932 F.3d 114
3rd Cir.2019Background
- Plaintiff Galo Coba owned 2006 Ford F-350 trucks whose steel fuel tanks delaminated (lining peeled), contaminating fuel and causing engine/fuel-system problems; Ford replaced tanks multiple times, including under warranty.
- Coba sued Ford (putative class action) asserting breach of express warranty (New Vehicle Limited Warranty, NVLW), breach of the implied covenant of good faith and fair dealing, and violation of the New Jersey Consumer Fraud Act (NJCFA); common-law fraud claim was later abandoned.
- The district court exercised CAFA jurisdiction, denied class certification as moot during summary judgment, and granted Ford summary judgment on all remaining claims; Coba appealed.
- Key factual dispute: whether delamination was caused by a design defect in Ford’s use of Magni’s tank coatings (A36/A35) or by fuel contaminants (initially suspected biodiesel, later acetic/formic acids); Ford’s internal investigations evolved over time.
- Legal questions: (1) Does denial of class certification after removal under CAFA divest federal jurisdiction? (2) Does an express warranty limited to defects in “materials or workmanship” cover alleged design defects? (3) Was there sufficient evidence that Ford knew of a design defect or that Ford’s information about delamination risk was material under the NJCFA?
- Court’s disposition: Third Circuit affirmed—federal jurisdiction proper despite later denial of class certification; NVLW excludes design defects; no triable issue that Ford knew of a design defect before Coba’s purchases or that omission was material.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of class certification after removal under CAFA divests federal jurisdiction | Coba argued loss of class status eliminates CAFA jurisdiction, requiring remand | Ford argued jurisdiction depends on the posture at filing/removal and denial of certification does not divest court | Court held denial of certification does not divest jurisdiction when CAFA jurisdiction was proper at filing/removal |
| Whether NVLW’s coverage of defects in “materials or workmanship” includes design defects | Coba argued NVLW should cover the tank delamination regardless of whether cause was design-related, pointing to Ford’s repairs/replacements | Ford argued plain terms limit coverage to materials/workmanship and exclude design defects | Court held “materials or workmanship” excludes design defects under NJ law; NVLW does not cover design defects |
| Whether the fuel-tank delamination alleged is a materials/workmanship defect or a design defect | Coba argued the tanks had a common-root defect (design) making them all susceptible | Ford maintained the problem was due to fuel contaminants and not the tanks’ design/manufacture | Court held delamination, as alleged, was a design defect (systemic vulnerability in tank/coating choice) and thus outside NVLW |
| Whether Ford had knowledge of a design defect or failed to disclose a material risk (NJCFA) | Coba argued Ford knew the true cause and concealed it (or failed to disclose a material risk) before his purchases | Ford pointed to contemporaneous records showing its principal theory was contaminated fuel (biodiesel), not a tank design defect, and low replacement rates | Court held no genuine dispute that Ford did not know of a design defect by Coba’s purchase dates; the low observed replacement rate and Ford’s belief about biodiesel made nondisclosure immaterial |
Key Cases Cited
- Metz v. Unizan Bank, 649 F.3d 492 (6th Cir. 2011) (time of filing/removal determines CAFA jurisdiction)
- Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) (CAFA jurisdiction assessed at filing; later denial of certification does not mandate remand)
- United Steel, Paper & Forestry v. Shell Oil Co., 602 F.3d 1087 (9th Cir. 2010) (post-filing events generally do not defeat jurisdiction properly invoked at filing)
- Lombard Corp. v. Quality Aluminum Prods. Co., 261 F.2d 336 (6th Cir. 1958) (distinguishing material/workmanship defects from design defects)
- Plumhoff v. Rickard, 572 U.S. 765 (U.S. 2014) (standard for viewing evidence on summary judgment and appeals)
- Berrier v. Simplicity Mfg., Inc., 563 F.3d 38 (3d Cir. 2009) (predicting state law when state high court precedent is absent)