Fernandez v. Takata Seat Belts, Inc.

• Decision Date: 24 March 2005
• Docket Number: No. CV-04-0277-PR.,CV-04-0277-PR.
• Citation: 108 P.3d 917,210 Ariz. 138
• Parties: Eleanora FERNANDEZ, individually and on behalf of all similarly situated persons, Plaintiff-Appellant, v. TAKATA SEAT BELTS, INC., Nissan North America, Inc.; General Motors Corporation; Ford Motor Company; DaimlerChrysler Corporation; SGS U.S. Testing Company, Inc., Defendants-Appellees.
• Court: Arizona Supreme Court

108 P.3d 917

210 Ariz. 138

Eleanora FERNANDEZ, individually and on behalf of all similarly situated persons, Plaintiff-Appellant, v. TAKATA SEAT BELTS, INC., Nissan North America, Inc.; General Motors Corporation; Ford Motor Company; DaimlerChrysler Corporation; SGS U.S. Testing Company, Inc., Defendants-Appellees.

No. CV-04-0277-PR.

Supreme Court of Arizona, En Banc.

March 24, 2005.

Rake & Catanese, PC, by David J. Catanese, Phoenix, Attorneys for Plaintiff-Appellant.

Bowman & Brooke, LLP, by Paul G. Cereghini, Jill S. Goldsmith, James C. Goodwin, Phoenix, Attorneys for Defendants-Appellees Takata Seat Belts, Inc., General Motors Corporation, and Nissan North America, Inc.

Carpenter & Lipps LLP, by Michael H. Carpenter, Columbus, Ohio, Attorneys for Defendant-Appellee Takata Seat Belts, Inc.

Snell & Wilmer LLP, by Martha E. Gibbs, Gregory J. Marshall, Phoenix and O'Melveny & Myers LLP, by Brian C. Anderson, Washington, D.C., Attorneys for Defendant-Appellee Ford Motor Company.

Snell & Wilmer LLP, by Patrick X. Fowler, Phoenix and Hogan & Hartson, LLP, by Lewis H. Goldfarb, Christopher B. Wren, New York, New York, Attorneys for Defendant-Appellee DaimlerChrysler Corporation.

Keller Rohrback, PLC, by Leon B. Silver, Phoenix, Attorneys for Defendant-Appellee SGS U.S. Testing Company, Inc.

Pacific Legal Foundation, by Deborah J. La Fetra, Gregory T. Broderick, Sacramento, California, Attorneys for Amicus Curiae Pacific Legal Foundation.

OPINION

RYAN, Justice.

¶ 1 In this case, we must decide whether a plaintiff who has no individual claim against a defendant may allege class action claims against that defendant and require the defendant to remain as a party to the lawsuit because she seeks to represent a class of other purported plaintiffs, some of whom may have claims against the defendant.

I

¶ 2 Eleanora Fernandez brought a class action lawsuit¹ against, among others, Takata Seat Belts, SGS U.S. Testing Company, Inc., Nissan North America, General Motors Corporation, Ford Motor Company, and DaimlerChrysler Corporation. She alleged fraudulent concealment, violation of the Arizona Consumer Fraud Act, unjust enrichment, and constructive trust. Fernandez claimed that between 1986 and 1999, several automobile manufacturers installed in their vehicles TK-52 seatbelt buckles manufactured by Takata and tested by SGS U.S. Testing. She alleged that the TK-52 buckles were defective because they could disengage in accidents. She also contended that all of the defendants knew about this supposed defect and that they concealed this risk from consumers.

¶ 3 The complaint did not specify the make or model of the automobile Fernandez owned. But she later conceded that she did not own a Nissan, General Motors, Ford, or DaimlerChrysler vehicle. These four automobile manufacturers filed a motion to dismiss for "failure to state a claim upon which relief can be granted." Ariz. R. Civ. P. 12(b)(6). The superior court dismissed all of Fernandez's claims, concluding that she had failed to allege essential elements of each of her four claims. ¶ 4 Fernandez appealed. The court of appeals affirmed the trial court's dismissal of her individual claims against the four automobile manufacturers. Fernandez v. Takata Seat Belts, et al., 1-CA-CV 03-0473, ¶¶ 11-12 (Ariz.App. June 10, 2004) (mem.decision). Under the standard of review for a motion to dismiss, however, the court stated that "until such time as the trial court issues an order determining whether a class action can be maintained in this case," it would "decline to review the viability of Plaintiff's class action claims against the automobile manufacturers in her representative capacity." Id. at ¶ 13.

¶ 5 The automobile manufacturers petitioned for review,² contending that Fernandez's "inability to assert individual claims against the automobile manufacturers precludes her from suing" them "on behalf of a proposed class." We granted review because this is a matter of first impression for this court. We have jurisdiction under Article 6, Section 5(3), of the Arizona Constitution, Arizona Revised Statutes ("A.R.S.") section 12-120.24 (2003), and Rule 23 of the Arizona Rules of Civil Appellate Procedure.

