The Oklahoma Supreme Court earlier this month upheld certification of a nationwide class in litigation alleging DaimlerChrysler Corp. should have provided repairs to steering systems on vehicles manufactured between 1993 and 2001. Masquat v. DaimlerChrysler Corp., Okla., No. 104971 (7/1/08), found here.
Plaintiffs alleged that LH platform vehicles contained a defect in the power rack and pinion steering system. These vehicles were sold as various Dodge and Chrysler models during model years 1993 through most of 2001. Plaintiffs alleged that shortly after production and sale of the LH vehicles began, Defendant began to receive reports from consumers of steering related problems. Defendant eventually introduced a newly designed steering system bolt, in late calendar year 2000. Plaintiffs’ theory is that the cure/repair to the problem developed by Defendant was never provided to already-produced LH platform vehicles, and consumers were not adequately informed that the fix was available and that the repair should be made.
Among the defenses asserted was the fact that the claims of most of the proposed class members seemed time-barred. Plaintiffs’ response was that the statute of limitations was tolled, based on alleged “active concealment” of the alleged defect in the steering system.
Following a hearing on the motion for class certification, the trial court certified a nationwide class of current owners of the vehicles. Class certification in Oklahoma is governed by Okla. Stat. Tit. 12 Sec. 2023, which provides for numerosity, commonality, typicality, and adequacy in language similar to Federal Rule of Civil Procedure 23(a), and for predominance and superiority in the same manner as Rule 23(b)(3). Defendants appealed, continuing to assert that individual issues predominate, especially those raised by the choice of law issues. Nationwide classes typically are inappropriate because they require the class court to try to explain, and the jury to try to apply, the varying law of 51 different jurisdictions.
The Supreme Court first noted that the substantive law of Michigan would apply to all the breach of warranty claims in this matter. The class of plaintiffs is pursuing breach of warranty claims against a Michigan manufacturer. Under the “most significant relationship” test applied in Oklahoma, Michigan law applies. Furthermore, the factual issues associated with the breach of warranty claims appear to be essentially uniform across the class as they arise from the same event or course of conduct and give rise to the same legal or remedial theory, said the Court.
The more hotly contested issue was whether common issues predominate over individual issues in regard to Defendant’s statute of limitations defense. Plaintiffs asserted that the statute of limitations was tolled because Defendant actively concealed information regarding the steering system tie rods from the class. Plaintiffs emphasized that they were not pursuing a common law fraud claim, which might require that the “law of 51 jurisdictions” be applied. Defendant, on the other hand, asserted that the choice of law rule applicable to the Court’s determination of the proper limitation period, and thus the appropriate requirements for tolling that provision, must be found in Oklahoma’s “borrowing statute.” That act provided that the period of limitation applicable to a claim accruing outside of this state shall be that prescribed either by the law of the place where the claim accrued or by the law of this state, whichever last bars the claim. Defendant argued that application of the borrowing statute will require the comparison of Oklahoma’s limitation period for a warranty claim to the warranty limitation period of each state in which a class member resides.
The Court agreed with Defendant, but only in part. The borrowing statute was the right approach, but because Michigan law applied to the warranty claims of the class, the Court need only compare the limitation period under Michigan law to that of Oklahoma and apply the one which “last bars” the claims.
Third, Defendant argued that predominance is defeated by the need to question each class member individually as to whether the class member exercised reasonable diligence in learning of the allegedly concealed defect. Some class members might well have been more diligent than others, and some class members may have known more about the alleged defect than others, based on their own experience, or the experience of people they know. In contrast to the choice of law issue, the Oklahoma Supreme Court admitted that it had never been presented with the opportunity to address the class action predominance requirement in the context of an asserted fraudulent concealment exception to the statute of limitations, with its possible factual roots.
The Court rejected the defense position, finding that the essence of fraudulent concealment is knowledge in possession of the person committing the fraud. Thus, in this matter, the principal focus on the statute of limitations defense will be Defendant’s conduct, claimed the Court. The “common questions” supposedly arising from Plaintiff’s assertion of fraudulent concealment were (1) whether Defendant affirmatively concealed the alleged defect, and thus concealed a breach of warranty, and (2) whether the class members, by exercising due diligence, could have determined that a breach had occurred.
On the latter point, which seems to MassTortDefense to raise basic individual issues, the Court stressed that common evidence included whether knowledge of the alleged defect was readily available so as to put an ordinary prudent class member on inquiry. This, of course, begs the question whether, even if not everyone should have known, some class members knew or should have known prior to the statutory period. But the Court concluded that any question of variation in individual reliance is eclipsed by the common questions surrounding the allegation of fraudulent concealment. “The mere presence of individual issues does not defeat predominance.”
Underlying this opinion may have been the factor that the trial court capped the amount of damages compensation at $310 for the bolt fix repair and $400 for other steering system repairs caused by the bolt problem, meaning that many class members might not pursue individual actions. The limited legal theories raised by class plaintiffs also limited the defense opportunity to unearth predominating individual issues.