Floyd v. Am. Honda Motor Co.

• Decision Date: 28 July 2020
• Docket Number: No. 18-55957,18-55957
• Citation: 966 F.3d 1027
• Parties: Heather FLOYD; Jody Schutte; Kate Zaiger, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. AMERICAN HONDA MOTOR CO., INC., a California Corporation; Honda North America, Inc., a Delaware Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

966 F.3d 1027

Heather FLOYD; Jody Schutte; Kate Zaiger, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,

v.AMERICAN HONDA MOTOR CO., INC., a California Corporation; Honda North America, Inc., a Delaware Corporation, Defendants-Appellees.

No. 18-55957

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 11, 2019 Pasadena, California

Filed July 28, 2020

Gregory F. Coleman (argued), Adam A. Edwards, Mark E. Silvey, Lisa A. White, and Rachel Soffin, Greg Coleman Law PC, Knoxville, Tennessee; Robert R. Ahdoot and Theodore W. Maya, Ahdoot & Wolfson PC, Los Angeles, California; for Plaintiffs-Appellants.

Eric Y. Kizirian (argued) and Michael Grimaldi, Lewis Brisbois Bisgaard & Smith LLP, Los Angeles, California; Jeffry A. Miller and Brittany B. Sutton, Lewis Brisbois Bisgaard & Smith LLP, San Diego, California; for Defendants-Appellees.

Before: Danny J. Boggs,^** Carlos T. Bea, and Andrew D. Hurwitz, Circuit Judges.

OPINION

BOGGS, Circuit Judge:

In this putative class action, plaintiffs raise warranty claims arising out of crashes or injuries caused by the alleged "rollaway effect" of certain Honda Civic vehicles. Plaintiffs appeal from the dismissal of their Magnuson-Moss Warranty Act ("MMWA") claim and their state-law claims for express and implied warranty against American Honda Motor Co., Inc. and Honda North America, Inc. (collectively, "Honda").

The question for decision is whether the Class Action Fairness Act ("CAFA") overrides the MMWA's requirement to name one hundred plaintiffs. This is an issue of first impression in this circuit, and we hold today that CAFA may not be used to evade the specific numerosity requirement of the MMWA.

I. BACKGROUND

Plaintiffs are owners or lessors of 2016, 2017, and 2018 models of Honda Civic vehicles who experienced a "rollaway effect" of the vehicle's continuously variable transmission that, on occasion, failed to activate the electric parking brake automatically. Plaintiffs allege that Honda's reliance on visual feedback in the absence of tactile feedback in the affected vehicles caused them to be unable to determine whether the parking brake had been properly engaged, which resulted in vehicles unintentionally rolling away and sometimes causing crashes or injuries. Plaintiffs allege that the transmission is inherently defective and that Honda failed to disclose the defect.

In December 2017, Plaintiff Heather Floyd, a citizen of Tennessee, filed a putative class action in the district court raising a federal claim under the MMWA and a variety of state-law claims. An amended complaint¹ joined Jody Schutte, a citizen of Wisconsin, and Kate Zaiger, a citizen of California, as plaintiffs, added Wisconsin and California subclasses, and alleged additional state-law claims.

The district court dismissed the First Amended Complaint, holding that the MMWA claim was not cognizable due to the complaint's failure to name one hundred plaintiffs. Noting that Plaintiffs had invoked supplemental jurisdiction over their state-law claims, the district court declined to exercise jurisdiction over those claims in light of its dismissal of the only federal claim. The district court, however, did not separately address whether jurisdiction existed over the state-law claims under CAFA.

Plaintiffs did not amend the First Amended Complaint and instead filed their notice of appeal on July 12, 2018, while final disposition of the district-court case was pending. The district court terminated the case on July 26, 2018 with a final order after Plaintiffs failed to file an amended complaint. Plaintiffs’ notice of appeal was not amended after the termination.

II. ANALYSIS

A. Jurisdiction

The parties dispute whether the district court's order granting the motion to dismiss without stating whether it was granted with or without prejudice, and without explicitly granting leave to amend, constituted a final disposition of the action under 28 U.S.C. § 1291.

