Appendix — General Motors Motors Corp. v. Bryant (No. 08-349)
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APPENDIX A — OPINION OF THE SUPREME
COURT OF ARKANSAS DATED JUNE 19, 2008
SUPREME COURT OF ARKANSAS
No. 07-437
GENERAL MOTORS CORPORATION, D/B/A
CHEVROLET, GMC, CADILLAC, BUICK,
AND OLDSMOBILE,
Appellant,
VS.
BOYD BRYANT, ON BEHALF OF HIMSELF
AND ALL OTHERS SIMILARLY SITUATED,
Appellee
Opinion Delivered June 19, 2008
APPEAL FROM THE MILLER COUNTY
CIRCUIT COURT,
NO. CV-2005-051-2,
HON. JAMES SCOTT HUDSON, JR., JUDGE.
AFFIRMED.
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Appendix A
PAUL E. DANIELSON, Associate Justice
Appellant General Motors Corporation d/b/a
Chevrolet, GMC, Cadillac, Buick, and Oldsmobile
appeals interlocutorily from the circuit court’s order
granting class certification to appellee Boyd Bryant, on
behalf of himself and all other similarly situated persons.
General Motors asserts four points on appeal: (1) that
extensive legal variations in state laws defeat
predominance; (2) that extensive factual variations in
the millions of claims defeat predominance; (3) that class
certification is not superior under Arkansas Rule of Civil
Procedure 23(b); and (4) that the class definition is
imprecise and overbroad. We affirm the circuit court’s
order granting class certification.
On September 5, 2006, Bryant filed a first amended
class-action complaint in which he alleged that some
4,000,000 pickup trucks and sport utility vehicles sold
by General Motors were equipped with defectively
designed parking brakes. Specifically, Bryant alleged
that the vehicles, model years 1999 through 2002:
contain parking brakes whose linings, due to
a defectively designed high force spring clip,
do not adequately float inside the parking
brake drums. This failure, alone, is
problematic and harms Plaintiff and Class
members. But inadequate lining float, by GM’s
own admission, also causes the parking brakes
to “self-energize” and experience excessive
lining wear after only 2,500 to 6,000 miles in
use.
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Bryant alleged that General Motors discovered the
defect in late 2000, redesigned the defective spring clip
in October 2001, and withheld from dealers admission
of responsibility for the defect until January 28, 2003.
Bryant alleged that General Motors’s actions permitted
it to avoid paying millions of dollars in warranty claims.
He further stated that, while General Motors recalled
manual-transmission trucks with the defective parking
brakes in 2005, the recall only involved about 60,000
vehicles and did not include the nearly 4,000,000
automatic-transmission vehicles owned by himself and
the members of the class. For his causes of action, Bryant
alleged the following: breach of express warranty,
breach of implied warranty of merchantability, violation
of the Magnuson-Moss Warranty Act, unjust
enrichment, and fraudulent concealment/failure to
disclose. Finally, Bryant sought damages “in an amount
necessary to remedy the defective parking brakes|,]|”
or, alternatively, out-of-pocket money damages for those
who had previously paid for repairs, or, alternatively,
disgorgement and restitution. After a hearing on a
motion for class certification filed by Bryant, the circuit
court issued a fifty-one page order in which it concluded
that Bryant had satisfied each of the requirements for
class certification set forth in Ark. R. Civ. P 23 and
defined the class as follows:
“Owners” or “subsequent owners” of 1999-
2002 1500 Series pickups and utilities
originally equipped with an automatic
transmission and a PBR 210x30 Drum-in-Hat
parking brake system utilizing a high-force
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Appendix A
spring clip retainer [footnote omitted], that
registered his vehicle in any state in the
United States.
General Motors now appeals, challenging the circuit
court’s findings as to predominance, superiority, and the
class definition itself.
I. Standard of Review
Rule 23 of the Arkansas Rules of Civil Procedure
governs class actions and provides, in pertinent part:
(a) Prerequisites to Class Action. One or
more members of a class may sue or be sued
as representative parties on behalf of all only
if (1) the class is so numerous that joinder of
all members is impracticable, (2) there are
questions of law or fact common to the class,
(3) the claims or defenses of the
representative parties are typical of the
claims or defenses of the class, and (4) the
representative parties and their counsel will
fairly and adequately protect the interests of
the class.
(b) Class Actions Maintainabdle. An
action may be maintained as a class action if
the prerequisites of subdivision (a) are
satisfied, and the court finds that the
questions of law or fact common to the
members of the class predominate over any
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Apperdix A
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. At an early
practicable time after the commencement of
an action brought as a class action, the court
shall determine by order whether it is to be
sO maintained. For purposes of this
subdivision, “practicable” means reasonably
capable of being accomplished. An order
under this section may be altered or amended
at any time before the court enters final
judgment. An order certifying a class action
must define the class and the class claims,
issues, or defenses.
Ark. R. Civ. P. 23(a-b) (2007). Our law is well-settled that
the six requirements for class-action certification
include: (1) numerosity, (2) commonality, (3) typicality,
(4) adequacy, (5) predominance, and (6) superiority.
See THE/FRE, Inc. v. Martin, 349 Ark. 507, 78 S.W.3d
723 (2002). In reviewing an order granting class
certification, we use the following standard for review:
We begin by noting that it is well settled
that this court will not reverse a circuit court’s
ruling on a class certification absent an abuse
of discretion. See, e.g., Arkansas Blue Cross
& Blue Shield v. Hicks, 349 Ark. 269, 78 S.W.3d
58 (2002). In reviewing a lower court’s class
certification order, “this court focuses on the
evidence in the record to determine whether
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it supports the trial court’s conclusion
regarding certification.” Arkansas Blue Cross
& Blue Shield, 349 Ark. at 279, 78 S.W.3d at
64. We have held that “neither the trial court
nor the appellate court may delve into the
merits of the underlying claim in determining
whether the elements of Rule 23 have been
satisfied.” 7d. Our court has said on this point
that “a trial court may not consider whether
the plaintiffs will ultimately prevail, or even
whether they have a cause of action.” Id. We,
thus, view the propriety of a class action as a
procedural question. See id.
Carquest of Hot Springs, Inc. v. General Parts, Inc.,
367 Ark. 218, 223, 238 S.W.3d 916, 919-20 (2006) (quoting
Van Buren Sch. Dist. v. Jones, 365 Ark. 610, 613, 232
S.W.3d 444, 447-48 (2006) (emphasis added)).
II. Predominance
A. Choice of Law
General Motors initially argues that the significant
variations among the fifty-one motor-vehicles product-
defect laws defeat predominance and prevent
certification in the instant case. It contends that a choice-
of-law analysis must be conducted prior to certification
of the class and that the circuit court’s failure to conduct
such an analysis at this juncture permits due-process
considerations to evade this court’s review. Bryant
responds that the circuit court correctly adhered to this
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court’s precedent, which he claims does not require a
rigorous choice-of-law analysis prior to class
certification. He further contends that the circuit court’s
predominance finding should be affirmed as this court
has previously recognized a circuit court’s broad
discretion to certify and manage a class action, which
includes the circuit court’s ability to conduct a choice-
of-law analysis subsequent to class certification. General
Motors replies that the elements of each of Bryant’s
claims must be examined so that the basic requirements
of Rule 23 can be objectively determined.
Here, the circuit court provided four reasons for its
finding that the potential application of multiple states’
law did not create predominance concerns. First, the
circuit court noted, the cases relied upon by General
Motors were federal cases that required a “rigorous
analysis” of Fed.R.Civ.P. 23’s class-certification factors
“including the impact state-law variations had on
predominance.” Because this court required no such
rigorous analysis, the circuit court rejected General
Motors’s attempt to engraft such an analysis
requirement into Ark. R. Civ. P 23 and preferred,
instead, to follow this court’s precedent “in determining
whether class certification [was] appropriate.” Second,
the circuit court found that Arkansas circuit courts have
wide discretion to manage class actions and, pursuant
to Security Benefit Life Insurance Co. v. Graham, 306
Ark. 39, 810 S.W.2d 943 (1991), the potential application
of many states’ laws was not germane to class
certification. Instead, the circuit court opined, this court
“viewed choice of law as a task for the trial court to
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undertake later in the course of exercising its autonomy
and ‘substantial powers’ to manage the class action.”
For its third reason, the circuit court found that
there was “no greater merits-intensive determination
than the one regarding choice of law.” With that in mind,
the circuit court stated, “[I]t would be premature for
the Court, at this stage in the case, to make the call on
choice of law.” Finally, the circuit court observed, a
decision to certify the matter as a class without resolution
of the choice-of-law issue would not create incurable
problems in that, if application of multiple states’ laws
was eventually required, and it proved too cumbersome
or problematic, the circuit court could always consider
decertifying the class.
We cannot say that the circuit court abused its
discretion in rejecting General Motors’s argument on
this issue as to predominance. We have held that the
starting point in examining the issue of predominance
is whether a common wrong has been alleged against
the defendant. See Chartone, Inc. v. Raglon, _ Ark.
_, S.W.3d__ (Apr. 24, 2008). If a case involves
preliminary, common issues of liability and wrongdoing
that affect all class members, the predominance
requirement of Rule 23 is satisfied even if the circuit
court must subsequently determine individual damage
issues in bifurcated proceedings. See id. We have
recognized that a bifurcated process of certifying a class
to resolve preliminary, common issues and then
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decertifying the class to resolve individual issues, such
as damages, is consistent with Rule 23. See id.
In addition, we have said that:
{t]he predominance element can be satisfied
if the preliminary, common issues may be
resolved before any individual issues. In
making this determination, we do not merely
compare the number of individual versus
common claims. Instead, we must decide if the
issues common to all plaintiffs “predominate
over” the individual issues, which can be
resolved during the decertified stage of
bifurcated proceedings.
Id.at__,__S.W3dat__ (quoting Georgia-Pacific Corp.
v. Carter, 371 Ark. 295, 301, = S.W3d __, __ (2007)).
Our inquiry is whether there is a predominating question
that can be answered before determining any individual
issues.
We hold that there is. Whether or not the class
vehicles contain a defectively designed parking-brake
system and whether or not General Motors concealed
that defect are predominating questions. That various
states’ laws may be required in determining the
allegations of breach of express warranty, breach of
implied warranty, a violation of the Magnuson-Moss
Warranty Act, unjust enrichment, fraudulent
concealment, damages, and restitution does not defeat
predominance in the instant case.
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Appendix A
We recently noted in FirstPlus Home Loan Owner
1997-1 v. Bryant, 372 Ark. 466, S. W3d ___ (2008),
that the mere fact that choice of law may be involved in
the case of some parties living in different states is not
sufficient in and of itself to warrant a denial of class
certification, citing our prior decision of Security Benefit
Life Insurance Co. v. Graham, supra. In Security
Benefit, we observed that Security Benefit’s main
argument “appear([ed] to center on the fact that the law
of thirty-nine states relative to novation would have to
be explored and that this would splinter the class action
into individual lawsuits.” 306 Ark. at 44, 810 S.W.2d at
945. We rejected its argument, holding that “resolution
of the common questions of law or fact would enhance
efficiency for all parties, even if individual claims still
remained to be adjudicated.” Jd., 810 S.W.2d at 945.
We then observed:
The mere fact that choice of law may be
involved in the case of some claimants living
in different states is not sufficient in and of
itself to warrant a denial of class certification.
Cf, Sun Oil Co. v. Wortman, 486 U.S. 717
(1988). And though we are not convinced at
this stage that reference to the laws of thirty-
nine states will be necessary, should it be
required, this does not seem a particularly
daunting or unmanageable task for the
parties or for the trial court.
Because Arkansas is the home state for
First Pyramid and because Arkansas law is
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the law to be applied under the Master Policy,
it is the logical situs for this action. Actions in
thirty-nine states, even with considerable
joinder, would be inefficient, duplicative, and
a drain on judicial resources. Denial of class
action status could well reduce the number
of claims brought in this matter, but that
result is hardly in the interest of substantial
justice.
Id. at 44-45, 810 S.W.2d at 945-46 (emphasis added).
Thus, we have suggested that multistate class
actions are not per se problematic for Arkansas courts.
A question of first impression still remains, however, as
to whether an Arkansas circuit court must first conduct
a choice-of-law analysis before certifying a multistate
class action. In examining that question, we must keep
in mind that we have been resolute that the circuit court
is afforded broad discretion in matters regarding class
certification. See Chartone, Inc. v. Raglon, supra;
Johnson’s Sales Co., Inc. v. Harris, 370 Ark. 387, __
S.W.3d __ (2007). In addition, we have held that “(t]he
mere fact individual issues and defenses may be raised
by the [defendant] regarding the recovery of individual
members cannot defeat class certification where there
are common questions concerning the defendant’s
alleged wrongdoing which must be resolved for all class
members.” FirstPlus Home Loan Owner 1997-1, 372
Ark.at , S.W3d_.
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Appendix A
As already stated, there are clearly common
questions concerning General Motors’s alleged
wrongdoing that will have to be resolved for all class
members, and we view any potential choice-of-law
determination and application as being similar to a
determination of individual issues, which cannot defeat
certification. See, e.g., THE/FRE, Inc. v. Martin, supra.
Other courts may disagree. See, e.g., In re Prempro
Prods. Liab. Litig., 230 F.R.D. 555 (E.D. Ark.2005)
(observing that when class certification is sought in a
case based on common-law claims, the question of which
law governs is crucial in making a class-certification
decision); Washington Mut. Bank, FA v. Superior Court,
24 Cal.4th 906, 926, 15 P3d 1071, 1085, 103 Cal.Rptr.2d
320, 335 (2001) (noting its favor in adopting the type of
burdens articulated in federal decisions and holding
that “a class action proponent must credibly
demonstrate, through a thorough analysis of the
applicable state laws, that state law variations will not
swamp common issues and defeat predominance”);
Beegal v. Park West Gallery, 394 N.J.Super. 98, 925 A.2d
684 (2007) (holding that a class-action motion court has
a duty to conduct a choice-of-law analysis before deciding
whether the predominance element is satisfied and that,
although conflict-of-law issues do not per se foreclose
certification of a multistate class, a thorough analysis of
state laws is particularly important where a possibility
exists that common issues could be subsumed by
substantive conflicts in state laws; but, advising that a
trial court should undertake a rigorous analysis to
determine if the requirements of the class-certification
rule have been met); Compaq Computer Corp. v. Lapray,
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135 S.W.3d 657, 672 (Tex.2004) (holding that “when
ruling on motions for class certifications, trial courts
must conduct an extensive choice of law analysis before
they can determine predominance, superiority,
cohesiveness, and even manageability”; but, also
requiring that its courts perform a rigorous analysis
before ruling on class certification to determine whether
all prerequisites to certification have been met).
However, those decisions do not bind this court, nor do
they dictate that were we to permit a choice-of-law
analysis after class certification, such a decision would
be erroneous. .
Moreover, we are simply not persuaded by the
reasoning of these courts as we have previously rejected
any requirement of a rigorous-analysis inquiry by our
circuit courts. See, e.g., Beverly Enters.-Arkansas, Inc.
v. Thomas, 370 Ark. 310, — S.W3d___ (2007). See also
Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261,
954 S.W.2d 898 (1997). Instead, we have given the circuit
courts of our state broad discretion in determining
whether the requirements for class certification have
been met, recognizing the caveat that a class can always
be decertified at a later date if necessary. See, e.g.,
Beverly Enters.-Arkansas v. Thomas, supra; Farmers
Ins. Co., Inc. v. Snowden, 366 Ark. 138, 233 S.W.3d 664
(2006); Tay-Tay, Inc. v. Young, 349 Ark. 675, 80 S.W.3d
365 (2002). As our rule so clearly provides, “[ajn order
under this section may be altered or amended at any
time before the court enters final judgment.” Ark. R.
Civ. P 23(b).
