General Motors Corporation, d/b/a Chevrolet, GMC, Cadillac, Buick, and Oldsmobile v. Boyd Bryant, On Behalf of Himself and All Others Similarly Situated
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SUPREME COURT OF ARKANSAS
No.
07-437
GENERAL MOTORS CORPORATION,
D/B/A CHEVROLET, GMC, CADILLAC,
BUICK, AND OLDSMOBILE,
APPELLANT,
VS.
BOYD BRYANT, ON BEHALF OF
HIMSELF AND ALL OTHERS
SIMILARLY SITUATED,
APPELLEE,
Opinion Delivered
June 19, 2008
APPEAL FROM THE MILLER
COUNTY CIRCUIT COURT,
NO. CV-2005-051-2,
HON. JAMES SCOTT HUDSON, JR.,
JUDGE,
AFFIRMED.
PAUL E. DANIELSON, Associate Justice
Appellant General Motors Corporation d/b/a Chevrolet, GMC, Cadillac, Buick, and
Oldsmobile appeals interlocutorily from the circuit court’s order granting class certification
to appellee Boyd Bryant, on behalf of himself and all other similarly situated persons. General
Motors asserts four points on appeal: (1) that extensive legal variations in state laws defeat
predominance; (2) that extensive factual variations in the millions of claims defeat
predominance; (3) that class certification is not superior under Arkansas Rule of Civil
Procedure 23(b); and (4) that the class definition is imprecise and overbroad. We affirm the
circuit court’s order granting class certification.
On September 5, 2006, Bryant filed a first amended class-action complaint in which
he alleged that some 4,000,000 pickup trucks and sport utility vehicles sold by General
Motors were equipped with defectively designed parking brakes. Specifically, Bryant alleged
that the vehicles, model years 1999 through 2002:
contain parking brakes whose linings, due to a defectively designed high force
spring clip, do not adequately float inside the parking brake drums. This
failure, alone, is problematic and harms Plaintiff and Class members. But
inadequate lining float, by GM’s own admission, also causes the parking brakes
to “self-energize” and experience excessive lining wear after only 2,500 to
6,000 miles in use.
Bryant alleged that General Motors discovered the defect in late 2000, redesigned the
defective spring clip in October 2001, and withheld from dealers admission of responsibility
for the defect until January 28, 2003. Bryant alleged that General Motors’s actions permitted
it to avoid paying millions of dollars in warranty claims. He further stated that, while General
Motors recalled manual-transmission trucks with the defective parking brakes in 2005, the
recall only involved about 60,000 vehicles and did not include the nearly 4,000,000
automatic-transmission vehicles owned by himself and the members of the class. For his
causes of action, Bryant alleged the following: breach of express warranty, breach of implied
warranty of merchantability, violation of the Magnuson-Moss Warranty Act, unjust
enrichment, and fraudulent concealment/failure to disclose. Finally, Bryant sought damages
“in an amount necessary to remedy the defective parking brakes[,]” or, alternatively, out-ofpocket money damages for those who had previously paid for repairs, or, alternatively,
disgorgement and restitution. After a hearing on a motion for class certification filed by
Bryant, the circuit court issued a fifty-one page order in which it concluded that Bryant had
satisfied each of the requirements for class certification set forth in Ark. R. Civ. P. 23 and
defined the class as follows:
“Owners” or “subsequent owners” of 1999-2002 1500 Series pickups and
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utilities originally equipped with an automatic transmission and a PBR 210x30
Drum-in-Hat parking brake system utilizing a high-force spring clip retainer
[footnote omitted], that registered his vehicle in any state in the United States.
General Motors now appeals, challenging the circuit court’s findings as to predominance,
superiority, and the class definition itself.
I. Standard of Review
Rule 23 of the Arkansas Rules of Civil Procedure governs class actions and provides,
in pertinent part:
(a) Prerequisites to Class Action. One or more members of a class may sue
or be sued as representative parties on behalf of all only if (1) the class is so
numerous that joinder of all members is impracticable, (2) there are questions
of law or fact common to the class, (3) the claims or defenses of the
representative parties are typical of the claims or defenses of the class, and (4)
the representative parties and their counsel will fairly and adequately protect the
interests of the class.
(b) Class Actions Maintainable. An action may be maintained as a class
action if the prerequisites of subdivision (a) are satisfied, and the court finds that
the questions of law or fact common to the members of the class predominate
over any questions affecting only individual members, and that a class action is
superior to other available methods for the fair and efficient adjudication of the
controversy. At an early practicable time after the commencement of an action
brought as a class action, the court shall determine by order whether it is to be
so maintained. For purposes of this subdivision, “practicable” means reasonably
capable of being accomplished. An order under this section may be altered or
amended at any time before the court enters final judgment. An order
certifying a class action must define the class and the class claims, issues, or
defenses.
