The Third DCA appeals court in Florida ruled last week that a class action involving consumers who bought Sephia model vehicles with allegedly defective brake systems from Kia Motors should not have been certified. Kia Motors America Corp. v. Butler, 2008 WL 2356354 (June 11, 2008, Fla. App. 3rd Dist.).

The panel held that the trial court in Miami-Dade County had abused its discretion by certifying the class. The named plaintiff, Yvonne Butler, had filed the proposed class action on behalf of all Florida purchasers of 1999-2001 Kia Sephia model passenger motor vehicles. The complaint alleged that all Sephias manufactured during those years contain a brake system design defect that causes premature wear of the brakes, as a result of which the vehicles fail to meet a U.S. market brake-wear expectation of 20,000-30,000 miles. According to the complaint, the defect caused the cars to be unable to stop, or to suffer impaired stopping performance, increased stopping distances, brake shudder, brake vibration, or brake lockup and loss of control. The class sought damages to each class member for economic losses, including the difference between the price paid for each vehicle and the value of the vehicle, reduced resale value, and any out-of-pocket repair costs on the cars. It was estimated that about 18,000 Sephia vehicles were sold or leased in the state during the class period.

Consumer Fraud Claim Made

Plaintiffs sought to proceed under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. §§ 501.201-.213, as well as breach of statutory, implied and express warranty. That makes the case one of the recent trend in which plaintiffs bring consumer fraud claims for what in the past might have been traditional products liability claims for product defects, under the theory that consumer fraud claims are easier to get certified as class actions. Not this time.

The Decision

The appeals court noted that class actions are an exception to the general rule that litigation is conducted by, and on behalf of, individual named parties only. For that reason, the trial court must conduct a rigorous analysis to determine whether the elements of the class action rule have been met. The first set of these requirements are referred to as the numerosity, commonality, typicality, and adequacy of representation elements of class certification. But in addition to satisfying those, a plaintiff also must satisfy one of the three subdivisions of Florida Rule of Civil Procedure 1.220(b). The relevant subdivision in this case was subsection (b)(3), which requires that common questions of law or fact predominate over any individual questions of the separate members, and that class representation is superior to other available methods for the fair and efficient adjudication of the controversy. Thus, to certify a class, this rule requires not only that common questions exist, but that those common questions predominate over individual questions; and that the class action to be manageable and superior to other proceedings. (much like the federal rule)

To determine if these requirements have been met, a trial court must envision how a class action trial would proceed. (MassTortDefense has frequently urged trial judges to “look down the road” and not blindly accept plaintiffs’ bold assertions about trial procedures.) Under this analysis, the trial court must determine whether the purported class representatives can prove their own individual cases and, by so doing, necessarily prove the cases for each one of the thousands of other members of the class. If they cannot, a class should not be certified.

Predominance Lacking

The class certification in this case failed, first, to satisfy the predominance criteria. While plaintiffs alleged a common defect, the evidence demonstrated that the brake systems found in the three Kia Sephia models in this case were far from uniform. The disc braking process in an automobile is a complicated mechanical and hydraulically assisted process. The Kia Sephia vehicle disc brakes installed during the model years at issue were comprised of component parts specific to that model year. For example, the pad material was changed, the pad shim material was changed, the pad shim protector was removed, and rotor material modified. The 2000 model Sephia was manufactured with a different brake pad design from the prior model. Additionally, the rotor thickness was changed. For the 2001 model-year, the Sephia’s front brake system was completely redesigned.

Thus, the court concluded that the component and design changes resulted in significant  differences in the performance of the Kia Sephia’s front brakes over the three model years at issue here. “It is therefore scientifically and logically impossible to conclude that any performance issues for these three model years were the result of a common design.”  And it follows that even if there existed a difference between the price paid for each vehicle and the value of the vehicle as delivered for any design period, that difference cannot be proven on a class-wide basis.

Due Process Concerns

Importantly, the court took on plaintiffs’ vague trial plan assertions, noting that to proceed at the level of abstraction urged by plaintiffs would raise due process concerns. See Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 377-78 (1996). The Third DCA cited the famous language from Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir.1998), about a trial plan denying a class action defendant a fair trial when it is forced to defend against a composite “perfect plaintiff” pieced together for litigation. The court went on to note that due process requires that class actions not be used to diminish the substantive rights of any party to the litigation. See generally Moller, The Rule of Law Problem: Unconstitutional Class Actions and Options for Reform, 28 Harv. J.L. & Pub. Pol. 855 (2005); Epstein, Class Actions: Aggregation, Amplification, and Distortion, 2003 U. Chi. Legal F. 475 (2003).

Consumer Fraud Act Analysis

A claim for damages under FDUTPA has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. The FDUPTA class claim failed in this case on both the causation and actual damages elements. Among the individual questions that can be reasonably envisioned in the prosecution of this count, said the court, are: (1) whether the purchaser had knowledge of the alleged brake defect and purchased the vehicle despite such knowledge; (2) whether a deficiency attributable to Kia manifested itself; (3) whether an individual vehicle suffered diminished value as a result of the alleged deficiency if the deficiency was repaired; and (4) whether the purchase price of the vehicle reflected the alleged defect at the time it was purchased. These issues are compounded by the fact that the class representative in this case sought compensation not only for class members whose brakes have manifested a deficiency, but also for those whose brakes have performed satisfactorily. In certifying the class, the trial court had deviated from the majority of jurisdictions which consistently have denied class recovery on this type of theory.

The court concluded that without individual inquiry, there is no way to adjudicate this case to determine whether the need for a particular repair made by a class member was based on normal wear, a defective original part, a defective after market part, environmental factors, such as weather or road conditions, the presence of foreign objects in the braking system, the failure of parts other than the braking system, poor workmanship by a third party, or individual driving habits.

Superiority Lacking Too

To find superiority, a court must find all other methods of resolving the issues in a case to be inferior to a class action. Here, fewer than half of the class members reported brake difficulty. An individual inquiry and an inestimable number of mini-trials would be necessary to identify the class. Class certification is not ipso facto required where there exist multiple claims and potentially low dollar recovery.

Accordingly, the class was decertified.  And a decision product sellers may be able to use.