Rosenstengel dismisses class action against Chrysler over alleged sludge

By Record News | Mar 27, 2019


Coleman and Wisniewski  

EAST ST. LOUIS – U. S District Judge Nancy Rosenstengel dismissed a class action complaint over Chrysler warranties on March 18, and questioned her jurisdiction over a remaining claim of consumer fraud. 

She set an April 15 deadline for plaintiffs Chris Hanusek and Jesse Swafford to set forth the basis for her jurisdiction. 

Hanusek and Swafford claim that in Jeep Wrangler models from 2012 to 2017, coolant reacts with aluminum to produce sludge in heating and cooling systems. 

They claim the defect puts them at risk in extreme heat and cold. 

Greg Coleman of Knoxville, Tenn. filed the suit last February in association with Eric Johnson of John Simmons’s firm in Alton. 

The complaint alleged breach of express and implied warranties, violation of the Magnuson-Moss Warranty Act, and fraud under Illinois consumer law. 

Chrysler counsel Kathy Wisniewski moved to dismiss the warranty claims, arguing that plaintiffs failed to provide notice before suing. 

She moved to dismiss the consumer fraud claims, arguing that plaintiffs failed to support the requisite element of causation. 

Coleman then moved to amend the complaint, and Chrysler opposed amendment. 

Rosenstengel reserved ruling on the amendment and gave Coleman a week to respond to the motion to dismiss. 

Coleman responded with reasons why the notice requirement didn’t apply. 

Discovery proceeded while the parties awaited a decision. 

In October, former magistrate judge Stephen Williams allowed Chrysler to inspect vehicles of Hanusek, Swafford, and plaintiff Brian Kochman. 

In November, Kochman voluntarily dismissed his claim. 

This Feb. 8, Mitchell Breit from the New York City office of the Simmons firm entered an appearance. 

He represented Hanusek and Swafford at a status conference that day, along with Mark Silvey of Coleman’s firm. 

On Feb. 27, Thien An Truong from the New York office entered an appearance. 

Rosenstengel dropped bad news on the growing team. 

“Plaintiffs first argue that Chrysler was put on notice for purposes of the Illinois express warranty statute when plaintiffs took their vehicles in to be serviced at authorized dealerships after the defect manifested,” Rosenstengel wrote. 

She cited their precedent that presenting a vehicle to a dealer for repair of a defect provides sufficient notice. 

In that case, she wrote, plaintiff gave the dealer specific information about the defect and the warranty. 

“Here, however, the complaint does not allege that the dealership was made aware of such specific information regarding the defect,” she wrote. 

She wrote that plaintiffs argued that Chrysler had the requisite actual knowledge necessary to overcome the notice requirement. 

“Importantly, the actual knowledge exception is not available to plaintiffs when the seller knows only the concerns of third parties,” she wrote.  “Instead, the seller must have actual knowledge of the litigating buyer’s problem with the purchased product.” 

She wrote that even though there are public reports about a general problem with a product line, a seller has no way of knowing whether a particular product actually suffers from the defect until the buyer provides notice. 

She wrote that plaintiffs alleged Chrysler had access to complaints filed with the National Highway Traffic Safety Administration, but that this demonstrated only that Chrysler was aware of third party complaints. 

“Additionally, none of these complaints mentions Chrysler’s use of a coolant that negatively reacts with aluminum components,” she wrote. 

“Nowhere in the complaint or proposed amended complaint do plaintiffs allege that Chrysler’s knowledge of the sludge necessarily means Chrysler also had knowledge of a reaction between the manufacturer installed coolant and the aluminum components of the engine.” 

She dismissed warranty claims with prejudice. 

She wrote that without Magnuson-Moss in the case, her only basis for jurisdiction was the Class Action Fairness Act. 

Rosenstegel further found that plaintiffs made only a conclusory allegation that the controversy met the $5 million minimum for federal jurisdiction. 

She also questioned whether plaintiffs showed that the number in their class met the jurisdictional prerequisite. 

Jury trial is sent for April 2020.

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