White et al v. FCA US, LLC et al
OPINION AND ORDER Denying 4 Motion to Dismiss and 7 Motion to Remand. Signed by District Judge David M. Lawson. (SPin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SUSAN WHITE, as Personal Representative
of the Estate of KAYLA WHITE, deceased,
and CODY CAMPBELL, as Personal Representative
of the Estate of BRAEDIN CAMPBELL,
Case Number 17-12320
Honorable David M. Lawson
FCA US, LLC and CLARENCE HEATH,
OPINION AND ORDER DENYING MOTION
TO REMAND AND MOTION TO DISMISS
The genesis of this case is a tragic automobile accident. Decedent Kayla White was
immolated when the 2003 Jeep Liberty she was driving burst into flames after it was struck from the
rear by another car. White was five months pregnant at the time. Her estate and the estate of her
unborn fetus brought a product liability action in state court against the driver of the other vehicle
and defendant FCA US, LLC, also known as Fiat Chrysler, US, LLC. The 2003 Jeep, however, was
manufactured by Chrysler LLC, a company that ceased operating in 2009 after filing for bankruptcy.
The plaintiffs allege that the present defendant, FCA US, LLC, purchased the assets from the “Old
Chrysler” under a Master Transaction Agreement (MTA) that was approved by the bankruptcy
court, in which FCA agreed to assume responsibility for product liability claims arising from a
certain class of vehicles, which included the Jeep Kayla White was driving.
FCA removed the action to this Court under 28 U.S.C. § 1334(b), contending that the
plaintiffs’ product liability claim the “arises in” the Old Chrysler bankruptcy proceeding, because
the Court will be required to interpret the MTA, especially the liability-transfer provision. FCA
points to language in that provision that excludes “any claim for exemplary or punitive damages,”
and it argues that the plaintiffs are seeking that category of damages when they contend that the
defendant had actual knowledge of the product defect when it sold the vehicle, which it willfully
disregarded. The plaintiffs made those allegations on the way to their argument that they should not
be restricted by the cap on damages under Michigan product liability law.
The plaintiffs insist that nowhere in their amended complaint have they sought exemplary
or punitive damages, and they have filed a motion to remand the case to state court. They argue that
Old Chrysler’s bankruptcy case is not implicated because this Court need not be concerned with the
exemplary and punitive damages restriction. Defendant FCA opposes the remand motion, and it has
filed a motion of its own to dismiss the complaint on three grounds, one of which is that the
plaintiffs are seeking damages from them which they did not assume any obligation to pay under
In order to determine whether defendant FCA is liable for damages caused by a vehicle it
did not manufacture, the Court inevitably must examine and interpret the MTA. Consequently, the
case “arises in” the bankruptcy proceeding, and in fact is a core proceeding. Therefore, the Court
has subject matter jurisdiction under 28 U.S.C. § 1334(b), and the motion to remand will be denied.
Although the plaintiffs allege in the amended complaint that the defendant possessed scienter that
may be consistent with a claim for punitive or exemplary damages, a plain reading of that pleading
does not suggest those categories of damages are being sought. The amended complaint otherwise
states valid claims. The motion to dismiss, therefore, likewise will be denied.
In early 2009, the “Old Chrysler” auto company entered into a highly publicized bankruptcy
proceeding, which eventually involved a partial takeover of the company by the United States
government and a transition sale of most of Chrysler’s assets and operations to Fiat, SpA (the Italian
car maker), via the formation of a new entity that became Fiat Chrysler, US, LLC (a/k/a FCA US,
LLC). As part of the bankruptcy proceedings, Old Chrysler entered into an agreement to sell
substantially all of its assets to the successor entity through a Master Transaction Agreement (MTA).
The MTA executed between the parties to the bankruptcy sale on May 19, 2009 stated that FCA
would assume certain liabilities for tort claims relating to vehicles made by Old Chrysler before the
sale. On October 29, 2009, the parties to the sale executed an amendment which, among other
things, altered section 2.08(h) of the Agreement to expand the scope of the assumed liabilities to
all Product Liability Claims arising from the sale on or prior to the Closing of motor
vehicles or component parts, in each case manufactured by Sellers or their
Subsidiaries and distributed and sold as a Chrysler, Jeep, or Dodge brand vehicles
or MOPAR branded parts, solely to the extent such Product Liability Claims (A)
arise directly from motor vehicle accidents occurring on or after Closing, (B) are not
barred by any statute of limitations, (C) are not claims including or related to any
alleged exposure to any asbestos-containing material or any other Hazardous
Material and (D) do not include any claim for exemplary or punitive damages.
