Porter, et al v. Chrysler Group LLC

Filing 67

ORDER: Defendant Chrysler Group LLC's Motion [to] Compel Arbitration and Dismiss or Stay Case and Incorporated Memorandum of Law (Doc. 48) is DENIED IN PART AND TAKEN UNDER ADVISEMENT IN PART; denying 58 emergency motion to stay. On or before Monday, January 6, 2014, Defendant is DIRECTED to file a supplemental brief. On or before Thursday, January 23, 2014, Plaintiffs are DIRECTED to respond to Defendant's supplemental brief. Signed by Judge Roy B. Dalton, Jr. on 12/19/2013. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
ROBERT CHARLES JUSTIN PORTER
and EVA ANDREA PORTER, on behalf
of themselves and all others similarly
situated,
Plaintiffs,
v.

Case No. 6:13-cv-555-Orl-37GJK

CHRYSLER GROUP LLC,
Defendant.
ORDER
This cause is before the Court on the following:
1.

Defendant Chrysler Group LLC’s Motion [to] Compel Arbitration and
Dismiss or Stay Case and Incorporated Memorandum of Law (Doc. 48),
filed October 21, 2013;

2.

Plaintiffs’ Opposition to Defendant Chrysler Group LLC’s Motion to Compel
Arbitration and Dismiss or Stay Case (Doc. 51), filed November 7, 2013;

3.

Defendant Chrysler Group LLC’s Emergency Motion to Stay (Doc. 58), filed
November 15, 2013;

4.

Defendant Chrysler Group LLC’s Amended Reply Brief in Support of Its
Motion to Compel Arbitration and Dismiss or Stay Case (Doc. 61), filed
November 22, 2013; and

5.

Plaintiffs’ Opposition to Defendant Chrysler Group LLC’s Motion to Stay
(Doc. 64), filed December 2, 2013.

Upon consideration, the Court finds that Defendant’s motion to compel is due to be denied

in part.
BACKGROUND
This Magnuson-Moss Warranty Act (“MMWA”) claim arose when Plaintiffs bought
an allegedly defective truck from a Chrysler dealership. (Doc. 40, ¶ 2.) The warranty
provided by Defendant did not mention arbitration as it related to Plaintiffs. 1 (Doc. 8-1.)
However, at the time of purchase, Plaintiffs signed a separate “Arbitration Clause”
agreeing to arbitrate any claims against the dealership or related third parties.
(Doc. 48-1.)
Defendant now moves to compel arbitration, arguing that it is a third-party
beneficiary of that agreement. (Doc. 48.) It also moves to stay this case pending
consideration of this motion. (Doc. 58.) Plaintiffs opposed both motions. (Docs. 51, 64.)
Defendant replied in support of its motion to compel. (Doc. 60.) This matter is ripe for the
Court’s adjudication.
STANDARDS
The Federal Arbitration Act provides that arbitration agreements are presumed to
be valid and enforceable. 9 U.S.C. § 2. However, Congress may limit the use of such
agreements in particular statutes. See Shearson/Am. Express, Inc. v. McMahon, 482 U.S.
220, 226 (1987). It did so in the MMWA, which requires disclosure of information
regarding “any informal dispute settlement procedure” in the warranty itself. 15 U.S.C.
§ 2302(a)(8). The U.S. Court of Appeals for the Eleventh Circuit has accordingly held that
the “failure to disclose in the warranty a term or clause requiring the [plaintiffs] to utilize
1

The warranty does mention arbitration as it relates to purchasers in states other
than Florida. (Doc. 8, p. 36.) However, this information is inapplicable to the instant
Plaintiffs. (See Doc. 2, ¶ 2 (noting that Plaintiffs bought their truck and reside in Florida).)

2

an informal dispute resolution mechanism runs afoul of the disclosure requirements of the
Magnuson-Moss Warranty Act.” Cunningham v. Fleetwood Homes of Ga., Inc., 253 F.3d
611, 624 (11th Cir. 2001). Thus, in an MMWA case, a third-party beneficiary cannot
enforce an arbitration agreement if the terms of the agreement are not disclosed within
the warranty. See id. (affirming the district court’s denial of a third-party manufacturer’s
motion to compel because the dealer’s arbitration agreement was separate from the
warranty).
DISCUSSION
The Court is quite troubled by Defendant’s utter failure to cite to Cunningham,
which plainly controls the disposition of this motion. 2 Defendant belatedly—and
improperly—attempted to distinguish Cunningham in its motion for leave to file a reply, in
which it pointed to Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir.
2002). 3 (Doc. 52.) However, Davis does nothing to recede from Cunningham, so this
argument is unavailing.
Cunningham explicitly declined to address “whether warrantors may include
binding arbitration provisions in the warranty itself.” 253 F.3d at 623–24. However, Davis
was presented with that precise question and answered it in the affirmative. 305 F.3d at
1272 (“[W]e conclude that the MMWA permits the enforcement of valid binding arbitration
agreements within written warranties.” (emphasis added)). Therefore, Davis is inapposite
2

Because this motion turns on the application of Cunningham, the Court need not
address Plaintiffs’ waiver and estoppel arguments. (See Doc. 51, pp. 8–20.)
3 Plaintiff also cites Patriot Manufacturing, Inc. v. Dixon, 399 F. Supp. 2d 1298,
1303 (S.D. Ala. 2005), for the proposition that Cunningham is no longer good law in the
Eleventh Circuit. (Doc. 52.) However, this Court must disagree in light of the fact that
Davis expressly distinguished Cunningham, leaving its holding intact. Davis, 305 F.3d at
1272 n.1.

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here, where the arbitration agreement was separate from and not referenced in the
warranty; Cunningham thus controls.
Because the arbitration agreement was not contained within the warranty, it “runs
afoul of the disclosure requirements” of the MMWA and cannot be enforced here. See
Cunningham, 253 F.3d at 624. Defendant’s motion to compel the MMWA claim is due to
be denied. As such, Defendant’s motion to stay the case pending disposition of the motion
to compel is also due to be denied.
The Court notes that this ruling is made solely on the basis of the MMWA claim.
The Court makes no findings with regard to the arbitrability of Plaintiffs’ state law breach
of warranty claims in the absence of arbitration of the MMWA claim, as this issue was not
fully briefed by the parties. The part of the motion seeking to compel arbitration of those
claims is therefore due to be taken under advisement pending further briefing.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.

Defendant Chrysler Group LLC’s Motion [to] Compel Arbitration and
Dismiss or Stay Case and Incorporated Memorandum of Law (Doc. 48) is
DENIED IN PART AND TAKEN UNDER ADVISEMENT IN PART.
a.

The part of the motion seeking to compel arbitration of the MMWA
claim is DENIED.

b.

The part of the motion seeking to compel arbitration of the state law
breach of warranty claims is TAKEN UNDER ADVISEMENT.

c.

On or before Monday, January 6, 2014, Defendant is DIRECTED to
file a supplemental brief addressing the issue of whether the state

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law claims should be arbitrated, in light of the denial of the motion to
compel arbitration of the MMWA claim.
d.

On or before Thursday, January 23, 2014, Plaintiffs are DIRECTED
to respond to Defendant’s supplemental brief.

2.

Defendant Chrysler Group LLC’s Emergency Motion to Stay (Doc. 58) is
DENIED.

DONE AND ORDERED in Chambers in Orlando, Florida, on December 19, 2013.

Copies:
Counsel of Record

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