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Indeed, it is possible that other states’ laws might
be applicable to the class members’ claims. However,
we cannot say that our class-action jurisprudence
requires an Arkansas circuit court to engage in a choice-
of-law analysis prior to certifying a class, as we have not
hesitated to affirm a finding of predominance so long as
a common issue to all class members predominated over
individual issues. While General Motors argues that a
failure to require such an analysis precertification allows
that analysis to evade review, it is mistaken. Upon a final
order by the circuit court, General Motors would be able
to challenge the circuit court’s choice of law, just as in
any other case. See, e.g., Ganey v. Kawasaki Motors
Corp., U.S.A., 366 Ark. 238, 234 S.W3d 838 (2006)
(reviewing a circuit court’s decision to apply Louisiana
law in an appeal from an order of dismissal in a products-
liability case). Moreover, were we to require the circuit
court to conclude at this time precisely which law should
be applied, such a decision could potentially stray into
the merits of the action itself, which we have clearly
stated shall not occur during the certification process.
See, e.g., Carquest of Hot Springs, Inc. v. General Parts,
Inc., supra. For these reasons, we cannot say that the
circuit court abused its discretion in finding that the
predominance requirement was not precluded by the
potential application of other states’ laws.
b. Factual Variations
General Motors next asserts that many factual
variations preclude a finding of predominance. It claims
that the following questions are individualized and
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predominate over any common question: (1) does a class
member’s parking brake have a defect; (2) if a parking
brake failed, how will causation be determined; (3) with
regard to the alleged “cover up,” what did General
Motors know and when, and what did General Motors
disclose and when; (4) was a parking brake repaired
already under warranty and, if not, why not; (5) when
did a class member’s warranty expire; (6) did a class
member first provide General Motors with notice of
breach; (7) did a class member have knowledge about a
potential parking-brake problem at the time of purchase;
(8) did a class member rely on General Motors’s
alleged misrepresentation; (9) were the alleged
misrepresentations or omissions material to a class
member; (10) for leased vehicles, is General Motors liable
to the lessor or the lessee; (11) is a class member’s claim
barred by the statute of limitations; (12) is a class
member’s claim barred by various affirmative defenses,
such as comparative negligence; and (13) what the
appropriate remedy, if any, is for any particular class
member. Bryant responds that the central common
issues in the case can be decided first and that any
potential individualized issue raised by General Motors
can be dealt with after deciding the common
predominating issues. General Motors replies, in
essence, that where there are numerous individualized
issues, they can be better resolved on a case-by-case
basis.
We cannot say that the circuit court abused its
discretion in its finding that factual variations did not
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preclude a finding of predominance. Here, the circuit
court found that:
the alleged inadequate float problem appears
to be something that is present in all class
vehicles and which occurs each time a class
vehicle is used. This is because all class
vehicles utilize the PBR 210x30 Drum-in-Hat
park brake system, and GM has admitted in
numerous documents, with little to no
equivocation, that the inadequate float
problem regarding that brake system is a real
one.
It further found that:
the presence of this common inadequate float
problem negates GM’s argument that there
is no one set of operative facts that establishes
liability, or no single proximate cause that
equally applies to each potential class
member... .23. Even assuming arguendo the
parking brake “failure” should, as GM says,
be defined more broadly such that individual
inspections for lining wear and/or
consideration of individual use factors might
be necessary, Rule 23(b) predominance still
exists. The Court views any need for
individual inspections and/or the individual
use factors merely as_ individual
determinations relating to right to recovery
or damages that pale in comparison to the
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common issues surrounding GM’s alleged
defectively designed parking brake and cover
up to avoid paying warranty claims. ...
We have repeatedly recognized that conducting a
trial on the common issue in a representative fashion
can achieve judicial efficiency. See Arkansas Blue Cross
& Blue Shield v. Hicks, supra. Furthermore, we have
routinely found the bifurcated process of class actions
to be consistent with Rule 23(d), which allows the circuit
court to enter orders necessary for the appropriate
management of the class action. See id. In fact, we have
expressed our approval for the bifurcated approach to
the predominance element by allowing circuit courts to
divide a case into two phases: (1) certification for
resolution of the preliminary, common issues; and (2)
decertification for the resolution of the individual issues.
See id. The bifurcated approach has only been disallowed
where the preliminary issues to be resolved were
individual issues rather than common ones, see id.,
which is not the situation in the instant case.
As already stated, the common issue that
predominates here over any other potential issue is
whether the parking-brake system installed in the class
members’ vehicles was defective and whether General
Motors attempted to conceal any alleged defect. These
overarching issues can be resolved before the circuit
court reaches any of the individualized questions raised
by General Motors. See, ¢.g., Asbury Auto. Group, Inc.
v. Palasack, 366 Ark. 601, 237 S.W.3d 462 (2006). We have
held that the mere fact that individual issues and
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defenses may be raised by the defendant regarding the
recovery of individual class members cannot defeat class
certification where there are common questions
concerning the defendant’s alleged wrongdoing that
must be resolved for all class members. See FirstPlus
Home Loan Owner 1997-1 v. Bryant, supra. Moreover,
we have observed that challenges based on the statutes
of limitations, fraudulent concealment, releases,
causation, or reliance have usually been rejected and
will not bar predominance satisfaction because those
issues go to the right of a class member to recover, in
contrast to underlying common issues of the defendant’s
liability. See id. (quoting SEECO, Inc. v. Hales, 330 Ark.
402, 413, 954 S.W.2d 234, 240 (1997) (quoting 1 Herbert
B. Newberg, Newberg on Class Actions § 4.26, at 4-104
(3d ed.1992))). Accordingly, we cannot say that the circuit
court abused its discretion in its finding of
predominance.
Ill. Superiority
For its third point on appeal, General Motors
contends that the circuit court erred in its finding on
superiority. It urges that the superior method of
handling a claim that particular vehicles are defective
is by petition to the National Highway Traffic Safety
Administration (NHTSA). It submits that a class action
would be unmanageable and unfair, arguing further that
certification of the instant class would be
unconstitutional, should bifurcation take place. Bryant
responds that where the NHTSA has already denied
relief to the proposed class members, NHTSA’s process
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can in no way be superior to a class action. He further
asserts that a class action would be manageable and fair
and that, because it is not yet known whether bifurcation
would be required, this court should not address General
Motors’s constitutional claim.
Rule 23(b) requires “that a class action is superior
to other available methods for the fair and efficient
adjudication of the controversy.” This court has
repeatedly held that the superiority requirement is
satisfied if class certification is the more efficient way of
handling the case, and it is fair to both sides.
See Chartone, Inc. v. Raglen, supra. Where a cohesive
and manageable class exists, we have held that real
efficiency can be had if common, predominating
questions of law or fact are first decided, with cases then
splintering for the trial of individual issues, if necessary.
See id. This court has further stated that when a circuit
court is determining whether class-action status is the
superior method for adjudication of a matter, it may be
necessary for the circuit court to evaluate the
manageability of the class. See id. Furthermore, the
avoidance of multiple suits lies at the heart of any class
action. See id.
In the instant case, the circuit court concluded that
a class was the superior method to resolve the claims of
Bryant and the proposed class. With respect to
manageability, the circuit court stated:
46. First, the Court does not believe for one
moment that 4,000,000 individual, phase II
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trials will be conducted in this case. Among
other things, potential opt outs and claims
dismissed under a summary disposition
procedure that can be developed will greatly
reduce the number of potential phase [I trials.
47. Second, Lenders II [358 Ark. 66, 186
S.W.3d 695 (2004) | concerned a class of 50,000
potential members and the Arkansas
Supreme Court took no issue with it
proceeding as a class action. (Citation
omitted.] In the Court’s view, the prospect of
trying 50,000 cases is no different, from a
manageability standpoint, than trying a
potentially greater number of cases.
48. Third, the fact GM’s allegedly defective
design has adversely affected so many
consumers is not Mr. Bryant’s fault. Mr.
Bryant and the class should not be penalized
for the widespread nature of GM’s alleged
defect and subsequent cover up. [Citation
omitted. }
49. Finally, in at least the conte::t of discussing
class definition, the Arkansas Supreme Court
has rejected lack of administrative feasibility
as an excuse to avoid class certification. —
[Citation omitted.] The Court believes the
Arkansas Supreme Court would similarly
reject GM’s similar argument that class size,
alone, counsels against a finding of Rule 23(b)
predominance.
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With respect to the propriety of a class action versus
the NHTSA, the circuit court found:
Moreover, as brought to light at the class
certification hearing, the record reveals
frustrated consumers have at least twice (most
recently in mid 2006) petitioned NHTSA about
the alleged parking brake defect in automatic
transmission vehicles, and NHTSA rejected
the petitions. Accordingly, the Court does not
understand why GM believes NHTSA will
provide a superior remedy to Mr. Bryant and
class members. The Court concludes GM’s
NHTSA-based superiority argument has no
merit. Mr. Bryant has established Rule 23(b)
superiority.
Here, the proposed class of approximately 4,000,000
members makes it at least likely that without a class
action, numerous meritorious claims might go
unaddressed. We have held that to be a factor in
determining superiority. See, e.g., Lenders Title Co. v.
Chandler, 358 Ark. 66, 186 S.W.3d 695 (2004). In addition,
the circuit court found that the uniform relief sought
by Mr. Bryant and the class was relatively small if sought
on an individual basis, and, thus, it was not economically
feasible for members of the class to pursue General
Motors on an individual basis. While not the sole basis
for certifying the class, the smallness of the claims is
another factor to be considered in deciding superiority.
See id. It is evident that the circuit court thoroughly
considered the manageability of the proposed class.
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For that reason, we cannot say that the circuit court
abused its discretion in finding that the class was
manageable. And again, as to manageability, this court
has made it abundantly clear that a circuit court can
always decertify a class should the action become too
unwieldy. See Tay-Tay, Inc. v. Young, supra.
Nor can we say that a class action is not superior to
having the matter addressed by the NHTSA. As noted
by the circuit court, NHTSA has twice rejected petitions
dealing with the allegations made in the instant case.
Clearly, resolution by that agency cannot be superior to
a class action when the agency has made such a
rejection. Moreover, it has been recognized that the
Motor Vehicle Safety Act and NHTSA itself do not in
any way preempt a plaintiff’s right to bring common-
law claims against the manufacturer of an allegedly
defective part. See, e.g., Chin v. Chrysler Corp., 182
FE-R.D. 448 (D.N.J.1998) (citing 49 U.S.C. § 30103); In re
Ford Motor Co. Ignition Switch Prods. Liab. Litig., 174
F.R.D. 332 (D.N.J.1997) (citing 49 U.S.C. § 30103). See
also Amalgamated Workers Union of Virgin Islands
v. Hess Oil Virgin Islands Corp., 478 F.2d 540, 543 (3d
Cir.1973) (“As we view it, it would appear that
[Fed.R.Civ.P 23(b)(3) Jwas not intended to weigh the
superiority of a class action against possible
administrative relief. The ‘superiority requirement’ was
intended to refer to the preferability of adjudicating
claims of multiple-parties in one judicial proceeding and
in one forum, rather than forcing each plaintiff to
proceed by separate suit, and possibly requiring a
defendant to answer suits growing out of one incident
23a
Appendix A
in geographically separated courts.”). With this in mind,
we hold that the circuit court did not abuse its discretion
in finding that a class-action suit was superior to
resolution by the NHTSA.
Nor does the possibility of bifurcation render the
instant class certification unconstitutional. As we have
previously held, we do not know at the point of
certification whether more than one jury would
ultimately be necessary, and we will not speculate on
the question of the inevitability of bifurcated trials or
issue an advisory opinion on an issue that well may not
develop. See, e.g., BNL Equity Corp. v. Pearson, 340
Ark. 351, 10 S.W.3d 838 (2000).
IV. Class Definition
General Motors, for its final point, argues that the
instant class definition is both overbroad and
amorphous, arguing that the definition in no way
distinguishes between “owners” and “subsequent
owners” and that the class definition includes categories
of individuals that have not been harmed in any fashion.!
1. For example, General Motors suggests the following
categories: “owners who have never had a problem, those who
have already had a warranty repair, those who experienced a
problem after the expiration of the warranty, those who chose
never to seek the warranty repair, those who sold their vehicles
before a problem occurred, those who acquired vehicles after a
repair had already occurred, and those who experienced parking
brake failures that were caused by something other than wear
condition.”
24a
Appendix A
Bryant responds that the circuit court correctly
determined that the class was subject to precise
definition and was not overbroad.
With respect to class definition, it is axiomatic that
for a class to be certified, a class must exist. See Asbury
Auto. Group, Inc. v. Palasack, supra. The definition of
the class to be certified must first meet a standard that
is not explicit in the text of Rule 23, that the class be
susceptible to precise definition. See id. This is to ensure
that the class is neither “amorphous” nor “imprecise.”
See id. Concurrently, the class representatives must be
members of that class. See id. Thus, before a class can
be certified under Rule 23, the class description must
be sufficiently definite so that it is administratively
feasible for the court to determine whether a particular
individual is a member of the proposed class. See id.
Furthermore, for a class to be sufficiently defined, the
identity of the class members must be ascertainable by
reference to objective criteria. See id.
Here, the circuit court defined the class in a precise,
objective manner. The class definition clearly states that
the class includes any owner or subsequent owner of a
1999-2002 1500 Series pickup or utility vehicle that was
originally equipped with an automatic transmission and
the specified parking-brake system. Thus, the identity
of the class members can be ascertained without an
investigation into the merits of each individual’s claim.
See, e.g., Lenders Title Co. v. Chandler, supra. Moreover,
the circuit court found that the terms “owners” and
“subsequent owners” were terms taken from General
=
-
25a
Appendix A
Motors’s own warranty publications and that General
Motors admitted it had the ability to provide personal
information regarding the original vehicle purchasers
via its warranty database, as well as current vehicle
owners via vehicle-identification-number searches
conducted by third-party vendors. In addition, the
circuit court further pointed to the fact that General
Motors had previously conducted a recall on its manual-
transmission version of the class vehicles, which
demonstrated the administrative feasibility of General
Motors’: ability to not only identify class members, but
also its ability to contact them. We simply cannot say
that the class definition is in any way overbroad.
Nor do any individual issues among potential class
members raised by General Motors render the
definition imprecise. As already made clear, such issues
cannot defeat class certification where there are common
questions concerning the defendant’s alleged
wrongdoing that must be resolved for all class members.
See FirstPlus Home Loan Owner 1997-1 v. Bryant,
supra. We hold, therefore, that the class is identifiable
from objective criteria, specifically, owner: :ip of the
specified vehicles so specifically equipped, and that the
circuit court did not abuse its discretion in finding that
the class definition was sufficiently precise.
26a
Appendix A
For the foregoing reasons, we affirm the circuit
court’s order granting class certification.
Affirmed.
Special Justice LANE STROTHER joins.
CORBIN and IMBER, JJ., concur.
GUNTER, J., not participating.
27a
Appendix A
SUPREME COURT OF ARKANSAS
No. 07-437
GENERAL MOTORS CORPORATION, D/B/A
CHEVROLET, GMC, CADILLAC, BUICK,
AND OLDSMOBILE,
APPELLANT,
VS.
BOYD BRYANT, ON BEHALF OF HIMSELF
AND ALL OTHERS SIMILARLY SITUATED,
APPELLEE.
Opinion Delivered June 19, 2008
APPEAL FROM THE MILLER COUNTY
CIRCUIT COURT,
NO. CV-2005-051-2,
HON. JAMES SCOTT HUDSON, JR., JUDGE,
CONCURRING.
28a
Appendix A
ANNABELLE CLINTON IMBER, Associate Justice
While I concur in the result on the facts presented
by this case, I write separately because I believe the
majority’s analysis of General Motors’s argument on the
choice-of-law issue reaches a conclusion that is
overbroad. The majority declares that addressing any
choice-of-law argument at the class-certification stage
goes beyond our required analysis of the elements of
certification and is, therefore, never indicated. Such a
declaration extends far past the holdings of our prior
case law addressing class certification and forecloses
analysis that could conceivably be required.
