Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D.N.Y.: Deceptive trade practices claim against Chrysler over defective tire value stems proceeds, (Jun 25, 2015)

By Linda O’Brien, J.D., LL.M.

A consumer of a used Chrysler minivan alleged sufficient facts to pursue claims against the automobile’s manufacturer for engaging in deceptive acts or practices by failing to disclose a defect in metal alloy value stems on tires that were part of a tire pressure monitoring system, the federal district court in Albany, New York has held. However, the court dismissed the consumer’s affirmative misrepresentation claim (Tomassini v. FCA US LLC, June 23, 2015, D’Agostino, M.).

FCA US LLC, formerly known as Chrysler Group, is an American automobile manufacturer. In April 2012, Robert Tomassini purchased from a wholesale dealer in New York a used 2010 Town and Country minivan manufactured by FCA. The vehicle was equipped with a tire pressure monitoring system (TPMS) which report real-time tire pressure by utilizing pressure sensors to transmit pressure information to the vehicle’s instrument cluster. The minivan’s TPMS contained a metal alloy value stem on each tire.

In August 2013 and June 2014, tire value stems on Tomassini’s minivan became corroded and had to be replaced. After FCA refused to reimburse Tomassini for the cost of the repairs, he filed a class action complaint, alleging that FCA engaged in unfair and deceptive trade practices in violation of Section 349 the New York General Business Law (NYGBL). FCA moved to dismiss the complaint for failure to state a claim.

Failure to disclose claim. The court found that the plaintiff sufficiently alleged that the defendant engaged in a materially misleading act or practice. To assert a claim under the NYGBL, a plaintiff must allege that a defendant has engaged in consumer-oriented conduct that is materially misleading and the plaintiff suffered injury as a result of the alleged deceptive act or practice, the court explained. Tomassini contended that FCA knowingly misrepresented and intentionally failed to disclose the known defects in the TPMS value stems to consumers at the time of sale or post-sale.

Although the plaintiff’s allegations that FCA had prior knowledge of the corrosion risk of the metal alloy parts was conclusory and insufficient to plausibly establish FCA’s knowledge of the alleged value stem defect, allegations that FCA was notified of the value stem failure by its customers and dealerships plausibly suggested that FCA knew the value stems were defective. Additionally, consumer complaints to the National Highway and Traffic Safety Administration and a 2010 investigation by Transport Canada pertaining to failed value stems in FCA minivans constituted circumstantial evidence that FCA had knowledge of the alleged value stem defect, in the court’s view.

FCA’s argument that the plaintiff failed to articulate an injury caused by FCA’s alleged post-sale failure to disclose the defect was rejected. The court noted that the plaintiff alleged that the defendant’s deceptive conduct included failing to recall the defective parts, voluntarily replace the defective value stems, or reimburse owners for the costs incurred to replace the defective stems. The alleged injury was sufficiently causally related to the defendant’s alleged post-sale omissions to satisfy the causation element of Tomassini’s post-sale failure to disclose claim.

Affirmative misrepresentation claim. However, Tomassini identified no specific affirmative misrepresentation to support his affirmative misrepresentation claim under the NYGBL. According to the court, the plaintiff’s complaint vaguely referenced affirmative representations allegedly made by FCA concerning the good working order and merchantability of the auto maker’s minivans. Since the plaintiff failed to identify a specific deceptive representation made by the defendant, the court granted dismissal of the plaintiff’s affirmative misrepresentation claim.

The case is No. 3:14-cv-01226-MAD-DEP.

Attorneys: Elmer Robert Keach, III (Law Offices of Elmer Robert Keach III, P.C.), Jordan L. Chaikin (Parker Waichman LLP), and Nicholas A. Migliaccio (Whitfield Bryson & Mason, LLP) for Robert Tomassini. Alan J. Pope (Pope & Schrader LLP) and John W. Rogers (Thompson Coburn LLP) for FCA US LLC.

Companies: FCA US LLC

Cases: StateUnfairTradePractices NewYorkNews