On February 11, 2020, the U.S. District Court for the Western District of Washington granted Ford’s motion for summary judgment on the plaintiff’s fraud and consumer protection claims, concluding that the plaintiff had not presented sufficient evidence to create a triable issue of fact on the questions of whether Ford knew about and failed to disclose a material defect in the Ford Escape’s panoramic glass sunroof.

• Plaintiff Jessica Beaty alleged that the panoramic glass sunroof on her 2013 Ford Escape spontaneously shattered while she was driving on the highway nearly five years after she purchased the vehicle. She alleged that the purported defect in the glass extended to a wide range of Ford vehicles and sought to represent a putative class of purchasers of those vehicles. Ford moved for summary judgment on Beaty’s fraudulent concealment and Washington Consumer Protection Act claims.
• The core issues were whether Ford knew about and failed to disclose a material defect in the glass sunroof. The court separately addressed knowledge, disclosure, and materiality, finding for Ford on all three issues.
  • Beaty argued that Ford knew about the alleged defect because it had experienced similar issues in other vehicle models and because there were “industry-wide” problems with these types of sunroofs. The court rejected this argument based on Ford’s evidence that the Escape’s sunroof was significantly different from the sunroofs in those other vehicles and the fact that Ford had never been ordered to recall its vehicles.
  • As to Ford’s duty to disclose, the court noted that it “defie[d] common sense” to claim that a manufacturer must disclose the failure of every single component to every potential purchaser, even if the failure rate is minor. Instead, the court found that the duty to disclose hinged on the materiality of the alleged defect.
  • The court assessed materiality by examining the severity of harm, the frequency of the harm, and the “economic, social, and safety” consequences of reducing the risk to a reasonable level. It found that the .05% chance of shattering was not material, as that rate was lower than the shatter rate for sunroofs on a different vehicle that NHTSA did not recall. It also noted Ford’s evidence that the shattering did not cause any serious injuries or accidents. The court expressly declined, however, to adopt the Third Circuit’s “‘bright line’ 1% threshold” for when a failure rate is not material as a matter of law—a case discussed in our August 2019 issue. See Coba v. Ford Motor Co., 932 F.3d 114 (3d Cir. 2019).
• Additionally, the court rejected the plaintiff’s proposed use of a “conjoint analysis survey” to determine benefit-of-the-bargain damages; i.e., the difference between an Escape as represented (with sunroofs that would not fail) and the one Beaty bought (with a .05% chance of failure). Relying on a Southern District of New York order in the GM Ignition Switch Litigation (also discussed in our August 2019 edition), the court explained that the survey was flawed because it could account only for what a willing purchaser would pay for a vehicle without the alleged defect, and not whether Ford would be willing to sell such a hypothetical vehicle.
• The court’s decision provides product manufacturers facing fraud and consumer protection claims with strong arguments to defeat knowledge, duty to disclose, and materiality requirements. Further, the court’s rejection of Beaty’s proposed damages model will be helpful in cases where plaintiffs seek to establish “benefit-of-the-bargain” damages through a conjoint analysis survey.
• The case is Beaty v. Ford Motor Co. Read more here.