Ysbrand v. DaimlerChrysler Corp.

• Decision Date: 25 February 2003
• Docket Number: No. 97,469.,97,469.
• Citation: 81 P.3d 618,2003 OK 17
• Parties: Sheryl YSBRAND and Mary Cooney, individually and on behalf of all others similarly situated, Appellees, v. DAIMLERCHRYSLER CORPORATION, a Delaware corporation, individually and as successor in Interest to Chrysler Corporation and Chrysler Corporation, a Delaware corporation, individually, Appellants.
• Court: Oklahoma Supreme Court

81 P.3d 618

2003 OK 17

Sheryl YSBRAND and Mary Cooney, individually and on behalf of all others similarly situated, Appellees, v. DAIMLERCHRYSLER CORPORATION, a Delaware corporation, individually and as successor in Interest to Chrysler Corporation and Chrysler Corporation, a Delaware corporation, individually, Appellants.

No. 97,469.

Supreme Court of Oklahoma.

February 25, 2003.

Rehearing Denied November 6, 2003.

Clyde A. Muchmore, Harvey D. Ellis, Jr., Courtney K. Warmington, Crowe & Dunlevy, Oklahoma City, OK, Peter W. Herzog, III, Bryan Cave, St. Louis, MO, Thomas G. Wolfe, Lyndon W. Whitmire, Phillips, McFall, McCaffrey, McVay & Murrah, Oklahoma City, OK, for Appellants.

Harry Scoufos, Sallisaw, OK, Darleen Jacobs, New Orleans, LA, James Minge, New Orleans, LA, Joseph J. McKernan, Baton Rouge, LA, Patrick W. Pendley, Plaquemine, LA, Robert E. Reeves, Lexington, KY, Anthony Majestro, Masters & Taylor, Charleston, WV, Stephen E. Van Gaasbeck, San Antonio, TX, for Appellees.

HODGES, J.

¶ 1 This opinion reviews the trial court's determination that this dispute meets the requirements for a class action found at Title 12, section 2023, of the Oklahoma Statutes. The class certification order is affirmed as to the warranty claims asserted but is reversed as to the claim for fraud and deceit.

¶ 2 Defendant, DaimlerChrysler, is a Delaware corporation with its principal place of business in Michigan. It manufactured over one million 1996 and 1997 model "minivans" equipped with front passenger seat air bags. Plaintiffs, each an owner of one of the minivans, have asserted Uniform Commercial Code claims for "breach of express warranty," "breach of implied warranty of merchantability," and "breach of implied warranty of fitness." In addition, they assert a claim for "fraud and deceit."

¶ 3 Plaintiffs' claims are based on their assertion that the front passenger seat air bags are defective due to "1) their propensity to deploy with overly aggressive force and 2) their propensity to deploy during a low speed collision." Plaintiffs further assert that DaimlerChrysler failed to warn purchasers that this defect has the potential to kill or seriously injure a child or small adult seated in the front passenger seat.¹ According to Plaintiffs, there are air bags available which deploy with less force and at higher collision speeds. They claim that these bags are currently used as replacements when a bag has been deployed. Plaintiffs seek damages in an amount sufficient to allow owners to install the "safer" air bags or, in the alternative, replacement of the "defective" air bags by DaimlerChrysler.

¶ 4 Following initial discovery and a hearing, the trial court issued a twenty-one page order certifying a class consisting of Plaintiffs and

[a]ll entities and adult persons domiciled or residing in any of the fifty states of the United States of America or in the District of Columbia, who purchased and who, according to motor vehicle registration records maintained by their respective states or districts of residence or domicile, can be identified as the current owner of at least one (1) model year 1996-1997 "minivan" automobile marketed by defendant as Chrysler Town & Country or Chrysler Minivan or Plymouth Voyager or Plymouth Grand Voyager or Dodge Caravan, which was manufactured by defendant for sale in any of the fifty states of the United States of America or the District of Columbia, or which defendant marketed in any of the fifty states of the United States of America or the District of Columbia as a product of its own manufacture, which was configured at the time of original sale or occupancy by at least five (5) passengers, and which contains on the driver side and/or passenger side of the forward seating area a passive restraint system commonly known as an "air bag," which employs a fabric-covered envelope designed to expand rapidly with sodium azide or other gases and thus cushion a front-seat occupant when the system is activated by a sensor during a frontal collision.

Excluded from the class were (1) those who have suffered personal injury from air bag deployment, (2) DaimlerCrysler employees and affiliates, (3) judges and judicial personnel, (4) those who have had their air bags deactivated, and (5) those who had the original air bags replaced.² DaimlerChrysler now appeals the class certification order and the matter has been retained for this Court's review.

