Rosack v. Volvo of America Corp.

• Decision Date: 18 May 1982
• Citation: 182 Cal.Rptr. 800,131 Cal.App.3d 741
• Court: California Court of Appeals Court of Appeals
• Parties: , 1982-83 Trade Cases P 65,145 Charlene P. ROSACK, Plaintiff and Appellant, v. VOLVO OF AMERICA CORPORATION et al., Defendants and Respondents. Civ. 45210.

Page 800

182 Cal.Rptr. 800

131 Cal.App.3d 741, 1982-83 Trade Cases P 65,145

Charlene P. ROSACK, Plaintiff and Appellant, v. VOLVO OF AMERICA CORPORATION et al., Defendants and Respondents.

Civ. 45210.

Court of Appeal, First District, Division 3, California.

May 18, 1982.

Hearing Denied Aug. 25, 1982.

Joseph W. Cotchett, Susan Illston, David M. McKim, Cotchett, Dyer & Illston, Harold C. Wright, San Mateo, Ernest S. Pierucci, Oakland, Law Offices of Harold C. Wright, San Mateo, Robert E. Cartwright, Michael B. Moore, Cartwright, Sucherman, Slobodin & Fowler, Inc., San Francisco, for plaintiff and appellant.

Paul, Hastings, Janofsky & Walker, Daniel H. Williams, III, Douglas C. Conroy, Robert S. Span, Santa Monica, Ropers, Majeski, Kohn, Bentley & Wagner, Walter C. Kohn, Redwood City, for defendants and respondents.

BARRY-DEAL, Associate Justice.

Appellant, Charlene P. Rosack, appeals from the trial court's order dismissing the class action after denial of her motion for class certification in her antitrust suit against Volvo ¹ for treble damages for violation of the Cartwright Act (Bus. & Prof.Code, § 16700 et seq.). The dismissal was operative only against the class and not against the named plaintiff, Charlene P. Rosack, purporting to represent the class.

The parties raise a number of issues: (1) is the denial of class certification an appealable order? (2) do common issues of law or fact predominate, and specifically is the "fact of injury" to each member of the class capable of generalized as opposed to individualized proof? (3) is the class action unmanageable? and (4) is appellant typical of the class she purports to represent?

1. Statement of Facts

Appellant filed suit on March 12, 1976, on behalf of herself and a class of persons ² representing California retail automobile purchasers between 1967 and 1976 against the manufacturer of Volvo automobiles and its United States distributors. Appellant alleges a vertical retail price management scheme whereby Volvo coerced its dealers into giving little or no discount from the "Monroney" automobile sticker price, ³ thus conspiring to artificially maintain the price of Volvo automobiles above free competitive levels in violation of California's antitrust legislation, the Cartwright Act (Bus. & Prof.Code, § 16700 et seq.). The Volvo dealers, although alleged to be part of the conspiracy, are not named defendants in this action. The record does not reflect the number of dealers involved; 48 dealers throughout California filed affidavits disclaiming any part in a conspiracy with Volvo.

The complaint originally included an alleged improper tie-in of Volvo-made parts and accessories to the purchase of a Volvo automobile; defendants' demurrer to this cause of action was sustained without leave to amend. The year 1972 was set as the cut-off date for the statute of limitations. Purchasers of parts (independent of new car purchasers) and lessees were eliminated as members of the proposed class. Motions to quash by the parent company, A. B. Volvo, and by Volvo of America for lack of jurisdiction were denied. ⁴

Volvo removed the case to the United States District Court for the Northern District of California; appellant moved to have the case remanded to the superior court. The United States Supreme Court ultimately ordered the case remanded to the superior court on October 19, 1976. (Rosack v. Volvo of America Corp. (N.D.Cal.1976) 421 F.Supp. 933; Volvo of America Corp. v. Schwarzer (1976) 429 U.S. 1331, 97 S.Ct. 284, 50 L.Ed.2d 273.)

Appellant's motion for certification of the class and numerous opposing motions of respondents relating to class certification were consolidated for hearing in February 1978. On May 22, 1978, the court filed a memorandum of decision denying appellant's motion. The class allegations were dismissed, and a final order dismissing the class action was entered on June 21, 1978.

In its memorandum of decision, the trial court considered the central issue to be whether common questions of law or fact predominated over individual issues. The court was satisfied that existence of a conspiracy to fix prices, and that prices were in fact fixed, could be proved on a class basis. The court was unconvinced, however, that "injury" to the class members could be shown on a common basis, i.e., that each member of the class purchased at prices which were higher as a result of the price-fixing conspiracy. Additionally, the court found that class proof of injury in this case would be unmanageable and that the named plaintiff had not shown that she was representative of the purported class. Appellant having failed to carry her burden of establishing a community of interest as a matter of fact and by a preponderance of the evidence, the trial court denied appellant's motion for certification.

