Arkansas SC set to hear multi-state class certification issues

TEXARKANA, Ark. � The Arkansas Supreme court is scheduled to hear arguments on whether the Miller County Circuit Court erred in certifying a nationwide class prior to considering choice-of-law issues. The oral arguments are scheduled for May 29 in Little Rock.

The original suit was filed on Feb. 4, 2005, in Miller County Circuit Court against General Motors Corporation doing business as Chevrolet, GMC, Cadillac, Buick and Oldsmobile.

The suit accuses GMC of selling vehicles with defectively designed parking brakes including inadequate brake linings.

The court certified a class of GM vehicle owners who were the previous or subsequent owners of "1999-2002 1500 series pickups and utilities originally equipped with an automatic transmission and a PBR 210 x 30 drum -in-hat parking brake system utilizing a high-force spring clip retainer that registered his vehicle in any state of the United States."

The certification excluded those who choose to opt out, government vehicles, any owner suffering personal injury or property damage and those vehicle owners referenced in a 2000 GMC recall.

Circuit Court Judge Jim Hudson certified a nationwide class of vehicle buyers who have asserted claims of fraudulent concealment, unjust enrichment and breach of express and implied warranties. Although the Circuit Court certified the class, it did not address how it plans to conduct a class trial that involves legal standards from 50 different states.

According to the amicus curiae brief filed by the U.S. Chamber of Commerce, "the Court concluded that state law variations have no relevance to the class certification inquiry, adopting a 'certify now, worry later' approach."

The Southeast Texas Record is owned by the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce.

Those opposed to class certification argue that each class members' claim must be evaluated under laws from the state the car was purchased in, and therefore, there are different legal standards for different states preventing a common finding to whether the defendant committed a common wrong.

The Chamber's brief argues the trial court's decision should be reversed because uncritically certifying a class could result in "confusion and waste" through possible decertification and retraction notices, the lower court's method will transform class certification as a "procedural tool" to a method that combines different claims used solely for obtaining a settlement, and will provide the opportunity for a windfall of multi-state class actions based on state law claims.

In addition, the brief argues that the lower court erred by concluding that it need not address legal variations in certifying a class because, "potential application of many states' laws [is] not germane to class certification."

The circuit court stated that if it did examine a choice-of-law dispute, the inquiry would not come before certification but would simply be "a task for the trial court to undertake later."

Judge Hudson attempted to justify his decision by relying on the Arkansas rule that "trial courts are not permitted to delve into the merits of a case in deciding whether to certify it as a class action."

Finally, the Chamber's brief argues that the court also ignored factual variations within the plaintiff's fraud, warranty, and unjust enrichment claims that would also make the action uncertifiable.

The Chamber of Commerce states that "had the court conducted a proper analysis, it could have reached only one conclusion: that a class action involving the varying laws of all 50 states simply cannot satisfy the predominance and manageability requirements of the Arkansas class action rule."

Within in its response to the first amended class action, General Motors denies the plaintiffs' allegations. In addition to other defenses, GM states that the "plaintiff and potential class members lack standing to assert claims because they have not suffered damage or injury."

The class is seeking appropriate money damages to remedy the parking brake for each class member.

The potential class is represented by Texarkana attorney James C. Wyly and Sean F. Rommel of the law firm Patton, Roberts, McWilliams and Capshaw LLP and Dallas attorneys David W. Crowe and John W. Arnold of the Bailey/Crowe and Kugler LLP law firm.

Bryant et al v. General Motors Case No.: CV-2005-51-2