Ark. R. Civ. P. 23(a-b) (2007). Our law is well-settled that the six requirements for classaction certification include: (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5)
predominance, and (6) superiority. See THE/FRE, Inc. v. Martin, 349 Ark. 507, 78 S.W.3d
723 (2002). In reviewing an order granting class certification, we use the following standard
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for review:
We begin by noting that it is well settled that this court will not reverse
a circuit court’s ruling on a class certification absent an abuse of discretion. See,
e.g., Arkansas Blue Cross & Blue Shield v. Hicks, 349 Ark. 269, 78 S.W.3d 58
(2002). In reviewing a lower court’s class certification order, “this court
focuses on the evidence in the record to determine whether it supports the trial
court’s conclusion regarding certification.” Arkansas Blue Cross & Blue Shield,
349 Ark. at 279, 78 S.W.3d at 64. We have held that “neither the trial court
nor the appellate court may delve into the merits of the underlying claim in
determining whether the elements of Rule 23 have been satisfied.” Id. Our
court has said on this point that “a trial court may not consider whether the plaintiffs
will ultimately prevail, or even whether they have a cause of action.” Id. We, thus,
view the propriety of a class action as a procedural question. See id.
Carquest of Hot Springs, Inc. v. General Parts, Inc., 367 Ark. 218, 223, 238 S.W.3d 916, 919-20
(2006) (quoting Van Buren Sch. Dist. v. Jones, 365 Ark. 610, 613, 232 S.W.3d 444, 447-48
(2006) (emphasis added)).
II. Predominance
A.
Choice of Law
General Motors initially argues that the significant variations among the fifty-one
motor-vehicles product-defect laws defeat predominance and prevent certification in the
instant case. It contends that a choice-of-law analysis must be conducted prior to certification
of the class and that the circuit court’s failure to conduct such an analysis at this juncture
permits due-process considerations to evade this court’s review. Bryant responds that the
circuit court correctly adhered to this court’s precedent, which he claims does not require a
rigorous choice-of-law analysis prior to class certification. He further contends that the
circuit court’s predominance finding should be affirmed as this court has previously
recognized a circuit court’s broad discretion to certify and manage a class action, which
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includes the circuit court’s ability to conduct a choice-of-law analysis subsequent to class
certification. General Motors replies that the elements of each of Bryant’s claims must be
examined so that the basic requirements of Rule 23 can be objectively determined.
Here, the circuit court provided four reasons for its finding that the potential
application of multiple states’ law did not create predominance concerns. First, the circuit
court noted, the cases relied upon by General Motors were federal cases that required a
“rigorous analysis” of Fed. R. Civ. P. 23’s class-certification factors “including the impact
state-law variations had on predominance.” Because this court required no such rigorous
analysis, the circuit court rejected General Motors’s attempt to engraft such an analysis
requirement into Ark. R. Civ. P. 23 and preferred, instead, to follow this court’s precedent
“in determining whether class certification [was] appropriate.” Second, the circuit court
found that Arkansas circuit courts have wide discretion to manage class actions and, pursuant
to Security Benefit Life Insurance Co. v. Graham, 306 Ark. 39, 810 S.W.2d 943 (1991), the
potential application of many states’ laws was not germane to class certification. Instead, the
circuit court opined, this court “viewed choice of law as a task for the trial court to undertake
later in the course of exercising its autonomy and ‘substantial powers’ to manage the class
action.”
For its third reason, the circuit court found that there was “no greater merits-intensive
determination than the one regarding choice of law.” With that in mind, the circuit court
stated, “[I]t would be premature for the Court, at this stage in the case, to make the call on
choice of law.” Finally, the circuit court observed, a decision to certify the matter as a class
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without resolution of the choice-of-law issue would not create incurable problems in that,
if application of multiple states’ laws was eventually required, and it proved too cumbersome
or problematic, the circuit court could always consider decertifying the class.
We cannot say that the circuit court abused its discretion in rejecting General Motors’s
argument on this issue as to predominance. We have held that the starting point in
examining the issue of predominance is whether a common wrong has been alleged against
the defendant. See Chartone, Inc. v. Raglon, ___ Ark. ___, ___ S.W.3d ___ (Apr. 24, 2008).
If a case involves preliminary, common issues of liability and wrongdoing that affect all class
members, the predominance requirement of Rule 23 is satisfied even if the circuit court must
subsequently determine individual damage issues in bifurcated proceedings. See id. We have
recognized that a bifurcated process of certifying a class to resolve preliminary, common issues
and then decertifying the class to resolve individual issues, such as damages, is consistent with
Rule 23. See id. In addition, we have said that:
[t]he predominance element can be satisfied if the preliminary, common issues
may be resolved before any individual issues. In making this determination, we
do not merely compare the number of individual versus common claims.
Instead, we must decide if the issues common to all plaintiffs “predominate
over” the individual issues, which can be resolved during the decertified stage
of bifurcated proceedings.
Id. at ___, ___ S.W.3d at ___ (quoting Georgia-Pacific Corp. v. Carter, 371 Ark. 295, 301, ___
S.W.3d ___, ___ (2007)). Our inquiry is whether there is a predominating question that can
be answered before determining any individual issues.
