Arkansas Supreme Court
TEXARKANA,Ark. -- Variances in state laws will have no effect on class certification of multi-state class actions, the Arkansas Supreme Court ruled June 19.
The court concluded that determining choice of law issues prior to certification would force the lower court to conduct a rigorous analysis and delve into the merits of the case, which the court is not permitted to do prior to class certification.
Miller County Circuit Court Judge Jim Hudson certified the class action in January 2007 against General Motors. The lawsuit accuses General Motors of selling 4 million pickup trucks and sport utility vehicles with defectively designed parking brakes.
Plaintiff Boyd Bryant, the named class representative, argued General Motors discovered the parking brake defect in 2000, but withheld the information until 2003 to avoid paying millions of dollars in warranty claims.
Within the first amended complaint, Bryant accused GM of 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.
The class definition includes "owners 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 in the United States."
General Motors appealed the circuit court's class certification and the Arkansas Supreme Court held oral arguments at the end of May.
General Motors argued that the lawsuit could not continue as a class action because there are significant variances in state laws regarding motor vehicle product defects, there are factual variances, and the class definition is overbroad.
The Arkansas Supreme Court released its opinion on June 19, affirming the circuit's decision granting class certification but noted "that this court will not reverse a circuit court's ruling on a class certification absent an abuse of discretion."
The higher court ruled that the lower court did not abuse its discretion in ruling that Bryant had met each of the class certification requirements including: numerosity, commonality, typicality, adequacy, predominance and superiority.
Within the 51-page ruling allowing class certification, the circuit court stated that the Supreme 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."
In addition, the circuit court wrote that there is "no greater merits-intensive determination than the one regarding choice of law."
Writing the opinion for the Arkansas Supreme Court, Associate Justice Paul Danielson agreed with the lower court and stated that if the application of multiple states' laws "prove too cumbersome or problematic, the circuit court could always consider decertifying the class."
Moreover, the opinion stated, "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."
Case No CV-2005-51-2