Tuesday, July 01, 2008

An Arkansan Atrocity (General Motors v. Bryant)

We're steering slightly wide of drugs and devices here, but we're taking this detour at your collective request.

General Motors Corp. v. Bryant, 374 Ark. 38, ___ S.W.3d ___, 2008 WL 2447477 (Ark. June 19, 2008) (link here), is an automotive case. Boyd Bryant sued General Motors in Arkansas state court in 2005 (before CAFA was enacted) alleging that GM had sold slightly more than 4 million pick-up trucks between 1999 and 2002 with defectively designed parking brakes. GM later allegedly realized its error and recalled some 60,000 manual-transmission trucks to fix the problem, but did not recall the nearly 4 million trucks with automatic transmissions, like the one Bryant owned. Bryant alleged that GM breached a host of laws, including express and implied warranties, the Magnuson-Moss Warranty Act, unjust enrichment, and fraudulent concealment. He sought damages "in an amount necessary to remedy the" alleged brake problem, or alternatively reimbursement for those who had already fixed their brakes.

Bryant sued on behalf of a putative nationwide class.

The trial court issued a 51-page order certifying the national class. GM appealed. The Arkansas Supreme Court affirmed.

We're not going to wallow in the details of the Supreme Court's decision.

In fact, we weren't planning to publish a post about this case at all, but we've been shamed into it by you, dear readers. We simply got too many e-mails saying things like: "You gotta see this one!" and "What about the Constitution, for heaven's sake?" and "Didn't we resolve this issue 20 years ago in Shutts?" and "Where are you guys on this one? Write about it; it's your duty!"

Okay, okay.

We give up. We'll write about it.

This is what quickened our readers' collective pulse: Just about every court in the country recognizes that trial courts must rigorously analyze the requirements for class certification before certifying a class. If a trial court improperly certifies a class represented by an atypical or inadequate class representative, then either (1) the absent class members' Due Process rights have been violated -- they lost a lawsuit, even though they weren't properly represented -- or (2) the absent class members will not be bound by an adverse judgment, which is terribly unfair to the defendant. (The defendant would have been toast if it had lost, but now wins nothing by having won, since the absent class members aren't bound.) Either way, you're talking about egregious error. Class action law is so well-settled on these points that they now rest comfortably in the hornbooks.

The Arkansas Supreme Court, however, begs to differ. In Bryant, the Arkansas Supreme Court wrote that it had previously "rejected any requirement of a rigorous-analysis inquiry by our circuit courts." Slip op at 9. "Instead, we have given the circuit courts of our state broad discretion in determining whether the requirements for class certification have been met, recognizing the caveat that a class can always be decertified at a later date if necessary." Id. at 9-10.

According to the Arkansas Supremes, the trial court did not err by failing to conduct a choice-of-law analysis before certifying a nationwide class. Id. at 10. The Supreme Court approves of a bifurcated approach to deciding class actions in which the trial court decides "preliminary, common issues" in a first phase, and then decertifies the class to resolve individual issues in a second phase. Id. at 12. And the absence of a trial plan that explains exactly how the case will proceed poses no problem: "[W]e do not know at the point of certification whether more than one jury would ultimately be necessary, and we will not speculate on the question of the inevitability of bifurcated trials or issue an advisory opinion on an issue that well may not develop." Id. at 17.

We have this to say about that:

Shutts! (It violates Due Process to apply one state's law to a nationwide class when most class members had no relationship to that one state.)

General Telephone v. Falcon! (Error to certify a class without undertaking a "rigorous analysis" to ensure that all requirements of Rule 23 have been satisfied.)

Due Process! (If the plaintiffs lose the classwide trial, are you really going to bind absent class members to that loss, even though the named representatives were atypical or inadequate, or the trial court applied the wrong state's law? If you're not going to bind absent class members to a loss, then don't certify.)

Justice! (Don't tell us that General Motors can appeal after a final judgment is entered. Everyone understands that, once a class is certified, the likelihood of actually reaching a final judgment is remote.)

Okay, disgruntled readers, we've done it.

There's our short rant about GM v. Bryant.

We hope you feel better now.

As for us, we're heading back to drugs and devices.

No comments: