Chemical Logistics, Inc. v. Wabash Nat. Corp., Slip Copy, 2010 WL 1427327 (D. Nev. Apr 08, 2010) (No. 210-CV-0110-LRH-PAL).

The Nevada District Court remanded the action to state court finding that the defendants failed to establish that the amount in controversy exceeded $5 million by a preponderance of the evidence.  

Chemical Logistics, Inc. (CLI) filed a class action on behalf of people who purchased a Wabash trailer with a Meritor suspension system against Wabash National Corporation and Meritor in state court for breach of express and implied warranties.  

Wabash specializes in the design and production of truck trailers.  Meritor is a global supplier of integrated systems and components for commercial truck and trailer manufactures.  CLI owns 12 Wabash semi-trailers equipped with Meritor suspensions systems and axles. In October 2008, while pulling one of the Wabash trailers, the left tandem wheel assembly became unhinged from the trailer.  After CLI repaired the trailer and sought warranty reimbursement, Wabash declined stating that the trailer was not the cause of the wheel and axle failure.  In this action, CLI sought reimbursement of the cost of repair, and for other class members–sought replacement or retrofitting of the suspension systems.

Wabash removed the action to federal court on federal diversity grounds under CAFA alleging that the repair estimate provided by CLI in its initial disclosures satisfied the $5 million amount in controversy requirement.  Wanting to haul its trailer to state court, CLI moved to remand. 

Wabash multiplied the estimated repair cost of the failed trailer evidenced in CLI’s lowest estimate, $ 3,410.85, by 2000, the number of alleged Wabash trailers with a Meritor suspension system in CLI’s complaint.  The Court, however, found that Wabash’s calculations were not supported by the allegations in the complaint.

The Court noted that the putative class consisted of people who purchased a Wabash trailer with a Meritor suspension system, and not merely to those vehicles that had suffered a severe suspension failure. Moreover, CLI alleged that only one trailer out of 12 trailers which it owned had to be completely repaired.  As the only evidence before the Court was for the estimated repair cost of the single failed trailer, the Court opined that the repair estimate only established an amount in controversy of $ 3,410.85, well below the $5 million requirement.

As to the remaining vehicles in the class, CLI sought replacement or retrofitting of the suspension systems, not repair of the entire tandem wheel assembly.  The Court observed that Wabash had not provided any evidence as to the cost of replacing or retrofitting the allegedly faulty suspension system, but CLI had alleged that such replacements was significantly less than the repair estimate for the one failed vehicle because the repair estimate includes repairs to the suspension system, axle, wheel, hub assembly, and tire system.

As a result, the defendants have to try to gain balance to its suspension system in state court.