Arkansas Supreme Court Rejects Eastern District's Prempro Decision; Affirms Certification of Nationwide Class Action
In a powerful example of Arkansas's "liberalized" class-action procedure, the Arkansas Supreme Court affirmed Miller County Circuit Court Judge James Scott Hudson's certification of a nationwide product-liability class action. General Motors Corporation v. Boyd Bryant, et al., No. 07-437. In so doing, the Court expressly rejected the reasoning of a recent federal decision out of the Eastern District of Arkansas, In Re Prempro Products Liability Litigation, 230 F.R.D. 555 (E.D. Ark. 2005) (Wilson, J.).
Bryant sued GM on behalf of a nationwide class alleging that "some 4,000,000 pickup trucks and sport utility vehicles were equipped with defectively designed brakes."
The defect alleged is that a faulty "high force spring clip" causes the parking breaks in the vehicles to "self-energize" and wear out too soon. " Bryant alleged that GM discovered the problem in 2000 and fixed it in 2001, but didn't tell dealers about the defect until 2003. Bryant also alleged that a recall conducted by GM in 2005 was underinclusive because it didn't include trucks and SUVs with automatic transmissions. Bryant's causes of action were breach of express warranty, breach of implied warranty of merchantability, violation of the Magnuson-Moss Warranty Act, unjust enrichment, and fraudulent concealment.
The circuit court certified the following class:
“Owners” or “subsequent owners” of 1999-2002 1500 Series pickups and utilities originally equipped with an automatic transmission and a PBR 210x30 Drum-in-Hat parking brake system utilizing a high-force spring clip retainer, that registered his vehicle in any state in the United States.
On appeal, GM challenged predominance, superiority, and the preciseness of the class definition. GM argued that the individual issues in the case, namely, the substantive law of warranty, breach, and so forth, would consume the inquiry such that the common questions involving the spring clip did not predominate. "Our inquiry," the Court stated, "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 predominating questions. That various states’ laws may be required in determining the allegations . . . does not defeat predominance in the instant case.
Arkansas class-action law does not require a "rigorous analysis" to support certification, and it also bars consideration of any parts of the merits of the underlying case. These two rules combined to defeat GM's argument. The meat of the holding is a powerful rejection of contrary federal and state precedent:
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. 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, 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.
While the decision re-affirms Arkansas's unique approach to class actions, it should be noted that this case was presumably filed before the effective date of the Class Action Fairness Act of 2005, or CAFA.
