Hunter v. FCA US LLC

Background

Eric Hunter alleged that FCA US LLC manufactured Jeep Wrangler Rubicon vehicles with a defective electronic sway-bar disconnect system. According to the complaint, water or contaminants could enter the system through failed seals, causing the sway bar to disconnect or malfunction. Hunter alleged that this could cause a driver to lose control of the vehicle and roll over.

Hunter filed a proposed class action asserting claims under California’s Consumer Legal Remedies Act (CLRA), California’s Unfair Competition Law (UCL), and unjust enrichment. He alleged that FCA knew about the defect but did not disclose it. He also alleged that FCA’s marketing materials and vehicle manuals stated that the vehicles could ford water up to 30 inches deep.

The case was removed from state court to federal court. Hunter moved to remand the case to state court, and FCA moved to dismiss the complaint.

Motion to Remand

The court denied Hunter’s motion to remand. It found that the court had subject-matter jurisdiction under the Class Action Fairness Act. The court also found that Hunter’s complaint asserted a legal claim because it requested punitive damages for economic loss and out-of-pocket costs. The court treated punitive damages as legal, rather than equitable, relief.

The court separately concluded that Hunter had not alleged that money damages were inadequate to compensate him. Because the UCL and unjust-enrichment claims sought equitable relief and Hunter had an adequate remedy at law, the court found that it lacked equitable jurisdiction over those claims. The court held that those claims should be dismissed without prejudice rather than that the entire case should be remanded.

Motion to Dismiss

The court considered the motion to dismiss as to the remaining CLRA claim. Because the claim was based on alleged fraud, the court applied Federal Rule of Civil Procedure 9(b), which requires fraud-based allegations to describe the circumstances of the alleged fraud with particularity.

For the alleged misrepresentation that the vehicles could ford water up to 30 inches deep, the court held that Hunter had not adequately alleged that he saw or relied on that statement when buying the vehicle. The complaint stated that Hunter reviewed and relied on the window sticker, but the court treated the alleged lack of warning on the sticker as an omission claim rather than a misrepresentation claim.

For the omission claim, the court held that Hunter had not adequately alleged that FCA knew about the defect before the sale. The court found that allegations about testing, product-development information, warranty data, dealer records, and online complaints were too vague and general. The court also noted that the cited online complaints did not discuss the alleged rollover condition. The court therefore dismissed the omission-based fraud claim.

Disposition

The court denied Hunter’s motion to remand. It granted FCA’s motion to dismiss without leave to amend and without prejudice as to the UCL and unjust-enrichment claims. It granted the motion to dismiss with leave to amend as to the CLRA claim because the court could not conclude that amendment would be futile. Hunter was allowed to file an amended complaint within 21 days. The court also set a case-management conference and directed the parties to meet and confer and submit a revised joint case-management statement.