## Facts

- Jenny Nieto bought a ten-year-old pickup truck from used-car dealer Bill Pence for $600; the odometer read 14,736 miles.
- Pence provided a written odometer disclosure stating 14,736 miles and did not check the box indicating the actual mileage was unknown.
- The truck’s chain of title showed prior dealer transfers with similarly low certified mileages (about 14,290) and no indication that actual mileage was unknown.
- Nieto sued under the federal odometer statute, alleging Pence violated disclosure duties by failing to state that actual mileage was unknown given the circumstances.
- The district court found Pence lacked actual knowledge of any inaccuracy and lacked intent to defraud, and entered judgment for Pence.

## Issues

1. In a civil action under 15 U.S.C. § 1989, does liability for a violation committed “with intent to defraud” require proof of the dealer’s actual knowledge that the odometer reading was inaccurate, or can constructive knowledge suffice?

## Decision

- The Fifth Circuit reversed and remanded.
- The court held that constructive knowledge can support civil liability under § 1989; actual knowledge is not a prerequisite.
- The district court applied an erroneous legal standard by requiring actual knowledge and entering judgment for Pence on that basis.

## Legal Principles

- Under the federal odometer statute, “intent to defraud” for civil liability may be established by circumstantial evidence showing the transferor should have known the mileage was suspect but failed to disclose that actual mileage was unknown.
- Constructive knowledge—awareness that may be inferred from objective circumstances—can satisfy the statute’s intent requirement in civil actions.
- The Act is remedial and consumer-protective; interpretations that permit willful ignorance of obvious mileage discrepancies are disfavored.
- A suspiciously low odometer reading for an older vehicle, combined with the seller’s experience in the used-car business, can support an inference that the seller should have disclosed that actual mileage was unknown.

## Conclusion

The Fifth Circuit held that a dealer’s failure to disclose that actual mileage is unknown may create civil liability under the federal odometer statute when surrounding facts support an inference of constructive knowledge and intent to defraud, even without proof the dealer actually knew the odometer reading was false.


Nieto v. Pence, 578 F.2d 640 (5th Cir. 1978)