Hanlon v. Chrysler Corp.
| Citation | 150 F.3d 1011 |
| Decision Date | 24 July 1998 |
| Docket Number | Nos. 96-15043,96-16027,96-16076,96-15044,s. 96-15043 |
| Parties | 98 Daily Journal D.A.R. 8001 Stuart HANLON, Plaintiff, and Kenneth Edwards; Nancy Edwards; Kathy Hancock; Michael Hancock; Lori Tuttle; Paul Alan Levy; Nancy Huvendick; Center For Auto Safety, Intervenors-Appellants, v. CHRYSLER CORPORATION, a Delaware corporation, Defendant-Appellee. Stuart HANLON, Plaintiff, and Robert Kempton, Plaintiff-Appellant, and George Van Buskirk, Objector; Diane Cheatham, Objector, Appellants, v. CHRYSLER CORPORATION, a Delaware corporation, Defendant-Appellee. Stuart HANLON; Billy Macables; Lewis Amonette; June Amrhein; Richard Bales; Ray Baranowski; Lynette Barrera; Larry Beasley; Steven Bell; Sue & Stanley Bell; Angie Blain; Robert Bowman; Gail Broadway; Elizabeth Callais; Ann Caples; Steve Cathey; Allison Clay; George Clifford; Max Colvin; Karen & Ryan Courtade; George Cowsar; William Dalrymple; Greg Davis; Linda De Muro; Dennis Dean; Cheryl Deegan; James Deming; Bill Dippel; Chris Dixon; Jerry Donelson; Allen Douglass; Mary Douglass; Sandra Edwards; E.W. Ellison, Jr.; Al Fairley; Jerry Ferguson; Noah Ferrell; Benjamin Ferrydene; Jeanette Fisher; Steve Fontenot; Steven Franks; Thomas Gonda; Joseph & Jeanne Graham; Tammy Grantham; James Haffey; Della Hamilton; Michelle & Jay Hare; Cheryl Hensley; Sherman Hyatt; Carl Jackson; Diann James; Isaac Jarrett; Kamal Kabshura; James Kaigler; Paul L. Kennedy; Sandra King; Judith Koinm; John Langford; Laura Leathers; Walter Legers; Linda Lewandowski; Joseph Lewandowski; Thomas Look; Margaret Maddox; Roosevelt March; Debra Mason; Zandra Mcbride; Nancy Mcmanus; Adrian Millwood; Wendy & John Minerowicz; D. Mitchell; Starkey Morgan; Ana Nadim; Tim Nolan; Katie Nutall; Carey O'neal; Harry & Becky Pepper; David Ramsey; Teresa Ruiz; J.R. Sanders; Wilton Sanders; George Shackleford; A.J. Sims; Elaine Sims; Eileen Siss; William Spell; Dewey Stancil; Robert Stengl; Kevin Stevens; Denise Storey; Donna Strichter; Melanie Tichenor; Ed Turnage; Ralph Ulery; Sally Ulery; Robert Ware; Christine White; Darrell Wh |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Colette G. Matzzie, Washington, DC, for objectors-intervenors-appellants.
James E. Carter, Madison, GA, for objectors-appellants.
Charles A. Newman, Bryan Cave, St. Louis, MO, for defendant-appellee.
Elizabeth J. Cabraser, Michael F. Ram, Lieff, Cabraser, Heimann & Bernstein, San Francisco, CA, for plaintiffs-appellees.
William M. Rubenstein, Asst. Atty. Gen. of Connecticut, Hartford, CT, for Amicus Curiae States of Connecticut, Arizona, Iowa, Kansas, New York, Nevada, Oklahoma, Pennsylvania, Rhode Island and Vermont.
Appeals from the United States District Court for the Northern District of California; Charles A. Legge, District Judge, Presiding. D.C. No. CV-95-02010-CAL.
Before: GOODWIN and THOMAS, Circuit Judges, SEDWICK, 1 U.S. District Judge.
We are presented in this appeal with procedural and substantive objections to the settlement of a nationwide class action against Chrysler Corporation. After examining the settlement in accordance with the guidelines established in Amchem Products, Inc. v. Windsor, --- U.S. ----, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), we affirm the district court.
In September 1993, the National Highway Traffic Safety Administration ("NHTSA") Office of Defect Investigation learned of a rear liftgate latch problem in 1992 Chrysler minivans. NHTSA opened a preliminary investigation, which was expanded to an "engineering analysis" of all 1984-1994 Chrysler minivans. The Engineering Analysis included a technical evaluation of the rear latches, testing of the latches in different scenarios, and analyzing accidents, fatalities, injuries and consumer complaints. Despite NHTSA's investigation, Chrysler publicly denied any problem with its rear liftgate latches.
