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Ford Class Action Defense Cases–Cuesta v. Ford Motor: Oklahoma Supreme Court Reinstates Class Action Certification Order Holding Trial Court Did Not Abuse Discretion In Certifying Class Action

Products Liability Class Action Properly Certified as Class Action with Respect to Breach of Warranty Claim and Appellate Court Erred in Reversing Class Action Certification Order Oklahoma Supreme Court Holds

Plaintiffs filed a class action against Ford Motor and Williams Control for product liability; the class action complaint asserted claims based on “design and/or manufacturing defects in the fixed, non-adjustable accelerator pedal, i.e., the ‘electronic throttle control’, or ‘ETC’, which is designed and manufactured by Williams and installed in certain trucks manufactured by Ford.” Cuesta v. Ford Motor Co., ___ P.3d ___, 2009 OK 24, ¶ 2 (Okla. April 21, 2009) (footnotes omitted). According to the allegations underlying the class action, “the pedals, which were modified twice, failed Ford’s ‘overload’ tests and engineering specifications.” Id. Specifically, “when forcible pressure is applied to the pedals that they cause the vehicles to shift to idle instead of accelerating and, therefore, are defective and unreasonably dangerous.” Id. The class action complaint alleged causes of action for breach of express and implied warranties, negligence and strict products liability. Plaintiffs filed a motion with the trial court to certify the litigation as a class action; the trial court granted the motion, agreeing with plaintiffs that the following questions of law and fact are common: “(1) whether the accelerator pedals at issue are defective; (2) whether the pedals are unreasonably dangerous; (3) whether the pedals reduce the value of the vehicles; and (4) whether the sale of the vehicles containing these pedals to members of the class constitutes a breach of any express or implied warranty by Defendants Ford and WCI?” Id. The Oklahoma Court of Civil Appeals reversed the class action certification order, id., at ¶ 1. The Oklahoma Supreme Court granted plaintiffs’ petition for writ of certiorari and vacated the appellate court’s opinion, holding that the trial court did not abuse its discretion in granting class action treatment.

The Oklahoma Supreme Court began by noting that it was determining “only whether class certification is appropriate to determine a breach of warranty theory under the facts presented.” Cuesta, at ¶ 2. The Court noted also that “[a] trial court’s order certifying a class action is reviewed for an abuse of discretion.” Id., at ¶ 7 (citation omitted). It began its legal analysis by discussing the applicable choice of law, see id., at ¶¶ 8 et seq. We do not summarize the Oklahoma Supreme Court’s analysis of this issue, noting simply that the Court concluded that the law of Michigan governed the class action’s breach of warranty claims, id., at ¶¶ 15-16.

Turning to the issue of plaintiffs’ claims for damages and the predominance of common issues of fact and law, the Supreme Court noted the trial court’s conclusion that “Plaintiffs and class members seek identical remedies which include the replacement cost of a defective pedal and/or the diminution in value of the vehicle caused by the defective pedal,” but that the appellate court had reversed based on its conclusion that “individualized issues of damages predominate over common issues, including whether owners who have not experienced the defect would want a replacement pedal, an uncertainty making the class unmanageable.” Cuesta, at ¶ 17. Plaintiffs argued on appeal that the differences identified by the appellate court were simply differences in amounts of monetary damage suffered by individual class members, and therefore do not defeat class action treatment. Id., at ¶ 18. The Supreme Court agreed but “affirm[ed] the trial court’s certification order only as to Plaintiffs’ breach of warranty claims for which economic damages, such as replacement costs, are appropriate.” Id., at ¶ 19. The Court explained at paragraph 19, “The trial court can use subclasses, if necessary, to distinguish between different types of economic damages, e.g., replacement costs, diminution in value, or the cost of a loaner vehicle, or different models of the allegedly defective pedals[.]”

With respect to the issue of typicality and the appellate court’s consideration of the merits, plaintiffs advanced two arguments. First, plaintiffs argued the appellate court erred in concluding that typicality did not exist because it “expressly disregarded the trial court’s findings which include: (1) that the claims are based on the same legal theories, (2) that the claims arise from the same course of conduct by Defendants (Ford installed defective pedals, manufactured by Williams, which do not meet Ford’s own engineering specifications); and (3) that the same remedies are being sought (cost of replacing the pedal and/or diminution in value).” Cuesta, at ¶ 21. The Oklahoma Supreme Court agreed the plaintiffs’ claims were typical of those of the class, id., at ¶ 23. Second, plaintiffs argued that the appellate court improperly inquired into the merits of the class action claims, id., at ¶ 24. Again the Supreme Court, explaining that the appellate court’s opinion referred to defenses and facts that were “fact questions for a jury.” Id., at ¶ 28. Accordingly, the Oklahoma Supreme Court held (1) that class action treatment was warranted, particularly as the estimated cost of replacing the defective pedal is only $185 making it “too costly” for individuals to pursue in separate lawsuits, id., at ¶ 29, and (2) that the trial court did not abuse its discretion in granting class action certification and that the appellate court erred in reversing that order, id., at ¶ 30.

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