Notice of Removal, Ex. 3, Am. No. 4 to Master Trans. Agrmt. dated Oct. 29, 2009 (Pg ID 188). The
amendment to the sale agreement was approved by an order of the bankruptcy court on November
On June 13, 2017, plaintiffs Susan White and Cody Campbell, as personal representatives
for the estates of their respective decedents Kayla White and Braedin Campbell, filed a lawsuit
against defendants FCA and Clarence Heath in the Oakland County, Michigan circuit court. Susan
White is the mother of the deceased Kayla White, and Cody Campbell was the fiancé of Kayla
White and father of their unborn fetus Braedin Campbell. After the case was removed to this Court
by the defendant, White filed an amended complaint. The facts that follow are stated as alleged in
that amended complaint.
In 2006 Kayla White’s father Rusty White bought a 2003 model year Jeep Liberty (KJ),
which as part of its design had a fuel tank located behind the rear axle, close to and hanging slightly
below the rear bumper. Some time in 2013, Kayla White’s parents gave the 2003 Jeep Liberty to
her. In June 2014 Kayla White became pregnant. In August 2014, in response to a number of
rear-end collisions that resulted in fires as a result of spilled fuel from the rear-mounted tanks
igniting, FCA issued a recall notice for model year 2002 through 2007 Jeep Liberty (KJ) vehicles
with rear-mounted fuel tanks. FCA advised affected owners that the rear-mounted tanks would be
replaced at FCA’s expense, but that owners should await a further notice from the company about
when to bring their vehicles in for a recall repair.
On November 11, 2014, at around 4:30 p.m., Kayla was driving to work in the Jeep through
the City of Southfield, Michigan, when she was forced to slow down due to heavy traffic. Her car
was struck from behind by a car driven by Clarence Heath. Heath failed to brake in time to avoid
the slowing cars in front of him. White’s Jeep was pushed into the car in front of her, which in turn
was pushed into another vehicle. The front bumper of Heath’s car entered a “nosedive” due to
Heath’s heavy braking effort just before impact, which caused the front of the car to go under the
Jeep’s rear bumper, striking the fuel tank, and also flipping the Jeep over to rest on the driver side,
pinning the driver side door shut. The rear hatch of the Jeep also popped open from the impact.
However, White and her unborn fetus were not seriously injured by the initial collision. The fuel
tank of the Jeep was broken open by the impact, and spilled gasoline from the tank quickly ignited.
White was unable to escape the Jeep due to the rollover pinning the driver side door shut and the
spread of flames into the vehicle through the open rear hatch, although she tried for several minutes
to open the exposed passenger door without success. It was determined that White died from burns
and smoke inhalation while still trapped inside the Jeep.
The complaint pleads claims against defendant Heath for negligence (Count VII), and against
defendant FCA for (1) product liability under Michigan Compiled Laws § 600.2947(3) (Count I);
(2) defective design under Mich. Comp. Laws §§ 600.2946(2), 2946a(3), 2949a (Count II); (3)
failure to warn under Mich. Comp. Laws § 600.2946(2) (Count III); (4) breach of the implied
warranty of fitness for use (Count V), and (5) “negligent recall” (Count VI).
In each of the substantive counts of the complaint against defendant FCA, the plaintiffs
alleged that the defendant’s gross negligence in designing and subsequently failing to repair the Jeep
Liberty or adequately warn about its defects, and its willful disregard of the hazards of the Jeep’s
design, caused the wrongful deaths of their decedents, for which the plaintiffs assert that they are
entitled to recover damages under the Michigan Wrongful Death Statute including for:
a. The deaths of Kayla White and Braedin Campbell;
b. Conscious pain and suffering;
c. Loss of society and companionship;
d. Pain, suffering[,] and emotional distress, past, present and future;
e. Humiliation, mortification, [and] fright, past, present and future;
f. Medical expenses;
g. Lost wages, compensation, and earning capacity, past, present and future;
h. Emotional and mental suffering, past, present and future;
i. Loss of enjoyment of life, past, present and future;
j. Attorney fees and legal costs;
k. Any and all other injuries and damages found to be appropriate by the trier of fact.
Am. Compl. ¶¶ 104, 112, 117, 122. The plaintiffs also alleged in Count IV of their amended
complaint that, because the defendant had actual knowledge of the Jeep’s fuel tank design defect and
willfully disregarded the risk that the design would cause the deaths of Kayla White and her unborn
fetus, and because an alternative design that would have prevented their deaths was economically
and technically feasible, “pursuant to M.C.L. 600.2949a, the cap on non-economic damages is
inapplicable to this litigation.” Id. ¶¶ 118-121.