Prior Case Law
The majority cites FirstPlus Home Loan Owner
1997-1 v. Bryant, 372 Ark. 466, _S.W.3d__ (2008), and
Security Benefit Life Ins. Co. v. Graham, 306 Ark. 39,
810 S.W.2d 943 (1991), and quotes them as holding the
mere fact that choice-af-iaw may be involved in the case
of some parties living in different states is not sufficient
in and of itself to warrant a denial of class certification,
and multi-state class actions are not per se problematic
for our state’s courts. From that holding, the majority
then goes on to conclude that “any potential choice-of-
law determination and application” is “similar to a
determination of individual issues, which cannot defeat
certification.” (Emphasis added).
In Security Benefit Life Ins. Co. v. Graham, 306
Ark. 39, 810 S.W.2d 943 (1991), owners of certain single-
29a
Appendix A
premium, deferred annuities filed a complaint against
an insurer, alleging breach of contract. The circuit court
granted a motion for certification of a class of plaintiffs
defined as all present owners of individual insurance
certificates issued by the insurer under one certain
master policy. Jd. at 41, 810 S.W.2d at 944. The insurer
appealed class certification, alleging, inter alia, that
common issues of law did not predominate over
individual issues because the certificate holders resided
in thirty-nine states. Jd. at 43, 810 S.W.2d at 945. We
rejected the argument that application of the law of
thirty-nine states relative to a defense of novation
defeated the predominance element of class
certification, concluding that a class action would resolve
several common questions more efficiently than joinder
of plaintiffs, and it did not “seem a particularly daunting
or unmanageable task for the parties or the trial court”
to apply the laws of multiple states to determine
whether the insurer could avail itself of a defense of
novation against the class members who resided in the
respective states. /d. Thus, similar to the instant case,
the choice-of-law issue presented in Security Benefit
was related to plaintiffs’ individual recoveries and
corresponding defenses the defendant could maintain
against those plaintiffs. We did not, however, conclude
in Security Benefit that the circuit court was prohibited
from considering any choice-of-law issues at the class-
certification stage.
The majority also cites THE/ FRE, Inc. v. Martin,
349 Ark. 507, 78 S.W.3d 723 (2002), for the proposition
that “any potential choice-of-law determination and
30a
Appendix A
application [is] similar to a determination of individual
issues, which cannot defeat certification.” In THE/F RE,
we affirmed the circuit court’s grant of class certification
against the appellants’ assertion that issues related to
recovery of individual class members and defenses that
may be raised by the appellants predominated over
common questions of law or fact. To the extent that
choice-of-law issues in the instant case go to potential
recovery of individual class members or potential
defenses that GM may raise, I agree with the majority’s
reasoning. The circuit court in THE/FRE, however, did
not consider any choice-of-law issues. Thus, I fail to see
any logic or authority that will span the gap between
our conclusion in the THE/FRE case and the majority’s
conclusion in the instant case. A conclusion here that
choice-of-law issues not related to recovery or defenses
will never predominate over common questions of law
or fact is one that I find to be impermissibly overbroad.
Rigorous Analysis
Next, the majority holds that a choice-of-law analysis
is foreclosed at the class-certification stage because “we
have previously rejected any requirement of a rigorous-
analysis inquiry by our circuit courts.” As support for
this proposition, the majority cites federal court
decisions, all of which hold that the trial court must
conduct a “thorough” or “rigorous” analysis of the choice
of governing state law before certifying a case as a class
action. While it may be a necessary element of
“thorough” or “rigorous” analysis in other jurisdictions
that a court analyze applicable state laws as a
3la
Appendix A
prerequisite to class certification, the converse
proposition-any consideration of choice-of-law issues at
class certification stage amounts to a “thorough” and
“rigorous” analysis—is not necessarily true. In fact,
there may be circumstances where the trial court should
undertake a choice-of-law analysis to enable us to
conduct a meaningful review of the certification issue
on appeal. Lenders Title Co. v. Chandler, 353 Ark. 339,
107 S.W.3d 157 (2003).
Choice-of Law and Analysis on the Merits
Newberg specifically endorses choice-of-law
considerations at the certification stage, but, at the
same time, states that it is not permissible to go to the
merits of the case upon deciding a motion for class
certification. Newberg on Class Actions § 4.26
(3d ed.1992). Thus, it is clear that Newberg does not
equate a choice-of-law analysis with an impermissible
examination of the merits of the plaintiff’s claims. The
majority cites Carquest of Hot Springs, Inc. v. General
Parts, Inc., 367 Ark. 218, 238 S.W.3d 916 (2006), for the
proposition that requiring the circuit court to conclude
at class certification which law should apply potentially
strays into the merits of the action itself. In Carquest,
the defendant/counterclaimant alleged that General
Parts had engaged in an illegal tying arrangement and
violated the Arkansas Franchise Practices Act. Jd. at
220. The circuit court found that it did not have
jurisdiction over Carquest’s illegal-tying claim because
that claim was based on the federal Sherman Anti-Trust
Act, and in so finding, the court failed to consider
32a
Appendix A
whether the same claim could fall within the purview of
the Arkansas Unfair Practices Act (AUPA). We held that
discarding Carquest’s AUPA claim amounted to a ruling
that the state claim could not prevail, and that ruling
constituted an impermissible consideration of the merits
of Carquest’s state claim. Jd. at 224. This holding does
not support the majority’s statement equating a choice-
of-law analysis with an examination of the merits of the
case. Therefore, I believe the majority’s contention that
Carquest precludes choice-of-law considerations at the
class-certification stage is flawed.
GM’s Choice-of-Law Argument
Here, Bryant’s complaint includes claims of breach
of express warranty, breach of implied warranty of
merchantability, violation of the federal Magnuson-Moss
Warranty Act, and fraudulent concealment of a product
defect. General Motors argues that the circuit court
erred in failing to consider the conflicts of laws present
among the states in which GM has sold the trucks and
SUVs alleged to have the parking brake defect. Before
the hearing on class certification, GM presented the
court with a thorough analysis of conflicts of laws
regarding the state-law fraud claims, breach of warranty,
applicable statutes of limitations, and unjust
enrichment. It appears from a thorough reading of the
circuit court’s fifty-one page class certification order
that the court in fact reviewed and considered GM’s
choice-of-law arguments, but, nevertheless, found that
Bryant had satisfied the class-certification element of
predominance. The circuit court went on to declare as a
33a
Appendix A
matter of law that our court has interpreted Rule 23 of
the Arkansas Rules of Civil Procedure as precluding a
choice-of-law analysis at the class-certification stage and
stated without citation that “[i]n truth, there is no
greater merits-intensive determination than the one
regarding choice of law. Choice of law has everything to
do with a case’s merits.”
The majority opinion ratifies the circuit court’s
declaration and thereby cuts off any future possibility
that a conflict of laws could defeat a finding of
predominance. With this | cannot agree.
Class Certification Order
From my reading of the class certification order,
I believe that the circuit court properly considered the
conflict of laws argument GM presented to the court
and found that the issues of law and fact common to the
members of the class predominate over individual issues
of law and fact. The court determined from the evidence
presented at the class-certification hearing that Bryant
alleges a product defect that is present at the time of
manufacture on all of a set of vehicles defined in the
class definition. Similarly, all class members received
identical express warranties from GM, and all class
members seek the same warranty remedies. Bryant
presented extensive documentation of initial reports to
GM of a potential defect, GMs testing and verification
of the alleged product defect, and procedures by which
GM addressed the alleged defect with respect to
vehicles equipped with manual transmissions, while at
~
34a
Appendix A
the same time electing not to address the alleged defect
with respect to vehicles equipped with automatic
transmissions. Specifically, the circuit court stated that
it saw “nothing to convince it that this alleged defect is
not present in all class vehicles, or that it doesn’t occur
or manifest itself each time a class vehicle is used.” With
respect to potential state-law variations, the vast
majority relate to defenses raised by GM regarding the
recovery of individual members, such as: application of
statutes of limitations; fraud-related materiality and
reliance; individual knowledge of parking brake defect;
whether an individual’s parking brake has been repaired
under warranty; notice of warranty breach; expiration
of factory warranty based on mileage; and comparative
fault. The mere fact that individual issues and defenses
may be raised by a company regarding the recovery of
individual members cannot defeat a class certification
where there are common questions concerning the
defendant’s alleged wrongdoing which must be resolved
for all class members. Lenders Title Co. v. Chandler,
supra; Seeco Inc. v. Hales, 330 Ark. 402, 954 S.W.2d.
234 (1997). Here, the circuit court concluded that the
“individual determinations relating to recovery or
damages ... pale in comparison to the common issues
surrounding GM’s allegedly defectively designed
parking brake and cover up to avoid paying warranty
claims.” Based on the circuit court’s extensive review of
the evidence and its thorough findings of fact and
conclusions of law, it is clear that the circuit court acted
within its discretion in certifying the class of plaintiffs
as defined in the court’s order.
35a
Appendix A
For these reasons, I concur with the majority’s
opinion that the circuit court did not abuse its discretion
in finding that Bryant has met the requirements of Rule
23; likewise, I would affirm the circuit court’s order of
class certification.
CorBIN, J., joins this concurrence.
36a
APPENDIX B — FINDINGS OF FACT AND
CONCLUSIONS OF LAW REGARDING CLASS
CERTIFICATION, AND ORDER CERTIFYING
CLASS OF THE CIRCUIT COURT OF MILLER
COUNTY, ARKANSAS FILED JANUARY 11, 2007
IN THE CIRCUIT COURT OF MILLER COUNTY,
ARKANSAS
NO. CV-2005-051
BOYD BRYANT, ON BEHALF OF HIMSELF AND
ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS;
VS.
GENERAL MOTORS CORPORATION D/B/A
CHEVROLET, GMC, CADILLAC, BUICK AND
OLDSMOBILE,
DEFENDANT.
FINDINGS OF FACT AND CONCLUSIONS OF
LAW REGARDING CLASS CERTIFICATION, AND
GRDER CERTIFYING CLASS
I.
Introduction
This is a proposed nationwide class action brought
by Plaintiff Boyd Bryant, a resident of Fouke, Arkansas.
Relying mostly on admissions in Defendant GM’s own
37a
Appendix B
documents, Mr. Bryant, the owner of a 2002 Chevrolet
Tahoe Z-71 sport utility vehicle, claims the parking
brakes on nearly four million model year 1999 through
2002 GM pickup trucks and utility vehicles equipped
with automatic transmissions are defectively designed
in that, due to an improperly engineered spring clip
retainer, they do not permit the parking brake lining to
adequately float inside the parking brake drum.
Mr. Bryant claims this defect exists the very moment
each class vehicle rolls off its assembly line, and is
persistent. That is, it reveals itself in the form of
inadequate lining float each time a class vehicle is driven.
Mr. Bryant further claims this lack of adequate lining
float can cause additional problems relating to parking
brake functionality, most significantly brake “self
application” or “self energizing.” Mr. Bryant describes
this condition as the parking brake lining — due to the
inadequate float problem — sticking out of position and
making contact with the spinning parking brake drum.
Mr. Bryant asserts this contact grinds down the linings
to such a degree that the space between the lining and
drum becomes too wide. This results in the linings and
drum making no or insufficient contact when the parking
brake pedal is depressed.
Mr. Bryant has asserted claims for breach of express
and implied warranty of merchantability, both under the
Uniform Commercial Code (“UCC”) and the federal
Magnusson-Moss Warranty Act. 15 U.S.C. §2301 et seq.
He has also brought claims for unjust enrichment and
fraudulent concealment because, he claims, GM knew
about the defective parking brake, yet knowingly
38a
Appendix B
concealed its existence from class members, including
class members that had not yet purchased class vehicles.
Mr. Bryant believes GM concealed the alleged defect so
that the limited warranties on certain GM vehicles would
expire, facilitating non-payment of warranty claims.
Claiming the parking brakes on his own Tahoe Z-71
are defective and will not hold his vehicle on a hill, and
further that he was defrauded by GM, Mr. Bryant has
moved for class certification. The Court has received
briefing from Mr. Bryant in support of his motion.
It has also received briefing from GM in support of its
position that Mr. Bryant’s case is not suitable for class
certification. Attached to the briefing filed by both
Mr. Bryant and of GM is extensive documentary
evidence, nearly all of which consists of GM’s own
documents produced in this litigation. At the September
28, 2006 class certification hearing, over no objection
from the parties, the Court admitted into evidence all
documents attached to the parties’ briefing. It also
admitted into evidence GM’s responses to Mr. Bryant’s
requests for admission; a GM-produced CD containing
written limited warranties applicable to class vehicles;
affidavits from Mr. Bryant and William Coleman’, an
expert witness retained by Mr. Bryant; and a document
containing the National Highway Traffic and Safety
Administration’s (NHTSA) finding that it would not
1. Attached to Mr. Coleman’s affidavit were authenticated
pictures of Mr. Bryant’s parking brakes, as well as a DVD
containing a roll demonstration involving Mr. Bryant’s vehicle
conducted by Mr. Bryant and Mr. Coleman.
39a
Appendix B
further entertain a recall of class vehicles. Moreover,
the Court received stipulations from the parties that
Mr. Bryant currently owns his 2002 Chevrolet Z-71
Tahoe, that his vehicle is registered in Arkansas, and
that Mr. Bryant received a typical GM three year/36,000
mile written limited warranty at the time he purchased
his vehicle. Finally, GM stipulated to the Rule 23(a)(1)
class-certification element of numerosity. The parties
called no live witnesses to testify at the class-
certification hearing.
The Court has been asked by GM to make written
findings of fact and conclusions of law in connection with
ruling on Mr. Bryant’s motion for class certification. See
Ark. R. Civ. PB 52. The Court has carefully taken notice
of and reviewed the pleadings currently on file, the
briefing and evidence submitted by the parties, and
evaluated their respective oral arguments made at the
September 28, 2006 hearing. The Court, exercising its
discretion to do so, determines this matter is suitable
for class certification under Ark. R. Civ. P 23(a) and (b)
and orders that it be certified as a class action. Its Rule
52 findings of fact and conclusion of law supporting this
ruling and order are set forth herein as follows.
“
40a
Appendix B
Il.
Findings of Fact
1. Defendant General Motors Corporation (“GM”)
manufactured and sold through dealers throughout the
United States the following vehicles:
i) Model-year 1999-2004 C/K 15 Series pickup
trucks with a Gross Vehicle Weight Rating
(“GVWR)” of less than or equal to 6400 Ibs.
(with the exception of 2003-2004 Silverado SS
mode});
ii) Model-year 1999-2004 C/K 15 Series SUV/
UUVs with a GVWR of less than or equal to
7200 lbs.;
iii) Model-year 2002 K15706 Cadillac
Escalade and 2002 K15936 Cadillac Escalade.
P Exh. “1”, p. 1. The “C” signifies two-wheel drive, while
“K” signifies four-wheel drive. P Exh. “22”, p. 101, lines
14-23.
2. GM collectively describes these vehicles as “1500
Series pickups and utilities.” P Exh. 2, passim; Exh. 9,
passim; P- RFA Answers 1-5. GM also refers to these
vehicles as “GMT 800 1500 Series vehicles.”*
2. The Court will adopt GM’s terminology and refer to the
vehicles described in paragraph 1. above as “1500 Series
pickups and utilities”.
4la
Appendix B
3. All 1500 Series pickups and utilities were
originally equipped, manufactured and sold by GM with
a single shoe, PBR 210x30 Drum-in-Hat parking brake
system. P. Exh. “2”, GM000036104 (“The entire
population of 1500 Series vehicles is equipped with the
PBR single-shoe parking brake system with the
exception of certain crew cab models.”); P RFA Answers
1-5.
