SAN FRANCISCO (CN) — A federal judge issued a mixed-bag ruling Tuesday in a class action accusing FCA US, formerly known as Chrysler, and their engine manufacturer Cummins of misrepresenting their products after the companies installed so-called “defeat devices” in more than 630,000 RAM pickup trucks.
U.S. District Judge Jacqueline Scott Corley allowed roughly half of the plaintiffs’ 11 claims to survive a motion to dismiss, largely upholding claims related to consumer protection laws while tossing civil RICO claims and those related to breaches of warranty.
“Drawing all reasonable inferences in favor of the non-movant, plaintiffs have plausibly alleged FCA’s and Cummins’ knowledge of the defeat device prior to selling the Class Trucks to consumers,” the Joe Biden appointee said.
The judge also granted the plaintiff’s leave to amend most of the dismissed claims, save for the civil RICO claims.
FCA US, which changed its name from Chrysler in 2014, is one of the “Big Three” automobile manufacturers in the U.S. In partnership with its long-time collaborator Cummins, the company sold 1.3 million vehicles in 2024 alone.
But the two companies have found themselves in massive legal trouble in recent years. In December 2023, the Department of Justice reached an agreement with Cummins to settle claims the company unlawfully altered hundreds of thousands of RAM 2500 and 3500 engines using “defeat devices” to bypass emissions tests in violation of the Clean Air Act.
A “defeat device” or “‘auxiliary emission control devices,” is a component installed on vehicle’s engine that can bypass or alter the operation of the car’s emissions control system, allowing the vehicle to meet rigorous emission standards during certification testing in the lab, before the car is released and sold to the public.
The company was ordered to pay $1.675 billion, the largest civil penalty ever secured under the Clean Air Act, and what Attorney General Merrick Garland at the time called “the second largest environmental penalty ever secured.”
The plaintiffs brought this class action in 2023, shortly after the DOJ’s announcement, claiming they were not informed that their RAM 2500 and 3500 trucks contained the defeat devices and that FCA materially misrepresented the trucks’ performance, since it could only be achieved by emitting greater pollution levels than a reasonable consumer would expect for a diesel vehicle.
Many of the consumers claim they never would have purchased the trucks if they knew of their true specifications.
The plaintiffs are seeking an order preventing the companies from continuing their unlawful conduct, as well as damages to be decided at trial.
In her 33-page order, Corley said many of the plaintiffs’ claims were fit to proceed, especially those related to state consumer protection laws.
The judge also upheld claims that the companies violated the California Consumers Legal Remedies Act, California Unfair Competition Law and California False Advertising Law. The judge examined all these related claims in conjunction, saying they “rise or fall” together, and allowed them to survive.
“Defendants raise five arguments in favor of dismissal—none is persuasive,” Corley said.
In their defense, FCA and Cummins generally countered that the plaintiffs failed to demonstrate they made their purchases based on the companies’ specific advertisements touting their trucks’ performance, or otherwise that claims they knew about the defeat devices before sale were inadequate. The judge disagreed.
However, Corley was not so warm to the plaintiffs’ “breach of warranty” claims, striking down several, because they didn’t meet certain requirements under the California Commercial Code and Song-Beverly Act, one of which being that they try to repair their trucks multiple times through FCA. She similarly didn’t buy the argument that FCA’s repair attempts would be “futile,” noting that some plaintiffs didn’t even bring their vehicles in for repair.
“But even if there were an exception, plaintiffs have not plausibly alleged futility,” she said.
The plaintiffs will have 30 days to file an amended complaint, if they choose to do so.
FCA US and Cummins moved to dismiss the lawsuit in early October 2024. Oral arguments took place at a hearing on Jan. 16.
Representatives for the plaintiffs and defendants could not immediately be reached for comment Tuesday evening.