The plaintiffs filed their complaint in the Oakland County, Michigan circuit court on June
13, 2017. The defendant removed the case to this Court on July 17, 2017. The defendant then filed
a motion to dismiss, and the plaintiffs filed a motion to remand. The plaintiffs later filed an
amended complaint, but the parties stipulated (and the Court has ordered) that the motion to dismiss
is deemed to apply to the amended pleading. The Court heard oral argument on both motions on
November 9, 2017.
The plaintiffs challenge this Court’s subject matter jurisdiction and have moved to remand
the case to state court. Defendant FCA contends that this Court has jurisdiction under 28 U.S.C. §
1334(b), which states that “the district courts shall have original but not exclusive jurisdiction of all
civil proceedings arising under title 11, or arising in or related to cases under title 11.” Although
FCA spills much ink in its removal notice discussing the need to interpret the MTA’s language
excluding “claim[s] for exemplary or punitive damages,” it summarized its basic rationale for the
idea that this case “aris[es] in” the Old Chrysler bankruptcy as follows:
The State Action “arises in” the Bankruptcy Code because FCA US’s liability in this
case necessarily derives from the Sale Order. FCA US, of course, did not exist at the
time that the vehicle here was designed, manufactured, and sold. Liabilities that it
assumed from the real manufacturer must be identified in the MTA, and determining
whether FCA US will be liable in this particular case will require a court to interpret
and enforce the Sale Order.
Removal Notice ¶ 24
The plaintiffs insist, however, that (1) the claims in this case do not “arise under” the
Bankruptcy Code or “arise in” a bankruptcy proceeding, because they all are state-law tort claims
and the plaintiffs’ right to recovery of damages would be exclusively against FCA, not Old Chrysler
or the bankruptcy estate; and (2) the case is not “related to” the bankruptcy because the plaintiffs
do not seek exemplary damages, and their claims thus do not implicate the bankruptcy order of sale
that limits FCA’s liability against such claims.
A defendant may remove a case from state court to federal court if “the district courts of the
United States [would] have [had] original jurisdiction” over the case. 28 U.S.C. § 1441(a).
Defendant FCA here carries the burden of establishing subject matter jurisdiction. Mays v. City of
Flint, 871 F.3d 437, 442 (6th Cir. 2017) (“As the party seeking removal, the [defendant bears] the
burden of establishing federal court jurisdiction.”) (citing Eastman v. Marine Mech. Corp., 438 F.3d
544, 549 (6th Cir. 2006)). And, as noted above, it predicates its claim of federal jurisdiction on the
idea that the Court must interpret the MTA and the bankruptcy order of sale to determine if White’s
Jeep is one of the vehicles for which it assumed responsibility for product liability claims. It
believes, therefore, that this state law case relates to the bankruptcy.
“The grant of jurisdiction over proceedings ‘related to’ the bankruptcy case is quite broad.”
In re Greektown Holdings, LLC, 728 F.3d 567, 577 (6th Cir. 2013) (citing Celotex Corp. v.
Edwards, 514 U.S. 300, 307-08 (1995)). “The test for determining whether a civil proceeding is
related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect
on the estate being administered in bankruptcy.” Ibid. (citing Lindsey v. O'Brien, Tanski, Tanzer
and Young Health Care Providers of Conn. (In re Dow Corning Corp.), 86 F.3d 482, 489 (6th Cir.
1996)) (quotation marks and alterations omitted). “‘An action is related to bankruptcy if the
outcome could alter the debtor’s rights, liabilities, options, or freedom of action (either positively
or negatively) and which in any way impacts upon the handling and administration of the bankrupt
estate.’” Ibid. (quoting Lindsey, 86 F.3d at 489). “The mere fact that there may be common issues
of fact between a civil proceeding and a controversy involving the bankruptcy estate does not bring
the matter within the scope of section 1334(b).” Ibid. (quotations and alterations omitted). “Instead,
there must be some nexus between the ‘related’ civil proceeding and the title 11 case.” Ibid.
“For the purpose of determining whether a particular matter falls within bankruptcy
jurisdiction, it is not necessary to distinguish between . . . proceedings ‘arising under,’ ‘arising in,’
and ‘related to’ a case under title 11 . . . . [I]t is necessary only to determine whether a matter is at
least ‘related to’ the bankruptcy.” In re Wolverine Radio Co., 930 F.2d 1132, 1142 (6th Cir. 1991).
The “‘related to’ inquiry asks . . . whether the outcome of the claims would affect the estate,” and,
accordingly, “whether there is a nexus between the other proceeding and the bankruptcy case.”
Greektown, 728 F.3d at 578 (citing Lindsey, 86 F.3d at 489) (emphasis in original).
