Chin v. Chrysler LLC, 07-2760.
| Citation | 538 F.3d 272 |
| Decision Date | 07 August 2008 |
| Docket Number | No. 07-2760.,07-2760. |
| Parties | David CHIN; Kevin L. Sullivan; Marvin Kirschenbaum; Bruce McCutcheon; Debra Dodge; Kevin L. Dodge; Howard Barkan; Bessie Coyne; George Higgins; Julie Szabos; Jim Coffey; Claude Meyer; Susan Robins; Al Zeidler; Fran Strykowski; Jeff Bradley; Jerry Green; Tony Sanchez; Kenneth E. Nealy; Craig M. Dinsmore; David P. Yexley; Ed Mikoloajczyk; Martha Singleton; Calvin M. Singleton; Howard G. Saul; Scott A. Hollenbeck; Bernard Simelton; William Knueven; Gary Berner; John D. James; Mary M. Gaar; Dave Andrews; Dennis Beam; Carolyn A. Butler; Greg Carps; Chris Clarkson; Cynthia Cooper; Byrce Custodio; Sgt. Christopher B. Dye; Karen Elliott; Karen Fallis; Kimberly S. Fish; Darlene Fluker; Steve Foley; William Fowler;J.V. Franck; Thomas E. Gardner; Raymond C. Gomez; Benjamin M. Gosswiller; Mark Goza; J.E. Gravenmier; Jim Green; Sharon Green; Jean E. Grimm; Dr. Mark Handle; Mary Lynn Handle; Hyman Hass; James B. Hasty; Jean Palmer Heck; Doug Heins; Anthony A. Helm; Brenda L. Helm; Carey E. Hidaka; Eric Holmgren; Ron Hommelson; Nan Hutchins; Charles Jabbonsky; George R. Jones; Lula Jones; Robert Jones; Daniel G. Kagan; James E. Kay; Barbara A. Kay; Charles Kelley; Steve Kelly; James Kemp; Vicky Kemp; Thomas F. Kinder; Lloyd J. King; Marvin Kitchen; Delores Kitchen; Dr. Lora Kravec; Dr. Thomas Kravec; Michelle Lesse; Timothy Malone; Lori Malone; Mike McInerney; C. Stuart McPherson; AAA Realty, Inc.; Willene Mitchell; Nancy Molhagen; Walter H. Moorer, Jr.; Leonard Nelson; Kenneth H. Norris; Khaleel Nurideen; Cynthia Olsen; Maureen O'Neil; David C. Polich; Susan L. Pomeroy; David Price; Norman Revolinski; Robert T. Reyes; James Reynolds; Kathy Schofield; Walter Semchyshyn; Fred Shimizu; Nancy Shimizu; Loreine Simopoulos; Bernie K. Sloane; Paul T. Smith; Eric Stoppa; Debbie Stoppa; Sheila T. Straub; Mark Sudfeld; Joseph Tucker; Rose Tucker; Peter F. Von Savoye, Ii; Ernest C. Walsh; Frank Wallace (Wally) Bromberg; Paul Nelson Ware; Sonnie Washington; Kermit Workman; Sandra Workman; Lana Andrews; Roger Gauthier; Gilberg Helwig; Tony Oliver; Barbara Oliver; Ernest T. Oddo; Donald Bailey; Lillian Bailey; Marvin Weirich; Freddie A. Tate; Linda T. Nelson; Nancy Wood Loening; Stephen Cline; Terri Cline; James Peters; v. CHRYSLER LLC, Appellant. (Per Clerk's Order 10/24/07). |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
D. Brian Hufford, Esq. (Argued), Pomerantz, Haudek, Block, Grossman & Gross, New York, NY, and Bruce D. Greenberg, Esq., Allyn Z. Lite, Esq., Lite, De Palma, Greenberg & Rivas, Newark, NJ, for Appellant.
Theodore J. Boutrous, Jr., Esq. (Argued), Gibson, Dunn & Crutcher, Los Angeles, CA, and Thomas R. Curtin, Esq., Graham Curtin, Morristown, NJ, for Appellees.
Before: SLOVITER, BARRY and ROTH, Circuit Judges.
Appellees are a putative class of owners of cars manufactured by appellant, Chrysler LLC ("Chrysler"). Almost thirteen years ago, they brought a products-liability action against Chrysler, claiming that certain braking systems in Chrysler's cars were defective. More specifically, in a complaint that was later amended three times, appellees asserted a cause of action under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (the "Magnuson-Moss Act" or the "Act"), 15 U.S.C. §§ 2301-12, and causes of action for common-law fraud and breach of implied and express warranties. Approximately one month after the first amended complaint was filed, however, Chrysler recalled the affected cars. Appellees voluntarily dismissed their complaint and moved for an award of attorneys' fees under the Act. Only after that motion was denied did appellees seek an award of attorneys' fees under California state law, although no substantive claim under California law had been pled, much less decided. The District Court granted the motion and awarded attorneys' fees and expenses in the amount of $4,654,433.14. Chrysler appeals that order. We will reverse.