We hold that there is. Whether or not the class vehicles contain a defectively designed
parking-brake system and whether or not General Motors concealed that defect are
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predominating questions. That various states’ laws may be required in determining the
allegations of breach of express warranty, breach of implied warranty, a violation of the
Magnuson-Moss Warranty Act, unjust enrichment, fraudulent concealment, damages, and
restitution does not defeat predominance in the instant case.
We recently noted in FirstPlus Home Loan Owner 1997-1 v. Bryant, 372 Ark. 466, ___
S.W.3d ___ (2008), that the mere fact that choice of law may be involved in the case of some
parties living in different states is not sufficient in and of itself to warrant a denial of class
certification, citing our prior decision of Security Benefit Life Insurance Co. v. Graham, supra.
In Security Benefit, we observed that Security Benefit’s main argument “appear[ed] to center
on the fact that the law of thirty-nine states relative to novation would have to be explored
and that this would splinter the class action into individual lawsuits.” 306 Ark. at 44, 810
S.W.2d at 945. We rejected its argument, holding that “resolution of the common questions
of law or fact would enhance efficiency for all parties, even if individual claims still remained
to be adjudicated.” Id., 810 S.W.2d at 945. We then observed:
The mere fact that choice of law may be involved in the case of some
claimants living in different states is not sufficient in and of itself to warrant a
denial of class certification. Cf., Sun Oil Co. v. Wortman, 486 U.S. 717 (1988).
And though we are not convinced at this stage that reference to the laws of thirty-nine
states will be necessary, should it be required, this does not seem a particularly daunting
or unmanageable task for the parties or for the trial court.
Because Arkansas is the home state for First Pyramid and because
Arkansas law is the law to be applied under the Master Policy, it is the logical
situs for this action. Actions in thirty-nine states, even with considerable
joinder, would be inefficient, duplicative, and a drain on judicial resources.
Denial of class action status could well reduce the number of claims brought in this matter,
but that result is hardly in the interest of substantial justice.
Id. at 44-45, 810 S.W.2d at 945-46 (emphasis added).
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Thus, we have suggested that multistate class actions are not per se problematic for
Arkansas courts. A question of first impression still remains, however, as to whether an
Arkansas circuit court must first conduct a choice-of-law analysis before certifying a multistate
class action. In examining that question, we must keep in mind that we have been resolute
that the circuit court is afforded broad discretion in matters regarding class certification. See
Chartone, Inc. v. Raglon, supra; Johnson’s Sales Co., Inc. v. Harris, 370 Ark. 387, ___ S.W.3d
___ (2007). In addition, we have held that “[t]he mere fact individual issues and defenses may
be raised by the [defendant] regarding the recovery of individual members cannot defeat class
certification where there are common questions concerning the defendant’s alleged
wrongdoing which must be resolved for all class members.” FirstPlus Home Loan Owner 19971, 372 Ark. at ___, ___ S.W.3d ___.
As already stated, there are clearly common questions concerning General Motors’s
alleged wrongdoing that will have to be resolved for all class members, and we view any
potential choice-of-law determination and application as being similar to a determination of
individual issues, which cannot defeat certification. See, e.g., THE/FRE, Inc. v. Martin, supra.
Other courts may disagree. See, e.g., In re Prempro Prods. Liab. Litig., 230 F.R.D. 555 (E.D.
Ark. 2005) (observing that when class certification is sought in a case based on common-law
claims, the question of which law governs is crucial in making a class-certification decision);
Washington Mut. Bank, FA v. Superior Court, 24 Cal. 4th 906, 926, 15 P.3d 1071, 1085, 103
Cal. Rptr. 2d 320, 335 (2001) (noting its favor in adopting the type of burdens articulated in
federal decisions and holding that “a class action proponent must credibly demonstrate,
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through a thorough analysis of the applicable state laws, that state law variations will not
swamp common issues and defeat predominance”); Beegal v. Park West Gallery, 394 N.J.
Super. 98, 925 A.2d 684 (2007) (holding that a class-action motion court has a duty to
conduct a choice-of-law analysis before deciding whether the predominance element is
satisfied and that, although conflict-of-law issues do not per se foreclose certification of a
multistate class, a thorough analysis of state laws is particularly important where a possibility
exists that common issues could be subsumed by substantive conflicts in state laws; but,
advising that a trial court should undertake a rigorous analysis to determine if the requirements
of the class-certification rule have been met); Compaq Computer Corp. v. Lapray, 135 S.W.3d
657, 672 (Tex. 2004) (holding that “when ruling on motions for class certifications, trial
courts must conduct an extensive choice of law analysis before they can determine
predominance, superiority, cohesiveness, and even manageability”; but, also requiring that its
courts perform a rigorous analysis before ruling on class certification to determine whether
all prerequisites to certification have been met). However, those decisions do not bind this
court, nor do they dictate that were we to permit a choice-of-law analysis after class
certification, such a decision would be erroneous.
