9th Circuit Reverses Order Denying Class Certification in Consumer Products Action

In Wolin v. Jaguar Land Rover North America, LLC --- F.3d ---, (9th Cir., August 17, 2010), the plaintiffs brought a class action alleging that Land Rover's LR3 vehicles suffer from an alignment geometry defect that causes tires to wear prematurely. The district court (C.D. Cal., Guilford) denied class certification for lack of commonality.

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. After first stating that the plaintiffs in Samuel-Bassett v. Kia Motors America, Inc. showed that up to 85% of the vehicles were defective, 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. 212 F.R.D. 271, 282 (E.D.Pa.2002), vacated on other grounds, 357 F.3d 392 (3d Cir.2004). Gable and Wolin timely filed their appeals.

Slip op. at 2.

The Ninth Circuit reversed. The Court first found a number of common issues that satisfy Rule 23(a)(2):

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.

Slip op. at 3.

The Court next held that common issues predominate with regard to plaintiffs' allegations of existence of defect and violation of consumer protection laws:

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. The appellants allege a violation of the Michigan Consumer Protection Act and the Florida Deceptive and Unfair Trade Practices Act, because, for example, Land Rover represented that the vehicles had particular characteristics or were of a particular standard when they were of another, and Land Rover failed to reveal material facts about the vehicles. Gable alleges breach of implied warranty because the vehicles were defective and not of merchantable quality at the time they left Land Rover's possession. Common issues predominate such as whether Land Rover was aware of the existence of the alleged defect, whether Land Rover had a duty to disclose its knowledge and whether it violated consumer protection laws when it failed to do so. See Chamberlan v. Ford Motor Co., 402 F.3d 952, 962 (9th Cir.2005) (per curiam).
Land Rover argues that the evidence will demonstrate that the prospective class members' vehicles do not suffer from a common defect, but rather, from tire wear due to individual factors such as driving habits and weather. Thus, according to Land Rover, the district court correctly decided not to certify a class because appellants failed to prove that their tires wore prematurely due to a defect. However, we have held that proof of the manifestation of a defect is not a prerequisite to class certification. 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.

Slip op. at 3-4. In other words, the plaintiffs need not prove at class certification that each and every class member -- or even a majority of the class members -- were affected in the same manner by the alleged defect.

The Court also held that common issues predominate with regard to plaintiffs' warranty claims:

[A]ll of the proposed class members here are covered by a Limited Warranty that provides for the repair or replacement of defects, and all of the proposed class members allege that their vehicles suffer from the same defect. These claims require common proof of the existence of the defect and a determination whether Land Rover violated the terms of its Limited Warranty. Accordingly, we conclude that common issues predominate regarding Land Rover's obligations under its Limited Warranty.

Slip op. at 5.

The Court next held that the plaintiffs had satisfied Rule 23(a)(3)'s typicality requirement:

Land Rover asserts that Gable's and Wolin's claims are not typical because their tires indicate wear that is not the kind attributable to vehicle alignment. However, Gable and Wolin allege that they, like all prospective class members, were injured by a defective alignment geometry in the vehicles. Gable and Wolin and the class seek to recover pursuant to the same legal theories: violation of consumer protection laws, breach of warranty, and unjust enrichment. Land Rover has identified no defenses that are unique to Gable and Wolin that would make class certification inappropriate.

Finally, the Court held that the plaintiffs had satisfied Rule 23(b)(3)'s requirement that a class action be "superior to other available methods for fairly and efficiently adjudicating the controversy."

Gable and Wolin have identified 2100 and 1183 vehicles at issue in their class actions, respectively, that would be at issue in litigation in the same forum and that are subject to the same consumer protection laws. Appellants aver that no other prospective class members have filed other related actions, and Land Rover does not dispute this point. The amount of damages suffered by each class member is not large. Forcing individual vehicle owners to litigate their cases, particularly where common issues predominate for the proposed class, is an inferior method of adjudication. Accordingly, although alternative means of recovery are available, e.g., small claims court, we conclude that class-wide adjudication “of common issues will reduce litigation costs and promote greater efficiency.” Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.1996).
Land Rover suggests that automobile-wear cases involve inherently individualized determinations such that classwide litigation would be inefficient and unmanageable. Instead of pursuing a class action, Land Rover argues, proposed class members should litigate separately the issues of liability and causation. However, as discussed above, appellants allege that their injury results not from bad tires, but from a single, defective alignment geometry. 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.

Slip op. at 7.

The full opinion is available here.