Cole v. General Motors Corp.

• Decision Date: 10 April 2007
• Docket Number: No. 05-31070.,05-31070.
• Citation: 484 F.3d 717
• Parties: Beverly COLE; Anita S. Perkins; Jewell P. Lowe, Plaintiffs-Appellees, v. GENERAL MOTORS CORP., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

484 F.3d 717

Beverly COLE; Anita S. Perkins; Jewell P. Lowe, Plaintiffs-Appellees, v. GENERAL MOTORS CORP., Defendant-Appellant.

No. 05-31070.

United States Court of Appeals, Fifth Circuit.

April 10, 2007.

Walter C. Thompson, Jr., Charles Michael Pisano (argued), Barkley & Thompson, New Orleans, LA, Jon Kenton Parsons, Roedel, Parsons, Koch, Frost, Balhoff & McCollister, Baton Rouge, LA, Donald Gene Kelly, Kelly, Townsend & Thomas, Natchitoches, LA, Bob F. Wright, Domengeaux, Wright, Roy & Edwards, Lafayette, LA, for Plaintiffs-Appellees.

David G. Radlauer, Thomas A. Casey, Jr. (argued), Aimee M. Quirk, Jones Walker, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Western District of Louisiana.

Before KING, GARZA and OWEN, Circuit Judges.

KING, Circuit Judge:

Defendant-appellant General Motors Corporation appeals the district court's certification of a nationwide Rule 23(b)(3) class of Cadillac DeVille owners who allege breach of express and implied warranties. For the reasons that follow we REVERSE the district court's Ruling and REMAND for entry of an order denying class certification.

I. FACTUAL AND PROCEDURAL BACKGROUND

General Motors Corporation ("GM") manufactured and sold over 200,000 1998 and 1999 model year Cadillac DeVilles ("DeVilles") in the United States. The DeVilles feature side-impact Air Bag Systems and Side Impact Sensing Modules ("SISMs"), the latter of which trigger inflation of the vehicle's side impact air bags under certain conditions. This class action centers on alleged defects in the SISMs.

In September 2000, GM sent a voluntary recall notice to all DeVille record owners and lessees explaining that GM

has decided that a defect which relates to motor vehicle safety exists and may manifest itself in your 1998 or 1999 model year Cadillac DeVille. [GM] ha[s] learned of a condition that can cause the side impact air bags in your car to deploy unexpectedly, without a crash, as you start your car or during normal driving.

GM indicated that it had received 306 reports of inadvertent deployment out of approximately 224,000 affected vehicles. GM further explained that it was working to obtain replacement SISMs and that it would contact DeVille owners again when replacement SISMs were available so that owners could take their DeVilles to a dealership for the installation of two new SISMs. GM expected those replacement SISMs to be available to a first group of owners in April 2001. GM additionally provided safety recommendations for the interim and a toll-free phone number for customers who had questions.

Replacement of the SISMs was delayed because the manufacturing line for the 1998 and 1999 SISMs had been dismantled. GM did not have enough replacement parts to implement a general recall of all DeVilles until May 2001. According to GM, it devised a two-part recall plan to overcome this production problem. Using available components, GM produced 40,000 replacement SISMs by November 2000. GM referred to these as "service build modules" and offered them to owners who called the toll-free phone number and expressed particular concerns about the recall. GM engaged a third-party vendor to manufacture the remaining replacement systems, which were referred to as "replacement build modules."

Among the owners who received GM's voluntary recall notice were the named plaintiffs (and now class representatives) Beverly Cole, Anita S. Perkins, and Jewell P. Lowe (collectively, "plaintiffs"). Lowe is the mother of one of plaintiffs' counsel, Perkins is a paralegal for another of plaintiffs' counsel, and Cole is the paralegal's cousin. Each purchased a 1998 or 1999 DeVille equipped with the SISMs at issue; however, the SISMs in their vehicles were not among those that had deployed inadvertently. Nevertheless, after receiving GM's September 2000 letter, plaintiffs filed a class action suit against GM in federal court in October 2000. In response, GM contacted plaintiffs in November 2000 and offered to replace the SISMs in their DeVilles immediately with replacements from GM's stock of service build modules. According to plaintiffs, they rejected GM's offer because GM did not extend the offer to all DeVille owners and GM would not answer questions about the source of the parts, the number available, and whether the SISMs had been properly tested. Plaintiffs later voluntarily dismissed this first suit.

