Saval v. BL Ltd.

Decision Date28 June 1983
Docket NumberNo. 82-1707,82-1707
Parties1983-2 Trade Cases 65,494 Leonard SAVAL and Saval-Director, Inc.; John Frost; Ann Frost; Michael Kilchenstein; Grace Kilchenstein, Appellants, v. BL LTD.; Jaguar Rover Triumph, Inc.; Royston Distributors, Inc.; Capital Motors, Ltd.; Manhattan Auto, Inc., Appellees.
CourtU.S. Court of Appeals — Fourth Circuit

Barbara S. Brewer, Baltimore, Md. (J. Hardin Marion, Tydings & Rosenberg, Baltimore, Md., on brief), for appellants.

George E. Hughes, III, Baltimore, Md. (Geoffrey S. Mitchell, Charles P. Goodell, Jr., Semmes, Bowen & Semmes, Baltimore, Md., on brief), for appellees.

Before HALL and ERVIN, Circuit Judges, and TURK, * District Judge.

PER CURIAM:

Appellants purchased twelve-cylinder Jaguar automobiles. 1 Each automobile developed defects which, according to appellants, were of six types: fluid leakage from the power steering system, engine overheating, engine and transmission oil leakage, vibration and pulsation of the front brakes, malfunctioning of the climate control systems, and malfunctioning of the electrical systems. Appellants believe that the foregoing problems resulted from a faultily designed cooling system. Each appellant was required to have his or her Jaguar repaired a number of times, but the problems were never remedied completely.

Appellants joined in what they maintain is their common cause and instituted suit in the United States District Court for the District of Maryland against everyone in the chain of distribution of these automobiles. The complaint alleged the existence of claims under the Magnuson-Moss Warranty Act--Federal Trade Commission Improvement Act, 15 U.S.C. Secs. 2301 et seq. ("Act"), and various state statutes and tort law doctrines. Appellants moved for dismissal of the complaint under Fed.R.Civ.P. 12(b). The district court dismissed the complaint in its entirety under Fed.R.Civ.P. 12(b)(1) on the ground that subject matter jurisdiction over the claims was lacking. 2 Appellants challenge this ruling.

Aggrieved consumers may sue to enforce rights under the Act in state, 15 U.S.C. Sec. 2310(d)(1)(A), or federal, 15 U.S.C. Sec. 2310(d)(1)(B), court. Federal court jurisdiction, however, is limited by 15 U.S.C. Sec. 2310(d)(3) which provides:

(3) 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.

Each of the appellants' claims exceeds twenty-five dollars, and the suit was not filed as a class action. Accordingly, we are concerned mainly with subsection (d)(3)(B), although subsections (d)(3)(A) and (C) may aid in its interpretation.

The court below, in dismissing the complaint, ruled that the total amount in controversy falls short of the $50,000 requirement. Appellants maintain that the threshold may be reached under one of three theories: (1) that their claims may be aggregated; (2) that each is entitled to attorneys fees, and that these may be added to each of their claims; and (3) that among their demands is a prayer for punitive damages, and that this is sufficient to bring any one of them within the jurisdictional limit. We conclude that the district court properly disallowed each of these three theories, and affirm the judgment below.

I.

Appellants argue, first, that, by aggregating the compensatory damages sought by each, the $50,000 requirement may be reached. They maintain that aggregation of the claims is proper because Sec. 2310(d)(3)(B) creates a "major new substantive right" of joinder which supersedes that found in Fed.R.Civ.P. 20. 3

This conclusion cannot be reached from the language of the statute itself. All that is certain from Sec. 2310(d)(3)(B) is that aggregation of claims is contemplated in some cases; it says nothing about what types of cases. The fact that Sec. 2310(d)(3)(C) sets forth an additional requirement for class actions reveals further that aggregation of claims is permissible when the parties are not suing as a class.

The legislative history does not address this specific issue. Several comments in the House Report, however, are helpful: "The purpose of these jurisdictional provisions is to avoid trivial or insignificant actions being brought as class actions in the federal courts." H.R.Rep. No. 93-1107, 93d Cong., 2d Sess., reprinted in [1974] U.S.Code, Cong. & Ad.News 7702, 7724. Further, it provides:

Under the monetary and other limitation included in subsection (d), no action could be brought in a United States district court unless the overall matter in controversy exceeded $50,000 exclusive of interests and cost, and no individual claim could be aggregated in any such action by joinder or in a class action unless it exceeded $25.