The NHTSA investigation proceeded throughout 1994. On November 17, 1994, Chrysler and NHTSA representatives met to discuss the engineering analysis and the growing evidence that the latches presented a serious safety threat. Following that meeting, NHTSA and Chrysler negotiated a voluntary resolution to the investigation wherein Chrysler announced a "Service Action" to replace the rear liftgate latches on all 1984-1994 minivans. The Service Action was extended one month later to include 1995 minivans.
The details of the Service Action are found in the correspondence exchanged between Chrysler and NHTSA; Chrysler understood its campaign to include:
a redesigned improved replacement latch to be installed free of charge;
a series of letters to minivan owners advising them the new latches were available;
an advertising campaign;
monitoring the response rate of owners and taking all necessary steps to ensure an appropriate response rate; and
quarterly reports to NHTSA.
NHTSA kept its investigation open after Chrysler initiated the Service Action to ensure the company's compliance. The investigation was finally closed on October 25, 1995. At that time, NHTSA was satisfied that the voluntary action taken by Chrysler had been as effective as a formal recall. However, NHTSA reserved the right to reopen the proceedings and initiate a recall if Chrysler's Service Action proved inadequate or if Chrysler abandoned the plan.
Prior to the agreement between NHTSA and Chrysler, plaintiffs lawyers in several states filed class actions in various state courts seeking latch replacement, as well as damages under various state-law warranties and theories of recovery. 2 The plaintiffs' counsel in the state actions met with engineering experts, conducted and defended depositions, and were proceeding through the normal course of document-intensive discovery. Class counsel in the two California cases and the Texas case moved for class certification; however, the hearings were continued at Chrysler's request.
Approximately two weeks before it announced the NHTSA-approved Service Action, Chrysler and counsel from the various state actions began serious settlement discussions, which continued throughout April, May and June 1995. As a result of the settlement discussions, all of the state class actions were consolidated in one large national class action (the Hanlon class) in federal court in the Northern District of California under Judge Legge on June 16, 1995. In their complaint the Hanlon plaintiffs asserted various claims against Chrysler with regard to an alleged defect in the rear liftgate latches of the minivans. Three days after filing the case, the parties submitted a settlement agreement to the court for approval. The district court held a preliminary hearing on the settlement agreement on August 18, 1994, and issued an Order granting preliminary approval of the settlement and certifying the nationwide class of Minivan owners for settlement purposes only. All personal injury and death cases are excluded from this settlement.
The Order also provided at Paragraph 19:
Pending final determination of whether the settlement embodied in the Settlement Agreement is to be approved, no member of the Settlement Class, either directly, representatively, derivatively, or in any other capacity, shall commence or prosecute any action or proceeding in any court or tribunal asserting any of the claims described in paragraph 17 of the Settlement Agreement.
Pursuant to the August 18 Order, the Court-approved notice of the proposed settlement was mailed directly to over 3.3 million Minivan owners. The order granting preliminary approval of the settlement set an objection and opt-out date of October 20, 1995, and all activity on the state actions ceased.
A few weeks after the Hanlon action was filed, Robert Kempton, a resident of Georgia and Chrysler minivan owner, filed a similar class action in a Georgia state court. Kempton sought to represent himself and all Georgia residents and entities who purchased or leased a Chrysler minivan in the relevant product years. In direct contravention of the federal district court's August 18 order, Kempton filed a motion to certify the Georgia class on October 17, 1995. Kempton specifically stated that his goal was either to opt out all Georgia residents from the Hanlon action or object on their behalf. The Hanlon plaintiffs and Chrysler filed a motion to enjoin Kempton from proceeding, and the California district court issued such an order on October 19, 1995.
Kempton expressly ignored the injunction and proceeded with the Georgia class certification, arguing that he had opted out of the Hanlon class and therefore was not subject to that court's jurisdiction or bound by its orders. The Georgia state judge entered an order conditionally granting Kempton's motion and certifying the class.
Following notification of the proposed settlement, the district court in California conducted two fairness hearings on the adequacy of the settlement in November 1995. The court made several findings at the second hearing on November 30, 1995, indicating its approval of the settlement. Prior to entering the order, the court gave objectors an opportunity to present arguments on the pending settlement. The objections centered around one primary issue: the adequacy and fairness of the settlement in light of Chrysler's prior agreement with NHTSA to replace all of the defective latches. At the conclusion of the hearing, the court entered...
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