4. GM is responsible for integrating the PBR
210x30 Drum-in-Hat park brake system into these
vehicles. P Exh. “2”, GM000036113; P Exh. “9”, p. 11 of
13; P Exh. “23”, p. 34 (limes 5-9).
5. The PBR 210x30 Drum-in-Hat parking brake
system in 1500 Series pickups and utilities is operated
by foot pedal near the vehicle floor to the left of the
accelerator pedal and service brake. It has an intended
use as a parking assist device to be used in conjunction
with the transmission in its “park” position (automatic
transmission) or in reverse gear (manual transmission).
P Exh. “8”, GM000036753; P Exh. “15”, GM000025715;
P Exh. “22”, p. 145 (lines 18-25); 146 (lines 1-11); P Exh.
“23”, p. 88 (lines 4-9).
6. In numerous places in its owners’ manuals for
1500 Series pickups and utilities, GM cautions “[iJt is
dangeroms to get owt of your vehicle if the shift lever is
not fully in PARK (P) with the parking brake firmly set.
Your vehicle can roll.” P Exh. “24”, pp. 2-32; 2-39; 2-41;
2-42; 4-89; P Exh. “15”, GM000025718. Given this
language — which makes no distinction between manual
42a
Appendix B
and automatic transmission vehicles — the Court finds
the parking brake, even on automatic transmission
vehicles, is not a superfluous item as GM seems to
suggest in its briefing.’
7. GM expects people will use their owner’s
manuals. The information is there for their benefit in
how to maintain their vehicle and how to operate their
3. As additional support for the idea that parking brakes
on GM vehicles are not unnecessary, even on automatic
transmission vehicles, the GM Vehicle Technical Specifications
(VTS) for model-year 1999-2002 1500 Series pickups and utilities
specify the park brake shall hold the vehicle stationary at Gross
Vehicle Weight (GVW) with the transmission in neutral. P Exh.
“15”, GM000025714; P Exh. “19”, VTS 3.2.1.13.7.1 “Vehicle
Parking Gradeability” (“The park brake shall hold the vehicle
stationary at GVW, with the transmission in neutral.”); P Exh.
“23”, p. 46 (line 25); p. 47 (lines 1-20). Moreover, without
distinguishing between manual] and automatic transmission
vehicles, the GM VTS applicable to the model-year 1999-2002
1500 Series pickups and utilities require the PBR 210x30 Drum-
in-Hat parking brake system to enable and endure a total of 20
simulated police style U-turns without loss of function. P Exh.
“19”, VTS 3.2.1.5.7.2 “Simulated Police-Style U-turns”. The
applicable VTS also require the parking brake system to enable
and endure 4 dynamic stops at 60 mph without loss of function.
P Exh, “19”, VTS 3.2.1.5.7.3 “Dynamic Park Brake Stop”. Finally,
federal motor vehicle safety regulations governing vehicles such
as model-year 1999-2002 1500 Series pickups and utilities state
such vehicles “shall be manufactured with a parking brake
system of a friction type with a solely mechanical means to retain
engagement.” P. Exh. “20”. GM has admitted that if its vehicles
do not meet federal safety standards, it cannot sell such non-
compliant vehicles. P Exh. “23”, p. 49 (lines 2-5)
43a
Appendix B
vehicle. P Exh. “22”, p. 127 (lines 10-18). GM owners’
manuals, as a general proposition, prescribe how GM
believes 1500 Series pickups and utilities should
ordinarily be used by their owners or operators. P RFA
Answer 54.
8. Most vehicles with automatic transmissions
experience infrequent parking brake application by
their owners, drivers, or users in normal operations.
P RFA Answer 56.
9. The parking brake’s linings, made of a friction
material known as T103, sit inside a hollow metal cylinder
or drum attached to the inboard portion of the vehicle’s
wheel. Exh. “23”, p. 94 (lines 20-24). When the wheel
turns, the drum (also referred to as a “rotor”) likewise
turns. When the parking-brake foot pedal is depressed
a cable-actuated piston causes the parking brake’s
linings to travel or expand outward and contact the
inner portion of the drum. See P. Exh. “8”,
GM000036753. The design intent is that the contact of
the parking brake’s lining with the drum will, as a matter
of friction and torque, prevent the wheel from turning
and hold the vehicle motionless while parked, even if
the transmission is in neutral or out of gear. Jd.
10. The PBR 210x30 Drum-in-Hat parking brake
system on 1999-2002 model-year 1500 Series pickups
and utilities was originally assembled and distributed
with what GM calls a “high-force spriig clip retainer.”
P Exh. “6”, GM000036718.
44a
Appendix B
11. The specific GM model codes for the 1999-2002
model-year 1500 Series pickups and utilities containing
parking brakes with high-force spring clip retainers are
as follows:
1500 Series Pickup: C-K15703 (MY 99-02)
C-K15753 (MY 99-02)
C-K15903 (MY 99-02)
C-K15953 (MY 99-02)
1500 Series Utility: C-K 15706 (MY 00-02)
C-K15906 (MY 00-02)
C-K15936 (MY 02 only)
P. Exh. “6”, GM000036718. In light of GM’s 2005 recall
of manual transmission vehicles, discussed infra, the
automatic-transmission versions of these vehicles are
the only ones at issue in Mr. Bryant’s proposed class
action. That is, the automatic-transmission versions of
these model-coded vehicles are the class vehicles.‘
12. The function of the spring-clip retainer is to
ensure the parking brake linings, when not in use, are
retracted and properly positioned — concentric with the
drum — such that when the foot pedal is depressed and
the linings travel outward, they are properly centered
and make contact with the éorrect place on the interior
of the drum. P. Exh. “8”, GM000036754.
4. GM manufactured 3,905,481 model-year 1999-2002 1500
Series pickups and utilities vehicles with automatic
transmissions and equipped with parking brakes containing
high-foree spring clip retainers. P, Exh. “2”, GM000036 106.
4Sa
Appendix B
13. GM admits the high-force spring clip retainer
installed on model-year 1999-2002 1500 Series pickups
and utilities does not function properly in that it exerts
more retaining force than aligning forces tending to
center the parking brake linings in relation to the drum.
P Exh. “2”, GM000036107; P Exh. “8”, GM000036754;
P Exh. “9”, p. 2 of 13; P Exh. “23”, p. 77 (lines 1-18); p.
78 (lines 1-7).
14. The exertion of excessive retaining force is also
characterized by GM as the high-force spring clip
retainer not allowing the brake shoe and attached
linings to “float” inside the drum and remain concentric
with the drum. P Exh. “2”, GM000036102; P Exh. “9”;
P Exh. “30”, GM000038052; P Exh. “3”, GM000036624.
Mr. Bryant contends this alleged inadequate shoe/lining
float problem is the principle result of the defectively
designed high-force spring clip retainer. Mr. Bryant
claims the inadequate shoe/lining float problem exists
the very moment each class vehicle rolls off its assembly
line, and is persistent. That is, it reveals itself each time
a class vehicle is driven. Based on a review of
Mr. Bryant’s cited evidence, and the evidentiary record
as a whole, the Court agrees with Mr. Bryant and finds
the high-force spring clip retainer, if it is indeed
defectively designed (an issue ultimately to be
determined by the trier of fact), to create a common,
inadequate shoe/lining float problem in all class vehicles,
which is persistent, which occurs each time a class vehicle
is driven, and which exists, if at all, from the time class
vehicles roll off their respective assembly lines.
46a
Appendix B
15. This exertion of excessive retaining force by the
high-force spring clip retainer can result in a loss of
concentricity between the linings and drum. P. Exh. “2”,
GM000036102; P Exh. “9”, p. 4 of 13 This loss of
concentricity, which may be prompted by inertia-induced
movement of the parking-brake linings during vehicle
travel, rough road inputs, and/or axle deflection
occurring during certain vehicle cornering or loading
conditions®, can also allow or further result in
unintended, intermittent contact between the parking
5. With regard to inertia-induced movement of the
parking-brake linings, and how it affects parking brake
performance on 1999-2002 model-year 1500 Series pickups and
utilities, GM has further admitted to additional design-related
shortcomings regarding the PBR 210x30 Drum In Hat parking
brake system. First, it has admitted to design failure in that
load-induced axle shaft deflection under high-g cornering was
not comprehended as a cause of potential parking brake lining
wear in the Design Failure Mode Effects Analysis (DFMEA),
and that such failure to comprehend is something representing
a process non-existent, inadequate or missed by GM. Exh. “2”,
GM000036107; Exh. “7”; Exh. “9”, p. 11 of 13. Similarly, GM has
admitted design failure in that the Subsystem Technical
Specification (STS) for 1999 through 2002 model year 1500
Series pickups and utilities did not contain a maximum
allowable limit for axle shaft deflection, and that such omission
is something representing a process non-existent, inadequate
or missed by GM. Exh. “2”, GM000036107; Exh. “7”; Exh. “9”,
p. 11 of 13. Finally, GM has admitted design failure in that in
the pre-production design phase it did not adequately test or
perform durability validation with respect to the PBR 210x30
Drum-in-Hat parking brake system in 1999 through 2002 model
year 1500 Series pickups and utilities vehicles. Exh. “2”,
GM000036107; Exh. “7”; Exh. “9”, p. 11 of 13.
47a
Appendix B
brake linings and drum during vehicle travel. P Exh.
“2”, GM000036107; P Exh. “8”, GM000036754; P Exh.
“9”, pp. 1 and 2 of 13; PR Exh. “15, GM000025715; Exh.
“23” (lines 3-22)(“... . [a] severe pothole or some other
intertial event [] would move the park brake out of its
center position, and then this original clip might not
allow it to return back to that center position as
readily.”); P RFA Answer 35.
16. This unintended, intermittent contact between
the linings and drum during travel — a condition GM
has termed parking brake “self-application” or “self-
energizing” — essentially grinds down the parking
brake lining and promotes excessive, premature lining
wear. See P. Exh. “2”, GM000036102; P. Exh. 3,
GM000036624 (“Park brakes are wearing out due to ‘self
energizing.’”); P Exh. “8”, GM000036754 (“Relative
motion of the drum during driving acts to self-energize
the brake so as to maintain drum/lining contact and may
occur even in the absence of a parking brake
application.”); P Exh. “9”, p. 2 of 18; PR Exh. “15,
GM000025715; P. Exh. “23”, p. 83 (lines 6-16) (“The self-
energizing is where you get contact between the linings
and the rotor that, due to the direction of rotation of
the rotor, it tends to pull the lining in. It creates more
contact rather than pushing it away.”).
17. Excessive lining wear results in too large of a
gap between the lining and the drum such that
depressing the park brake will not cause the lining to
travel far enough to make sufficient contact with the
drum and hold the vehicle motionless. P Exh. “2”,
48a
Appendix B
GM000036107; P Exh. “9”, pp. 1 and 2 of 13. In GM’s
own words, parking brake “[ljining wear can increase
the clearance between the linings and the parking brake
drum to a point where the required apply lever travel
and associated shoe travel exceed the design capabilities
of the apply system, reducing its ability to generate
sufficient park brake torque to hold the vehicle
motionless.” P Exh. “2”, GM000036107; P Exh. “9”,
pp. 1 and 2 of 13; PR Exh. “15, GM000025716.
18. GM has also admitted the design of the PBR
210x30 Drum-in-Hat parking brake system with the high
force spring clip retainer is “.... less than optimal
because it is overly sensitive to proper lining-to-drum
clearances.” P Exh. “2”, GM000036107; P Exh. “7”;
P. Exh. “9”, p. 11 of 18. The Court finds this admission
to describe an additional potential design defect in the
PBR 210x30 Drum-in-Hat parking brake system in
model year 1999-2002 1500 Series pickups and utilities.
This potential defect is significant, given GM’s apparent
position, based on the affidavit of Jason Petric, that the
parking brake linings on Mr. Bryant’s vehicle were not
excessively worn, but rather were merely out of
adjustment and gapped too far away from the brake
drum. Even if GM is correct (the Court does not believe
it is, especially based on the contents of William
Coleman’s affidavit and measurements on Mr. Bryant’s
vehicle Mr. Coleman made), the Court finds the
condition of the PBR 210x30 Drum-in-Hat parking
brake system being overly sensitive to proper lining to
drum clearances is yet another example of a universal,
alleged defect in all class vehicles that persistently exists
and is actionable on a class-wide basis.
49a
Appendix B
19. GM maintains a Problem Resolution Tracking
System (“PRTS”). P Exh. “22”, p. 63, lines 17-25. The
PRTS was triggered regarding the parking brake due
to higher-than-expected-warranty claims. Jd. at 64, lines
15-19.
20. The PRTS regarding the defective parking
brakes “was initiated at the end of 2000 and was
assigned to engineering in early 2001.” P Exh. “22”,
p. 64, lines 20-25; p. 65, lines 1-5.
21. The GM Truck Group began 5-Phase Action plan
CK800U0331 regarding defective parking brakes on
January 29, 2001. P Exh. 29. In the written document
corresponding to that plan, GM noted the park brake
“(s]ystem was found in many cases to not be able to hold
after a low amount of miles (2500-6000). This condition
was found in the system 2A and 2B park brakes.”®
Id., GM000037499.
22. The component manufacturer of the parking
brake, PBR Banksia (“PBR”), performed testing on the
PBR 210x30 Drum-in-Hat parking brake system
originally utilized in 1999 through 2002 model year 1500
Series pickups and utilities. From its testing it concluded
that at 10,048 miles the defective parking brakes needed
a first adjustment and that at 27,273 miles the defective
parking brakes’ linings wear to steel. P Exh. “10” (bar
chart entitled “Wear Life Comparison, Original T800,
6. The “system 2A and 2B park brakes” are in essence the
PBR 210x30 Drum-in-Hat parking brake system. P. Exh. “1”.
50a
Appendix B
Low Load, Twin Clip”); P Exh. “23”, p. 23 lines 3-25; p.
24 (entire); p. 25 (lines 1-10); p. 26 (lines 22-25); p. 27
(lines 1-10). PBR has actually estimated the parking
brake lining life in 1999-2002 model year 1500 Series
pickups and utilities, due to the alleged defect, to be a
mere 30,000 to 35,000 miles, only 1/5 of the expected life
of such vehicles, and before expiration of the 36,000 mile
written limited warranty provided by GM to vehicle
purchasers. P. Exh. “11” (“Lining Life Estimates:
Original design = 30-35,000 miles”); P Exh. “25”, p. 7
(Section entitled “1999 General Motors Corporation New
Vehicle Warranty”).
23. GM expects the life of all 1500 Series pickups
and utilities to be 10 years of exposure or 150,000 miles.
P Exh. “19”, VTS 3.2.1.1 “Target Life”; P Exh. “22”,
p. 124 (lines 11-14); P Exh. “23”, p. 27 lines 23-25; p. 28
(lines 1-4). No criteria or performance standards
concerning expected mileage or months of service of the
parking brake, including parking brake linings, is set
forth in the GM Vehicle Technical Specification (VTS)
or GM Sub-System Technical Specification (SSTS) for
1500 Series pickups and utilities. PR Exh. “15”,
GM000025714; P Exh. “16”, GM000029872; P Exh. “19”;
P Exh. “22”, p. 66 (Lines 1-17). Similarly, the VTS for
1500 Series pickups and utilities indicates parking brake
linings are not considered items that will “wear out” or
are “wear out items”. Exh. “19”, VTS 3.2.3.1. “Wearout
Items”; VTS 3.2.3.1.1 “Brake Wearout Items”; Exh. “22”,
p. 72 (lines 18-25); p. 73 (line 1) (“The park brake, if
adjusted correctly and maintained, I believe the
expectation is that they will not wear out based on them
Sla
Appendix B
not being on this wear-out item matrix.”); Exh. 23, p. 28
(lines 2-7) (Question: “Is it your understanding that the
park brake linings are supposed to last [the 150,000 mile
target life of the vehicles ]?” Answer: “Yes”). On the other
hand, a performance standard of 40,000 miles for the
service brake linings is prescribed in the GM Vehicle
Technical Specification (VTS) for 1500 Series pickups
and utilities. Exh. “19”, VTS 3.2.3.1.1 “Wearout Items”;
Exh. “22”, p. 66 (lines 18-25; 67 lines 1-10; p. 70, lines
12-22). In the Court’s mind, the only inference that can
be drawn from these omissions and the existence of a
specific standard for service brakes is that GM has
always expected the parking brake linings on these
vehicles to last the expected vehicle life, ie. 10 years of
exposure or 150,000 miles. Indeed, GM’s own VTS
confirms this, stating the “Target Life” of the parking
brake is essentially 10 years of exposure of 150,000 miles.
