Law360: Chrysler Brake Defect Lawsuit

2nd Circ. Mulls Reviving Chrysler Brake Defect Suit

By Erin Fuchs, August 24, 2011

Law360, New York — The Second Circuit on Wednesday grilled attorneys on whether a consumer can bring a proposed class action against Chrysler Group LLC over premature brake failures in Dodge and Chrysler vehicles without citing the alleged cause of those failures.

During oral arguments, a three-judge panel focused largely on whether consumer Anthony Cali’s suit would survive dismissal without alleging why brake pads and brake rotors wore out or warped prematurely.

Cali claimed the front brake pads and front and rear brake rotors on 2008 and 2009 Chrysler Town and Country, Dodge Caravan and Dodge Grand Caravan vehicles wore out or needed to be replaced every 12,000 to 20,000 miles.

Because merely replacing the brake pads and rotors allegedly did not fix the problem, Cali contended the failures stemmed from nonbrake components of the vehicles without specifying what those components were.

Cali could only allege the “symptom” of the problem: the fact that he must incur continuous expense by replacing brake pads, his attorney, Sergei Lemberg told the appeals panel.

“That’s what the consumer knows. That’s what’s in the complaint,” Lemberg said.

At this stage in the litigation, consumers could not know the cause of the problem without disassembling their vehicles themselves, U.S. Circuit Judge Chester Straub pointed out to Chrysler lawyer John W. Rogers.

But Cali’s “bare-bones” allegations cited only that his brakes needed repairs, Rogers contended, adding that the suit should have to specify the defective component to move forward.

Cali discovered the brake problems after 13,572 miles, but the warranty for his vehicle only covered brake problems for the first 12,000 miles, according to a lower court’s order dismissing the case. However, the warranty’s limitation for brake repairs did not apply to that particular problem because the overall design of the vehicle was too heavy for the brake components installed in it, Cali had argued, according to that order.

In dismissing the case in January, U.S. District Judge Jed S. Rakoff ruled that the most plausible reading of Cali’s allegations led him to believe that the alleged problems concerned the vehicle’s brakes.

“Plaintiff first brought the vehicle to the dealership complaining of a ‘shimmy’ in the brakes; the dealership diagnosed the problem as excessive brake ‘run out,’ and on each occasion the necessary repairs involved the front brake rotors and the front brake pads,” Judge Rakoff wrote.

But even assuming that the vehicle’s overall design caused the defect and not the brakes themselves, Cali’s claim for breach of express warranty still failed because the warranty covered only defects in “material, workmanship or factory preparation” rather than in design, the judge said.

Judge Rakoff rejected Cali’s lawyers argument that the terms “workmanship” and “factory preparation” also included the design of the vehicle. “The court … is unpersuaded by plaintiffs’ transparent attempts to evade the clear provisions of defendant’s warranty by obfuscating the plain meaning of common English words,” the judge wrote.

Cali’s suit included claims for breach of express warranties, breach of written warranty under the Magnuson-Moss Warranty Act and breach of implied warranty of merchantability.

Lemberg said he hoped the Second Circuit would reach a decision “that requires manufacturers to repair defective vehicles, rather than repeatedly apply band aids until the warranty runs out.”

Chrysler for its part extended warranties on its 2008 and 2009 minivans in an effort to resolve issues “in the normal course of business,” Chrysler spokesman Michael Palese said Wednesday. “Chrysler Group values its relationship with each customer,” he said.

Judges Chester Straub, Jose A. Cabranes and Ralph K. Winter sat on the Second Circuit panel.

Sergei Lemberg of Lemberg & Associates LLC represents Cali.

John W. Rogers of Thompson Coburn LLP represents Chrysler.

The case is Anthony Cali et al. vs. Chrysler Group LLC, case number 11-642, in the U.S. Court of Appeals for the Second Circuit.

–Editing by Eydie Cubarrubia.

Original story: At Law 360