Fiat Chrysler Wants Data Hack Class Action Forced Into Arbitration

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Two Fiat Chrysler customers who filed a proposed class action lawsuit over the Uconnect hacking scandal may be forced into arbitration considering the discounted price their vehicle sold at.

FCA claims that plaintiffs Kelly and George Brown of Missouri, who initiated the class action lawsuit, previously agreed with FCA to arbitrate all warranty disputes related to their Jeep Cherokee because they bought the vehicle with a friend-of-employee discount.

Even though the case has been pending 11 months, FCA claims they only just learned of the Brown’s arbitration agreement through third-party discovery.

“In fact, one of plaintiffs’ alleged misrepresentations was FCA US’s statement after discovery of a hacking vulnerability in the vehicles that described the alleged defect and the remedy, which FCA US originally released as an extended warranty remedy and not a safety recall,” the company said.

On Monday, FCA told the court that in purchasing their vehicle, the Browns took advantage of a program which allowed them to purchase their vehicle at a substantial discount.

In exchange for that discount, they executed an “Employee Advantage – Friends Program Pricing & Acknowledgement Form” which stated near the top, in large capital letters that “THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.”

The Browns first filed suit against FCA, as well as co-defendant Harman International Industries, in August. The complaint, which included a third plaintiff Brian Flynn, was filed after Wired magazine published an article in which security researchers demonstrated the ability to remotely hack into a 2014 Jeep Cherokee while it was driving on a highway in St. Louis.

According to the article, researchers were able to gain access to the vehicle through security vulnerabilities in the Uconnect system and were able to rewrite encoded chips in the Uconnect hardware which allowed them to access and issue commands.

In filing the class action lawsuit, the plaintiffs seek to represent a broad Class of consumers based on the alleged defects of model-year 2014 Jeep Cherokee vehicles and 27 other different make and model year FCA vehicles.

According to the plaintiffs, FCA violated the Magnuson-Moss Warranty Act and breached the implied warranty of merchantability, along with numerous other claims.

All of the claims are based on alleged defects in certain FCA vehicles that may have allowed the cars to be vulnerable to hacking by a cybercriminal, who could then control certain vehicle functions.

As per the plaintiffs, hackers could even use Uconnect to shut down cars while on the highway, both through the 3G network, which cannot be disconnected, and through the radio, a separate hacking risk that is currently under investigation by the National Highway Traffic Safety Administration.

Moreover, the lawsuit contends that Fiat Chrysler was aware of the hacking vulnerability almost 18 months prior to the recall, and waited for the recall to be issued, constituting a breach of the company’s responsibilities under the Transportation Recall Enhancement, Accountability and Documentation Act.

In December 2015, an amended complaint also added a fourth plaintiff, Michael Keith. Both Keith and Flynn, who are not associated with the arbitration agreement, have asked the court to stay the litigation until the arbitration process has ended.

The FCA customers are represented by Christopher D. Baucom, IJay Palansky, Lucas T. Pendry, Emily Buckley and Stephen R. Wigginton of Armstrong Teasdale LLP, and Christopher F. Cueto, Lloyd M. Cueto and Michael J. Gras of Law Office of Christopher Cueto Ltd.

The Fiat Chrysler Uconnect Hacking Class Action Lawsuit is Flynn, et al. v. FCA US LLC, et al., Case No. 3:15-cv-00855, in the U.S. District Court for the Southern District of Illinois.

UPDATE: On Sept. 23, 2016, a federal judge dismissed claims based on theories of warranty, fraud and negligence but will allow the remainder of the plaintiffs’ claims to proceed.

UPDATE 2: On Oct. 25, 2016, plaintiffs Kelly and George Brown who are part of a larger legal battle with Fiat Chrysler Automobiles (FCA) over allegations the automaker knew the uConnect systems installed in their vehicles were vulnerable to hacking asked an Illinois federal judge to lift a discretionary stay imposed in the case.

UPDATE 3: On Oct. 13, 2017, the plaintiffs asked an Illinois federal judge to grant Class certification to a putative class action lawsuit that alleges some Fiat Chrysler vehicles are vulnerable to hacking.

UPDATE 4: On July 5, 2018, a judge agreed to certify Class Members from the states of Illinois, Michigan, and Missouri. The proposed nationwide Class was too “unwieldy,” stated the judge in his order.

UPDATE 5: On Dec. 11, 2018, the defendants in a Fiat Chrysler class action lawsuit over claims that Jeep Cherokees are vulnerable to being hacked now argue that thousands of Jeep drivers should not have been certified as a Class.