Key Issue

Whether consumers seeking monetary and injunctive relief due to an alleged design defect could be certified as a nationwide class under Rule 23(b)(2) and as 16 elemental sub-classes under Rule 23(b)(3) or in the alternative, 23 state-by-state sub-classes.1

Background

Plaintiffs brought a consumer class action in 2016 after FCA US LLC (Chrysler) announced it was recalling approximately 1.1 million vehicles after discovering an issue with the gear shift that could cause these vehicles to roll away after the driver had exited because the park function would not engage as expected. Plaintiffs sought to certify a nationwide class in the Eastern District of Michigan under Rule 23(b)(2) to require defendant to take corrective action to fix the vehicles. They also sought to certify 16 subclasses under Rule 23(b)(3) that they proposed to organize by commonality of certain elements of their causes of action under various state laws. In the alternative, they asked for certification of classes state-by-state in only 23 states. Plaintiffs sought damages on the theory that they suffered economic losses due to overpaying for new vehicles at the point of sale, which they believed were safe and fit, but later found were difficult and dangerous to drive.

Decision

The court denied class certification, but permitted plaintiffs across 21 states to collectively pursue their warranty and product liability claims through an issue-based class under Rule 23(c)(4).

First, the court denied nationwide certification under Rule 23(b)(2), holding that because the main thrust of plaintiffs' complaint was the recovery of damages for the loss of the value of cars they purchased, they were prevented under the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes from seeking class certification when each class member would be entitled to an individualized award of monetary damages. Although Dukes kept open the possibility that Rule 23(b)(2) certification might be appropriate when monetary relief was "incidental" to injunctive relief, the monetary damages in this case were not incidental, but rather the main relief sought.

Second, the court held that plaintiffs failed to meet their burden of demonstrating compliance with Rule 23(b)(3) because their request for sub-classing based on common elements across various state laws was unsupported by any legal authority and they did nothing to suggest how the elements on which plaintiffs focused predominated over other issues raised by the various causes of action. The court found that plaintiffs' proposed state-by-state structure of subclasses similarly did not do the "heavy lifting of analyzing state by state and claim by claim why the purported common issues predominate over any individual questions, or what common proofs would be used to sustain each claim."2

Third, although plaintiffs had not adequately demonstrated that any of their causes of action was appropriate for class treatment, the court held that there were discrete issues apparent from the record that were suitable subjects for classwide adjudication under Rule 23(c)(4). Plaintiffs did not address the option of issue class certification in their briefing, instead stating only at oral argument that they would be amenable to it; nonetheless, the court stated that Rule 23(c)(4) was appropriate, especially given the Sixth Circuit's "broad view" of Rule 23(c) (4) that instructed courts to analyze predominance after identifying common issues for class treatment. In the Sixth Circuit, this broad view allows courts to use Rule 23(c)(4) even where predominance has not been satisfied for the cause of action as a whole.3 The court stated that at least three common questions satisfied these requirements: whether the gear shift had a design defect that rendered vehicles unsuitable for ordinary use; whether defendants knew about the alleged safety defect in the gear shift design and concealed its knowledge; and whether this information would be material to a consumer. Accordingly, the court conditionally certified a class where the vehicle was purchased in one of 21 states for determination of these three discrete issues.

Thoughts & Takeaways

The opinion demonstrates that courts take seriously the requirement to engage in a "rigorous analysis" of whether common issues predominate over individual issues under Rule 23(b)(3). The court stated that although "plaintiffs need not show that every element of every claim can be sustained by common proofs," they "must at least identify the elements of their claims so that the Court can weigh the common and individualized issues to determine which predominate."4 Plaintiffs' second request for a Rule 23(b)(2) class also brought to light the often-raised question of when a request for money damages will be considered "incidental" to injunctive or declaratory relief such as to allow certification of Rule 23(b)(2) and 23(b)(3) classes at the same time. Finally, plaintiffs' alternative proposal of state-by-state subclasses did not help their argument, but rather made "evident" the "unmanageability of the plaintiffs' proposed schemes of certification" because plaintiffs had conceded that they were not seeking class certification for consumer protection claims of plaintiffs in seven states in the statebystate structure and it was "unclear whether counsel intend[ed] to proceed with individual litigation of those claims, or, more likely, mean[t] to simply abandon the plaintiffs to their own devices" under that structure.5 As a result, when plaintiffs present various or alternative certification proposals in consumer class actions, defendants should carefully analyze the claims and plaintiffs across these proposals to uncover inconsistencies that may doom plaintiffs' certification request.

Read the decision here.

Footnotes

1. In re FCA US LLC Monostable Elec. Gearshift Litig., — F.R.D.—, 2019 WL 6696110 (E.D. Mich. Dec. 9, 2019).

2. Id. at *8.

3. Martin v. Behr Dayton Thermal Prods. LLC, 896 F.3d 405, 411 (6th Cir. 2018), cert. denied, 139 S. Ct. 1319 (2019).

4. FCA US, 2019 WL 6696110, at *10.

5. Id. at *9.

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