Consumers don't need to allege mileage-related fraud to pursue Odometer Act claims, according to a federal appeals court that reinstated a lawsuit against a Miami dealership.
A dealership's failure to comply with disclosure and title regulations is enough to justify a federal claim, even if the true mileage and odometer reading were accurately disclosed, the 11th Circuit U.S. Court of Appeals in Atlanta ruled.
The decision in Glendale Owens' lawsuit against Marlin Mazda sets the stage for possible Supreme Court review because it conflicts directly with a September interpretation of the Odometer Act by a Seventh Circuit Court of Appeals panel in Chicago. In that decision, the panel found that the federal odometer law "extends only to cases where the transferor intended to defraud a transferee about the vehicle's mileage."
At issue is the scope of protection available to consumers and the potential liability of vehicle sellers.
"Right now, there's a conflict," dealership lawyer Michael Gonzalez of Coral Gables, Fla., told Automotive News, adding that his client hasn't decided on the next legal step.
Owens' lawsuit accused the dealership of failing to show her the original title of a used 2002 Mazda 626 as required, allegedly to conceal that the car had been a Hertz short-term rental. She would not have paid $25,858 if she had known that fact, the lawsuit asserts.
A lower court judge dismissed the federal claim without trial because Owens, of Broward County, Fla., did not allege that the dealership intended to defraud her about mileage. State fraud and unfair trade practices allegations were dismissed on procedural grounds.
In reinstating the federal claim, the appeals court said the plain language of the Odometer Act allows Owens to pursue damages.
"Congress mandated standardized disclosure requirements and record-keeping procedures formulated to provide consumers with transparent information about a vehicle's background," the unanimous three-judge panel said.
And the regulations that the dealership allegedly violated "aim in part to thwart title laundering," the court continued. "To require the mileage disclosure directly on the title establishes a paper trail for consumers and law enforcement to deter potential violators and help apprehend sellers that break the law."
Owens' lawyer, Robert Murphy of Fort Lauderdale, Fla., declined to discuss the potential impact of the decision, telling Automotive News, "I'm concerned about this one case."
Said Gonzalez: "I think the court got it wrong." The dealership acknowledges, though, that it didn't show Owens the original title certificate.
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