In re Bridgestone/Firestone, Inc. Tires Products

• Decision Date: 27 July 2001
• Docket Number: No. IP-00-9373-C-B/S.,IP-00-9373-C-B/S.
• Citation: 155 F.Supp.2d 1069
• Parties: In re BRIDGESTONE/FIRESTONE, INC. TIRES PRODUCTS LIABILITY LITIGATION.
• Court: U.S. District Court — Southern District of Indiana

155 F.Supp.2d 1069

In re BRIDGESTONE/FIRESTONE, INC. TIRES PRODUCTS LIABILITY LITIGATION.

No. IP-00-9373-C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

July 27, 2001.

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Don Barrett, Barrett Law office, PA, Lexington, MS, Victor Manuel Diaz, Jr., Podhurst Orseck Josefberg & Eaton, Miami, FL, Mike Eidson, Colson Hicks Eidson, Coral Gables, FL, Irwin B. Levin, Cohen & Malad, Indianapolis, IN, William E. Winingham, Wilson Kehoe & Winingham, Indianapolis, IN, for Plaintiffs.

John H. Beisner, O'Melveny & Myers LLP, Washington, DC, Daniel P. Bryon, McHale Cook & Welch, PC, Indianapolis, IN, Mark Herrmann, Jones Day Reavis & Pogue, Cleveland, OH, Thomas S. Kilbane, Squire Sanders & Dempsey LLP, Cleveland, OH, Mark Merkle, Krief Devault Alexander & Capehart, Indianapolis, IN, Randall Riggs, Locke Reynolds, LLP, Indianapolis, IN, Colin P. Smith, Holland & Knight LLP, Chicago, IL, Thomas G. Stayton, Baker & Daniels, Indianapolis, IN, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART THE MOTION TO DISMISS THE MASTER COMPLAINT

BARKER, District Judge.

This cause is before the Court on the Motion to Dismiss the Master Complaint in this Multi District Litigation("MDL"), filed by defendantsBridgestone/Firestone, Inc., ("Firestone") and Ford Motor Company("Ford").The motion is fully briefed, and the Court, being duly advised, GRANTS IN PART AND DENIES IN PART the motion for the reasons set forth below.¹

BACKGROUND

The Master Complaint, which was filed in this Court on January 2, 2001, combines dozens of class action complaints involving Firestone tires that were filed in or removed to federal district courts throughout the country and transferred to this MDL proceeding.The named Plaintiffs in the Master Complaint are residents of 27 different states² who seek to represent a class ("the Tire Class") essentially consisting of "all persons and entities in the United States who now own or lease, or owned or leased, vehicles that are or were equipped with Firestone-brand ATX, ATX II, FirehawkATX, ATX 23 Degree, Widetrack Radial Baja, Wilderness, or other comparably designed or manufactured Firestone-brand, steel-belted radial tires"("the Tires") and a separate class ("the Explorer Diminution Class")³ essentially consisting of "all persons and entities in the United States who now own or lease, or owned or leased, Ford Explorer sport-utility vehicles, regardless of the tires with which those Explorers were equipped."⁴Defendant Firestone is an Ohio corporation with its principal place of business in Nashville, Tennessee.Defendant Ford is a Delaware corporation with its principal place of business in Dearborn, Michigan.⁵

The specific claims asserted in the Master Complaint are set out in detail below, but in general Plaintiffs allege that the Tires are defective due to their design and/or method of manufacture.The defect causes the Tires to have "an unreasonably dangerous propensity to suffer complete or substantial tread separation or `belt leaves belt' separation."Master Complaint, ¶ 4.In addition, Plaintiffs allege that certain models of the Ford Explorer have "significant handling and stability defects" which created "a substantial risk of rollovers and other safety problems."Id.,¶¶ 63-66, 70.In order to compensate for these stability defects, Plaintiffs allege that Ford and Firestone agreed to lower the recommended tire pressure on the Firestone tires that were used as original equipment on the Explorer.This had the effect of lowering the likelihood of rollover accidents, but also had the effect of exacerbating the tire defect and "substantially increas[ing] the risk of tread separation and other catastrophic tire failures."Id.at ¶¶ 70-71.

The Master Complaint asserts federal claims pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d)(1), and the Racketeer Influenced and Corrupt Organizations Act("RICO"), 18 U.S.C. § 1962, and pendent state law claims for unjust enrichment, breach of express warranty, breach of implied warranty, negligence, violation of consumer protection statutes, and redhibition (under Louisiana statute).The Master Complaint specifically excludes any claims for personal injury or wrongful death resulting from accidents caused by the alleged defects; rather, it seeks remedies for those Tire and Explorer owners who have not been involved in accidents, but allegedly have suffered injury simply because they own(ed) or lease(d) defective vehicles or vehicles with defective tires.