Plaintiffs filed the present class action suit in Louisiana state court on December 18, 2000. GM removed the case on the basis of diversity jurisdiction to the Western District of Louisiana. On January 26, 2001, plaintiffs moved for class certification pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure on behalf of "[a]ll persons and legal entities who have acquired, whether by purchase, lease, donation or otherwise ... anywhere in the United States, 1998 or 1999 Cadillac Devilles equipped with side impact air bag systems and side impact sensing modules."¹ Their motion for class certification specifically excluded DeVille owners "who sustained bodily injury or death as the result of the unexpected or premature deployment of a side impact air bag."

Briefing and discovery on class certification issues ensued. Meanwhile, GM began a phased general recall of 1998 and 1999 DeVilles in May 2001 by sending recall letters to DeVille record owners and lessees.² Pursuant to this general recall, Lowe's SISMs were replaced in September 2001, and Perkins's and Coles's SISMs were replaced in October 2001. According to GM, it completed mailing recall notices to all DeVille record owners and lessees on December 28, 2001, and the majority of those owners and lessees have had their SISMs replaced. Plaintiffs do not dispute that GM's recall is now complete.

In their First Amended and Restated Class Action Complaint ("complaint"), plaintiffs allege that GM "promoted side impact air bags, which included so-called [SISMs], as an added safety feature" in its 1998 and 1999 DeVilles. Plaintiffs also allege that GM "has . . . admitted that a defect exists in the 1998 and the 1999 Cadillac Devilles which can cause the side impact air bags to deploy unexpectedly, without a crash, when the car is started or during normal driving." Plaintiffs further assert that GM "did not repair or replace the [SISMs] within a reasonable time after the sale and/or lease of the subject vehicles." Based on these allegations, plaintiffs aver that GM

has failed to deliver to plaintiffs and the class members the thing purchased, has delivered a thing other than the thing purchased, has breached express and implied warranties of sale, has sold and delivered to plaintiffs and the class members a thing containing defects under the redhibition laws of the State of Louisiana and the comparable provisions of the Uniform Commercial Code, and/or has breached contracts with plaintiffs and the class members, and such conduct has damaged plaintiffs and the class members.

Plaintiffs seek recovery from GM for

(1) return of the purchase or lease price, or, alternatively, for a reduction of the purchase or lease price, (i.e., the loss of the benefit of the bargain, or the difference between the value of the vehicle as delivered and the value it would have had if it had been delivered as warranted), and (2) for all other pecuniary and/or economic damages as permitted by the redhibition laws of the State of Louisiana and/or the comparable provisions of the Uniform Commercial Code, (3) punitive damages, if permitted, (4) interest at the legal rate from the date(s) of purchase, or alternatively, from the date of judicial demand, until paid, together with (5) reasonable attorney's fees, and all costs.

Finally, both the complaint and the motion for class certification assert that questions of law and fact common to the class included:

(a) Whether GM breached its contractual or quasi contractual obligations to the class, including (without limitation), the warranty against vices and defects, the warranty of merchantability, and/or all express warranties and warranties implied by law;

(b) Whether the defective [SISMs] with which the 1998 and 1999 Cadillac Devilles are equipped diminish the usefulness or value of the vehicles;

(c) Whether the [SISMs] with which the 1998 and 1999 Cadillac Devilles are equipped are defective such that plaintiffs have been deprived of the difference in value between what they were promised and what they received;

(d) Whether the 1998 and 1999 Cadillac Devilles equipped with the aforementioned side impact airbag system are fit for their intended use; and (e) Whether restitution or, alternatively, reduction, of the purchase and/or lease price, and other pecuniary and/or economic damages, under the redhibition laws of the State of Louisiana and/or the comparable provisions of the Uniform Commercial Code; punitive damages, if applicable; and/or attorney's fees are available to plaintiffs and the class members.

For reasons that are not apparent, the district court appointed a special master to review the motion for class certification and other related documents.³ On September 27, 2002, the special master concluded that Rule 23's prerequisites were satisfied and recommended certification of a Rule 23(b)(3) class. GM objected to the special master's recommendation in October 2002, contending that plaintiffs lacked standing and that plaintiffs failed to satisfy Rule 23's requirements of predominance, superiority, adequacy, and typicality. Again for reasons that are not apparent, the district court took nearly three years to enter its Ruling. On August 4, 2005, the district court accepted the special master's recommendation, certified the class,⁴ and named Cole, Perkins, and Lowe as class representatives.

GM now brings this interlocutory appeal under Rule 23(f), asserting that the district court abused its discretion in certifying a nationwide class of plaintiffs bringing...