P Exh. “19”, 3.2.3.1 “Target Life”.
24. In October 2001 GM concluded the design of the
parking brake, including its spring clip retainer, was
faulty. P Exh. “2”, GM000036102; P Exh. 9, p. 4 of 13.
25. On October 19, 2001 GM initiated an
Engineering Work Order (E WO) to release a spring clip
retainer with lower retaining force. P Exh. “2”,
GM000036102, GM000036106, GM000036109; P Exh.
“9”, p. 40f 13. This release was effective with 2003 model
year start of production. /d. ; P RFA 82 Answer.
26. GM believed the reduced force spring clip
retainer would “. ... minimize the lining self energizing
52a
Appendix B
by allowing the lining to float easier and not “stick” to
the inside of the rotor during operation on rough roads.”
P. Exh. “30”, GM000038052.
27. The implementation of the low-load or reduced
force spring clip retainer beginning with model year
2003 1500 Series pickups and utilities has effectively
eliminated the intermittent contact condition between
the parking brake lining and the parking brake surface
or drum during vehicle travel. P Exh. “9”, p. 4 of 13
(“Implementation was effective with 2003 start of
production, after which the warranty repair rate due to
lining wear became insignificant.”); P Exh. “23”, p. 77
(lines 1-18); p. 78 (lines 1-7).
28. All 1999 through 2002 model year 1500 Series
pickups and utilities are covered by a GM bumper-to-
bumper new vehicle warranty for three (3) years or
36,000 miles. P Exh “15”, GM000025710 (“The subject
vehicles, with the exception of the Cadillac vehicles, are
covered by a bumper-to-bumper new vehicle limited
warranty for three years or 36,000 miles whichever
occurs first.); P Exh. “16”, GM000029865 (“The subject
vehicles, with the exception of the Cadillac vehicles, are
covered by a bumper-to-bumper new vehicle limited
warranty for three years or 36,000 miles whichever
occurs first. The Cadillac subject vehicles are covered
by a bumper-to-bumper new vehicle limited warranty
for four years or 50,0000 miles whichever occurs first”);
Exh. “25”, pp. 7-11 (Section entitled “1999 General
Motors Corporation New Vehicle Warranty”); GM CD
containing warranty booklets admitted into evidence at
53a
Appendix B
the class-certification hearing. In relevant part, the
limited warranty language regarding coverage is as
follows:
Wuat Is CovERED
WARRANTY APPLIES
THis WARRANTY Is For GM VEHICLES
REGISTERED IN THE UNITED STATES NORMALLY
OPERATED IN THE UNITED StaTES OR CANADA,
AnD Is ProvipED To THE ORIGINAL AND ANY
SUBSEQUENT OWNERS OF THE VEHICLE DURING
THE WARRANTY PERIOD.
REPAIRS COVERED
THE WARRANTY Covers Repairs To CORRECT
ANY VEHICLE DEFECT RELATED To MATERIALS
Or WoRKMANSHIP OCCURRING DuRING THE
WARRANTY PERIOD. NEEDED REPAIRS WILL BE
PERFORMED USING NEW OR REMANUFACTURED
Parts.
WARRANTY PERIOD
THE WARRANTY PERIOD For ALL COVERAGES
BeGins ON THE Date THE VEHICLE Is First
DELIVERED Or Put In Use AnD Enps AT THE
EXPIRATION OF THE COVERAGE PERIOD.
54a
Appendix B
Bumper-T0-BuMPER COVERAGE
THE CoMPLETE VEHICLE IS COVERED For 3
YeaARS Or 36,000 MILES, WHICHEVER COMES
FIRST. ...
No CHARGE
WaRRANTY Repairs, INCLUDING TowING, PARTS
Anp Lasor, WILL BE Mape At No Cuarce, LEss
Any APPLICABLE DEDUCTIBLE.
Orner TerRMs: THIS WARRANTY GIVES YOU
Sreciric LEGAL Ricuts AND You May AtLso
Have OTHER RIGHTS WHICH Vary FROM STATE
To STATE.
GENERAL Motors DoEs Not AUTHORIZE ANY
PERSON To CREATE For It Any OTHER
OBLIGATION OR LIABILITY IN CONNECTION WITH
THESE VEHICLES. ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR Fitness For A
PARTICULAR PurRPOSE APPLICABLE To THIS
VEHICLE Is Limitep IN Duration To THE
DuRATION Or THis WrittTeEN WARRANTY.
PERFORMANCE OF ReEpaiRS AND NEEDED
ADJUSTMENTS Is THE ExcLusivE REMEDY UNDER
THis WRITTEN WARRANTY Or Any IMPLIED
WarRRANTY. GENERAL Motors SHALL Nor BE
LIABLE For INCIDENTAL Or CONSEQUENTIAL
DamacGes (Sucu As, But Nor Limitep To, Lost
Waces Or VeEuHiIcLeE RENTAL EXPENSES)
RESULTING FrRoM THe BREACH OF Tuis WRITTEN
WARRANTY Or ANY IMPLIED WARRANTY.
55a
Appendix B
The Court finds this coverage language is identical in
material respects for all 1999 through 2002 model year
1500 Series pickups and utilities. /d.
29. On September 17, 2002 (eleven months after
issuance of the GM engineering work order to
re-engineer the high-force spring clip retainer) GM
released technical service bulletin #2-05-26-011 to its
dealers. P Exh. “22”, p. 46, lines 2-7. In this bulletin it
was noted “[a] rear parking brake retaining spring clip
kit has been released for service.” Significantly, however,
it also stated “Important — The spring clip kits
mentioned in this bulletin do not address any parking
brake concerns.” Exh. “13” The Court finds, as Mr.
Bryant has argued, that this language is troubling and
can be construed as an effort on GM’s part to conceal
— to the detriment of all class members — its
responsibility for problems with the PBR 210x30 Drum-
in-Hat parking brake system to avoid paying warranty
claims. To begin with, the Court does not understand
why GM waited eleven (11) months after it re-engineered
the high-force spring clip retainer on October 19, 2001
to issue a bulletin regarding vehicles that had been
manufactured with the high-force clip. For the bulletin
to then contain this language, in the Court’s view, is
triable evidence GM wanted to conceal its responsibility
for the design problem from all class members. The fact
the three-year GM limited warranties were beginning
to expire in August 2001 only reinforces the Court’s view
that GM’s conduct may have been inappropriate,
designed either to avoid paying warranty claims or to
induce prospective sales of class vehicles.
56a
Appendix B
30. On January 28, 2003 — roughly two years after
GM engineering received notice of parking brake
problems — GM published technical service bulletin 02-
05-26-002A and sent it to dealers. It was in this service
bulletin that GM first acknowledged to outside entities
such as dealers that scraping noise from the rear of
vehicles “may |sic] due to the parking brake shoe
contacting the drum in hat rotor without the parking
brake being applied, causing premature wear on the shoe
lining.” P Exh. “2”, GM000036109; P Exh. “14”; P Exh.
“22”, p. 46.
31. In December 2003 the National Highway Traffic
and Safety Administration (NHTSA) issued Preliminary
Evaluation Information Request (“IR”) PE03-057
regarding allegations of parking brake ineffectiveness
on model year 1999-2008 full-size pickup trucks built on
the GMT 800 platform and equipped with manual
transmissions and drum-in-hat parking brakes. PR Exh.
“2”, GM000036103; P Exh. “9”, p. 4 of 13
32. In mid-February 2004 GM provided a response
to the NHTSA IR and thereafter engaged in vehicle
testing regarding the defective parking brake. P Exh.
“2”, GM000036103; P Exh. “15”.
33. On November 18, 2004 NHTSA issued
engineering analysis IR EA04-011, which expanded the
scope of the initial IR to include all model year 1998-
2004 full-size pickup trucks and utilities built on either
the GMT 400 or GMT 800 platform and equipped with
either a manual or automatic transmission. P Exh. “2”,
GM000036102.
S7a
Appendix B
34. The primary concern of the NHTSA
investigation directed at the PBR 210x300 Drum-in-Hat
parking brake system in 1999 through 2002 model year
1500 Series pickups and utilities was vehicle rollaways.
P Exh. “8”, GM000036756.
35. On ipril 18, 2005, after the issue of the defective
parking brake was presented to the Senior
Management Committee, GM’s Field Action Decision
Committee decided to conduct a safety recall. P Exh.
"9". p. 2
36. On April 20, 2005 GM sent NHTSA written
notification of this decision. P Exh. “17” In that
correspondence GM stated “General Motors has decided
that a defect, which relates to motor vehicle safety, exists
in certain 1999-2002 UK. Series (PBR parking brake
system)... pickups with manual transmissions. Some
of these vehicles have a condition in which the parking
brake friction linings may wear to an extent where the
parking brake can become ineffective in immobilizing a
parked vehicle.” P Exh. “17”, p. 1
37. In July 2005 GM issued Recall Bulletin 05042,
which applied only to manual transmission versions of
1999-2002 1500 Series pickups and utilities. P Exh. “18”.
38. GM projected the cost to recall only 1999-2002
1500 Series pickups and utilities manual transmission
vehicles with defective parking brakes to be $6,645,793.
P Exh. “4”, GM000036679-80.
58a
Appendix B
39. In contrast, GM projected the cost to recall both
the manual and automatic transmission version of such
vehicies to be fifty (50) times greater, or $350,083,047.
P Exh. “4”, GM000036679-80.
40. To date GM has neither contacted owners of nor
recalled any of the 3,905,481 model-year 1999-2002 1500
Series pickups and utilities with automatic transmissions,
the class vehicles here, based on parking brake concerns.
Exh. “22”, p. 39, lines 13-17; p. 42, lines 7-10.
41. The PBR 210x30 Drum-in-Hat park brake
system utilized in manual transmission 1999-2002 1500
Series pickups and utilities is identical to the PBR
210x380 Drum-in-Hat park brake system installed on
automatic-transmission 1999-2002 1500 Series pickups
and utilities. Moreover, “the same physical parking
brake wear mechanism is also present on vehicles with
automatic transmissions. ...” P Exh. “5”; P Exh. “22”,
p. 43, lines 5-9; PR P Exh. “23”, p. 36 (lines 20-25); p. 37
(lines 1-25); p. 38 (lines 1-8).
42. The remedy in Recall Bulletin 05042 is that GM
instructs dealers to “inspect the parking brake lining
thickness on both rear brakes, and depending on the
amount of lining remaining, install either a reduced force
parking brake retainer spring clip on both rear brakes
or parking brake shoe kits, which includes the reduced
force clip.” P Exh. “18”, p. 1.
43. In all cases GM’s recall remedy is to supply a
reduced force spring clip retainer. /d. This is consistent
59a
Appendix B
with GM’s belief that implementation of the low-load or
reduced force spring clip retainer beginning with model
year 2003 1500 Series pickups and utilities effectively
eliminates the intermittent contact condition between
the parking brake lining and the parking brake surface
or drum during vehicle travel.
44. GM’s recall test for excessive lining wear is that
the parking brake lining thickness must equal or exceed
1.5 millimeters (.06 inches) in at least 6 places on each
side of the vehicle. P Exh. 2, GM000036108; P Exh. “18”,
p.4. As per GM’s recall materials, in the event parking
brake lining thickness is less than 1.5 millimeters (.06
inches) on any of at least 6 places on each side of the
vehicle, GM instructed its dealers to install a new
parking brake lining on both sides of the vehicle. Exh.
2, GM000036108; Exh. “18”, p.4.
45. In sum, if the linings are not sufficiently worn,
Recall Bulletin 05042 only entails installation of a
reduced force parking brake retainer spring clip on both
rear brakes. However, if the linings are excessively worn,
the recall requires both the replacement of the linings
and a reduced force spring clip retainer.
46. GM’s dealer sales and service agreement
requires its dealers nationwide to perform recall-related
repairs. P RFA Answer 157.
47. GM has estimated .9 hours per vehicle at an
hourly labor rate of $71.19 to represent labor costs in
terms of dealers inspecting and correcting the parking
60a
Appendix B
brake defect. P Exh. “2”, GM000036115; see also P. Exh.
“4”, GM000036679-80; P RFA Answer 153.
48. GM has estimated $4.93 to represent its cost
for corrective parts, per vehicle, in tends of dealers
inspecting and correcting the parking brake defect.
P. Exh. “2”, GM000036115; see also P. Exh. “4”,
GM000036679-80; P RFA Answer 154. ©
49. GM has estimated $1.00 per initial notice letter
per vehicle (First Class Mail) and $0.36 for “customer
follow up” per vehicle as administrative costs associated
with dealers inspecting and correcting the parking
brake defect. P Exh. “2”, GM00003 6 1 1 5; see also P
Exh. “4”, GM000036679-80; P RFA Answer 155.
50. On May 10, 2005 NHTSA’s Office of Defect
Investigations (ODI) issued an “ODI Resume” and
“Engineering Analysis Closing Report” closing its
engineering analysis Investigation EA 04-011 regarding
the defective parking brakes. P Exh. “8”
51. NHTSA closed the investigation because it
determined vehicle rollaways — again, the primary
concern of the investigation — would be prevented by
GM’s recall of manual-transmission 1999-2002 1500
Series pickups and utilities. P Exh. “8”, GM000036756-
000036757.
52. In closing its investigation NHTSA stated, “The
Engineering Analysis is closed because GM’s recall
action will remedy the defect condition in the MY 1999-
6la
Appendix B
2003 C/K 1500 pickup trucks equipped with manual
transmissions.” P Exh. “8”, GM000036757.
53. As demonstrated by responses to NHTSA and
the recall campaign in general, GM has the ability to
conduct a Vehicle Identification Number (VIN) search
within its internal databases and identify the name,
address and telephone number of each original
purchaser or owner of 1999 through 2002 model year
1500 Series pickups and utilities. PR Exh. “15”,
GM000025708; see also P RFA Answers 97-101.
54. In addition, on-line internet access at GM’s
owner website, www.mygmlink.com, provides a way for
owners of 1999 through 2002 model year 1500 Series
pickups and utilities to obtain personalized information
for their specific vehicles. GM controls the format and
content of this website, with some limitations. P Exh.
“17”, p. 16; see also PR RFA Answers 159-161.
55. GM also has the ability to obtain contact
information (name and address) for current or used
vehicle owners by contacting an “outside supplier” and
having it obtain registration information for all desired
or affected VINs. P. Exh. “22”, p. 38, lines 14-25.
56. On April 4, 2002 Plaintiff Boyd Bryant, at the
time and currently a resident of Fouke, Miller County,
Arkansas, purchased and took delivery of a new 2002
Chevrolet Tahoe Z-71, VIN 1GNEK13282R268414 (“the
Bryant vehicle”) from Tom Morrick Chevrolet, Inc. in
Ashdown, Arkansas. P. Exh. “26”. By stipulation of the
62a
Appendix B
parties, Mr. Bryant received a standard GM three-year/
36,000 mile written limited warranty (as identified and
discussed above) at the time he purchased the Bryant
vehicle.
57. Mr. Bryant presently owns the Bryant vehicle;
it has approximately 81,000 miles on it.
