Latest Securities Claims in Fiat Chrysler Class Action Tossed
Aug. 7, 2017—Plaintiffs in an ongoing securities fraud class action suit against Fiat Chrysler Automobiles over emissions violations faced a setback on Tuesday, according to the New York Law Journal.
U.S. District Judge Jesse Furman of the Southern District of New York granted defendants' motion to dismiss new allegations of fraud by the international automotive company.
The latest theory offered in the suit seeking class status was sunk by "general claims," "vague statements" and "unremarkable fact[s]" that didn't hold up under a conscious recklessness standard, Furman found.
The securities suit, initiated by plaintiff Victor Pirnik, was first filed in September 2015 after the FCA recalled over a million vehicles over safety concerns. In the expanded allegation in the plaintiffs' third amended complaint, defendants, including FCA's CEO Sergio Marchionne, are alleged to have misled investors after California and federal environmental regulators issued a violation notice in January 2017 for failing to disclose software that could alter emissions outputs in recent diesel versions of Jeep Grand Cherokees and Dodge Ram 1500 trucks.
Furman agreed with defendants' argument that the allegations didn't make a strong enough case of scienter, while failing to show either actual intent or a conscious recklessness that comes close. "Conspicuously absent," Furman wrote, is any hard evidence that FCA officials, including the CEO, were made aware of emissions noncompliance in the 100,000 or so vehicles prior to January, nor has any "regulatory body ... definitively found" they were using an illegal "defeat device" to rig emission results.