693 F.Supp.3d 425
D. Del.2023Background
- Seven named plaintiffs purchased various MY2015–2022 Dodge/Challenger/Charger high‑performance vehicles (the “Class Vehicles”) and allege a latent rear "Differential Defect" that degrades under high torque, causing failures and safety risks.
- Plaintiffs filed a First Amended and Supplemental Class Action Complaint (FASC) after attending the MY2023 Demon reveal and added allegations about dealer communications, technical service bulletins (TSBs), consumer complaints, testing, and the Demon’s redesigned differential.
- FCA moved to dismiss under Rule 12(b)(6). The court applied Rule 9(b) to fraud‑based claims and Rule 8/Twombly/Iqbal standards to others.
- The court found plaintiffs failed to plausibly plead FCA’s pre‑sale knowledge required for fraud/omission claims and dismissed those fraud‑based counts with prejudice.
- The court dismissed California (Song‑Beverly) and Florida implied‑warranty claims (and related consumer‑statute claims) with prejudice (statute‑of‑limitations and privity issues), but allowed New Jersey and Texas implied‑warranty claims to proceed.
- The Magnuson–Moss claim was dismissed in part because plaintiffs lacked the 100 named‑plaintiff threshold for a class action under the MMWA; plaintiffs were given leave to add named plaintiffs. The requested court‑ordered recall was dismissed as preempted by federal recall scheme.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs plausibly pleaded FCA’s pre‑sale knowledge to support fraud/omission claims | Plaintiffs pointed to TSBs, NHTSA complaints, dealer communications, pre‑production testing, and the MY2023 Demon redesign as evidence FCA knew of the defect before sale | FCA argued these allegations are conclusory, do not identify the defect or tie the communications/tests/Demon to Class Vehicles, and fail Rule 9(b) particularity | Dismissed with prejudice: plaintiffs failed to plausibly plead pre‑sale knowledge; fraud‑based counts (I, II, V, VI, VIII, X, XII) dismissed |
| Whether implied warranty claims survive under state law (CA, FL, NJ, TX) | Plaintiffs contend different state law implied‑warranty claims allege vehicles are unfit for ordinary purpose because the defect impairs safety/reliability | FCA argued statute‑of‑limitations (CA), lack of privity/agency (FL), and failure to plead unfitness | Held: CA (Song‑Beverly) and FL claims dismissed with prejudice (time‑bar/privity). NJ and TX implied warranty claims survive (Counts IX, XI) |
| Magnuson–Moss Warranty Act claim viability | Plaintiffs rely on surviving state implied‑warranty claims to support MMWA class claim | FCA noted MMWA requires 100 named plaintiffs for a class action; also MMWA stands/falls with state warranty claims | MMWA claim dismissed with prejudice to the extent it depended on CA/FL claims; dismissed without prejudice as to NJ/TX claims but plaintiffs must add named plaintiffs to reach 100 |
| Whether court may order a voluntary recall under NHTSA procedures | Plaintiffs seek an order compelling FCA to issue a voluntary recall (citing NHTSA provisions) | FCA argued federal preemption/improper intrusion into federal regulatory scheme governing recalls | Held: Request dismissed with prejudice as preempted; court‑ordered recall relief impermissibly intrudes on federal recall procedure |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (conclusory allegations insufficient to survive Rule 12(b)(6))
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (Rule 9(b) requires particularity for fraud claims)
- Petruska v. Gannon Univ., 462 F.3d 294 (3d Cir. 2006) (Rule 9(b) applies to state‑law fraud claims)
- Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408 (3d Cir. 2002) (courts routinely exclude evidence of subsequent remedial measures for proving defect or culpability)
- In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625 (3d Cir. 2017) (caution on using post‑event remediation as admission at pleading stage)
- Daniel v. Ford Motor Co., 806 F.3d 1217 (9th Cir. 2015) (MMWA claims stand or fall with underlying state warranty claims)
- Jolly v. Eli Lilly & Co., 44 Cal.3d 1103 (Cal. 1988) (California discovery rule for accrual of warranty claims)