Moreover, we are simply not persuaded by the reasoning of these courts as we have
previously rejected any requirement of a rigorous-analysis inquiry by our circuit courts. See,
e.g., Beverly Enters.-Arkansas, Inc. v. Thomas, 370 Ark. 310, ___ S.W.3d ___ (2007). See also
Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997). Instead, we have
given the circuit courts of our state broad discretion in determining whether the requirements
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for class certification have been met, recognizing the caveat that a class can always be
decertified at a later date if necessary. See, e.g., Beverly Enters.-Arkansas v. Thomas, supra;
Farmers Ins. Co., Inc. v. Snowden, 366 Ark. 138, 233 S.W.3d 664 (2006); Tay-Tay, Inc v.
Young, 349 Ark. 675, 80 S.W.3d 365 (2002). As our rule so clearly provides, “[a]n order
under this section may be altered or amended at any time before the court enters final
judgment.” Ark. R. Civ. P. 23(b).
Indeed, it is possible that other states’ laws might be applicable to the class members’
claims. However, we cannot say that our class-action jurisprudence requires an Arkansas
circuit court to engage in a choice-of-law analysis prior to certifying a class, as we have not
hesitated to affirm a finding of predominance so long as a common issue to all class members
predominated over individual issues. While General Motors argues that a failure to require
such an analysis precertification allows that analysis to evade review, it is mistaken. Upon a
final order by the circuit court, General Motors would be able to challenge the circuit court’s
choice of law, just as in any other case. See, e.g., Ganey v. Kawasaki Motors Corp., U.S.A., 366
Ark. 238, 234 S.W.3d 838 (2006) (reviewing a circuit court’s decision to apply Louisiana law
in an appeal from an order of dismissal in a products-liability case). Moreover, were we to
require the circuit court to conclude at this time precisely which law should be applied, such
a decision could potentially stray into the merits of the action itself, which we have clearly
stated shall not occur during the certification process. See, e.g., Carquest of Hot Springs, Inc.
v. General Parts, Inc., supra. For these reasons, we cannot say that the circuit court abused its
discretion in finding that the predominance requirement was not precluded by the potential
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application of other states’ laws.
b.
Factual Variations
General Motors next asserts that many factual variations preclude a finding of
predominance. It claims that the following questions are individualized and predominate over
any common question: (1) does a class member’s parking brake have a defect; (2) if a parking
brake failed, how will causation be determined; (3) with regard to the alleged “cover up,”
what did General Motors know and when, and what did General Motors disclose and when;
(4) was a parking brake repaired already under warranty and, if not, why not; (5) when did
a class member’s warranty expire; (6) did a class member first provide General Motors with
notice of breach; (7) did a class member have knowledge about a potential parking-brake
problem at the time of purchase; (8) did a class member rely on General Motors’s alleged
misrepresentation; (9) were the alleged misrepresentations or omissions material to a class
member; (10) for leased vehicles, is General Motors liable to the lessor or the lessee; (11) is
a class member’s claim barred by the statute of limitations; (12) is a class member’s claim
barred by various affirmative defenses, such as comparative negligence; and (13) what the
appropriate remedy, if any, is for any particular class member. Bryant responds that the
central common issues in the case can be decided first and that any potential individualized
issue raised by General Motors can be dealt with after deciding the common predominating
issues. General Motors replies, in essence, that where there are numerous individualized
issues, they can be better resolved on a case-by-case basis.
We cannot say that the circuit court abused its discretion in its finding that factual
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variations did not preclude a finding of predominance. Here, the circuit court found that:
the alleged inadequate float problem appears to be something that is present in
all class vehicles and which occurs each time a class vehicle is used. This is
because all class vehicles utilize the PBR 210x30 Drum-in-Hat park brake
system, and GM has admitted in numerous documents, with little to no
equivocation, that the inadequate float problem regarding that brake system is
a real one.
It further found that:
the presence of this common inadequate float problem negates GM’s argument
that there is no one set of operative facts that establishes liability, or no single
proximate cause that equally applies to each potential class member. . . .
23.
Even assuming arguendo the parking brake “failure” should, as GM says,
be defined more broadly such that individual inspections for lining wear and/or
consideration of individual use factors might be necessary, Rule 23(b)
predominance still exists. The Court views any need for individual inspections
and/or the individual use factors merely as individual determinations relating
to right to recovery or damages that pale in comparison to the common issues
surrounding GM’s alleged defectively designed parking brake and cover up to
avoid paying warranty claims. . . .
We have repeatedly recognized that conducting a trial on the common issue in a
representative fashion can achieve judicial efficiency. See Arkansas Blue Cross & Blue Shield
v. Hicks, supra. Furthermore, we have routinely found the bifurcated process of class actions
to be consistent with Rule 23(d), which allows the circuit court to enter orders necessary for
the appropriate management of the class action. See id. In fact, we have expressed our
approval for the bifurcated approach to the predominance element by allowing circuit courts
to divide a case into two phases: (1) certification for resolution of the preliminary, common
issues; and (2) decertification for the resolution of the individual issues. See id. The bifurcated
approach has only been disallowed where the preliminary issues to be resolved were
individual issues rather than common ones, see id., which is not the situation in the instant
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case.
