Mazza v. American Honda Motor Co.

Decision Date12 January 2012
Docket NumberNo. 09–55376.,09–55376.
Citation666 F.3d 581,2012 Daily Journal D.A.R. 485,12 Cal. Daily Op. Serv. 522
PartiesMichael MAZZA; Janet Mazza; Deep Kalsi, Plaintiffs–Appellees, v. AMERICAN HONDA MOTOR COMPANY, INC., Defendant–Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

OPINION TEXT STARTS HERE

Roy Morse Brisbois, Eric Y. Kizirian, Lewis Brisbois Bisgaard & Smith LLP, Los Angeles, CA, Donald Manwell Falk, Mayer Brown, LLP, Palo Alto, CA, for the defendant-appellant.

Robert Ebert Byrnes, Payam Shahian, Glenn A. Danas, Marc Primo, Initiative Legal Group APC, Los Angeles, CA, Michael Francis Ram, Ram, Olson, Cereghino & Kopczynski, LLP, San Francisco, CA, for the plaintiff-appellees.

Appeal from the United States District Court for the Central District of California, Valerie Baker Fairbank, District Judge, Presiding. D.C. No. 2:07–cv–07857–VBF–JTL.Before: D.W. NELSON and RONALD M. GOULD, Circuit Judges, and JAMES S. GWIN, District Judge.*Opinion by Judge GOULD; Dissent by Judge D.W. NELSON.

OPINION

GOULD, Circuit Judge:

Honda appeals the district court's decision to certify a nationwide class of all consumers who purchased or leased Acura RLs equipped with a Collision Mitigation Braking System (“CMBS”) during a 3 year period under Federal Rule of Civil Procedure 23(b)(3). Plaintiffs allege that certain advertisements misrepresented the characteristics of the CMBS and omitted material information on its limitations. The complaint states four claims under California Law. Honda contends: (1) that Plaintiffs failed to satisfy Rule 23(a)(2)'s commonality requirement; (2) that common issues of law do not predominate because there are material differences between California law and the consumer protection laws of the 43 other jurisdictions in which class members purchased or leased their Acura RLs; (3) that common issues of fact do not predominate because resolution of these claims requires an individualized inquiry into whether consumers were exposed to, and actually relied on, various advertisements; and (4) that some members of the proposed class lack Article III standing because they were not injured.

We have jurisdiction pursuant to 28 U.S.C. § 1292, and we vacate the class certification order. We hold that the district court erred because it erroneously concluded that California law could be applied to the entire nationwide class, and because it erroneously concluded that all consumers who purchased or lease the Acura RL can be presumed to have relied on defendant's advertisements, which allegedly were misleading and omitted material information.

I

The CMBS was part of an optional technology package for Honda's Acura RL vehicles released in 2005. Honda said that the CMBS detects the proximity of other vehicles, assesses the equipped car's speed, and implements a three-stage process of warning, braking, and stopping to minimize the damage from rear-end collisions. At Stage 1, the system sounds a tone and flashes a “BRAKE” warning sign on the dashboard. At Stage 2, the system also brakes lightly and tightens the driver's seat belt. At Stage 3, while continuing the other warnings, the system increases the braking force and tightens both the driver's and the front-end passenger's seat belts. Honda promoted the CMBS as a way to make rear-end collisions less common and to minimize the consequences of collision. The CMBS was sold as part of a technology package that also included adaptive cruise control and run-flat tires, and added $4,000 to the price of the car. To advertise the CMBS, Honda prepared marketing materials describing the system's functionality.

In 2006, Honda released a product brochure stating that the CMBS “is designed to help alert the driver of a pending collision or—if it's unavoidable—to reduce the severity of impact by automatically applying the brakes if an impending collision is detected.” The brochure described the CMBS system's three-step process of alerting, lightly braking, and strongly braking if a crash is imminent:

If the system senses a vehicle, it determines the distance and closing speed. If the closing speed goes above a programmed threshold, the system will immediately alert the driver with an audible alarm and a flashing indicator on the instrument panel. If the driver takes no action to reduce speed, the system will automatically tug at the driver's seat belt and lightly apply the brakes. When the system senses that a frontal collision is unavoidable and the driver still takes no action, the front seat belts are retracted tightly and strong braking is applied automatically to lower impact speed and help reduce damage and the severity of injury.