58. The Bryant vehicle falls within the description
of 1999 through 2002 model year 1500 Series pickups
and utilities and, more particularly, is one of the
“utilities” in that description.
59. The Bryant vehicle was originally equipped with
a PBR 210x30 Drum-in-Hat park brake system utilizing
high-force spring clip retainers. P Exh. “28”, p. 8
(“.... the parking brake on Mr. Bryant’s vehicle was a
PBR parking brake.”). The Bryant vehicle is still
equipped with a PBR 210x30 Drum-in-Hat park brake
system utilizing high-force spring clip retainers.
See photographs attached to William Coleman’s affidavit.
60. Plaintiff’s engineer expert, William Coleman,
measured the parking brake lining thickness on the
Bryant vehicle, and in at least one place on the passenger
side it is less than 1.5 millimeters (.06 inches). See William
Coleman affidavit; photographs attached to and
authenticated by Mr. Coleman’s affidavit. Based on this
measurement, the Court finds the Bryant vehicle is
exhibiting lining wear consistent with the inadequate
lining float Mr. Bryant alleges is associated with GM’s
use of the high-force spring clip retainers.
63a
Appendix B
61. Mr. Coleman also tested the Bryant vehicle for
parking brake functionality. With the parking brake fully
depressed and the transmission in neutral, the Bryant
vehicle rolls on both steep and lesser hills or grades.
William Coleman affidavit; see DVD containing
videotaped footage of the hill testing of the Bryant
vehicle. Accordingly, the Bryant vehicle’ is exhibiting
7. According to GM, the 1500 Series utilities like the Bryant
vehicle (i.e. sport utility vehicles such as Chevrolet Tahoes and
Suburbans, and GMC Yukons and Yukon XLs) have experienced
the defect-related premature lining wear more than any other
category of vehicles in the 1999 through 2002 model year 1500
Series pickups and utilities class of vehicles. P Exh. “5”. By
GM’s own admission, the reason the 1999-2002 1500 series
utilities are more prone to poor parking brake performance is
that 1500 Series utilities have the following unique design
characteristics or traits:
_ Small axle shaft diameters relative to other
vehicles in the 1999 through 2002 model year 1500
Series pickups and utilities class of vehicles;
_ The highest GVW ratings relative to other
vehicles in the 1999 through 2002 model year 1500
Series pickups and utilities class of vehicles;
_ The greatest unladen weights relative to
other vehicles in the 1999 through 2002 model year
1500 Series pickups and utilities class of vehicles,
_ They have coil-spring suspensions with
unique spring and shock absorber calibrations
(Cont’d)
64a
Appendix B
lack-of-parking-brake functionality consistent with the
presence of the defect associated with GM’s use of the
high-force spring clip retainers.
62. As per his affidavit, Mr. Bryant has reviewed
the original and amended pleadings in this matter, and
understands the allegations against GM. He also
understands his duties and obligations as a class
representative and has testified that he has complied
with them by, among other things, giving a deposition
in this case, assisting with written discovery answers,
and by staying in touch with representative counsel
during this litigation to keep aware of status and
progress of this lawsuit. In that vein, the Court notes
Mr. Bryant not only participated in at least two
inspections of Z-71 Tahoe, as well as a roll test of this
vehicle, but he also attended part of the class-
certification hearing, even though it occurred on one of
his off days from his employment.
63. Mr. Bryant further agrees to fairly and
adequately represent other members of any designated
(Cont’d)
compared to other vehicles in the 1999 through 2002
model year 1500 Series pickups and utilities class of
vehicles.
P. Exh. “2”, GM000036106; Exh “5”. These factors subject the
1500 Series utilities to greater parking brake shoe inertia and
axle shaft deflection, resulting in accelerated parking brake
lining wear. /d.
65a
Appendix B
class with similar claims and damages because of the
importance that all benefit from this lawsuit equally.
64. Finally, he states there is no collusion or
conflicting interest between members of the proposed
class and him.
III.
Conclusions of Law
A. Mr. Bryant’s Class Definition.
1. Before the six (6) criteria for class certification
under Rule 23 are analyzed, the trial court must
determine whether a class, in fact, exists. F.g. State
Farm Fire & Cas. Co. v. Ledbetter, 355 Ark. 28, 129
S.W.3d 815 (2003). A class must be susceptible to precise
definition. Its description must be sufficiently definite
so that it is administratively feasible for the court to
determine whether a particular individual is a member
of the proposed class, and the identity of the class
members must be ascertainable by reference to
objective criteria. Arkansas Blue Cross and Blue Shield
v. Hicks, 349 Ark. 269, 78 S.W.3d 58 (2002). Part of the
“objective criteria” requirement is that a class may not
be defined in a manner that would require the trial court
to inquire into the merits of each class member’s case
in order to determine whether he is a suitable class
member. Ledbetter, 355 Ark. at 37.
66a
Appendix B
2. Mr. Bryant has moved under Ark. R. Civ. P 23
for certification of the following nationwide class of GM
vehicle owners:
“Owners” or “subsequent owners” of 1999-
2002 1500 Series pickups and utilities
originally equipped with an automatic
transmission and a PBR 210x30 Drum-in-
Hat parking brake system utilizing a high
force spring clip retainer’, that registered
his vehicle in any state in the United States.
Excluded from Mr. Bryant’s proposed class are the
following individuals or entities:
a. Individuals or entities, if any, who timely
opt out of this proceeding using the correct
8. The term “1999-2002 1500 Series pickups and utilities
originally equipped with an automatic transmission and a PBR
210x30 Drum-in-Hat parking brake system utilizing a high-
force spring clip retainer” as utilized in his class definition refers
to the following GM model-year and model-coded vehicles
equipped with automatic transmissions:
1500 Series Pickup: C-K15703 (MY 99-02)
C-K15753 (MY 99-02)
C-K15903 (MY 99-02)
C-K15953 (MY 99-02)
1500 Series Utility: C-K15706 (MY 00-02)
C-K15906 (MY 00-02)
C-K15936 (MY 02 only)
67a
Appendix B
protocol for opting out that will be formally
established by the Court;
b. Any and all federal, state, or local
governments, including, but not limited to,
their departments, agencies, divisions,
bureaus, boards, sections, groups, counsels,
and/or subdivisions;
c. Any currently sitting Arkansas state court
judge or justice in the current style and/or
any persons within the third degree of
consanguinity to such judge or justice;
d. Any person who has given notice to GM,
by service of litigation papers or otherwise,
and alleged he or she has suffered personal
injury or collateral property damage due to
an alleged defect in any braking component,
including the parking brake, in 1999-2002 1500
Series pickups and utilities originally equipped
with an automatic transmission and a PBR
210x30 Drum-in-Hat parking brake system
utilizing a high-force spring clip retainer;
e. Any person, “owner”, or “subsequent
owner” whose GM vehicle was included in
GM’s July 2005 recall bulletin No. 05042, or
any supplements or amended versions of that
bulletin that have previously been issued.
68a
Appendix B
3. The Court concludes the nationwide class for
which Mr. Bryant seeks certification both exists and is
susceptible to precise definition. The terms “owners”
and “subsequent owners” are taken from GM’s own
warranty publications. Thus GM cannot complain of the
class not being susceptible to precise definition, nor of
it not being ascertainable by reference to objective
criteria. Moreover, GM has admitted it has the ability
to provide personal information (name, address,
telephone number) regarding original vehicle
purchasers via its warranty database, as well as current
vehicle owners via third party vendors that conduct VIN
searches. Finally, the fact GM has conducted a recall on
the manual-transmission versions of class vehicles
demonstrates it is administratively feasible for GM not
only to identify class members, but also to contact them.
4. GM contends the class is not susceptible to
precise definition because class member status is
dependent upon “when the alleged damage (parking
brake failure) occurred.” GM also contends Mr. Bryant’s
class definition is flawed because it “continu[es] to shift
on a daily basis as large numbers of the four million
vehicles are sold... .” Both of GM’s arguments lack merit.
First, the Court has concluded the “failure” as alleged
by Mr. Bryant — the inadequate lining float — occurs
from day one off the assembly line. Consequently, all
“owners” and “subsequent owners” experienced the
“failure” at delivery and are continuing to experience
it, if it is ultimately proven to exist. There is no single
post-purchase date of “failure” which might taint
Mr. Bryant’s class definition here. As for GM’s other
69a
Appendix B
argument, there will obviously be some daily shift in class
vehicle ownership that may occur. But this would be the
case in most any products-based class action. The Court
fails to see how this shift in product ownership, alone,
provides any basis to attack Mr. Bryant’s class definition.
GM has admitted its warranty database provides the
identity of and contact information for all original owners
of class vehicles. In addition, GM personnel have
admitted third-party firms can conduct VIN searches
and obtain a snapshot regarding present owners of class
vehicles. So there are numerous ways to objectively
determine the individuals that are members of
Plaintiff’s proposed class. GM’s concerns are
unwarranted.
B. Rule 23(a)(1) Numerosity.
5. As noted, GM has stipulated to the Rule 23
element of numerosity. The Court accepts this
stipulation and concludes the nationwide class proposed
by Mr. Bryant is sufficiently numerous to satisfy
Ark. R. Civ. P 23(a)(1).
C. Rule 23(a)(2) Commonality.
6. The second requirement, set forth in Rule
23(a)(2), is commonality. As written by Professor
Newberg, a legal scholar frequently cited by the
Arkansas Supreme Court in class action opinions,
Rule 23(a)(2) does not require that all
questions of law or fact raised in the litigation
70a
Appendix B
be common. The test or standard for meeting
the rule 23(a)(2) prerequisite is . . . that is
there need be only a single issue common to
all members of the class. .. When the party
opposing the class has engaged in some course
of conduct that affects a group of persons and
gives rise to a cause of action, one or more of
the elements of that cause of action will be
common to all of the persons affected.
Herbert B. Newberg, Newberg on Class Actions, § 3.10
(3d ed. 1993); BPS, Inc. v. Richardson, 341 Ark. 34, 20
S.W.3d 403, 407 (2000.
7. These common issues of law and fact asserted to
exist by Mr. Bryant arise principally from Mr. Bryant’s
allegation that the class vehicles contain defectively
designed PBR 210x30 Drum-in-Hat parking brake
systems, and that GM engaged in a cover up to avoid
paying warranty claims. Among others, Mr. Bryant
believes the common issues of law and fact satisfying
Rule 23(a)(2) in this matter are:
BREACH OF EXPRESS WARRANTY:
Whether, based on the terms of GM’s written
limited warranty, the alleged design flaw in
the parking brakes in class vehicles
constitutes a “vehicle defect related to
materials or workmanship occurring during
the Warranty Period.”
Tila
Appendix B
BREACH OF IMPLIED WARRANTY OF
MERCHANTABILITY: Whether the alleged
design flaw in the parking brakes on class
vehicles has rendered those vehicles “not fit
for [their] ordinary purpose.”
MAGNUSON-MOSS WARRANTY ACT:
Whether GM, by virtue of the parking brake’s
allegedly defective design, has failed to comply
with its own “written warranty’ or an “implied
warranty.”
UNJUST ENRICHMENT: Whether GM, by
allegedly defectively designing the parking
brake and concealing the defect to avoid
paying warranty claims, has unjustly retained
benefits that it should restore to Plaintiff and
class members.
FRAUDULENT CONCEALMENT: Whether
GM, once it acquired knowledge of the parking
brake’s defect in late 2000 (or sometime
later), was clothed with a duty to speak to
existing owners of class vehicles so they could
obtain warranty relief. In addition, whether
GM, once it acquired knowledge of the parking
brake’s defect in late 2000 (or some time
later), owed a duty to speak to prospective
purchasers of class vehicles, alerting them to
the existence of the defect.
72a
Appendix B
DAMAGES: Whether Mr. Bryant and the
class members have suffered and are entitled
to damages.
RESTITUTION: Whether Mr. Bryant and
class members are entitled to restitution
based on, without limitation, GM’s unjust-
enrichment-related misconduct and/or having
previously paid for repairs to the defective
parking brakes.
8. In view of its factual findings regarding the
alleged defective parking brake and GM’s alleged cover
up, and Mr. Bryant’s pleadings, the Court agrees with
Mr. Bryant and concludes the foregoing issues of law
and fact are sufficiently common to establish Rule
23(a)(2)’s element of commonality.
D. Rule 23(a)(3) Typicality.
9. The Arkansas Supreme Court has also cited
Professor Newberg’s work in defining the contours of
typicality required by Rule 23(a)(3):
Typicality determines whether a sufficient
relationship exists between the injury to the
named plaintiff and the conduct affecting the
class, so that the court may properly attribute
a collective nature to the challenged conduct.
In other words, when such a relationship is
shown, a plaintiffs injury arises from or is
directly related to a wrong to a class, and that
73a
Appendix B
wrong includes the wrong to the plaintiff.
Thus, a plaintiff’s claim is typical if it arises
from the same event or practice or course of
conduct that gives rise to the claims of other
class members, and if his or her claims are
based on the same legal theory. When it is
alleged that the same unlawful conduct was
directed at or affected both the named plaintiff
and the class sought to be represented, the
typicality requirement is usually met
irrespective of varying fact patterns which
underlie individual claims. [Footnotes
omitted. }
Summons v. Missouri Pac. R.R., 306 Ark. 116, 813
S.W.2d 240, 248 (1991) (citing H. Newberg, Class
Actions, § 3.13 (2d ed. 1985)); Cheqnet Systems, Inc. v.
Montgomery, 322 Ark. 742, 911 S.W.2d 956, 959 (1995);
Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954
S.W.2d 898, 904 (1997). When analyzing typicality, the
focus should be “upon the defendant’s conduct anc not
the injuries or damages suffered by the plaintiffs.”
Jacola, 954 S.W.2d at 904. Similarly, “even if allegations
about injuries or damages are different, claims are
typical when they ‘arise from the same wrong allegedly
committed against the class.”” Farm Bureau Mutual
Ins. Co. of Ark., Inc. v. Lee, 323 Ark. 706, 918 S.W.2d
129, 131 (1996) (citing Cheqnet Systems, Inc. ,911 S.W.2d
at 959); THE/FRE, Inc. v. Martin, 349 Ark. 507, 78
S.W.3d 723, 729 (2002) (“Our case iaw is clear that the
essence of the typicality requirement is the conduct of
74a
Appendix B
the defendants and not the varying fact patterns and
degree of injury or damage to individual class
members”).
10. With regard to defenses GM may raise, the
Arkansas Supreme Court has repeatedly refused to
examine such defenses at the certification stage,
especially in the course of evaluating typicality. See Lee,
918 S.W.2d at 130 (Characterizing as “false” appellee’s
premise that a plaintiff “individually must have a claim
before he can seek certification of a class.””); Jacola, 954
S.W.2d at 905 (explicit refusal to consider merits-based
argument that Jacolas were inadequate representatives
because they did not read their insurance policy); BNL
Equity Corp. v. Pearson, 340 Ark. 351, 10 S.W.2d 838,
841 (2000) (accusing defendant of “plowing old ground”
in arguing potential defenses against the putative class
representatives should be examined in the course of,
among other things, addressing typicality); Direct
General Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528,
531 (1997) (“Moreover, it is apparent that Direct
Insurance, by asserting that Ms. Lane has not suffered
any damages, has attempted to defeat class certification
by delving into the merits of the case. That is
inappropriate.”); USA Check Cashers of Little Rock, Inc.
v. Island, 349 Ark. 71, 76 S.W.3d 243, 248 (2002)
(“Moreover, this court has repeatedly held that we will
not look either to the merits of the class claims or to the
appellant’s defenses in determining the procedural issue
of whether the Rule 23 factors are satisfied.”).