As already stated, the common issue that predominates here over any other potential
issue is whether the parking-brake system installed in the class members’ vehicles was
defective and whether General Motors attempted to conceal any alleged defect.
These
overarching issues can be resolved before the circuit court reaches any of the individualized
questions raised by General Motors. See, e.g., Asbury Auto. Group, Inc. v. Palasack, 366 Ark.
601, 237 S.W.3d 462 (2006). We have held that the mere fact that individual issues and
defenses may be raised by the defendant regarding the recovery of individual class members
cannot defeat class certification where there are common questions concerning the defendant’s
alleged wrongdoing that must be resolved for all class members. See FirstPlus Home Loan
Owner 1997-1 v. Bryant, supra. Moreover, we have observed that challenges based on the
statutes of limitations, fraudulent concealment, releases, causation, or reliance have usually
been rejected and will not bar predominance satisfaction because those issues go to the right
of a class member to recover, in contrast to underlying common issues of the defendant’s
liability. See id. (quoting SEECO, Inc. v. Hales, 330 Ark. 402, 413, 954 S.W.2d 234, 240
(1997) (quoting 1 Herbert B. Newberg, Newberg on Class Actions § 4.26, at 4-104 (3d ed.
1992))). Accordingly, we cannot say that the circuit court abused its discretion in its finding
of predominance.
III. Superiority
For its third point on appeal, General Motors contends that the circuit court erred in
its finding on superiority. It urges that the superior method of handling a claim that particular
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vehicles are defective is by petition to the National Highway Traffic Safety Administration
(NHTSA). It submits that a class action would be unmanageable and unfair, arguing further
that certification of the instant class would be unconstitutional, should bifurcation take place.
Bryant responds that where the NHTSA has already denied relief to the proposed class
members, NHTSA’s process can in no way be superior to a class action. He further asserts
that a class action would be manageable and fair and that, because it is not yet known whether
bifurcation would be required, this court should not address General Motors’s constitutional
claim.
Rule 23(b) requires “that a class action is superior to other available methods for the
fair and efficient adjudication of the controversy.” This court has repeatedly held that the
superiority requirement is satisfied if class certification is the more efficient way of handling
the case, and it is fair to both sides. See Chartone, Inc. v. Raglon, supra. Where a cohesive and
manageable class exists, we have held that real efficiency can be had if common,
predominating questions of law or fact are first decided, with cases then splintering for the trial
of individual issues, if necessary. See id. This court has further stated that when a circuit court
is determining whether class-action status is the superior method for adjudication of a matter,
it may be necessary for the circuit court to evaluate the manageability of the class. See id.
Furthermore, the avoidance of multiple suits lies at the heart of any class action. See id.
In the instant case, the circuit court concluded that a class was the superior method to
resolve the claims of Bryant and the proposed class. With respect to manageability, the circuit
court stated:
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46.
First, the Court does not believe for one moment that 4,000,000
individual, phase II trials will be conducted in this case. Among other things,
potential opt outs and claims dismissed under a summary disposition procedure
that can be developed will greatly reduce the number of potential phase II
trials.
47.
Second, Lenders II [358 Ark. 66, 186 S.W.3d 695 (2004)] concerned a
class of 50,000 potential members and the Arkansas Supreme Court took no
issue with it proceeding as a class action. [Citation omitted.] In the Court’s
view, the prospect of trying 50,000 cases is no different, from a manageability
standpoint, than trying a potentially greater number of cases.
48.
Third, the fact GM’s allegedly defective design has adversely affected so
many consumers is not Mr. Bryant’s fault. Mr. Bryant and the class should not
be penalized for the widespread nature of GM’s alleged defect and subsequent
cover up. [Citation omitted.]
49.
Finally, in at least the context of discussing class definition, the Arkansas
Supreme Court has rejected lack of administrative feasibility as an excuse to
avoid class certification. [Citation omitted.] The Court believes the Arkansas
Supreme Court would similarly reject GM’s similar argument that class size,
alone, counsels against a finding of Rule 23(b) predominance.
With respect to the propriety of a class action versus the NHTSA, the circuit court found:
Moreover, as brought to light at the class certification hearing, the record
reveals frustrated consumers have at least twice (most recently in mid 2006)
petitioned NHTSA about the alleged parking brake defect in automatic
transmission vehicles, and NHTSA rejected the petitions. Accordingly, the
Court does not understand why GM believes NHTSA will provide a superior
remedy to Mr. Bryant and class members. The Court concludes GM’s
NHTSA-based superiority argument has no merit. Mr. Bryant has established
Rule 23(b) superiority.
