Fiat Chrysler Suit Over Reporting Defects Narrowed by Judgeby
Case goes ahead over claims of compliance with safety rules
Suit brought by three investors who seek to represent class
Fiat Chrysler Automobiles NV must face a narrowed suit by investors who challenged the carmaker’s statements about compliance with safety rules and its handling of product defects and recalls.
U.S. District Judge Jesse Furman in Manhattan dismissed some claims while allowing others to go forward, including allegations that the carmaker falsely said it was complying with safety rules.
The suit was filed last year against Fiat Chrysler and three top officers of its U.S. unit, chief executive Sergio Marchionne, chief financial officer Richard Palmer and Scott Kunselman, the former head of vehicle safety and regulatory compliance. The judge on Wednesday dismissed claims against Palmer.
The suit is being pursued by three Fiat Chrysler investors who seek to represent a class of shareholders from Oct. 13, 2014, to October 28, 2015. They claim the company falsely said it was "substantially in compliance" with relevant regulations affecting its products throughout the world. Company shares then dropped 4.9 percent on July 27, 2015, after Fiat Chrysler agreed to pay $105 million to settle a National Highway Traffic Safety Administration investigation into claims it delayed acting on safety defects in its light trucks and cars.
The company said in a statement, “FCA is pleased the court dismissed with prejudice several of the more significant claims in the complaint. FCA will vigorously defend itself on those claims that were not dismissed in our initial motion to dismiss.”
The case is Koopman v. Fiat Chrysler Automobiles NV, 15-cv-07199, U.S. District Court, Southern District of New York (Manhattan).