75a
Appendix B
11. The Court is satisfied a sufficient relationship
exists between the alleged injury to Mr. Bryant and
GM’s alleged conduct affecting the class to satisfy the
requirement of typicality. Mr. Bryant purchased and
currently owns a class vehicle. He has also received GM’s
written limited warranty with his purchase. Mr. Bryant
has suffered the alleged parking brake problem this
litigation concerns. The wrong allegedly committed
against the class — GM designing and implementing a
defectively designed parking brake into class vehicles,
then engaging in a cover up — is the precise wrong
Mr. Bryant contends he has suffered, especially because
he purchased his vehicle in April 2002, which is after
October 21, 2001 but before the issuance of GM’s
January 28, 2003 service bulletin. Finally, because the
damages sought in this matter appear to be essentially
uniform, there is no concern Mr. Bryant’s damages are
any different from or at odds with those of other class
members (which is not a concern the Arkansas Supreme
Court would entertain anyway). In fact, the apparent
uniformity of damages here does nothing but strengthen
the case for typicality and for fulfillment of the other
Rule 23 requirements.
12. GM contends Mr. Bryant is subject to “unique
defenses” that defeat typicality because he didn’t give
pre-suit notice to GM, and he didn’t maintain his vehicle
according to his owner’s manual. The Court disagrees.
First, if the notice issue has any significance whatsoever
(the Court believes it does not, see footnote 16, infra),
it only affects the warranty claims asserted by
Mr. Bryant and class members. Mr. Bryant has asserted
76a
Appendix B
claims other than for breach of warranty. Lack of notice
will not be a defense, let alone a “unique defense” to
those claims. Second, Mr. Bryant’s assertion of parking
brake “failure”, with which the Court agrees, negates
GM’s lack-of-maintenance argument. Not even daily
maintenance could cure the alleged parking brake
defect and the “failure” it allegedly produces. Third, and
finally, even assuming Mr. Bryant is subject to GM’s lack
of notice and failure-to-maintain defenses, then a
population of class members will almost certainly be as
well. If class representatives and class members have
potential exposure to the same defenses, such defenses
are not sufficiently “unique” to defeat typicality. Barnes,
349 Ark. at 529, 78 S.W. 3d at 736; USA Check Cashers
of Little Rock, Inc., 349 Ark. at 81; 76 S.W.3d at 248.
GM’s lack of typicality argument based on these factors
is rejected. The Court concludes Mr. Bryant has
established Rule 23(a)(3) typicality.
E. Rule 23(a)(4) Adequacy of Representation.
13. Rule 23(a)(4)’s requirement of adequacy of
representation was first addressed in the Arkansas
Supreme Court’s decision in First National Bank of
Fort Smith as follows:
The elements of the requirement are: (1) the
representative counsel must be qualified
experienced and generally able to conduct the
litigation; (2) that there be no evidence of
collusion or conflicting interest between the
representative and the class; and (3) the
77a
Appendix B
representative must display some minimal
level of interest in the action, familiarity with
the practices challenged, and ability to assist
in decision making as to the conduct of the
litigation.
First National Bank of Fort Smith v. Mercantile Bank,
304 Ark. 196, 801 S.W.2d 38, 40-41 (1990) (citing Gentry
v. C&D Oil Co., 102 F.R.D. 490, 493 (W.D. Ark. 1984)).
14. As for the first element, absent a showing to the
contrary, it is presumed that the representative’s
attorney will vigorously and competently pursue the
litigation. BPS, Inc., 20S.W.3d at 408 (citing Jacola, 954
S.W.2d at 904). Mr. Bryant’s counsel has entered their
firm resumes into evidence detailing their various
backgrounds and experiences handling complex civil
litigation, including class actions. Representative
counsel have also vigorously pursued this litigation,
diligently conducting voluminous discovery, hiring
expert witnesses, seeking class certification, and
preparing for trial on the merits. This first element is
established.
15. With regard to the second element, there is no
evidence that collusion or conflicting interests exist
between Mr. Bryant and the class. That element is easily
satisfied.
16. Third, and finally, Mr. Bryant owns a class
vehicle, alleges he has been harmed by GM’s misconduct
affecting all class members, and has educated himself
78a
Appendix B
concerning GM’s alleged practices bringing about that
harm. He is very much interested in obtaining relief for
himself and class members both in Arkansas and
throughout the United States. He is not at all reluctant
to assist with written discovery requests, participate in
oral discovery, and generally assist representative
counsel with the decisions that need to be made during
the course of this litigation.
17. Allin all, Mr. Bryant has satisfied the Court that
he is an adequate class representative. The Rule 23(a)(4)
element of adequacy is met.
F Rule 23(b) Predominance.
18. Mr. Bryant, as noted, has established the
existence of common issues of law and fact as required
by Rule 23(a)(2). BPS, Inc., 20 S.W.3d at 408 (“We have
held that the starting point for our examination of the
predominance issue is whether a common issue of law
or fact exists in the case for all class members.”);
Lenders Title Co. v. Chandler, No. 04-41, 2004 Ark.
LEXIS 399 *15 (Ark. June 17, 2004) (“Lender’s II”).
Accordingly,
the next issue is whether the common question
predominates over individual questions.
When deciding whether common questions
predominate over other questions affecting
only individual members, [the Arkansas
Supreme Court] does not merely compare the
number of individual versus common claims.
79a
Appendix B
[BPS, Inc., 20 S.W.3d at 408] Rather, [it]
decides if the issues common to all class
members “predominate over” the individual
issues, which can be resolved during the
decertified stage of a bifurcated proceeding.
Id. Thus, the mere fact that individual issues
and defenses may be raised regarding the
recovery of individual members cannot defeat
class certification where there are common
questions concerning the defendant’s alleged
wrongdoing that must be resolved for all class
members. USA Check Cashers, 349 Ark. 71,
76 S.W.3d 243.
Id. It is the element of Rule 23(b) predominance that
GM contends is most lacking in this case. The Court
will address GM’s contentions in turn.
i. Individual Inspections and Use Factors.
20. GM principally argues predominance is lacking
because each class member’s vehicle must be inspected
in order to determine whether a parking brake “failure”
has occurred, and because individual-use factors such
as related component failure, rough road conditions,
excessive dirt in the brake, owner modification, lack of
service or maintenance, overloading, error by third-
party service technician, or prior accident all may
contribute to parking brake “failure”. GM attempts to
shore up these arguments by claiming parking brake
“failure” can only be defined in ultimate, safety-related
terms — that is, as the parking brake’s linings
80a
Appendix B
excessively wearing to the point of not being able to hold
a vehicle on a hill or grade. GM also cites two Arkansas
cases Mittry and Baker — as establishing a rule that
“where no one set of operative facts establishes liability,
no single proximate cause equally applies to each
potential class member” Rule 23(b) predominance
cannot be found. Mittry v. Bancorpsouth Bank, No. 04-
829, 2005 Ark. LEXIS 6 (Ark. Jan. 6, 2005); Baker v.
Wyeth-Aherst Labs Division, 338 Ark. 242, 992 S.W.2d
797, 800 (1999).
21. The Court disagrees that Rule 23(b)
predominance is lacking due either to a requirement of
individual vehicle inspections, or the individual-use
factors alleged by GM. Both Mr. Bryant’s pleadings and
the evidence adduced demonstrate the primary alleged
“failure” in the parking brake is the allegedly defective
high-force spring clip retainer not permitting the shoe
and attached linings to adequately float inside the brake
drum. The Court has seen nothing to convince it that
this alleged defect is not present in all class vehicles, or
that it doesn’t occur or manifest itself each time a class
vehicle is used. To the contrary, and as stressed by
Mr. Bryant a the class certification hearing, the alleged
inadequate float problem appears to be something that
is present in all class vehicles and which occurs each
time a class vehicle is used. This is because all class
vehicles utilize the PBR 210x30 Drum-in-Hat park brake
system, and GM has admitted in numerous documents,
with little to no equivocation, that the inadequate float
problem regarding that brake system is a real one.
8la
Appendix B
22. As for Mittry and Baker, even if those cases
stand for what GM says they stand for, the presence of
this common inadequate float problem negates GM’s
argument that there is no one set of operative facts that
establishes liability, or no single proximate cause that
equally applies to each potential class member. For that
reason, neither Mittry nor Baker gives the Court any
pause whatsoever.®
23. Even assuming arguendo the parking brake
“failure” should, as GM says, be defined more broadly
such that individual inspections for lining wear and/or
consideration of individual use factors might be
necessary, Rule 23(h) predominance still exists. The
Court views any need for individual inspections and/or
the individual use factors merely as individual
determinations relating to right to recovery or damages
that pale in comparison to the common issues
surrounding GM’s alleged defectively designed parking
brake and cover up to avoid paying warranty claims. In
9. As discussed in paragraph 18 of the Court’s findings of
fact, GM has also admitted the design of the PBR 210x30 Drum-
in-Hat parking brake system with the high force spring clip
retainer is “...less than optimal because it is overly sensitive to
proper lining-to-drum clearances.” P Exh, “2”, GM000036107;
P. Exh. “7”; P Exh. “9”, p. 11 of 13. In the Court’s view, this is yet
another potential defect in the parking brake system that
existed from day one off the assembly line in all class vehicles,
and which reveals itself each time class vehicles are driven,
This alleged defect also defeats GM’s argument that there is no
common defect that uniformly harms Mr. Bryant and class
members.
82a
Appendix B
Seeco, the Arkansas Supreme Court discussed the
significance of such individual, right-to-recover
determinations as follows:
Challenges based on the statute of limitations,
fraudulent concealment, releases, causation,
or reliance have usually been rejected and will
not bar predominance satisfaction because
those issues go to the right of a class member
to recover, in contrast to underlying common
issues of the defendant’s liability.
Seeco, Inc. v. Hales, 330 Ark. 402, 954 S.W.2d 234, 238
(1997) quoting 1 Herbert B. Newberg, NEWBERG ON
CLASS ACTIONS § 4.26, at 4-104 (3d ed. 1992).'°
24. The predominance concerns arising from
individual use factors or inspections are no different
from the ones the Arkansas Supreme Court in recent
years addressed and rejected in Seeco and other cases."!
10. The identical excerpt from Professor Newberg’s treatise
is also cited for the same proposition in both USA Check Cashers
and Tay-Tay, Inc. in support of the Arkansas Supreme Court’s
affirming the trial court’s finding of predominance.
See USA Check Cashers of Little Rock, Inc., 76 S.W.3d at 249-
250; Tay-Tay, Inc. v. Young, 349 Ark. 675, 80 S.W3d 365, 372
(2002).
11. See Jacola, 954 S.W.2d at 903; Seeco, 954 S.W.2d at 238;
Fraley v. Williams Ford Tractor & Equip. Co., 339 Ark. 322,
5 S.W.3d 423, 438 (1999); BNL Equity, 10 S.W.3d at 842-843;
(Cont'd)
83a
Appendix B
‘Mr. Bryant relies on these cases in his briefing, and
rightly so. GM has not convinced the Court these cases
should not have direct bearing on the predominance
analysis in this case.
25. In fact, it appears the Arkansas Supreme Court
in Snowden addressed and rejected an argument nearly
identical to GM’s regarding the need for individual
inspections as they pertain to wrecked cars.’ The
(Cont’d)
Arkansas Blue Cross and Blue Shield v. Hicks, 349 Ark. 269, 78
S.W.3d 58, 63 (2002); Lenders J7, 2004 Ark. LEXIS 399 at **16-
‘17; American Abstract & Title Co. v. Rice, No. 03-754, 2004 Ark.
LEXIS 401 at **12-14 (July17, 2004); Farmers Ins. Co., Inc. v.
Snowden, No. 05-527, 2006 Ark. LEXIS 298 at *19 (April 13,
2006).
12. In Snowden the plaintiff filed class action against
defendant auto insurer claiming it had breached insurance
contracts by refusing to pay, in addition to cost of repairs,
diminished value of policyholders’ automobiles that had
endured collision damage. The trial court determined two
predominating issues existed: 1) whether the Arkansas Personal
Auto Policy in issue obligated the defendant to compensate
insureds for diminished value; and 2) whether Plaintiff and
class members had any obligations other than presenting their
claim to Farmers to receive compensation for diminished value.
In affirming the trial court’s finding, the Court wrote
In the instant case, the class is made up of insureds
who all had the same policy with Farmers. The
overarching issue is whether the policy owned by
all the insureds bound Farmers to pay proper claims
(Cont'd)
84a
Appendix B
inspections of wrecked cars in Snowden were required
to make an assessment of diminished value. The
Snowden inspections, in the Court’s view, are more
individualized that anything that may be required in this
case, as they required not only individual inspections,
but individual, case-by-case damage calculations based
on what was seen. By contrast, the Court understands
Mr. Bryant to allege that new, non-defective low-force
spring retaining clips are necessary for all class
members. No individual inspections are required for
(Cont'd)
for diminished value, which is a question that does
not rely on factors such as meeting of the minds or
when the contract was created. It is a question on
which this case turns and is a strict question of
Arkansas law and contract interpretation.
Snowden, 2006 Ark. LEXIS 298 at *19. In addressing the
insurer’s complaint that the damages each aggrieved
policyholder suffered would be vastly different and thus defeat
predominance, the Court responded,
As previously noted, the common questions in the
instant case do not rely on individualized factors,
rather they turn on Arkansas law and contract
interpretation. The individualized factors, including
the factors discussed by appellant’s expert, are only
relevant to the issue of damages, determining
whether or not a certain insured has a valid claim
for diminished value and is entitled to that
compensation from Farmers.
Id. at **21-22.
8Sa
Appendix B
class members to obtain that relief. GM’s inspection
concern arises only because Mr. Bryant’s contends that
if the alleged defect has cause excessive lining wear as
per GM’s service bulletin or recall criteria, then lining
replacement is also necessary. But the inspection of
brake linings can occur in conjunction with the clip
replacement, requires only a few measurements, and is
a task Mr. Bryant asserts must occur anyway, incidental
to the clij replacement. Moreover, the cost of new
parking brake linings appears to be certain or fixed,
unlike the diminution-in-value damages assessment
discussed in Snowden. In sum, because the Arkansas
Supreme Court found no unconquerable predominance
problems in Snowden on the basis of individual
inspections, the Court will find none in this case.
ii. Potential Application of Multiple States’
Laws.
26. GM also insists that the potential application of
multiple states’ laws to create predominance concerns.
The Court disagrees.
27. First, beginning with /n re Prempro, the cases
GM cites for the proposition that application of multiple
states’ laws is necessary are all federal cases requiring
a “rigorous analysis” of Fed. R. Civ. P. 23 class-
certification factors, including the impact state-law
variations has on predominance.'* Importantly, the
13. E.g. In re Prempro Prod. Liab. Litig., 230 F.R.D. 555,
565 (E.D. Ark. 2005) (“A class should not be certified until the
district court has found through rigorous analysis, that all the
(Cont'd)
86a
Appendix B
Arkansas Supreme Court requires no such “rigorous
analysis”. Lenders I], 2004 Ark. LEXIS 399 at *7-8
(“As stated in Lenders I, [Ark. R. Civ. PR 23] does not
require the trial court to conduct a rigorous analysis;
rather, the trial court must undertake enough of an
analysis to enable [the reviewing court] to conduct a
meaningful review of the certification issue.”); Lender’s
Title Co. v. Chandler, 353 Ark. 339, 107 S.W.3d 157 (2003)
(“Lender’s I”); Jacola, 330 Ark. 261, 954 S.W.2d 901 (“We
have not, as argued by the dissent, previously required
the court to enter into the record a detailed explanation
of why it concluded that certification was proper, and
we refuse to impose such a requirement on the trial
court at this time.”). The Court prefers to follow
Arkansas Supreme Court precedent in determining
whether class certification is appropriate. GM’s attempt
to engraft a “rigorous analysis” requirement onto the
elements of class certification under Ark. R. Civ. P 23 is
not well taken and is rejected.