Here, the proposed class of approximately 4,000,000 members makes it at least likely
that without a class action, numerous meritorious claims might go unaddressed. We have
held that to be a factor in determining superiority. See, e.g., Lenders Title Co. v. Chandler, 358
Ark. 66, 186 S.W.3d 695 (2004). In addition, the circuit court found that the uniform relief
sought by Mr. Bryant and the class was relatively small if sought on an individual basis, and,
thus, it was not economically feasible for members of the class to pursue General Motors on
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an individual basis. While not the sole basis for certifying the class, the smallness of the claims
is another factor to be considered in deciding superiority. See id. It is evident that the circuit
court thoroughly considered the manageability of the proposed class. For that reason, we
cannot say that the circuit court abused its discretion in finding that the class was manageable.
And again, as to manageability, this court has made it abundantly clear that a circuit court can
always decertify a class should the action become too unwieldy. See Tay-Tay, Inc. v. Young,
supra.
Nor can we say that a class action is not superior to having the matter addressed by the
NHTSA. As noted by the circuit court, NHTSA has twice rejected petitions dealing with
the allegations made in the instant case. Clearly, resolution by that agency cannot be superior
to a class action when the agency has made such a rejection. Moreover, it has been
recognized that the Motor Vehicle Safety Act and NHTSA itself do not in any way preempt
a plaintiff’s right to bring common-law claims against the manufacturer of an allegedly
defective part. See, e.g., Chin v. Chrysler Corp., 182 F.R.D. 448 (D.N.J. 1998) (citing 49
U.S.C. § 30103); In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 174 F.R.D. 332
(D.N.J. 1997) (citing 49 U.S.C. § 30103). See also Amalgamated Workers Union of Virgin Islands
v. Hess Oil Virgin Islands Corp., 478 F.2d 540, 543 (3d Cir. 1973) (“As we view it, it would
appear that [Fed. R. Civ. P. 23(b)(3)]was not intended to weigh the superiority of a class
action against possible administrative relief. The ‘superiority requirement’ was intended to
refer to the preferability of adjudicating claims of multiple-parties in one judicial proceeding
and in one forum, rather than forcing each plaintiff to proceed by separate suit, and possibly
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requiring a defendant to answer suits growing out of one incident in geographically separated
courts.”). With this in mind, we hold that the circuit court did not abuse its discretion in
finding that a class-action suit was superior to resolution by the NHTSA.
Nor does the possibility of bifurcation render the instant class certification
unconstitutional. As we have previously held, we do not know at the point of certification
whether more than one jury would ultimately be necessary, and we will not speculate on the
question of the inevitability of bifurcated trials or issue an advisory opinion on an issue that
well may not develop. See, e.g., BNL Equity Corp. v. Pearson, 340 Ark. 351, 10 S.W.3d 838
(2000).
IV. Class Definition
General Motors, for its final point, argues that the instant class definition is both
overbroad and amorphous, arguing that the definition in no way distinguishes between
“owners” and “subsequent owners” and that the class definition includes categories of
individuals that have not been harmed in any fashion.1 Bryant responds that the circuit court
correctly determined that the class was subject to precise definition and was not overbroad.
With respect to class definition, it is axiomatic that for a class to be certified, a class
must exist. See Asbury Auto. Group, Inc. v. Palasack, supra. The definition of the class to be
certified must first meet a standard that is not explicit in the text of Rule 23, that the class be
1
For example, General Motors suggests the following categories: “owners who have
never had a problem, those who have already had a warranty repair, those who experienced
a problem after the expiration of the warranty, those who chose never to seek the warranty
repair, those who sold their vehicles before a problem occurred, those who acquired vehicles
after a repair had already occurred, and those who experienced parking brake failures that
were caused by something other than wear condition.”
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susceptible to precise definition.
See id.
This is to ensure that the class is neither
“amorphous” nor “imprecise.” See id. Concurrently, the class representatives must be
members of that class. See id. Thus, before a class can be certified under Rule 23, the class
description must be sufficiently definite so that it is administratively feasible for the court to
determine whether a particular individual is a member of the proposed class. See id.
Furthermore, for a class to be sufficiently defined, the identity of the class members must be
ascertainable by reference to objective criteria. See id.
Here, the circuit court defined the class in a precise, objective manner. The class
definition clearly states that the class includes any owner or subsequent owner of a 1999-2002
1500 Series pickup or utility vehicle that was originally equipped with an automatic
transmission and the specified parking-brake system. Thus, the identity of the class members
can be ascertained without an investigation into the merits of each individual’s claim. See, e.g.,
Lenders Title Co. v. Chandler, supra. Moreover, the circuit court found that the terms
“owners” and “subsequent owners” were terms taken from General Motors’s own warranty
publications and that General Motors admitted it had the ability to provide personal
information regarding the original vehicle purchasers via its warranty database, as well as
current vehicle owners via vehicle-identification-number searches conducted by third-party
vendors. In addition, the circuit court further pointed to the fact that General Motors had
previously conducted a recall on its manual-transmission version of the class vehicles, which
demonstrated the administrative feasibility of General Motors’s ability to not only identify class
members, but also its ability to contact them. We simply cannot say that the class definition
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is in any way overbroad.