The plaintiffs here seek to hold FCA accountable for defects in a vehicle that was
manufactured by Old Chrysler. Were it not for the MTA, the plaintiffs would have to bring their
claim as an adversary proceeding in Old Chrysler’s bankruptcy case. A successful judgment likely
would make the plaintiffs unsecured creditors of Old Chrysler, who would share with other such
creditors in the estate’s assets, if any. However, the MTA and order of sale would transfer that
liability to FCA — if it actually applies to the vehicle described in the amended complaint. It is hard
to imagine how the Court could allocate that liability without construing the MTA; the consequence
of that construction necessarily has an effect on Old Chrysler’s bankruptcy estate.
The first premise of the plaintiff’s right to pursue relief against FCA, therefore, is the fact
that FCA expressly assumed all product liability claims related to a category of vehicles made by
Old Chrysler. As the defendant correctly points out, the state case “arises in” and “relates to” the
bankruptcy, because (1) FCA did not exist when the 2003 Jeep was made and was not the entity that
designed or manufactured the Jeep; (2) FCA’s liability for the claims pleaded in the complaint
necessarily derives from the bankruptcy sale agreement and order confirming that sale that was
entered in the bankruptcy case; and (3) in order for the case to proceed at all, the plaintiff must begin
by showing that FCA assumed liability for the claims pleaded.
All of those issues exist in the case irrespective of whether the plaintiffs are attempting to
recover punitive or exemplary damages. Absent that issue, of course, the interpretation of the MTA
is a simple task. But interpretation is required nonetheless. That FCA raised the damages exclusion
issue simply reinforces the point that the case relates to Old Chrysler’s bankruptcy proceeding.
Now, the plaintiffs also must demonstrate that those claims are not precluded by the express
exceptions laid out in the bankruptcy sale order. Once again, that will require this Court in the first
instance to interpret and apply the terms of the MTA.
The plaintiffs also contend that, even if the case does “arise in” or “relate to” a bankruptcy
matter, the Court must decline to exercise its bankruptcy jurisdiction under the mandatory abstention
provision of 28 U.S.C. § 1334(c)(2). That provision states that federal courts “shall abstain from
hearing” cases “based upon a . . . State law cause of action, related to a case under title 11 but not
arising under title 11 or arising in a case under title 11, with respect to which an action could not
have been commenced in a court of the United States absent jurisdiction under” section 1334(b).
See In re Timco, LLC, 511 F. App’x 513, 515 (6th Cir. 2013) (quoting 28 U.S.C. § 1334(c)(2))
(explaining that where “‘an action is commenced, and can be timely adjudicated, in a State forum
of appropriate jurisdiction,’” and “if the action is non-core and if no basis for jurisdiction other than
§ 1334(b) exists, the bankruptcy court ‘shall abstain from hearing’ it”).
That exception does not apply to core proceedings. “[C]ore proceedings are those that arise
in a bankruptcy case or under Title 11.” Stern v. Marshall, 564 U.S. 462, 476 (2011). The
Bankruptcy Code defines “core proceedings” to include, among other things, “‘matters concerning
the administration of the estate’ [and] ‘orders approving the sale of property other than property
resulting from claims brought by the estate against persons who have not filed claims against the
estate.’” Stern, 564 U.S. at 475 n.3 (quoting 28 U.S.C. § 157(b)(2)). The adjudication of state-law
claims “‘may be considered [a] core [proceeding] if [those claims] are dependent upon the rights
created in bankruptcy.’” In Matter of Galaz, 841 F.3d 316, 323 (5th Cir. 2016) (quoting In re
Spillman Dev. Grp., Ltd., 710 F.3d 299, 305 (5th Cir. 2013)).
Such is the case here. As one court explained:
Before any court considers the merits of the case, it will first have to interpret the
scope of the Sale Order as applied to the Plaintiff’s claims. Therefore, the court finds
that the case ‘arises in’ a bankruptcy case and that it is a core proceeding. There is
proper jurisdiction under § 1334(b), removal was proper under § 1452, and
mandatory abstention under § 1334(c)(2) is not applicable.
Powell v. FCA US LLC, No. 15-393, 2015 WL 5014097, at *4 (M.D. Ala. Aug. 21, 2015) (collecting
There is no basis for mandatory abstention under section 1334(c)(2), because the
interpretation and enforcement of provisions of a bankruptcy order of sale is a “core proceeding”
implicating the administration of the estate or enforcement of an order for sale of property. “In
Cohens v. Virginia, Chief Justice Marshall famously cautioned: ‘It is most true that this Court will
not take jurisdiction if it should not: but it is equally true, that it must take jurisdiction if it
should. . . . We have no more right to decline the exercise of jurisdiction which is given, than to
usurp that which is not given.’” Marshall v. Marshall, 547 U.S. 293, 298-99 (2006) (quoting 6
Wheat. 264, 404 (1821)). Here, the Court is not free to abstain from the exercise of jurisdiction
plainly granted by Congress. The case was properly removed, and it may not be remanded under
any form of abstention.
