Nissan May Be Liable Under State Consumer Laws for Concealing Faulty Transmission

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

Nissan purchasers stated claims under the consumer protection statutes of New Jersey, California, Illinois, Ohio, and Pennsylvania against Nissan Motor Co. for allegedly concealing a defectively designed transmission in certain vehicle models, the federal district court in Camden, New Jersey, has held.

Certain Nissan vehicles contain transmissions that rely on a complex system that enables a smooth shift to the appropriate gear. The problems at issue allegedly result from the improper design and function of the transmission valve body, which caused delayed shift patterns, excessive heat buildup, slippage, harshness, premature internal part wear, metal debris, and catastrophic transmission failure. The purchasers alleged that the transmission failed well in advance of their expected useful life and posed significant safety risks due to an unpredictable acceleration response and sudden total transmission failure.

Federal Rule of Civil Procedure 9(b) requires a plaintiff to state the circumstances of the alleged fraud with sufficient particularity to place the defendant on notice of the precise misconduct with which it is charged.

Each purchaser’s claims met the heightened pleading standard of Rule 9(b), pleading the date, time, and place of the alleged fraud. The claims also sufficiently stated that Nissan knew and withheld material information from consumers, Nissan possessed exclusive knowledge about the problem, the information was material, and the purchasers relied on the materiality of the non-disclosed information.

The purchasers presented sufficient evidence to state New Jersey, California, Illinois, Ohio, and Pennsylvania consumer protection law claims, according to the court. Each state law was brought by a resident of that state. Although the laws require different evidence, the evidence was sufficient to state a claim under each law.

The decision is Nelson v. Nissan North America, Inc., CCH State Unfair Trade Practices ¶32,539.

Further information regarding CCH State Unfair Trade Practices appears here.