Nor do any individual issues among potential class members raised by General Motors
render the definition imprecise. As already made clear, such issues cannot defeat class
certification where there are common questions concerning the defendant’s alleged
wrongdoing that must be resolved for all class members. See FirstPlus Home Loan Owner 19971 v. Bryant, supra. We hold, therefore, that the class is identifiable from objective criteria,
specifically, ownership of the specified vehicles so specifically equipped, and that the circuit
court did not abuse its discretion in finding that the class definition was sufficiently precise.
For the foregoing reasons, we affirm the circuit court’s order granting class
certification.
Affirmed.
Special Justice LANE STROTHER joins.
CORBIN and IMBER, JJ., concur.
GUNTER, J., not participating.
IMBER, J., concurring. While I concur in the result on the facts presented by this case,
I write separately because I believe the majority’s analysis of General Motors’s argument on
the choice-of-law issue reaches a conclusion that is overbroad. The majority declares that
addressing any choice-of-law argument at the class-certification stage goes beyond our
required analysis of the elements of certification and is, therefore, never indicated. Such a
declaration extends far past the holdings of our prior case law addressing class certification and
forecloses analysis that could conceivably be required.
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Prior Case Law
The majority cites FirstPlus Home Loan Owner 1997-1 v. Bryant, 372 Ark. 466, ___
S.W.3d ___ (2008), and Security Benefit Life Ins. Co. v. Graham, 306 Ark. 39, 810 S.W.2d 943
(1991), and quotes them as holding the mere fact that choice-of-law may be involved in the
case of some parties living in different states is not sufficient in and of itself to warrant a denial
of class certification, and multi-state class actions are not per se problematic for our state’s
courts. From that holding, the majority then goes on to conclude that “any potential choiceof-law determination and application” is “similar to a determination of individual issues,
which cannot defeat certification.” (Emphasis added).
In Security Benefit Life Ins. Co. v. Graham, 306 Ark. 39, 810 S.W.2d 943 (1991), owners
of certain single-premium, deferred annuities filed a complaint against an insurer, alleging
breach of contract. The circuit court granted a motion for certification of a class of plaintiffs
defined as all present owners of individual insurance certificates issued by the insurer under
one certain master policy. Id. at 41, 810 S.W.2d at 944. The insurer appealed class
certification, alleging, inter alia, that common issues of law did not predominate over
individual issues because the certificate holders resided in thirty-nine states. Id. at 43, 810
S.W.2d at 945. We rejected the argument that application of the law of thirty-nine states
relative to a defense of novation defeated the predominance element of class certification,
concluding that a class action would resolve several common questions more efficiently than
joinder of plaintiffs, and it did not “seem a particularly daunting or unmanageable task for the
parties or the trial court” to apply the laws of multiple states to determine whether the insurer
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could avail itself of a defense of novation against the class members who resided in the
respective states. Id. Thus, similar to the instant case, the choice-of-law issue presented in
Security Benefit was related to plaintiffs’ individual recoveries and corresponding defenses the
defendant could maintain against those plaintiffs. We did not, however, conclude in Security
Benefit that the circuit court was prohibited from considering any choice-of-law issues at the
class-certification stage.
The majority also cites THE/FRE, Inc. v. Martin, 349 Ark. 507, 78 S.W.3d 723
(2002), for the proposition that “any potential choice-of-law determination and application
[is] similar to a determination of individual issues, which cannot defeat certification.” In
THE/FRE, we affirmed the circuit court’s grant of class certification against the appellants’
assertion that issues related to recovery of individual class members and defenses that may be
raised by the appellants predominated over common questions of law or fact. To the extent
that choice-of-law issues in the instant case go to potential recovery of individual class
members or potential defenses that GM may raise, I agree with the majority’s reasoning. The
circuit court in THE/FRE, however, did not consider any choice-of-law issues. Thus, I fail
to see any logic or authority that will span the gap between our conclusion in the THE/FRE
case and the majority’s conclusion in the instant case. A conclusion here that choice-of-law
issues not related to recovery or defenses will never predominate over common questions of
law or fact is one that I find to be impermissibly overbroad.
Rigorous Analysis
Next, the majority holds that a choice-of-law analysis is foreclosed at the class-
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certification stage because “we have previously rejected any requirement of a rigorous-analysis
inquiry by our circuit courts.” As support for this proposition, the majority cites federal court
decisions, all of which hold that the trial court must conduct a “thorough” or “rigorous”
analysis of the choice of governing state law before certifying a case as a class action. While
it may be a necessary element of “thorough” or “rigorous” analysis in other jurisdictions that
a court analyze applicable state laws as a prerequisite to class certification, the converse
proposition—any consideration of choice-of-law issues at class certification stage amounts to
a “thorough” and “rigorous” analysis—is not necessarily true.