We put some meat on the bare bones of the history we have summarized above. Appellees filed their initial complaint on October 27, 1995. The complaint alleged that certain cars manufactured by Chrysler between 1990 and 1995 were equipped with a defective anti-lock braking system referred to as the "Bendix 10 ABS"; that in 1990 Chrysler began receiving complaints and requests for brake repairs but denied that the braking systems were prone to failure; and that, in response to Chrysler's inaction, appellees lodged complaints with the National Highway Traffic Safety Administration ("NHTSA") and the Center for Auto Safety. Appellees brought their Magnuson-Moss Act claim "on their own behalf" and their common-law fraud and breach of express and implied warranty claims "as a class action on behalf of all others similarly situated (the `Class')." (J.A. 196.) They sought a declaration "that this action may properly proceed as a class action"; an injunction effectively requiring Chrysler to comply either with its obligations under the Act and the common law or to rescind the sales of the affected cars; payment of restitution and punitive damages; and an award of attorneys' fees and costs. Appellees amended their complaint on March 8, 1996 in order to broaden the class of affected car owners to include owners of Chrysler cars equipped with another, similar braking system that they alleged was also defective: the "Bendix 9 ABS."1 Appellees moved to certify the class on July 26, 1996, a motion denied by the District Court by order dated September 11, 1998. Chin v. Chrysler Corp., 182 F.R.D. 448 (D.N.J. 1998).
In March 1994, before appellees filed their initial complaint, the NHTSA had, pursuant to its authority under the Motor Vehicle Safety Act, 49 U.S.C. § 30101 et seq., initiated a preliminary evaluation of the braking systems installed on certain Chrysler cars for model years 1991 through 1993. After a two-year investigation, the NHTSA determined that, in some instances, due to the deterioration to a part of the braking systems, the brakes' function "may be lost and reduced power assist may be experienced progressively during braking." Id. at 452. On April 15, 1996, a little more than a month after appellees filed their first amended complaint, Chrysler voluntarily recalled cars equipped with the Bendix 10 ABS. In September 1996, the NHTSA began an inquiry into Chrysler cars equipped with the Bendix 9 ABS and, as a result, extended the recall to include those cars as well. The recall required Chrysler to notify all affected consumers of the recalls and then to inspect all affected cars; replace any malfunctioning braking systems for free; extend the warranty on such braking systems to 10 years or 100,000 miles, whichever came first; and reimburse prior and current owners for any expenses car owners previously incurred in fixing their faulty braking systems.2 Id.
On January 29, 1999, appellees moved for a declaration that they could recover attorneys' fees under the fee-shifting provision of the Magnuson-Moss Act, see 15 U.S.C. § 2310(d)(2). They relied on a "catalyst" theory, i.e. although they had voluntarily dismissed their claims against Chrysler, they nonetheless were a "prevailing party" for attorneys' fees purposes because they had catalyzed Chrysler to provide them (at least in part) the relief they sought — a recall of all cars equipped with either the Bendix 10 ABS or Bendix 9 ABS. The motion was denied by a magistrate judge on August 24, 1999 and appellees appealed the decision to the District Court. Three months later, the Court granted appellees' unopposed motion for entry of a final judgment and order of dismissal purportedly under Rule 41(a)(2). The Court stated, however, that it would determine in a separate order appellees' appeal of the magistrate judge's order denying their motion for a declaration of a right to attorneys' fees under the Act.
The District Court reversed the magistrate judge's August 24, 1999 order by opinion and order dated December 14, 1999, declaring as a matter of law that appellees could proceed to seek attorneys' fees under the Act on a catalyst theory. The Court granted appellees' motion for additional discovery on the factual question of whether their lawsuit had actually catalyzed Chrysler to recall the faulty braking system-equipped cars. After discovery, appellees moved for a declaration that Chrysler was liable to them for attorneys' fees because appellees had, in fact, catalyzed Chrysler to act.
While this motion was pending, however, the Supreme Court held in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 605, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), that a party may not recover attorneys' fees under certain federal laws on a catalyst theory. Consequently, Chrysler moved for reconsideration of the December 14, 1999 order in light of Buckhannon. Appellees opposed the motion and cross-moved for an award of attorneys' fees under § 1021.5 of California's Civil Procedure Code, arguing that 25 of the more than 100 named plaintiffs were residents of California and entitled to fees under the "private attorney general" doctrine because they were a catalyst in providing a benefit to a large class of persons. Section 1021.5 provides as follows:
Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity are such as to make the award appropriate, and (c) such fees should not in the interest of justice be...
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