On December 19, 2011, Judge Cox of the Eastern District of Michigan applied the Supreme Court’s Wal-Mart Stores Inc. v. Dukes case while denying a proposed class’s certification in In Re OnStar Contract Litigation.pdf. The proposed class consisted of “[b]uyers and lessees of automobiles equipped with OnStar telematics equipment . . .” Plaintiffs sought to certify classes for Michigan Consumer Protection Act claims and various state claims based on consumer fraud and breach of express warranty.
According to the court, the plaintiffs’ claims had an abundance of factual variations and, therefore, they did not meet Fed. R. Civ. P. 23(b)(3)’s predominance requirement. In its analysis, the court quoted the Dukes decision for the proposition that a party “must affirmatively demonstrate his compliance with the [certification rules]” and that this requires a “rigorous analysis” of whether the prerequisites have been met. In many cases, this analysis “will entail some overlap with the merits of the plaintiff’s underlying claim.” The court also quoted the Sixth Circuit’s recent decision in Pipefitters Local 636 Ins. Fund v. Blue Cross Blue Shield of Michigan, __ F.3d __, 2011 WL 3524325 at *9 (6th Cir. 2011), to say that particular care must be used in granting class certification because of the “huge amount of judicial resources expended by class actions.”
The “rigorous analysis” required by the Supreme Court in Dukes is evident in the OnStar decision. Before issuing its decision, the court allowed extensive discovery related to the class certification issue. This discovery began on March 2, 2009, and a hearing was not held on the issue until November 10, 2011. The court’s 67 page decision analyzes in great detail Fed. R. Civ. P. 23’s requirements, and plaintiffs’ inability to meet those requirements. The court found that it was not feasible to identify members of the purported class without making numerous individualized factual inquiries. The court also found that there were not sufficient common questions of law or fact. Again quoting Dukes, the court stated that commonality does not require “the raising of common ‘questions’ – even in droves – but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.” Plaintiffs’ class claims were fatally flawed because common issues such as reliance and damages did not predominate and would require individualized inquiries.