In fact, there may be
circumstances where the trial court should undertake a choice-of-law analysis to enable us to
conduct a meaningful review of the certification issue on appeal. Lenders Title Co. v. Chandler,
353 Ark. 339, 107 S.W.3d 157 (2003).
Choice-of Law and Analysis on the Merits
Newberg specifically endorses choice-of-law considerations at the certification stage,
but, at the same time, states that it is not permissible to go to the merits of the case upon
deciding a motion for class certification. Newberg on Class Actions §4.26 (3d ed. 1992). Thus,
it is clear that Newberg does not equate a choice-of-law analysis with an impermissible
examination of the merits of the plaintiff’s claims. The majority cites Carquest of Hot Springs,
Inc. v. General Parts, Inc., 367 Ark. 218, ___ S.W.3d ___ (2006), for the proposition that
requiring the circuit court to conclude at class certification which law should apply potentially
strays into the merits of the action itself. In Carquest, the defendant/counterclaimant alleged
that General Parts had engaged in an illegal tying arrangement and violated the Arkansas
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Franchise Practices Act. Id. at 220. The circuit court found that it did not have jurisdiction
over Carquest’s illegal-tying claim because that claim was based on the federal Sherman AntiTrust Act, and in so finding, the court failed to consider whether the same claim could fall
within the purview of the Arkansas Unfair Practices Act (AUPA). We held that discarding
Carquest’s AUPA claim amounted to a ruling that the state claim could not prevail, and that
ruling constituted an impermissible consideration of the merits of Carquest’s state claim. Id.
at 224. This holding does not support the majority’s statement equating a choice-of-law
analysis with an examination of the merits of the case. Therefore, I believe the majority’s
contention that Carquest precludes choice-of-law considerations at the class-certification stage
is flawed.
GM’s Choice-of-Law Argument
Here, Bryant’s complaint includes claims of breach of express warranty, breach of
implied warranty of merchantability, violation of the federal Magnuson-Moss Warranty Act,
and fraudulent concealment of a product defect. General Motors argues that the circuit court
erred in failing to consider the conflicts of laws present among the states in which GM has
sold the trucks and SUVs alleged to have the parking brake defect. Before the hearing on
class certification, GM presented the court with a thorough analysis of conflicts of laws
regarding the state-law fraud claims, breach of warranty, applicable statutes of limitations, and
unjust enrichment. It appears from a thorough reading of the circuit court’s fifty-one page
class certification order that the court in fact reviewed and considered GM’s choice-of-law
arguments, but, nevertheless, found that Bryant had satisfied the class-certification element of
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predominance. The circuit court went on to declare as a matter of law that our court has
interpreted Rule 23 of the Arkansas Rules of Civil Procedure as precluding a choice-of-law
analysis at the class-certification stage and stated without citation that “[i]n truth, there is no
greater merits-intensive determination than the one regarding choice of law. Choice of law
has everything to do with a case’s merits.”
The majority opinion ratifies the circuit court’s declaration and thereby cuts off any
future possibility that a conflict of laws could defeat a finding of predominance. With this I
cannot agree.
Class Certification Order
From my reading of the class certification order, I believe that the circuit court
properly considered the conflict of laws argument GM presented to the court and found that
the issues of law and fact common to the members of the class predominate over individual
issues of law and fact. The court determined from the evidence presented at the classcertification hearing that Bryant alleges a product defect that is present at the time of
manufacture on all of a set of vehicles defined in the class definition. Similarly, all class
members received identical express warranties from GM, and all class members seek the same
warranty remedies. Bryant presented extensive documentation of initial reports to GM of a
potential defect, GMs testing and verification of the alleged product defect, and procedures
by which GM addressed the alleged defect with respect to vehicles equipped with manual
transmissions, while at the same time electing not to address the alleged defect with respect
to vehicles equipped with automatic transmissions. Specifically, the circuit court stated that
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it saw “nothing to convince it that this alleged defect is not present in all class vehicles, or that
it doesn’t occur or manifest itself each time a class vehicle is used.” With respect to potential
state-law variations, the vast majority relate to defenses raised by GM regarding the recovery
of individual members, such as: application of statutes of limitations; fraud-related materiality
and reliance; individual knowledge of parking brake defect; whether an individual’s parking
brake has been repaired under warranty; notice of warranty breach; expiration of factory
warranty based on mileage; and comparative fault. The mere fact that individual issues and
defenses may be raised by a company regarding the recovery of individual members cannot
defeat a class certification where there are common questions concerning the defendant’s
alleged wrongdoing which must be resolved for all class members. Lenders Title Co. v.
Chandler, supra; Seeco Inc. v. Hales, 330 Ark. 402, 954 S.W.2d. 234 (1997). Here, the circuit
court concluded that the “individual determinations relating to recovery or damages . . . pale
in comparison to the common issues surrounding GM’s allegedly defectively designed parking
brake and cover up to avoid paying warranty claims.” Based on the circuit court’s extensive
review of the evidence and its thorough findings of fact and conclusions of law, it is clear that
the circuit court acted within its discretion in certifying the class of plaintiffs as defined in the
court’s order.
For these reasons, I concur with the majority’s opinion that the circuit court did not
abuse its discretion in finding that Bryant has met the requirements of Rule 23; likewise, I
would affirm the circuit court’s order of class certification.
CORBIN, J., joins this concurrence.
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