Id. (emphasis supplied). The underscored language suggests that the ordinary rules of joinder should apply in such actions. Indeed, we can find no support for appellants' assertion that a "substantive right of joinder" is contemplated by the Act. Rather, the Act allows aggregation of the claims of plaintiffs who are otherwise properly joined. The right to aggregate cannot be equated with the right of joinder.

Further, the attempt to characterize joinder as a "substantive right" is troublesome. Joinder is usually thought of as a procedural device by which parties with similar substantive claims might jointly enforce them. Were the statute an affirmative grant of the right to join under circumstances which might not otherwise exist, then perhaps it could be viewed as creating a "substantive" right. But Sec. 2310(d) is not such an affirmative grant; it is a restriction on the exercise of subject matter jurisdiction, and does not even mention "joinder." Claims not enforceable in federal court because of the restrictions found in Sec. 2310(d)(3) may be brought in state court. 15 U.S.C. Sec. 2310(d)(1)(A). The provision only describes the methods for enforcing the Act's substantive rights. (In fact, Sec. 2310 is entitled "Remedies." Pub.L. No. 93-637, Sec. 110, 88 Stat. 2189 (1974).)

Were we to accept plaintiff's rationale, no basis could be found to disallow the joinder of completely unrelated claims. (Appellants do not suggest what the parameters of any such substantive right of joinder should be.) This would be inconsistent with the structure of Sec. 2310(d), which is designed to restrict access to federal courts. Accordingly, we hold that the court below properly considered the issue of aggregation under the principles of joinder found in Fed.R.Civ.P. 20.

Appellants argue in the alternative that their claims satisfy the requirements of Rule 20, and that the district court's finding that they do not was "clearly erroneous." The proper standard of review, however, is whether the trial judge abused his discretion in denying joinder of these parties. Mosley v. General Motors Corp., 497 F.2d 1330, 1332 (8th Cir.1974). 4 We conclude that the district court judge did not abuse his discretion in denying joinder.

The district court held specifically that these parties did not satisfy the "transaction or occurrence" test of Rule 20. Application of this test has generally proceeded on a case by case basis. Id., 497 F.2d at 1333. The "transaction or occurrence test" of the rule "would permit all reasonably related claims for relief by or against different parties to be tried in a single proceeding. Absolute identity of all events is unnecessary." Id. Further, the rule should be construed in light of its purpose, which "is to promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits." Id., 497 F.2d at 1332. See, generally, 7 C. Wright & A. Miller, Federal Practice and Procedure: Civil Sec. 1652 (1972 & Supp.1983).

Plaintiffs complain essentially that they purchased their automobiles and experienced similar problems, none of which could be fixed satisfactorily. The district court found that the appellants' analysis "conveniently glosses over the differences between the unique histories of each of the four automobiles." District Court Mem.Op. at 3. Further, the court found that appellants had "not demonstrated that any of the alleged similar problems resulted from a common defect." Id. Plaintiffs argue that the similar problems do satisfy the transaction or occurrence requirement. Further, they argue that they need not, to prevail on their warranty claims, establish a common cause for the defects.

The district court did not err in determining that the allegedly similar problems did not satisfy the transaction or occurrence test. The cars were purchased at different times, were driven differently, and had different service histories. Quite probably, severance would have been required in order to keep straight the facts pertaining to the separate automobiles. At least as to the warranty claims, the similarity of defects is irrelevant; each complainant need only demonstrate what warranties were made, and the extent to which the products differed therefrom.

Appellants also maintain that the "transaction or occurrence" requirement was satisfied because each plaintiff relied on common misrepresentations and received identical warranties. Appellees counter that there has been no proof of reliance on the common misrepresentations, and that the same warranty was not given to each plaintiff. (The affidavit of John T. Verdeaux, p 3, and the exhibits attached thereto, tend to support appellees' contention in the latter regard.) The district court did not address these specific grounds for joinder under Rule 20, and appellees say that appellants never...

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