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In re FCA U.S. LLC Monostable Electronic Gearshift Litigation

United States District Court, E.D. Michigan, Southern Division

December 9, 2019

IN RE FCA U.S. LLC MONOSTABLE ELECTRONIC GEARSHIFT LITIGATION

          David R. Grand Magistrate Judge.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO CERTIFY CLASS ACTION, CERTIFYING ISSUE CLASSES, AND SETTING DEADLINES FOR SUBMISSION OF PROPOSED NOTICE

          DAVID M. LAWSON UNITED STATES DISTRICT JUDGE.

         The plaintiffs' steering committee has identified 39 named individuals from 23 different states asserting a variety of claims on behalf of a putative class against defendant FCA U.S. LLC (Chrysler) relating to their purchase of one of three models of the defendant's cars and trucks all equipped with a monostable shifter. The plaintiffs seek to certify a single nationwide class and either 16 or 23 subclasses (depending on which certification scheme wins approval) under Federal Rule of Civil Procedure 23(b)(2) or (b)(3). But because the main thrust of the economic loss component of this MDL is the recovery of damages, a (b)(2) class cannot be certified. And the plaintiffs have not satisfied their burden of establishing the predominance of common issues over individual issues in either their multi-state or state-by-state proposals for certification. However, there are several discrete issues that can be litigated on a collective basis to justify a common-issues class under Rule 23(c)(4). Those issues, identified below, will efficiently advance the litigation of this multidistrict case, and therefore the Court will certify a common-issues class, granting in part and denying in part the motion for class certification.

         I. Background

         A. Facts

         The factual background of the case is by now familiar to the parties and was reviewed at length in the Court's previous rulings on the defendant's several rounds of dispositive motions. For the purposes of the present motion, the plaintiffs rely principally on the following alleged circumstances which they believe the discovery in the case will establish.

         The vehicles targeted in the Second Amended Consolidated Master Complaint (SACMC) are the 2012-2014 Dodge Charger, the 2012-2014 Chrysler 300, and the 2014-2015 Jeep Grand Cherokee, which were manufactured with a monostable shifter. The defendant sold more than 800, 000 vehicles during those model years that used the same electronic gear shifter.

         The plaintiffs allege that studies conducted in 2010 and 2012 by defendant's retained market research firm, which were replicated during this litigation by the plaintiffs' human factors expert, suggest that the gear shift design “is defective because it inhibits reliable gear selection and provides insufficient tactile or audible feedback to allow drivers to readily and confidently shift to their intended gear.” In their earlier pleadings, the plaintiffs suggested that the transmission design also could, in some cases, spontaneously shift out of a selected gear into another, unintended gear. They now concede that they have abandoned any claims based on that second alleged defect, and they represent that they intend to proceed solely on the theory that the gear shift is defective due to its confusing interface design.

         Based on its own internal studies and employee test drives of pre-production cars, Chrysler knew about the problems with the gear shift design well before the class vehicles went to market. It also considered alternative designs such as a rotary knob shifter licensed by Jaguar, but those were rejected as too costly or time consuming to implement, and the defendant went ahead with marketing the monostable design despite its known issues. Employees who drove production models continued to report problems operating the shifter, which were confirmed by a 2012 focus group study after the first models went to market. Published press reviews of the design also criticized its difficult and confusing operation. Nevertheless, Chrysler continued to use the monostable design without any significant change in Charger and Jeep models through the 2014 model year. The problematic shifter eventually was scrapped in favor of a polystable design starting with the 2015 model year.

         In August 2015, in response to numerous driver reports of rollaway accidents involving class vehicles with the monostable shifter, the National Highway Transportation Safety Administration (NHTSA) began an investigation. NHTSA's report concluded that the design was problematic and ignored several basic design principles due to its inconsistency with established patterns of automobile gear selector operation, unexpected and counter-intuitive operation, excessive demands for user focus to interpret the shifter's condition and behavior, and difficulty of reliably achieving intended gear selections. On April 22, 2016, Chrysler issued a voluntary recall, but its recall notice attributed the rollaway accidents solely to “improper usage” of the shifter, and it asserted (and continues to assert) that its solution of a software update to add an “auto-park” feature to the class vehicles was merely to foreclose the possibility of rollaway accidents due to misuse by drivers who failed to put their vehicle in park before exiting. The plaintiffs contend that, notwithstanding the software fix, the problems with the shifter's confusing design and operation remain.

         The plaintiffs previously pleaded that their vehicles were subject to excess depreciation on the used market, but at oral argument on the parties' expert motions counsel for the plaintiffs conceded that they have abandoned that damages theory. They now assert that they will proceed solely on the theory that they suffered common economic losses due to overpaying for new vehicles at the point of sale, which they believed were safe and fit for daily transportation, but which they later found were unacceptably difficult and dangerous to drive.