The brochure showed a picture of an Acura behind a truck with three labels. Stage 1 was farthest from the truck and stated “RECOGNITION OF POSSIBLE COLLISION.” Stage 2 was in the middle and stated “BELTS TIGHTEN AND LIGHT BRAKING.” and Stage 3 was nearest the truck and stated “STRONG BRAKING.” The 2007 and 2008 product brochures were similar and were available at dealerships.

Honda also released television commercials describing the system's operation. One ran for a week in November 2005 and another ran from February to September 2006. In the 2005 commercial, a voice states, “The driver is warned, and warned again. If necessary, the system even applies the brakes to lessen the potential impact.” A voice in the 2006 commercial states, “The driver is warned so he can react. If necessary, the system would have even applied the brakes to lessen a potential impact.”

From March to September 2006, Honda released a “What Might Happen” advertisement in some magazines. This advertisement said that “the system can react. It can give you auditory and visual warnings, a tug on the seat belt, and when necessary, even initiate strong braking.” Honda ceased mass advertising for the CMBS in 2006.

However, Honda still pursued smaller-scale marketing efforts. Honda posted on its intranet two commercials stating that the CMBS's “various alert stages can overlap depending on the rate of closure of your vehicle and the vehicle ahead.... The system does have limitations, and will not detect all possible accident causing situations.” These videos were viewable on kiosks at Acura dealerships, and dealers were encouraged to show them to potential customers. The parties have not indicated how many people saw these videos, and Honda discontinued the use of intranet kiosks in March 2008. Honda also operated an “Owner Link” website that contained video clips describing the CMBS. Although this site was developed for car owners, the site was available to any customer via www. ahm- ownerlink. com until 2008 and via www. myacura. com thereafter. Also, Acura Style magazine, a periodical sent to Acura dealerships, subscribing Acura owners, and interested consumers twice each year, reported in a summer 2007 article that the CMBS responds “with any or all of three increasingly dramatic imperatives.”

Finally, the Acura RL owner's manual explained that the CMBS might shut off in certain conditions, including bad weather conditions, mountainous driving, driving with the parking brake applied, and when an abnormal tire condition is detected. The owner's manual stated that when this automatic shut off is triggered, a “CHECK CMBS SYSTEM” message appears in the instrument panel for five seconds to alert the driver that the system has turned off.

In 2007, Michael and Janet Mazza purchased a 2007 Acura RL from an authorized Acura dealership in Orlando, Florida. That same year, Deep Kalsi bought a 2007 Acura RL from an authorized Acura dealership in Gaithersburg, Maryland. Both vehicles were equipped with the CMBS System. In December 2007, the Mazzas and Kalsi filed a class action complaint against American Honda Motor Co., Inc. (Honda) alleging that Honda misrepresented and concealed material information in connection with the marketing and sale of Acura RL vehicles equipped with the CMBS.

According to Plaintiffs, Honda did not warn consumers (1) that its CMBS collision avoidance system's three separate stages may overlap, (2) that the system may not warn drivers in time to avoid an accident, and (3) that it shuts off in bad weather. Appellees brought claims under California Law, specifically the California Unfair Competition Law (UCL), Cal. Bus. & Prof.Code § 17200 et seq., False Advertising Law (FAL), Cal. Bus. & Prof.Code § 17500 et seq., the Consumer Legal Remedies Act (CLRA), Cal. Civil Code § 1750 et seq., and a claim for unjust enrichment.

On September 24, 2008, the district court denied Plaintiffs' motion for class certification without prejudice. The district court requested that the Plaintiffs provide clearer notice of the proposed class and subclasses, that Honda provide more detailed information regarding the propriety of applying out-of-state law, and that Plaintiffs clearly identify the alleged omissions and/or misrepresentations. On December 16, 2008, the district court granted Plaintiffs' renewed motion for class certification, finding that they met the requirements of Federal Rules of Civil Procedure 23(a) and 23(b)(3). The district court certified a nationwide class of people in the United States who, between August 17, 2005 and the date of class certification, purchased or leased new or used Acura RL vehicles equipped with the CMBS.1

The district court held that the following common questions of law and fact satisfied Rule 23(a):

(1) whether Honda had a duty to Plaintiffs and the prospective class members to disclose that: the three stages of the CMBS System overlap; the CMBS will not warn drivers in time to avoid an accident; and that the CMBS shuts off in bad weather;

(2) whether Honda had exclusive knowledge of material facts regarding the CMBS System, facts not known to the Plaintiffs and the prospective class members before they purchased the RL equipped with the CMBS...

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