Products Liability Law Daily Appeals court reverses dismissal of design defect claims against Chrysler in collision-avoidance technology case
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Thursday, May 7, 2020

Appeals court reverses dismissal of design defect claims against Chrysler in collision-avoidance technology case

By Robert B. Barnett Jr., J.D.

The trial court’s application of the doctrine of implied obstacle preemption, based on NHTSA’s decision not to require car makers to install AEB technology on all vehicle models, was rejected.

After a Maricopa County trial court dismissed a product liability suit against Chrysler on the ground that the National Highway Traffic Safety Administration’s (NHTSA) decision not to mandate installation of automated collision-avoidance technology in new cars impliedly preempted the common law claims, the Arizona Court of Appeals has reversed the decision, ruling that no implied preemption existed because nothing in NHTSA’s 2017 decision "even hints" at a regulatory objective to prevent such suits. As a result, a woman who was rear-ended at high speed, resulting in injuries to herself and the death of her four-year-old daughter, will be allowed to pursue her claims against FCA US LLC and two other automotive corporations (collectively, Chrysler) for defective design and negligence, stemming from Chrysler’s failure to install the collision-avoidance technology in the Jeep Grand Cherokee that had struck her vehicle (Varela v. FCA US LLC, May 5, 2020, Johnson, D.).

Background. Currently, auto makers design, install, and regularly sell cars that use technology to sense when a crash is likely to occur (forward collision warning) and that automatically apply the brakes to avoid or minimize the effects of a crash (crash imminent braking). NHTSA refers to these systems, along with "dynamic brake support," as automatic emergency braking (AEB) technologies. In 2014, Chrysler offered its Jeep Grand Cherokee vehicle with five trim levels—AEB technologies were standard on the two most expensive models, optional on two other models, and not available on the least expensive model. The driver who collided with the woman’s car drove one of the middle tier models and it did not include AEB technology. The woman sued Chrysler, alleging that its decision not to install AEB technology in all its models amounted to a design defect and negligence and that her daughter would not have been killed had AEB technology been installed on the 2014 vehicle that hit her vehicle. The trial court granted Chrysler’s motion to dismiss the woman’s claim son the grounds of implied obstacle preemption, based on NHTSA’s 2017 decision not to require car makers to install AEB technology on all their models. The woman appealed the decision to the Arizona Court of Appeals.

Implied preemption. Obstacle preemption occurs when a state common-law claim "stands as an obstacle to the accomplishment and execution of the full purpose sand objectives" of a federal law or regulation. Here, Chrysler did not argue that Congress enacted a statute or that a federal agency promulgated a rule barring the woman’s claims. Rather, Chrysler contended that her claims were barred by NHTSA’s decision not to regulate AEB technology—a subcategory of preemption called "implied obstacle preemption." The appellate court noted that such implied obstacle preemption cases are rare. In Geier v. American Honda Motor Co., 529 U.S. 861 (2000), the U.S. Supreme Court permitted preemption in a case involving safety restraints. The High Court ruled that allowing a plaintiff to sue for failing to provide certain safety restraints in all models would defeat the stated regulatory aim of allowing car makers to offer a mix of safety restraint options, including belts and air bags. In Williamson v. Mazda Motor of Am., Inc., 562 U.S. 323 (2011), however, the Court reached the opposite conclusion in another case involving safety restraints, this time lap-and-shoulder belts. The claims were not preempted because the regulatory reason for not requiring that all models include lap-and-shoulder belts for all passengers was cost concerns. The federal standards were deemed to be a minimum standard, with state tort law having a role to play in determining what is appropriate.

The question for the appellate court was whether the case at bar was more like Geier or more like Williamson. In between the two decisions, the Supreme Court also had ruled unanimously that a federal agency’s decision to refrain from mandating a national standard did not automatically impliedly preempt a state common law tort claim (Sprietsma v. Mercury Marine, 537 U.S. 51 (2002)). Examining the administrative record in this case, the appellate court concluded that NHTSA opted to not implement the requirement that all vehicles install AEB technology because the industry already was moving quickly to adopt the new technology. NHTSA was concerned that a decision to enact a new industry-wide requirement actually might slow down implementation of the technology. As the Supreme Court said in Williamson, a tort claim that would restrict a choice left open by agency action is impliedly preempted only when "that choice is a significant regulatory objective." Because choice was not a significant regulatory objective here, this case was more like Williamson than Geier. Consequently, the appellate court concluded that the doctrine of implied obstacle preemption did not apply. Therefore, the court reversed the judgment in favor of Chrysler and remanded for further proceedings.

The case is No. 1 CA-CV 19-0209.

Attorneys: G. Lynn Shumway (Shumway Law, PLLC) for Melissa Varela. Paul G. Cereghini (Bowman and Brooke, LLP) for FCA US LLC.

Companies: FCA US LLC

MainStory: TopStory PreemptionNews DefensesLiabilityNews DesignManufacturingNews MotorVehiclesNews MotorEquipmentNews ArizonaNews

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