CALIFORNIA CLASS ACTION LAW

In a 3-0 opinion, the Ninth Circuit Court of Appeals yesterday reversed a denial of class certification in Wolin v. Jaguar Land Rover North America, LLC, Nos. 09-55104, 09-55105, — F.3d —-, 2010 WL 3222091 (9th Cir. Aug. 17, 2010).  Tire defect cases are normally difficult to certify.  Plaintiffs took the correct approach and positioned their class not as one for tire defect, but for vehicle alignment defect.

Kenneth Gable and Brian Wolin each brought a class action lawsuit against Jaguar Land Rover North America, LLC (“Land Rover”) alleging that Land Rover’s LR3 vehicles suffer from an alignment geometry defect that causes tires to wear prematurely.  Id. *1.  The trial court denied their respective motions for class certification, holding that Gable and Wolin were unable to prove that a majority of potential class members suffered from the consequences of the alleged alignment defect.

Facts

The court stated the facts as follows:

Kenneth Gable and Brian Wolin each bought a 2005 Land Rover LR3. Gable purchased his vehicle in 2004 in Michigan. Wolin made his purchase in 2006 in Florida. Both vehicles came factory equipped with Goodyear Wrangler tires.

Gable and Wolin both allege that their vehicles are defective. The defect, characterized by the plaintiffs as a geometry defect in the vehicles’ alignment, allegedly caused uneven and premature tire wear and gave their vehicles a rough ride. According to Gable and Wolin, LR3 drivers must replace their tires prematurely, in many cases after just 15,000 miles.

The LR3 came with a four-year, 50,000 mile factory warranty (the “Limited Warranty”). This warranty covered “repairs required to correct defects in factory-supplied materials or factory workmanship … with the exception of tires.” Land Rover also provided a separate warranty (the “Tire Warranty”) covering tire replacement of tires and/or vehicle realignment in the event the tires exhibit “[e]xcessive wear that is inconsistent with normal use” and “caused by a manufacturing defect elsewhere on the vehicle.”

Gable’s class action was brought on behalf of all those who purchased or leased 2005 and 2006 Land Rover LR3s in Michigan. Wolin’s class action was brought behalf of all those who purchased or leased a 2004, 2005, or 2006 Land Rover LR3 in Florida.

The district court denied each of the motions for class certification, concluding that neither could meet his burden of showing that common issues predominate. “The court indicated that the number of people in the class who have experienced the alignment defect is an important factor in the Rule 23 analysis, and concluded that neither Gable nor Wolin produced sufficient evidence of the rate of the defect.” Id. *2. The “court held that both Gable and Wolin failed to meet their respective burdens because neither could estimate the percent of prospective class members whose vehicles manifested the defect, let alone show credibly that even a majority of class members’ vehicles experienced premature tire wear.” Id.

Commonality

The panel held that “Appellants easily satisfy the commonality requirement.”

The claims of all prospective class members involve the same alleged defect, covered by the same warranty, and found in vehicles of the same make and model. Appellants’ complaints set forth more than one issue that is common to the class, including: 1) whether the LR3’s alignment geometry was defective; 2) whether Land Rover was aware of this defect; 3) whether Land Rover concealed the nature of the defect; 4) whether Land Rover’s conduct violated the Michigan Consumer Protection Act or the Florida Deceptive and Unfair Trade Practices Act; and 5) whether Land Rover was obligated to pay for or repair the alleged defect pursuant to the express or implied terms of its warranties. These common core questions are sufficient to satisfy the commonality test. See Hanlon, 150 F.3d at 1019-20.

Id. *3.

Predominance

The court concluded that the “district court erred when it concluded, without discussion, that certification is inappropriate because Gable and Wolin did not prove that the defect manifested in a majority of the class’s vehicles.” Land Rover argued that appellants failed to prove that their tires wore prematurely due to a defect.  The Ninth Circuit noted that in its prior rulings, “we have held that proof of the manifestation of a defect is not a prerequisite to class certification.”  Id. *4 (citing Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir.1975) (“[N]either the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies the Rule.”)).