2. Appellate Review

Respondents claim that there is disagreement among California authorities on whether an order denying class certification is appealable under the requirement of Code of Civil Procedure section 904.1 (formerly § 963) providing in essence that an appeal may be taken only from a final judgment. They point out that the "California Supreme Court has ... stated that federal cases interpreting Rule 23 of the Federal Rules of Civil Procedure are persuasive in California class action cases" and urge us to follow the recent United States Supreme Court decision, Coopers & Lybrand v. Livesay (1978) 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351, holding that an order denying class certification is not appealable. ⁵

California appellate courts have generally granted review of an intermediate order relating to class certification, although the procedures for seeking review have varied and the opinions have presented seemingly inconsistent views. Most of the earlier cases reached the appellate court by writ or appeal at the pleading stage after a demurrer to the class action was sustained or a motion to strike the class allegations was granted. (See, e.g., Weaver v. Pasadena Tournament of Roses (1948) 32 Cal.2d 833, 198 P.2d 514 [writ--no discussion of the right to review]; Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 63 Cal.Rptr. 724, 433 P.2d 732 [appeal].) In 1971 the California Supreme Court in Vasquez v. Superior Court (1971) 4 Cal.3d 800, 820-821, 94 Cal.Rptr. 796, 484 P.2d 964, suggested that trial courts utilize the procedural provisions of the Consumers Legal Remedies Act (Civ.Code, § 1780 et seq.), which provides for a hearing, upon notice and motion, supported by affidavits, to determine if a class action is proper. Since that time, the majority of cases have reached the appellate court via a direct appeal from the intermediate order on certification of the class or an extraordinary writ seeking to compel the trial court to vacate or grant an order for certification. ⁶

Cases holding that an order denying class certification is appealable stem from Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 63 Cal.Rptr. 724, 433 P.2d 732. In Daar the trial court, after determining that plaintiff could not maintain a class action, sustained defendant's demurrer without leave to amend and transferred plaintiff's individual action to the municipal court. The Supreme Court held that even though an order sustaining a demurrer was not a final judgment and was nonappealable, the effect of the transfer was a determination that the complaint as a class action was legally insufficient and was "tantamount to a dismissal of the action as to all members of the class other than plaintiff." (Id., at p. 699, 63 Cal.Rptr. 724, 433 P.2d 732.) Thus the legal effect of the order was that of a final judgment, and an appeal would lie. (See, e.g., Collins v. Rocha (1972) 7 Cal.3d 232, 102 Cal.Rptr. 1, 497 P.2d 225 [no discussion]; Petherbridge v. Altadena Fed. Sav. & Loan Assn. (1974) 37 Cal.App.3d 193, 112 Cal.Rptr. 144; Hamwi v. Citinational-Buckeye Inv. Co. (1977) 72 Cal.App.3d 462, 140 Cal.Rptr. 215; Morrissey v. City and County of San Francisco (1977) 75 Cal.App.3d 903, 142 Cal.Rptr. 527.) Unlike Petherbridge, Hamwi, and Morrissey, supra, where the plaintiff's individual action remained viable in the superior court, in Anthony v. General Motors Corp. (1973) 33 Cal.App.3d 699, 109 Cal.Rptr. 254, the plaintiffs refused to amend their complaint to state individual causes of action, and an appeal was properly taken from the judgment of dismissal of the action.

Cases holding that an appeal will not lie from an order on class certification when the order disposes of less than all the causes of action between the parties rely on Vasquez v. Superior Court, supra, 4 Cal.3d 800, 94 Cal.Rptr. 796, 484 P.2d 964. In Vasquez the demurrer to plaintiffs' first cause of action, a class action for fraud, was sustained as to the class, but the demurrer to plaintiffs' second cause of action, a class action charging violation of the Unruh Act (Civ.Code, § 1801 et seq.), was overruled. Plaintiffs sought a writ of mandate; defendants asserted that plaintiffs had an adequate remedy by appeal. The Supreme Court, affirming that an appeal under these circumstances "would violate the rule that an appeal may be taken only from a final judgment," concluded "that since plaintiffs cannot appeal from the order which bars a substantial portion of their cause from being heard on the merits, their petition for writ of mandate deserves consideration." (Vasquez v. Superior Court, supra, 4 Cal.3d at pp. 806-807, 94 Cal.Rptr. 796, 484 P.2d 964, see, e.g., Petherbridge v. Prudential Sav. & Loan Assn. (1978) 79 Cal.App.3d 509, 513, 145 Cal.Rptr. 87 [order refusing certification not appealable, but reviewable on appeal from judgment on plaintiff's individual action].)

Since Vasquez, review of an intermediate order on class certification has most frequently been through use of an extraordinary writ. (See, e.g., City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 115 Cal.Rptr. 797, 525 P.2d 701 [writ...