Plaintiffs argue that we have jurisdiction because the district court intended its dismissal to be final and appealable. See Mendiondo v. Centinela Hosp . Med. Ctr ., 521 F.3d 1097, 1102 (9th Cir. 2008). In Mendiondo , the district court dismissed all of the plaintiffs’ claims and did not address a request for leave to amend, but also did not enter final judgment. Id. Although "[o]rdinarily an order dismissing the complaint rather than dismissing the action is not a final order and thus not appealable," when "it appears that the district court intended the dismissal to dispose of the action, it may be considered final and appealable." Knevelbaard Dairies v. Kraft Foods, Inc. , 232 F.3d 979, 983 (9th Cir. 2000) (citations omitted). The court in Mendiondo therefore "infer[red] that the district court intended to make the dismissal final for purposes of § 1291" because it did not address plaintiffs’ request for leave to amend. 521 F.3d at 1102 ; Cf. WMX Techs., Inc. v. Miller , 104 F.3d 1133, 1136 (9th Cir. 1997) ("[A] plaintiff, who has been given leave to amend, may not file a notice of appeal simply because he does not choose to file an amended complaint. A further district court determination must be obtained."). But in our case Plaintiffs did not request leave to amend their First Amended Complaint when all their claims were dismissed; instead, they filed a notice of appeal before their action was terminated.

Honda, on the other hand, argues that the district court never intended the order dismissing the action to be final, because the district court did not file its final order until two weeks after Plaintiff's notice of appeal and six weeks after issuance of the order to dismiss. See Disabled Rights Action Comm. v. Las Vegas Events, Inc ., 375 F.3d 861, 870 (9th Cir. 2004) ("A decision is ‘final’ within the meaning of § 1291 if it ‘(1) is a full adjudication of the issues, and (2) clearly evidences the judge's intention that it be the court's final act in the matter.’ " (quoting Casey v. Albertson's Inc. , 362 F.3d 1254, 1258 (9th Cir. 2004) )).

But we need not resolve the issue of whether the district court intended its grant of the motion to dismiss to constitute a termination of the case, because the subsequent final disposition of the case by a final order cured any prematurity of Plaintiffs’ appeal. See Fed. R. App. P. 4(a)(2) ("A notice of appeal filed after the court announces a decision or order—but before the entry of the judgment or order—is treated as filed on the date of and after the entry."). " Rule 4(a)(2) provides an exception for premature appeals" as it "was intended to protect the unskilled litigant who files a notice of appeal from a decision that he reasonably but mistakenly believes to be a final judgment, while failing to file a notice of appeal from the actual final judgment." Kennedy v. Applause, Inc ., 90 F.3d 1477, 1482–83 (9th Cir. 1996) (second quoting FirsTier Mortg. Co. v. Inv'rs Mortg. Ins. Co ., 498 U.S. 269, 276, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991) ).

The district court granted Honda's motion to dismiss on June 13, 2018. Plaintiffs filed a notice of appeal a month later, on July 12, 2018. Two weeks after the notice of appeal, on July 26, 2018, the district court closed the case, stating that no amended complaint had been filed. "There's no penalty for filing a premature notice of appeal." Orr v. Plumb , 884 F.3d 923, 931 (9th Cir. 2018). See also 16A Charles Alan Wright et al., Federal Practice & Procedure § 3950.2 (5th ed. 2020) ("When a judge neglects to enter a judgment on a separate document, the parties may be confused about the judge's intentions. However, if the judge does nothing further in the case for 150 days, then it ordinarily should occur to even the most inattentive of appellate counsel that it is time either to seek clarification from the judge or to file an appeal."). Here, Plaintiffs filed a notice of appeal a month after the dismissal of their claims but two weeks before the district-court case was closed. Whether Plaintiffs’ notice of appeal was premature or not, the final disposition of the case by the district court cures any timeliness defects of their appeal pursuant to Federal Rule of Appellate Procedure 4(a)(2), and we have jurisdiction to review it under 28 U.S.C. § 1291.

B. MMWA's Requirement to Name One Hundred Plaintiffs

The Magnuson-Moss Warranty Act, Pub. L. No. 93-637, 88 Stat. 2183 (1975), provides a cause of action for express and implied warranty claims under state law. It allows

a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, [to] bring suit for damages and other legal and equitable relief—

(A) in any court of competent jurisdiction in any State or the District of Columbia; or

(B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection.

15 U.S.C. § 2310(d)(1). However, the Act imposes specific limitations on the exercise of jurisdiction by federal courts:

No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection—

(A) if the amount in controversy of any individual claim is less than the sum or value of $25;

(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or

(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.

Id. § 2310(d)(3).

Whether the numerosity requirement of § 2310(d)(3)(C) applies to class-action claims brought under the Magnuson-Moss Warranty Act has been called into question by district courts following the enactment of the Class Action Fairness Act of 2005, Pub. L. 109-2, 119 Stat. 4 (2005) ("CAFA"). CAFA grants district courts

original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value

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