Invoking Federal Rule of Civil Procedure 12(b)(6), FCA argues in its motion that the
amended complaint should be dismissed because (1) the plaintiffs’ claims for noneconomic damages
beyond the $500,000 cap under the product liability statute are in essence “exemplary damages,”
and the sale order confirmed by the bankruptcy court expressly excluded claims for exemplary
damages from the scope of liabilities assumed by FCA US, LLC; (2) the Court should dismiss Count
VI alleging “negligent recall,” because under Michigan law because there is no recognized duty for
a manufacturer to perform a post-sale recall or repair of a defective product; and (3) the amended
complaint fails to set forth any “short and plain statement” of the plaintiffs’ claims. The plaintiffs
dispute each of these arguments.
The standards under Rule 12(b)(6) are well known to the parties: the purpose of the motion
is to allow a defendant to test whether, as a matter of law, the plaintiffs are entitled to legal relief if
all the factual allegations in the complaint are taken as true. Rippy ex rel. Rippy v. Hattaway, 270
F.3d 416, 419 (6th Cir. 2001) (citing Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993)). The
complaint is viewed in the light most favorable to the plaintiffs, the allegations in the complaint are
accepted as true, and all reasonable inferences are drawn in favor of the plaintiffs. Bassett v. Nat’l
Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). To survive the motion, the plaintiffs
“must plead ‘enough factual matter’ that, when taken as true, ‘state[s] a claim to relief that is
plausible on its face.’ Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007). Plausibility
requires showing more than the ‘sheer possibility’ of relief but less than a ‘probab[le]’ entitlement
to relief. Ashcroft v. Iqbal, [556 U.S. 662, 678] (2009).” Fabian v. Fulmer Helmets, Inc., 628 F.3d
278, 280 (6th Cir. 2010).
When deciding a motion under Rule 12(b)(6), the Court looks to the pleadings, Jones v. City
of Cincinnati, 521 F.3d 555, 562 (6th Cir. 2008), the documents attached to them, Commercial
Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (citing Fed. R. Civ.
P. 10(c)), documents referenced in the pleadings that are “integral to the claims,” id. at 335-36, and
documents that are not mentioned specifically but which govern the plaintiff’s rights and are
necessarily incorporated by reference, Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997),
abrogated on other grounds by Swierkiewicz v. Solerne, N.A., 534 U.S. 596 (2002). However,
beyond that, assessment of the facial sufficiency of the complaint ordinarily must be undertaken
without resort to matters outside the pleadings. Wysocki v. Int’l Bus. Mach. Corp., 607 F.3d 1102,
1104 (6th Cir. 2010).
Under Michigan law, when a plaintiff alleges that a product defect caused death, “the total
amount of damages for noneconomic loss shall not exceed $500,000.00.” Mich. Comp. Laws §
600.2946a(1). However, “if the court determines that at the time of manufacture or distribution the
defendant had actual knowledge that the product was defective and that there was a substantial
likelihood that the defect would cause the injury that is the basis of the action, and the defendant
willfully disregarded that knowledge in the manufacture or distribution of the product, then [the
damage cap] do[es] not apply.” Mich. Comp. Laws § 600.2949a. In an effort to plead around the
damage cap, the plaintiffs alleged in their amended complaint that the defendant “was grossly
negligent and acted with willful disregard for the safety of ultimate users” when it “design[ed],
manufactur[ed], and market[ed] the 2003 Jeep Liberty.” Am Comp. ¶ 110 (Page ID 1316). FCA
contends that the allegation constitutes a forbidden request for exemplary damages, which FCA did
not assume from the Old Chrysler, and therefore the amended complaint does not state a claim
Under Michigan law, “[e]xemplary damages are awarded for injury to feelings and for the
sense of indignity and humiliation suffered by a plaintiff because of injury maliciously and wantonly
inflicted.” American Central Corp. v. Stevens Van Lines, Inc., 103 Mich. App. 507, 514-15, 303
N.W.2d 234, 237 (1981) (citations omitted). They are a species of compensatory damages, but they
are “restricted to the party who has received the physical injury.” Ray v. City of Detroit, 67 Mich.