What Land Rover argues is whether class members can win on the merits. For appellants’ claims regarding the existence of the defect and the defendant’s alleged violation of consumer protection laws, this inquiry does not overlap with the predominance test.  Although early tire wear cases may be particularly problematic for plaintiffs seeking class certification, we reject Land Rover’s suggestion that automobile defect cases can categorically never be certified as a class. Gable and Wolin assert that the defect exists in the alignment geometry, not in the tires, that Land Rover failed to reveal material facts in violation of consumer protection laws, and that Land Rover was unjustly enriched when it sold a defective vehicle. All of these allegations are susceptible to proof by generalized evidence. Although individual factors may affect premature tire wear, they do not affect whether the vehicles were sold with an alignment defect.

The court concluded that “As to the existence of a defect in the vehicles, failure to disclose the defect, recovery pursuant to state consumer protection laws, and breach of the Limited Warranty, we hold that the district court erred when it required Gable and Wolin to show that a majority of proposed class members’ vehicles manifested the results of the defect.” Id. *5.

Typicality

Land Rover asserted that Gable’s and Wolin’s claims are not typical because their tires indicate wear that is not the kind attributable to vehicle alignment.

Whether they experienced premature tire wear at six months, nine months, or later goes to the extent of their damages and not whether named appellants “possess the same interest and suffer[ed] the same injury as the class members.” E. Tex. Motor Freight Sys. Inc. v. Rodriguez, 431 U.S. 395, 403 (1977) (internal quotation marks omitted). Typicality can be satisfied despite different factual circumstances surrounding the manifestation of the defect. See Daffin, 458 F.3d at 553. Gable and Wolin, like the rest of the class, may have a viable claim regardless of the manifestation of the defect. The fact that Gable and Wolin already received discounts and some free services also does not defeat typicality. See Lymburner v. U.S. Fin. Funds, Inc., 263 F.R.D. 534, 540 (N.D.Cal.2010) (finding named plaintiff typical of class despite availability of plaintiff-specific remedy and finding “no authority for the argument that typicality is defeated because the remedies may be different for class members or that the availability of rescission as a remedy will monopolize this case”). Gable’s and Wolin’s claims are typical of the class.

Superiority

Land Rover also argued that the district court’s error was harmless because Gable and Wolin cannot demonstrate that a class action is “superior to other available methods for fairly and efficiently adjudicating the controversy” pursuant to Fed. R. Civ. P. 23(b)(3).  Id. *6.  Gable and Wolin identified 2100 and 1183 vehicles at issue in their class actions.  Id. *7.  The court concluded that:

It is far more efficient to litigate this–the basis for their claim–on a classwide basis rather than in thousands of individual and overlapping lawsuits. Whether the alignment geometry was defective, whether Land Rover violated its Limited Warranty for defects within the vehicle, and whether Land Rover was unjustly enriched because consumers’ vehicles are worth less due to the defect are issues common to all class members and can be litigated together. Proposed class members face the option of participating in this class action, or filing hundreds of individual lawsuits that could involve duplicating discovery and costs that exceed the extent of proposed class members’ individual injuries. Thus, classwide adjudication of appellants’ claims is superior to other means of adjudicating this case.

Judges and Attorneys

Senior Circuit Judge Dorothy W. Nelson wrote the opinion for the court.  Circuit Judge Ronald M. Gould and District Judge James S. Gwin (sitting by designation) concurred.

The appeal was taken from an order of Hon. Andrew J. Guilford, United States District Court for the Central District of  California, D.C. Nos. 8:07-cv-00627-AG-RNB, 8:07-cv-00376-AG-RNB.

Plaintiffs-appellants were represented by James C. Shah (argued), Nathan Zipperian, James E. Miller, Laurie Rubinow of Shepherd, Finkelman, Miller & Shah, LLP.

Defendant-appellee was represented by Christopher T. Handman (argued), Martin A. Price, Paul A. Werner, Erica M. Knievel of Hogan & Hartson, LLP.

By CHARLES H. JUNG