In a ruling that highlights the increasing difficulty plaintiffs are having in pursuing class actions when their claims are subjected to the rigorous scrutiny demanded by recent Supreme Court and appellate authority, a federal judge in New Jersey has denied a renewed motion for class certification in the long-running Ford E-350 van products litigation.

In its 86-page opinion, the court conducted a thorough analysis of recent precedent, including the Supreme Court’s 2011 decision in Wal-Mart Stores, Inc. v. Dukes, and concluded that individual issues predominated over common ones to prevent certification of the statewide classes proposed by the plaintiffs.

In In re Ford Motor Co. E-350 Van Products Liability Litigation (No.II), the plaintiffs alleged that their 15-passenger Ford E-350 vans were defectively designed due to a high center of gravity, leading to an unusually high rollover rate. The putative class excluded anyone actually injured in such a rollover and instead sought only economic damages, largely based on a proposed $2,100 retrofit.

The court previously had determined that each purchaser’s home state law would govern and dismissed various plaintiffs and their corresponding state law claims. The plaintiffs filed a renewed motion for class certification on behalf of the remaining plaintiffs, whose claims encompassed the laws of California, New Jersey, Georgia, Pennsylvania, Florida, Michigan, New York, and Texas. These claims included breach of express warranty, breach of implied warranty, consumer fraud, and unjust enrichment.

Citing heavily to the Third Circuit’s 2009 decision in In re Hydrogen Peroxide Antitrust Litigation, the court acknowledged its obligation to conduct a "rigorous analysis" of Rule 23’s certification requirements, even when that analysis overlaps with the merits of the plaintiffs’ claims. The court specifically rejected plaintiffs’ arguments that Rule 23 should receive a liberal construction and that a merits inquiry is inappropriate.

In doing so, the court noted Hydrogen Peroxide’s rejection of "tentative decisions on certification," and its instruction that trial courts should refuse certification until all requirements have been clearly met, no matter the area of substantive law. The court further acknowledged that both Hydrogen Peroxide and Wal-Mart confirm that a merits inquiry is appropriate—and indeed required—when relevant to a class certification issue.

In accordance with this precedent, the court undertook a detailed review of the substantive elements of each plaintiff’s respective state law causes of action before concluding that individual issues—including exposure to differing representations, reliance, causation and damages—predominated over common ones.

The court’s orderly and comprehensive analysis could well serve as a template for class certification decisions involving multiple claims and multiple states laws. The court addressed, in turn, each element of each claim for each state, and it considered as to each element whether the evidence that the plaintiffs pointed to could serve as class-wide proof.

Where the plaintiffs made assertions of class-wide proof but the evidence showed otherwise, the court accepted the evidence rather than the assertion. For example, the plaintiffs asserted that the claimed defect manifested itself in all vehicles under normal driving conditions, but the court cited evidence to the contrary in concluding that, under New York law, an inherent defect could not be proven on a class-wide basis. In short, much effort was required, but through this painstaking process the court faithfully adhered to Wal-Mart and Hydrogen Peroxide in rejecting certification.

The plaintiffs alternatively sought certification for injunctive relief under Rule 23(b)(2) in an attempt to avoid the predominance inquiry that proved fatal to their (b)(3) class. The court denied certification under (b)(2) as well, finding that the issues identified in the predominance analysis revealed that the proposed (b)(2) class was not sufficiently cohesive to permit certification. Moreover, the court concluded that the plaintiffs were seeking primarily monetary damages that were not merely incidental to the claim for injunctive relief. Under Wal-Mart, that precludes certification of a (b)(2) class.

Ballard Spahr’s Product Liability and Mass Tort and Consumer Class Action Litigation Groups have substantial experience defending economic loss class actions involving consumer fraud, warranty, and product liability allegations. For more information, please contact Neal Walters, at 856.761.3438 or waltersn@ballardspahr.com; or Michael R. Carroll, at 856.761.3452 or carrollm@ballardspahr.com.  


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