App. 702, 704, 242 N.W.2d 494, 495 (1976). Perhaps for that reason, “exemplary damages are not
recoverable in a wrongful death action.” Fellows v. Superior Prod. Co., 201 Mich. App. 155, 157,
506 N.W.2d 534, 536 (1993); see also In re Disaster at Detroit Metro. Airport on Aug. 16, 1987,
750 F. Supp. 793, 805 (E.D. Mich. 1989).
Nowhere in the amended complaint do the plaintiffs make any demand for any such
damages. Contrary to FCA’s reading of the pleadings and applicable law, they also do not anywhere
allege facts that compel an inference that the damages sought are in substance essentially
“exemplary” in nature, as that species of damages has been construed by Michigan courts. The
complaint alleges only that the defendant was “grossly negligent” and acted with “willful disregard”
for the risks to the plaintiffs’ decedents posed by its defective fuel tank design. Am. Compl. ¶¶ 110,
112, 117, 119, 127, 130. Nowhere do the plaintiffs allege, or plead facts to suggest, that their
allegations about the defendant’s prior knowledge is intended to sustain a claim for exemplary
damages under Michigan law.
FCA argues that the plaintiffs allege scienter by the defendant that is consistent with a plea
for exemplary damages. Perhaps, although it does appear that the allegations in the amended
complaint stop short of accusing the defendant of the malicious, willful, and wanton conduct that
is required to establish a right to recover exemplary damages. See Midfield Concession Enterprises,
Inc. v. Areas USA, Inc., 130 F. Supp. 3d 1122, 1144 (E.D. Mich. 2015) (noting that under Michigan
law, “[i]n order to successfully assert a claim for exemplary damages, the plaintiff must show that
the injuries were maliciously, willfully, and wantonly inflicted”) (citing Unibar Maintenance
Services, Inc. v. Saigh, 283 Mich. App. 609, 630, 769 N.W.2d 911, 924 (2009)). “The theory of
[the cases on point] is that the reprehensibility of the defendant’s conduct both intensifies the injury
and justifies the award of exemplary damages as compensation for the harm done the plaintiff’s
feelings.” Kewin v. Massachusetts Mut. Life Ins. Co., 409 Mich. 401, 419, 295 N.W.2d 50, 55
(1980). Nonetheless, the fact that such a state of mind is a fundament of an exemplary damage claim
does not mean that pleading that state of mind converts an ordinary damage complaint into a plea
for exemplary damages, where no such damages actually are requested.
There is no question that the plaintiffs seek noneconomic damages. They list those as
consisting of “[c]onscious pain and suffering,” [l]oss of society and companionship, “emotional
distress, past, present and future,” [h]umiliation, mortification, [and] fright, past, present and future,”
“[e]motional and mental suffering, past, present and future,” and “[l]oss of enjoyment of life, past,
present and future.” Those damages are allowed under Michigan’s Wrongful Death Act. See Mich.
Comp. Laws § 600.2922(6). The plaintiffs’ allegations about the defendant’s state of mind plainly
are designed to avoid the cap on noneconomic damages. There is no suggestion in the amended
complaint, however, that the plaintiffs intend to leverage those allegations into a plea for a different
species of noneconomic damages. The defendant has offered no authority on point holding that
compensatory hazard damages in excess of the statutory cap magically are transformed into
“exemplary” damages merely based on the amount of the recovery.
There is nothing in the amended complaint that upsets FCA’s assumption of liability as set
out in the MTA and bankruptcy order of sale. The MTA is plain, and it states that FCA assumed
“all Product Liability Claims arising from the sale on or prior to the Closing of motor vehicles . . .
manufactured by [Old Chrysler] . . . sold as a . . . Jeep . . . solely to the extent such Product Liability
Claims (A) arise directly from motor vehicle accidents occurring on or after Closing, (B) are not
barred by any statute of limitations, . . . and (D) do not include any claim for exemplary or punitive
damages.” Notice of Removal, Ex. 3, Am. No. 4 to Master Trans. Agrmt. dated Oct. 29, 2009 (Pg
ID 188) (emphasis added).
All claims means “all claims” — subject to the narrowly delineated exceptions stated in the
MTA. None of those exceptions makes a reference to barring claims beyond any statutory cap on
noneconomic damages, or claims for damages predicated on a particular scienter or severity of
culpability of the defendant’s alleged conduct. “There is no more comprehensive term than ‘all.’”
Whaley v. Henry Ford Health Sys., 172 F. Supp. 3d 994, 1000-01 (E.D. Mich. 2016) (citing Sander
v. Alexander Richardson Inv., 334 F.3d 712, 716 (8th Cir. 2003) (holding, in the context of
construing written instruments, that “[i]n short, ‘all’ means all”); County of Oakland v. Federal
Housing Finance Agency, 716 F.3d 935, 940 (6th Cir.2013) (observing that “a straightforward
reading of the statute leads to the unremarkable conclusion that when Congress said ‘all taxation,’
it meant all taxation”)); see also In re Hydro Action, Inc., 266 B.R. 638, 645 (Bankr. E.D. Tex.