         B. Claims

         The SACMC pleads a variety of legal theories for recovery of these economic loss damages under the laws of 23 states, which do not always align neatly. In the decision on the defendant's motion to dismiss under Rule 12(b)(6), the Court dismissed several of the claims: (1) the implied warranty claims in Counts LXI (Nevada), LXXVI (North Carolina), CX (Washington); and (2) the claims voluntarily dismissed by former plaintiff Carol Clark, who was the sole named plaintiff from Oklahoma (Counts LXXXIII-LXXXVII). The Court also later dismissed, with the consent of the parties, the claims of Justine Andollo of Florida (Counts XVIII-XXI), due to her absence from or non-participation in the case (dismissed by Pretrial Order 17 issued Nov. 18, 2018). However, since Andollo was dismissed from the case, a new Florida plaintiff, Sara Lalli, has appeared to take her place. Lalli's claims presently are the subject of a separately filed motion to dismiss, but because that motion remains pending, Lalli's claims under Florida law will be considered here. Finally, the Court also dismissed, upon voluntary notices, the claims by the only named plaintiffs from Minnesota (Corinn Berken) (Counts XLIX, L, LI, LII, LIII, LIV) (ECF No. 370, Apr. 11, 2019), and Georgia (Erica Willis) (Counts XXII-XXVII) (ECF No. 263, Oct. 5, 2018).

         Accounting for the cumulation of those dismissals noted above, the remaining live claims pleaded in the SACMC are cataloged here. The Count No. is listed in parentheses:

. Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 (I) (by all plaintiffs)
. Arizona: Jeffrey Guy and Casey E. Perkins
o Consumer Fraud, Ariz. Rev. Stat. § 44-1521 (II)
o Fraudulent Concealment (III)
o Express Warranty, Ariz. Rev. Stat. § 47-2313 (IV)
o Unjust Enrichment (V)
. California: David Goldsmith and Michael V. Nathan, Jr.
o Unfair Competition, Cal. Bus. & Prof. Code § 17200 (VI)
o Consumers Legal Remedies Act, Cal. Civ. Code § 1750 (VII)
o False Advertising, Cal. Bus. & Prof. Code § 17500 (VIII)
o Fraudulent Concealment (IX)
o Express Warranty (Song-Beverly), Cal. Civ. Code §§ 1791.2 & 1793.2(D) (X)
o Implied Warranty (Song-Beverly), Cal. Civ. Code §§ 1791.1 & 1792 (XI)
. Colorado: Debra Felker
o Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 (XII)
o Strict Product Liability (XIII)
o Fraudulent Concealment (XIV)
o Express Warranty, Colo. Rev. Stat. §§ 4-2-313, 4-2.5-210 (XV)
o Implied Warranty, Colo. Rev. Stat. §§ 4-2-313, 4-2.5-212 (XVI)
o Unjust Enrichment (XVII)
. Florida: Sarah Lalli (Subject to separate motion to dismiss)
o Unfair & Deceptive Trade Practices, Fla. Stat. § 501.201 (XVIII)
o Fraudulent Concealment (XIX)
o Express Warranty, Fla. Stat. § 672.313 (XX)
o Unjust Enrichment (XXI)
. Illinois: Kean McDonald and Lindsey Wells
o Consumer Fraud & Deceptive Practices, 815 Ill. Comp. Stat. § 505/1 (XXVIII)
o Fraud by Concealment (XXIX)
o Implied Warranty, 800 Ill. Comp. Stat. §§ 5/2-314, 5/2A-212 (XXX)
o Unjust Enrichment (XXXI)
. Iowa: Pamela Havnen
o Consumer Fraud, Iowa Code § 714H (XXXII)
o Fraudulent Concealment (XXXIII)
o Express Warranty, Iowa Code §§ 554.2313, 554.13210 (XXXIV)
o Unjust Enrichment (XXXV)
. Louisiana: Dustin Stewart
o Implied Warranty (Redhibitory Defects), La. Civ. Code Arts. 2520, 2524 (XXXVI)
. Maryland: Charles Frank Schultz
o Consumer Protection Act, Md. Code Com. Law § 13-101 (XXXVII)
o Fraudulent Concealment (XXXVIII)
o Express Warranty, Md. Code Com. Law § 2-313 (XXXIX)
o Implied Warranty, Md. Code Com. Law § 2-314 XL)
o Unjust Enrichment (XLI)
. Massachusetts: Bernadine Hartt, Scott M. Youngstrom, Jr., and Todd Machtley
o Deceptive Acts or Practices, Mass. Gen. Laws Ch. 93A, §1 (XLII)
o Unjust Enrichment (XLIII)
. Michigan: Melvin Scott
o Consumer Protection Act, Mich. Comp. Laws § 445.903 (XLIV)
o Fraudulent Concealment (XLV)
o Express Warranty, Mich. Comp. Laws ยงยง 440.2313, ...

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