¶ 5 A trial court's class certification order is reviewed for abuse of discretion. Scoufos v. State Farm Fire & Cas. Co., 2001 OK 113, 41 P.3d 366, 367. "An abused judicial discretion is manifested when discretion is exercised to an end or purpose not justified by, and clearly against, reason and evidence." Patel v. OMH Med. Ctr. Inc., 1999 OK 33, 987 P.2d 1185, 1194. If the record does not demonstrate that the requisites for class action have been met, the trial court has abused its discretion. Greghol Ltd. Partnership v. Oryx Energy Co., 1998 OK CIV APP 111, 959 P.2d 596, 598. "The pragmatically correct action, in the face of a close question as to certification, has been said to sustain certification because if it develops later during the course of the trial that the order is ill-advised, the order is always (prior to judgment on the merits,) subject to modification." Perry v. Meek, 618 P.2d 934, 940 (Okla.1980).

¶ 6 Class action is a procedural device provided by Title 12, section 2023, of the Oklahoma Statutes.³ It permits plaintiffs to "vindicat[e] the rights of individuals who otherwise might not consider it worth the candle to embark on litigation in which the optimum result might be more than consumed by the cost." Deposit Guar., Nat'l Bank v. Roper, 445 U.S. 326, 338, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980). Section 2023 requires, as does its federal counterpart; numerosity, commonality, typicality, and adequacy of representation. In addition, the court must find that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Id. at § 2023(B)(3).

¶ 7 DaimlerChrysler challenges the trial court's determination that each of these requirements was demonstrated by Plaintiffs. Its challenge is focused primarily on whether common questions of law and fact predominate and whether a class action is superior to other available methods of adjudicating the controversy. DaimlerChrysler also argues that the class representatives and their counsel are inadequate.

I. COMMON ISSUES OF LAW OR FACT

A. Issues of Law

¶ 8 DaimlerChrysler argues that common issues of law or fact do not predominate because varying state laws will apply to the asserted claims and defenses. It cites KMC Leasing, Inc. v. Rockwell-Standard Corp., 2000 OK 51, 9 P.3d 683, in which this Court found no abuse of discretion in the trial court's refusal to certify a class for lack of predominating issues. The proposed class consisted of private aircraft owners who alleged four different product defects against multiple defendants in different states. The matter required application of differing terms in hundreds of nonuniform aircraft purchase contracts. Id. at 690-691. Because the substantive law of numerous states applied to issues which were not common to the entire class, there was no predominance and the trial court did not err in refusing to certify the class. Id.

¶ 9 In this matter the trial court determined that "the alleged choice of law problems identified by [DaimlerChrysler did] not bar certification." It relied upon In re Bridgestone/Firestone, Inc. Tires Liability Litigation, 155 F.Supp.2d 1069 (S.D.Ind. 2001), which granted class certification upon a finding of predominance.

¶ 10 In Firestone, a federal district court sitting in Indiana determined which state's substantiative law applied to a nationwide state law class action. Buyers had asserted tort and contract claims against Ford Motor Co. and Bridgestone/Firestone, Inc. for alleged tire defects on Ford's Explorer model sport utility vehicle. The court reasoned that because "the relationship between the parties [was] simply that of buyer and seller," the place where the products were purchased was not significant to the claims for product defect. Id. at 1082. Rather, it was "the conduct of Defendants as manufacturers" which was the focus of the litigation. Id. Therefore, the law of Michigan and Tennessee, the principal places of business of the manufactures, controlled.⁴ ¶ 11 The trial court's application of Firestone to this matter evidences its intent to apply the substantive law of Michigan, DaimlerChrysler's principal place of business, to the claims and defenses asserted. Application of Oklahoma's choice of law rules supports that conclusion.

1. Choice of Law—UCC Claims

¶ 12 The "most significant relationship" test applies to an action for breach of warranty in a sale of goods under Article 2 of the UCC. See Collins Radio Co. v. Bell, 623 P.2d 1039, 1046-47 (Okl.Civ.App.1980) ("The same rationale for accepting the [most significant relationship test] for torts dictates that its application should be made to actions that fall under Article 2 of the Uniform Commercial Code.") See also Bohannan v. Allstate Ins. Co., 820 P.2d 787, 795 (Okla.1991) ("[T]he UCC supports the most significant relationship test as applied in Collins Radio.") This test is guided by principles and contacts from the Restatement (Second) of Conflicts (1971). It determines which state's law is most directly connected to the parties and the transaction.

¶ 13 Under section 6 of the Restatement, the factors relevant to any choice of law decision include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in

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