ANALYSIS OF DEFENDANTS' MOTION TO DISMISS

I.Choice of Law

Defendants have moved to dismiss the Master Complaint on a variety of grounds.Before addressing any of the arguments raised by Defendants, we must first determine the appropriate law to apply to each of Plaintiffs' claims.For the federal claims asserted in the Master Complaint, the answer is relatively straightforward: for any questions of federal law about which federal circuits disagree, this Court, as the transferee court, applies the law of the federal circuit in which it sits, in this case the Seventh Circuit.In re Korean Air Lines Disaster of September 1, 1983,829 F.2d 1171, 1176(D.C.Cir.1987)("[T]he law of a transferor forum on a federal question ... merits close consideration, but does not have stare decisis effect in a transferee forum situated in another circuit."), judgment aff'd. byChan v. Korean Air Lines, Ltd.,490 U.S. 122, 109 S.Ct. 1676, 104 L.Ed.2d 113(1989);Eckstein v. Balcor Film Investors,8 F.3d 1121, 1126(7th Cir.1993)("We agree with Korean Air Lines that a transferee court normally should use its own best judgment about the meaning of federal law when evaluating a federal claim....").

The choice of law issue for the state law claims in the Master Complaint is more complex, however.The threshold question is whether the relevant substantive laws of the different states involved are sufficiently different to require a choice of law analysis.SeeJean v. Dugan,20 F.3d 255, 260(7th Cir.1994)(citation omitted)("This court has held that before `entangling itself in messy issues of conflict of laws a court ought to satisfy itself that there actually is a difference between the relevant laws of the different states.'").We conclude that Defendants have demonstrated such differences in the relevant states' laws.

We move to the next question, that is, which state's choice of law analysis should be used.Guidance is provided by the Seventh Circuit's holding that the choice of law rules of the forum state must be applied to determine the appropriate law to be applied to state law claims, whether they are premised on diversity of citizenship or are pendent to federal claims.Baltimore Orioles, Inc. v. Major League Baseball Players Ass'n,805 F.2d 663, 681(7th Cir.1986).In MDL proceedings, the forum state generally is the state in which the transferor court of each individual action sits; in other words, the transferee court must make an independent choice of law determination for each state from which a case was transferred into the MDL proceeding.SeeIn re Air Crash Disaster Near Chicago, Ill., on May 25, 1979,644 F.2d 594, 610(7th Cir.1981)(citingKlaxon Co. v. Stentor Elec. Mfg. Co.,313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477(1941);Van Dusen v. Barrack,376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945(1964);In Re Air Crash Disaster at Boston, Mass., on July 31, 1973,399 F.Supp. 1106(D.Mass.1975)).However, the parties agree that this Court should be treated as the forum court because Plaintiffs filed their Master Complaint in this Court.Indiana's choice of law rules therefore are applicable.

A.Law Applicable to Plaintiffs' Tort Claims

The Master Complaint asserts a common law negligence claim, as well as a claim for violation of state consumer protection statutes, the latter of which we view to be most closely analogous to a common law tort claim for fraudulent misrepresentation and therefore subject to the choice of law analysis for tort claims.⁶Indiana follows a modified form of the traditional lex loci delicti commissi rule in analyzing the choice of law question in tort cases.Hubbard Mfg. Co., Inc. v. Greeson,515 N.E.2d 1071(Ind.1987).Under the traditional rule, the substantive law of the "place of the tort" is applied-that is, the state in which the last event necessary to make the defendant liable for the alleged wrong took place, typically the state in which the injury occurred.Id. at 1073.Under the modified rule established by the Indiana Supreme Court in Greeson, this rule applies unless the place of the tort "bears little connection to the legal action."In those cases, other factors are considered, such as:

1) the place where the conduct causing the injury occurred;

2) the residence or place of business of the parties; and

3) the place where the relationship between the parties is centered.

Id. at 1073-74(citingRestatement (Second) of Conflicts of Laws§ 145(2)(1971))."These factors should be evaluated according to their relative importance to the particular issues being litigated."Id. at 1074.

Following the dictates of Greeson,we begin our choice of law analysis for the tort claims in the Master Complaint by determining the place of the tort for each named Plaintiff.As noted above, the place of the tort typically is the state in which the injury to the plaintiff occurred.In this case, Defendants argue, and Plaintiffs do not dispute, that any injury suffered by Plaintiffs occurred in each Plaintiff's home state, or perhaps more precisely in the state in which each Plaintiff purchased an Explorer or one or more of the Tires.

Whether these states "bear little connection" to this litigation turns on the nature of the tort claims in this action.The essence of Plaintiffs'...