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Thursday, March 28, 2024

Uconnect class action dismissed by Yandle on finding plaintiffs suffered no injury

Federal Court

BENTON – U.S. District Judge Staci Yandle dismissed a class action that former district judge Michael Reagan certified on a claim that hackers could seize control of certain Chrysler vehicles. 

On March 27, she found Belleville city attorney Brian Flynn and other plaintiffs lacked standing to sue Chrysler because they suffered no injury. 

“Article III of the United States Constitution limits federal court jurisdiction to actual cases and controversies,” Yandle wrote. 

More than a million Chrysler buyers belonged to classes Reagan certified for Illinois, Missouri, and Michigan. 

Yandle rejected an argument that Reagan granted standing and his decision should stand as law of the case. 

“The law of the case doctrine is a discretionary doctrine, not an inflexible mandate,” she wrote. “In this case, the court’s interest in ensuring subject matter exists, adhering to controlling law, and preventing clear error warrant a reexamination of defendants’ standing arguments.” 

Flynn sued Chrysler and Harman Industries, maker of Uconnect communication devices, in 2015. 

George Brown and Kelly Brown of Missouri and Michael Keith of Michigan sued along with him, proposing to represent classes in their states. 

The suit followed publication by Wired magazine of a report that experts under controlled conditions hacked a Chrysler through Uconnect. 

The article caused Chrysler to recall vehicles with Uconnect, but plaintiffs claimed the recall didn’t solve all problems and the vehicles remained vulnerable. 

Plaintiffs sought damages for risk and fear of injury, damages equal to the difference between what they paid for vehicles and what they would have paid if they had known about the defect. The also sought damages for the difference between the resale value of the vehicles and their resale value if they didn’t have the defect. 

Chrysler and Harman moved to dismiss for lack of standing. 

Reagan granted standing to plaintiffs in 2016, finding overpayment or a drop in value sufficed as an injury for standing purposes. 

He found events provided a foundation for claims that vehicles were overpriced or that they lost value when knowledge of defects reached the market. 

Chrysler and Harman challenged standing again, but Reagan repeated his earlier ruling and certified the classes in 2018. 

He retired a year ago, and Yandle presided over the close of discovery. 

Chrysler and Harman moved to decertify the classes, enter summary judgment, or dismiss for lack of standing. 

Yandle picked the last option, finding economic loss stemming from speculative risk of future harm cannot establish standing. 

“No hacker has remotely accessed the system, no hacker has seized control of a vehicle’s operations, and no consumer has ever been injured,” she wrote. 

She found the mere fact that a product has vulnerability does not in itself mean the product is defective. 

She found the evidence proffered by plaintiffs’ damage experts consisted of a survey conducted by an expert who asked consumers to make choices about vehicle features and the application by another expert of the survey results. 

Their estimate ran to billions of dollars. 

Yandle found no demonstrable effect on the market for the vehicles based on documented recalls, declining Kelly Blue Book values, or a risk so immediate it forced them to replace vehicles or discontinue using them. 

 She found plaintiffs didn’t allege that Uconnect didn’t work, that they experienced any problems related to it, that they were unwilling to drive their vehicles because of defects in it, or that they sold or traded or attempted to sell or trade their vehicles at a loss due to the alleged defects. 

“The allegation that defendants wrongfully induced them to purchase their vehicles by concealing the alleged defect in Uconnect and that their vehicles are worth substantially less than they would be without the alleged defect is conclusory and unsupported,” she wrote. 

“They received what they bargained for, vehicles equipped with infotainment services, and do not plausibly allege that they were financially harmed by virtue of their vehicle purchases.” 

Seven lawyers at Thompson Coburn in St. Louis represented Chrysler. 

Six lawyers from Foley and Lardner in Milwaukee, Madison, Wisc., Chicago, and Detroit represented Harman.

Six lawyers from Armstrong Teasdale in Clayton, Mo. and Denver represented Flynn, Keith, and the Browns.

So did Lloyd M. Cueto and Christopher Cueto, both of Belleville, and Michael Gras of St. Louis.

The docket shows former U.S. attorney Stephen Wigginton active for plaintiffs, though he voluntarily removed his name from the roll of Illinois attorneys in January.

The Illinois Attorney Registration and Disciplinary Commission website showed he wasn’t authorized to practice as of March 27.

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