Another court in the Eastern District of Michigan recently dismissed a putative class action on prudential mootness grounds, holding that the manufacturer’s voluntary recall program—which was supervised by a federal administrative agency—mooted the plaintiffs’ consumer fraud and warranty claims. See Pacheco v. Ford Motor Co., 2023 WL 2603937 (E.D. Mich. Mar. 22, 2023).
In July 2022, Ford Motor Company voluntarily recalled approximately 100,000 vehicles following reports that engine leaks in particular vehicles had resulted in under-hood fires or smoke. Id. at *1. In connection with the recall, Ford promised to repair all vehicles free of charge through two engine-related fixes, and to reimburse owners who had already paid out-of-pocket for repairs. Id. at *1, 3. One month later, fourteen plaintiffs filed a nationwide putative class action lawsuit against Ford, asserting claims for fraud, breach of warranty, unjust enrichment, as well as violations of various state consumer protection statutes. Id. at *1. Although none of the plaintiffs’ vehicles had actually experienced a leaky engine or engine fire, the plaintiffs nonetheless sought damages for “overpayment of their vehicles” based on the fire risk. Id. at *2.
In granting Ford’s motion to dismiss, the court bypassed the question of Article III standing and instead exercised its discretion to dismiss the lawsuit under the prudential mootness doctrine—which applies when “a coordinate branch of government steps in to promise the relief [that the plaintiff] seeks.” Id. at *2–5 (internal marks omitted). The court determined that Ford’s recall program left the court without any “effective relief” to provide, rendering dismissal appropriate in this case. Id. at *3, 5. Central to the court’s analysis was the fact that the National Highway Traffic Safety Administration (“NHTSA”) would oversee Ford’s recall program and could take action against Ford if the company failed to comply with its recall obligations. Id. at *3. Notably, the court’s ruling did not hinge on whether the plaintiffs had, in fact, sought relief through the recall program. See id. at *1.
The court also firmly rejected the plaintiffs’ concerns about the adequacy of Ford’s recall. While the plaintiffs argued that Ford’s two field fixes were insufficient to remedy the underlying defect in their vehicles and generated a new host of problems (such as diminished fuel economy), the court found that these speculative concerns did not “show a cognizable danger that the recall remedy supervised by NHTSA will fail.” Id. at *4. That plaintiffs “disagree with the approach taken by Ford to fix the problem,” the court noted, did not affect the prudential mootness analysis. Id.
Pacheco provides defendants with yet another tool to use when defending class action lawsuits brought following a manufacturer-initiated recall—particularly when the recall is subject to oversight by a federal regulator.