Peck on behalf of the Michigan Class for deceptive and unfair trade practices in violation of the Michigan Consumer Protection Act ("MCPA"), Mich. Comp. Laws Ann. § 445.903, et seq. (D.I. 11 at ¶¶ 187-212)

         Under the MCPA, "an action under this section shall not be brought more than six years after the occurrence of the method, act, or practice which is the subject of the action . . .." Mich. Comp. Laws Ann. § 445.911(7). In analyzing the MCPA, Michigan courts have concluded that "failure to reveal a material fact, the omission of which tends to mislead or deceive the consumer and which fact could not reasonably be known by the consumer, is an unfair, unconscionable, or deceptive method, act, or practice in the conduct of trade or commerce." Laura v. DaimlerChrysler Corp., 711 N.W.2d 792, 794 (Mich. Ct. App. 2006). When a MCPA claim is predicated on an alleged omission, the limitations period begins to run at the time of purchase, not when the product first fails. Id. Here, plaintiffs proceed on a material omissions theory. (D.I. 17 at 10 n.7)

         In June 2010, Peck purchased a new 2010 Dodge Journey. (D.I. 11 at ¶ 109) Because this action was initiated seven years after the date of purchase, FCA U.S. argues that the MCPA claims must be dismissed as time-barred. (D.I. 13 at 9) Plaintiffs argue that Peck never received any reimbursement from FCA US. (D.I. 17 at 7) Additionally, plaintiffs assert that Peck brings both pre-sale and post-sale claims under the MCPA, both of which are timely. (Id.) Plaintiffs do not directly address how Peck's claims related to an omission at the time of sale survive the statute of limitations bar. (See ...


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