II

A

¶ 6 We have previously concluded that "the question of standing in Arizona is not a constitutional mandate since we have no counterpart to the `case or controversy' requirement of the federal constitution," Armory Park Neighborhood Ass'n v. Episcopal Cmty. Servs. in Ariz., 148 Ariz. 1, 6, 712 P.2d 914, 919 (1985) (citing State v. B Bar Enters., 133 Ariz. 99, 649 P.2d 978 (1982)), and thus, when addressing questions of standing "we are confronted only with questions of prudential or judicial restraint." Id. Nonetheless, we have established a rigorous standing requirement. "To gain standing to bring an action, a plaintiff must allege a distinct and palpable injury." Sears v. Hull, 192 Ariz. 65, 69, ¶ 16, 961 P.2d 1013, 1017 (1998) (citing Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). We will consider the merits of a case without such an injury "only in exceptional circumstances, generally in cases involving issues of great public importance that are likely to recur. The paucity of cases in which we have waived the standing requirement demonstrates both our reluctance to do so and the narrowness of this exception." Hull, 192 Ariz. at 71, ¶ 25, 961 P.2d at 1019.

¶ 7 Fernandez admits that she has never owned any vehicle manufactured by defendants. Instead, she owns or owned an automobile manufactured by Honda, which is not a party to the lawsuit.³ Moreover, Fernandez has not alleged that she has suffered any injury, either physical or economic, "fairly traceable" to the conduct of the four defendant automobile manufacturers. See Bennett v. Napolitano, 206 Ariz. 520, 525, ¶ 18, 81 P.3d 311, 316 (2003) ("To establish federal standing, a party invoking the court's jurisdiction must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.") (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)); see also Easter v. American W. Fin., 381 F.3d 948, 961 (9th Cir.2004) (holding that "[t]o satisfy the traceability requirement, a class action plaintiff must `allege a distinct and palpable injury to himself, even if it is an injury shared by a large class of other possible litigants'") (quoting Warth, 422 U.S. at 501, 95 S.Ct. 2197). Accordingly, because Fernandez cannot allege "a distinct and palpable injury" resulting from any conduct of the four automobile manufacturers, she has no standing to bring an individual claim against them. Hull, 192 Ariz. at 69, ¶ 16, 961 P.2d at 1017.

¶ 8 The court of appeals therefore properly affirmed the dismissal of her individual claims against the four automobile manufacturers. Fernandez, 1-CA-CV 03-0473, mem. dec. at 12.

B

¶ 9 Fernandez nonetheless contends that because she owns or did own a Honda, which allegedly has one of the defective TK-52 series seatbelt buckles, she has standing to represent a class of people who actually own automobiles manufactured by one of the automobile manufacturer defendants in this case.

¶ 10 Because a plaintiff who cannot allege that a defendant inflicted a distinct and palpable injury on her cannot sue that defendant, Hull, 192 Ariz. at 69, ¶ 16, 961 P.2d at 1017, it logically follows that the same plaintiff should not be able to sue that defendant by bringing a class action purporting to represent a class of people who actually were harmed by the defendant. To permit a plaintiff to do that would severely weaken, if not entirely eliminate, our standing requirement.

¶ 11 "Although we are not bound by federal jurisprudence on the matter of standing, we have previously found federal case law instructive." Bennett, 206 Ariz. at 525, ¶ 22, 81 P.3d at 316 (citing Armory Park, 148 Ariz. at 6, 712 P.2d at 919). With respect to the issue presented by this case, several United States Supreme Court decisions are instructive.

¶ 12 The Court has held that "if none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class." O'Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974). In addition, the Court has stressed that named plaintiffs in class actions "must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent." Warth, 422 U.S. at 502, 95 S.Ct. 2197; see also Lewis v. Casey, 518 U.S. 343, 357, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996) (standing requirements are "no less true with respect to class actions than with respect to other suits"); Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 40 n. 20, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) ("That a suit may be a class action, however, adds nothing to the question of standing...."); Allee v. Medrano, 416 U.S. 802, 828-29, 94 S.Ct. 2191, 40 L.Ed.2d 566 (1974) ("[A] named plaintiff cannot acquire standing to sue by bringing his action on behalf of others who suffered injury which would have afforded them standing had they been named plaintiffs; it bears repeating that a person cannot predicate standing on injury which he does not share. Standing cannot be acquired through the back door of a class action.") (Burger, C.J., concurring in the result in part and dissenting in part). Given that our class action rule mirrors the federal rule,⁴ we find these Supreme Court cases persuasive in deciding the issue presented by this case.

¶ 13 We hold, therefore, that the proper inquiry in a class action lawsuit must initially focus on whether the plaintiff has an individual claim against the defendant. If she does not, she cannot maintain a...