2001) (“Notwithstanding the proclivities of a recent Chief Executive to the contrary, the meanings
of these three comprehensive words are not subject to serious dispute. ‘All’ means all. ‘Every’
means every. ‘Any’ means any.”). The amended complaint states a product liability claim against
As noted above, FCA also argues that Count VI of the amended complaint (alleging
“negligent recall”) is defective because under Michigan law there is no recognized duty for a
manufacturer to perform a post-sale recall or repair of a defective product. The Court disagrees.
The plaintiffs adequately have pleaded a claim that defendant FCA (itself, not its
predecessor) acted unreasonably in carrying out the voluntary recall of the 2003 Jeep Liberty (KJ)
in August 2014 when it (1) failed or refused promptly to issue a notice after instructed by the federal
government to do so; (2) failed adequately to warn drivers of the severity of the risk of fuel fires that
could result from a ruptured gas tank in a rear-end collision; and (3) failed to direct drivers of the
Jeep models affected to park their cars and not drive them until repairs could be performed. Those
acts go well beyond the defendant’s construction of the claim as merely alleging a failure to perform
a post-sale repair or recall of a defective vehicle. And it is well established under Michigan law that
a “party may be under a legal duty when it voluntarily assumes a function that it is not legally
required to perform.” Zychowski v. A.J. Marshall Co., 233 Mich. App. 229, 231, 590 N.W.2d 301,
302 (1998). “Once a duty is voluntarily assumed, it must be performed with some degree of skill
and care.” Ibid. The second amended complaint adequately alleges that, having voluntarily
undertaken to act in issuing the recall, the defendant failed to do so with reasonable care, based on
the knowledge of the danger of the Jeep’s design that was within its purview at the time.
In Comstock v. Gen. Motors Corp., 358 Mich. 163, 99 N.W.2d 627 (1959), the Michigan
Supreme Court held that in certain circumstances a manufacturer could be liable for failing to warn
of a “latent defect” discovered after manufacture and sale of a vehicle. The court explained:
We think that the testimony pertaining to the brake failure and the defects in the 1953
Buick power brake cylinder was sufficient to allow the jury to infer negligence on
the part of defendant General Motors Corporation in this case.
There is, however, in this case other testimony from which the jury could conclude
that the manufacturing and testing precautions taken by General Motors’ Buick
division were reasonable ones under all the circumstances; and that the failure of the
‘O’ ring sealers could not reasonably have been foreseen.
Even if such a conclusion were reached on this record, however, we do not think the
question of negligence ends there. Buick division subsequently learned in fact that
they had built thousands of power brakes with a defective part. The facts pertaining
to furnishing of replacement kits and assumption of costs allow no other inference
than that defendant had ample warning of a serious problem concerning the 1953
Buick power brakes well before the brakes involved here failed.
Defendant’s Buick division warned its dealers. It did not warn those into whose
hands they had placed this dangerous instrument and whose lives (along with the
lives of others) depended upon defective brakes which might fail without notice.
In our view, the facts in this case imposed a duty on defendant to take all reasonable
means to convey effective warning to those who had purchased ‘53 Buicks with
power brakes when the latent defect was discovered.
The duty to warn of known danger inherent in a product, or in its contemplated use,
has long been a part of the manufacturer’s liability doctrine.
358 Mich. at 175-77, 99 N.W.2d at 633-34. In this case, the pleadings can be read sufficiently to
allege both that the manufacturer knew of some risk of the design when the Jeep Liberty was
designed and sold, and also that it subsequently learned of a more severe “latent” risk of the design,
aggravated by “high speed” rear-end collisions, about which it failed to give any effective warning,
even when reports of fatal fires due to such collisions began to mount.
It is true that failure to warn of a known design defect at the point of sale, although sufficient
to sustain a product liability claim, will not give rise under Michigan law to any congruent post-sale
duty either to warn of or to repair the defect. As the Michigan Supreme Court explained in Gregory
v. Cincinnati Inc., 450 Mich. 1, 538 N.W.2d 325 (1995):
In [Prentis v. Yale Mfg. Co., 421 Mich. 670, 365 N.W.2d 176 (1984)], we held that
design defect cases require a risk-utility balancing test. With the focus on conduct
rather than simply the product, proof of a defect by the risk-utility test resolves any
issue of latency because the result of the test is a finding that the manufacturer either
knew or should have known of the danger at the point of manufacture. Accordingly,
a design defect cannot, practically speaking, be deemed undiscoverable at the point
of manufacture. In other words, constructive knowledge imputed to the manufacturer
under the state of the art at the time of design renders the concept of latency at issue
in Comstock moot in a design defect case. There being no issue of latency, the
question becomes whether any postmanufacture duty is imposed.
Because a prima facie case is established once the risk-utility test is proven, we are
persuaded that it is unnecessary and unwise to impose or introduce an additional duty
to retrofit or recall a product. Focusing on postmanufacture conduct in a negligent
design case improperly shifts the focus from point-of-manufacture conduct and
considers postmanufacture conduct and technology that accordingly has the potential
to taint a jury’s verdict regarding a defect.
450 Mich. at 21-22, 538 N.W.2d at 333-34 (citations omitted). However, the answer to the question
whether the defect in this case was entirely identified by the time of sale or partially “latent” will
have to await the development of the record, which will determine whether the plaintiffs can proceed
on either theory — or on both — at trial. See Volin v. Gen. Elec. Co., 189 F. Supp. 3d 411, 421
(D.N.J. 2016) (“At the pleading stage . . . where the distinction between a defect in design and defect
in materials or workmanship is a matter of semantics, and sufficient facts are alleged to assert both,
the defendant’s characterization of the nature of the claim pre-discovery should not control whether
the complaint survives. It is unclear what may have caused the alleged Surface Knob and Ignition
System Defects; a fortiori, it is not clear whether (assuming they exist) they should be classified as
design defects or defects in materials or workmanship. Such issues must await factual
Finally, FCA contends that the amended complaint violates Federal Rule of Civil Procedure
8, which requires a complaint to consist of “ a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). At 45 pages and 133 paragraphs, the
amended complaint pushes the limits of the “short” requirement. But the purpose of Rule 8 is to
“give the defendant fair notice of what the claim is and the grounds upon which it rests.” Twombly,
555 U.S. at 555 (internal quotation marks and ellipses omitted). The amended complaint satisfies
FCA criticizes the pleading as containing too much extraneous detail. It does appear that the
plaintiffs chose to include a surfeit of background facts, which are not essential to their claims.
Many of the allegations, however, are included to establish a right to economic damages in excess
of the statutory damage cap. “What constitutes a short and plain statement must be determined in
each case on the basis of the nature of the action, the relief sought, and the respective positions of
the parties in terms of the availability of information and a number of other pragmatic matters.” 5
Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1217 at 240–41 (3d ed.
It is true that a complaint that is verbose may be subject to dismissal for failure to comply
with Rule 8. Vicom v. Harbridge Merchant Servs., Inc., 20 F.3d 771, 775-76 (7th Cir. 1994) (noting
that “[a] complaint that is prolix and/or confusing makes it difficult for the defendant to file a
responsive pleading and makes it difficult for the trial court to conduct orderly litigation”). But here,
the complaint plausibly alleges sufficient specific facts to suggest that the defendant was aware of
and failed to warn the plaintiffs’ decedents about the dangerously defective design of the Jeep
Liberty’s fuel tank, which resulted in the escalation of a survivable rear-end collision into a
gruesome spectacle where 23-year-old Kayla White and her unborn fetus were burned alive while
struggling desperately to escape from the car. Those pleadings are sufficient plausibly to sustain
claims that the defendant negligently designed the Jeep Liberty fuel system — in particular by
employing a rear-mounted fuel tank configuration that had led to similar horrific fires following rear
end collisions in cars designed by other manufacturers decades before 2003.
The pleadings also sufficiently suggest that FCA failed to warn the plaintiffs’ decedents of
the dangers of their design, and, even when it undertook to perform a voluntary recall, did so
unreasonably carelessly by failing to communicate the severity of the fuel tank fire risk and failing
to advise owners to stop driving their cars.
Moreover, the facts about White’s employment and the circumstances of her home life to
which the defendant objects are pertinent at least to establish the value of the happy future and
prospective earnings that were cut short by her untimely death.
There is no basis to dismiss the amended complaint in this case under Rule 8.
The Court has subject matter jurisdiction over the case under 28 U.S.C. § 1334(b), and the
case was removed properly. The amended complaint states valid claims, including claims that the
plaintiffs are entitled to noneconomic damages in excess of Michigan’s damage caps in product
liability cases, and is not otherwise subject to dismissal under Rules 12(b)96)( or 8(a).
Accordingly, the plaintiffs’ motion to remand [dkt. #4] and defendant FCA’s motion to
dismiss [dkt. #7] are DENIED.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: November 16, 2017
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on November 16, 2017.
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