(Cont'd)
prerequisites of Rule 23(a) have been satisfied.”) (internal
quotes omitted); Zinser v. Accuflexr Research Inst., 253 F.3d 1180,
1186 (9" Cir. 2001) (“Before certifying a class, the trial court
must conduct a ‘rigorous analysis’ to determine whether the
party seeking certification has met the prerequisites of Rule
23.”); Spence v. Clock, 227 F.3d 308, 313 (5“ Cir. 2000) (“Before
Castano, then-Judge Ginsburg wrote that class action plaintiffs
must provide an ‘extensive analysis’ of state law variations to
reveal whether these pose “insuperable obstacles” to
certification.”); In re Am. Med. Sys., Inc., 75 F.3d 1069, 1078-79
(6" Cir. 1996) (“The Supreme Court has required district courts
to conduct a rigorous analysis into whether the prerequisites of
Rule 23 are met before certifying a class.”)
87a
Appendix B
28. Second, the Court agrees with Mr. Bryant that
trial judges in Arkansas have wide discretion to certify
class actions. It also agrees with Mr. Bryant that trial
courts have wide discretion to manage class actions.
BNL Equity Corp., 10 S.W.3d at 838. BNL Equity was
a securities class action which, by all accounts, would
require complex and individual inquiries into the level
of knowledge each class member possessed about a
fraudulent investment. The appellants, similar to GM
regarding application of multiple states’ laws here,
“rais[ed] the spectre that with the potential for
individual suits splintering on issues like investor
knowledge, trial of the class action could unravel and
turn into a procedural nightmare.” /d. at 844. The
Arkansas Supreme Court, however, viewed appellants’
concern as no deterrent to predominance or superiority,
or to class certification in general:
We will not speculate on this eventuality.
We simply hold that at this stage there is a
common issue related to the appellants’
conduct and liability that predominates over
individual questions and renders a class action
the superior method for litigating the matter.
Id. The Court in BNL Equity then observed:
This court has recognized that the ability to
manage and guide a class action is a necessary
part of a trial court’s decision to certify.
See International Union of Elec., Radio &
Mach. Workers v. Hudson, supra. We further
88a
Appendix B
have alluded to the substantial power in the
trial court to manage a class action. Jd.; see
also Summons v. Missouri Pac., R.R., supra.
We have also noted the ability of the trial court
to decertify should the action become too
unwieldy. Rule 23 specifically contemplates
that circumstance when it states: “An order
under this section may be conditional and it
may be altered or amended before the
decision on the merits.” Ark. R. Civ. P 23(b).
In the recent case of Fraley v. Williams Ford
Tractor & Equip. Co., supra, we quoted from
Newberg On Class Actions regarding the
decertification option and the fact that this
flexibility in the trial court is vital to “judicious
use of the class device.” See I Newberg On
Class Actions § 7.47, at 146 (3d ed. 1992).
We have no hesitancy in placing the
management of this class action in the trial
court. That is what the rule contemplates, and,
as already described, real efficiencies can be
obtained by resolving common issues, both for
the plaintiff class and the appellants. Were we,
on the other hand, to speculate on class
management or direct the trial court at this
stage to present the parties with a
management plan, we would be interfering in
matters that clearly fall within the trial
court’s bailiwick.
. 89a
Appendix B
Id. at 845. BNL Equity’s message is that an important
component of a trial court’s discretion to certify class
actions is its autonomy or “substantial powers” to
manage them. Thus trial courts are not required to
justify their certification decisions by, for example,
rigorously analyzing the Rule 23 certification elements.
Lenders II, Lender’s I, Jacola, supra. Nor are they
required to justify certification decisions by creating
detailed “management plan[s]” addressing how a case
may be managed and tried. BNL Equity, supra.
29. Importantly, the Arkansas Supreme Court
alluded to trial court autonomy and “substantial [class
management] powers” in addressing the precise issue
GM now raises: application of multiple states’ laws.
Security Benefit Life Ins. Co. v. Graham, 306 Ark. 39,
810 S.W.2d 943 (1991). Graham involved a potential class
of 1,419 annuitants residing in thirty-nine (39) different
states. The annuitants claimed Security Benefit
remained liable for annuity obligations because it never
provided notice another company, now insolvent, had
assumed the obligations. Security Benefit argued, in
part, the doctrine of novation might provide it a defense,
and claimed “.... the law of thirty-nine states relative
to novation would have to be explored and [] would
splinter the class action into individual lawsuits,” thus
creating Rule 23(b) predominance concerns. /d. at 945.
The Court rejected the defendant’s argument:
The mere fact that choice of law may be
involved in the case of some claimants living
in different states is not sufficient in and of
90a
Appendix B
itself to warrant a denial of class certification.
Cf, Sun Oil Co. v. Wortman, 486 U.S. 717
(1988). And though we are not convinced at
this stage that reference to the laws of thirty-
nine states will be necessary, should it be
required, this does not seem a particularly
daunting or unmanageable task for the parties
or for the trial court.
Id. at 946. In footnote 18 of its Brief In Opposition GM
contends “Security Benefit does not help Plaintiff. In
that matter, the court determined that ‘Arkansas law is
the law to be applied’ under the contract at issue.” GM’s
contention is wrong. The choice of law issue confronted
by the Court in Graham concerned novation; it did not,
as GM says, center on a contractual term. /d. In any
event, the Court in Graham clearly saw potential
application of many states’ laws as not germane to class
certification. It instead viewed choice of law as a task
for the trial court to undertake later in the course of
exercising its autonomy and “substantial powers” to
manage the class action.
30. This leads the Court to its third reason why
Arkansas law does not support GM’s argument,
especially GM’s suggestion the Court must resolve the
apparent choice of law dispute before class certification.
Arkansas trial courts are not permitted to delve into
the merits of a case in deciding whether to certify it as a
class action. BNL Equity, Fraley, supra. In truth, there
is no greater merits-intensive determination than the
one regarding choice of law. Choice of law has everything
9la
Appendix B
to do with a case’s merits. In many cases it is not briefed,
analyzed and determined until the litigation’s later
stages. So it would be vremature for the Court, at this
stage in the case, to make the call on choice of law.
31. Fourth, and finally, it is not as if a decision to
certify this matter as a class without resolving the choice
of law issue will create incurable problems. The
Arkansas Supreme Court has repeatedly stated
“'...acircuit court can always decertify a class should
the action become too unwieldy.” THE/FRE, Inc., 78
S.W. 3d 723; USA Check Cashers of Little Rock, Inc. v.
Island, 349 Ark. 71, 76 S.W.3d 243, 248 (2002); The
Money Place v. Barnes, 349 Ark. 518, 78 S.W. 3d 730
(2002); F&G Fin. Servs. v. Barnes, 349 Ark. 675, 80S. W.
3d 365 (2002). If application of r .““iple states’ laws is
eventually required here, and it proves too cumbersome
or problematic, the Court can consider decertifying the
class. As noted in the Arkansas Supreme Court’s Fraley
decision:
Rule 23 of the Arkansas Rules of Civil
Procedure specifically states that “an order
under this section may be conditional and it
may be altered or amended before the
decision on the merits.” Ark. R. Civ. P 23;
See also NEWBERG ON CLASS ACTIONS,
§ 7.47. Class rulings are often reconsidered,
and subsequently affirmed, altered, modified,
or withdrawn. /d.
92a
Appendix B
Although the court’s initial decision
under Rule 23(c)(1) that an action is
maintainable on a class basis in fact
may be the final resolution of the
question, it is not irreversible and
may be altered or amended at a later
date. This power to change the class
certification decision has encouraged
many courts to be quite liberal in
certifying a class when that decision
is made at an early stage, noting that
the action always can be decertified
or the class description altered if
later events suggest that it is
appropriate to do so.
WRIGHT, MILLER & KANE: FEDERAL
PRACTICE & PROCEDURE 2D § 1785 at
pp. 128-31 (2d Ed. 1986) (citations omitted).
“The ability of a court te reconsider its initial
class rulings . . . is a vital ingredient in the
flexibility of courts to realize the full potential
benefits flowing from the judicious use of the
class device.” NEWBERG ON CLASS
ACTIONS, § 7.47 at pp. 7-146. Class action
certification is necessarily an ongoing process
in light of Rule 23’s opt-out and decertification
provisions.
Fraley, 5 S.W.3d at 438-39 (1999). A trial court’s ability
to decertify class actions is an additional component of
its wide discretion to manage class actions. These flexible
93a
Appendix B
standards likely frustrate GM, particularly as to its
assertion that application of multiple states’ laws will
create Rule 23(b) predominance problems and frustrate
management of this case. However, Mr. Bryant filed this
case in an Arkansas state court, not in federal court.
GM is therefore bound by Ark. Civ. P. 23 and the
Arkansas Supreme Court decisions interpreting it.
iii. GM's Issues With Mr. Bryant’s Proposed Trial
Plan.
32. Further contesting Rule 23(b) predominance
and other Rule 23(b) elements, manageability in
particular, GM contends Mr. Bryant’s trial plan does not
feasibly deal with potential state law variations, or
supposed individual class member issues such as: notice
of warranty breach; whether an individual’s parking
brake has been repaired under warranty; expiration of
factory warranty based on mileage; individual
knowledge of parking brake defect; fraud-related
materiality and reliance; the entity to recover with
regard to leased vehicles; application of statutes of
limitation; comparative fault, if available; and the
damages a given class member can recover. GM argues
all these factors create incurable Rule 23(b)
predominance, superiority and manageability concerns.
The Court disagrees with GM.
33. As just discussed, now is not the time to decide
whether the laws of multiple states will apply. Neither
is Mr. Bryant required, at this juncture, to submit a
detailed trial plan which the Court must analyze and
94a
Appendix B
adopt, reject or modify in determining whether class
certification is proper. Nevertheless, for the sake of
addressing GM’s criticism of Mr. Bryant, the Court, in
the past, has examined many of the variations in state
warranty, fraudulent concealment and unjust
enrichment laws GM contends here to be
insurmountable. While some legal variations may exist
amongst different states, the Court does not perceive
them to create any barrier to class certification. Second,
in the event application and additional analysis of
multiple states’ laws yields a concern, it is important to
note that Arkansas trial courts have multiple tools at
their disposal to negotiate matters such as state-law
variations, as well as the supposed individual issues GM
complains of. Many of those tools, such as the option to
decertify, have already been discussed. But perhaps the
most useful tool, not yet discussed, is case bifurcation:
This court has repeatedly recognized that
conducting a trial on the common issue in a
representative fashion can achieve judicial
efficiency. See Summons v. Missouri Pac.
R.R., 306 Ark. 116, 813 S.W.2d 240 (1991);
International Union of Elect., Radio & Mach.
Workers v. Hudson, 295 Ark. 107, 747 S.W.2d
81 (1988). Moreover, this court has routinely
found the bifurcated process of class actions
to be consistent with Rule 23(d), which allows
the trial court to enter orders necessary for
the appropriate management of the class
action. Mega Life, 330 Ark. 261, 954 S.W.2d
898; Hudson, 295 Ark. 107, 747 S.W.2d 81. In
95a
Appendix B
fact, this court has expressed its approval for
the bifurcated approach to the predominance
element by allowing trial courts to divide the
case into two phases: (1) certification for
resolution of the preliminary, common issues;
and (2) decertification for the resolution of the
individual issues. Mega Life, 330 Ark. 261, 954
S.W.2d 898. The bifurcated approach has only
been disallowed where the preliminary issues
to be resolved were individual issues rather
than common ones. See Arthur v. Zearley, 320
Ark. 273, 895 S.W.2d 928 (1995).
Arkansas Blue Cross & Blue Shield v. Hicks, 349 Ark.
269, 286, 78 S.W. 3d 58, 68 (2002). In this case, numerous
common issues exist and are suitable to resolve in a
“phase I” trial. The Court has previously described
many of those issues, all centering on GM’s alleged
defective design and subsequent cover up to avoid
paying warranty claims.
34. First, as Mr. Bryant discusses in his trial plan,
given the identical wording in GM’s written warranty
to him and class members, GM’s express-warranty
liability can be litigated unconstrained by variations in
state law warranty defect standards. In addition, despite
what GM argues, the Uniform Commercial Code
(“UCC”) as adopted and applied by all states except
Louisiana does provide uniform legal standards
96a
Appendix B
governing the sales of goods." In particular, it provides
a nearly universal defect standard for implied warranties:
whether the defect renders the good in issue “fit for its
ordinary purpose.” The issue of whether the parking
14. See e.g. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022-
23 (9 Cir. 1998) (“1n this case, although some class members
may possess slightly differing remedies based on state statute
or common law, the actions asserted by the class representatives
are not sufficiently anomalous to deny class certification. On
the contrary, to the extent distinct remedies exist, they are local
variants of a generally homogenous collection of causes which
include products liability, breaches of express and implied
warranties, and ‘lemon laws.””); Cheminova Am. Corp. v. Corker,
779 So. 2d 1175, 1180 (Ala. 2000)(“The principles of the Uniform
Commercial Code (“U.C.C.”) can be easily applied on a classwide
basis. Under U.C.C. Article 2, some version of which has been
adopted in all states except Louisiana, a description of a product
on a label creates an express warranty. ); Tesauro v. Quigley
Corp., No. 1011, Control 051340, 2002 WL 372947 at * 5-6, 9 (Pa.
Corn. Pl. Jan. 25, 2002) (certifying nationwide class of
consumers who purchased “Cold-Eze” under implied warranty
and unjust enrichment theories); Shaw v. Toshiba Am. Info.
Sys., Inc., 91 F. Supp. 2d 942, 957 (E.D. Tex. 2000) (recognizing
the law under the UCC is uniform and that “(flor decades, courts
have certified [national] product defect class actions.”).
15. As noted by one group of legal scholars:
A multistate class action based on breach of implied
warranty of merchantability need not be further
subclassed because after the exclusion of relatively
few states that still require vertical privity for
economic loss claims (and also excluding used goods
(Cont'd)
97a
Appendix B
brake defect meets or falls short of that standard is
perfectly suitable for a “phase I” trial. Warranty
causation can also be addressed during “phase I”,
especially given Mr. Bryant’s contention, with which the
Court agrees, that the parking brake “failure” at issue
is the inadequate lining float. Because inadequate lining
float is alleged to occur in each GM vehicle owned by
class members, the causation question should be a
universal, class-wide one. Finally, during “phase II”
individual warranty-related concerns, if any, can be
litigated. These include, without limitation, whether an
individual class member has provided notice'®; when, if
(Cont’d)
and business purchasers in a few other states), state
implied warranty law under UCC §2-314(2)(c)
(whether the product is “fit for the ordinary
purposes”) is uniform as incorporated by Magnuson-
Moss (15 U.S.C. §2301(7), both in terms of statutory
language and judicial interpretation.
Brantley, Logan, and Moore, Class Action Reports,
“Commonality of Applicable State Law In Nationwide or
Multistate Class Actions — Breach of Implied Warranty”,
I. Introduction, p. 2 of 58 (2000).
16. However, because GM had actual notice of the parking
brake issue in late 2000, well before Mr. Bryant and many class
members purchased their vehicles, the Court does not agree
with GM’s contention that individual notice under UCC §2-607
is a required showing in this case, especially now that Mr. Bryant
has given additional notice by filing suit. E.g. Prutch v. Ford
Motor Co., 618 P2d 657, 661 (Colo. 1980)(“When, as here, the
(Cont'd)
98a
Appendix B
at all, a class member’s warranty expired due to
mileage; the type of ownership a given class member
possesses (e.g.. purchase v. lease); and limitations-
related issues. Warranty damages — which the Court
believes will be essentially uniform — can also be
addressed during a “phase II” trial.
35. Next, as to Mr. Bryant’s fraudulent concealment
claim, during “phase I” Mr. Bryant can present evidence
not only of GM’s defective design, but also concerning
GM’s alleged later cover up to avoid paying
warranty claims. Mr. Bryant may then submit jury
interrogatories’, appropriately accounting for state-law
(Cont'd)
purposes of the notice requirement have been fully served by
actual notice, the notice provision should not operate as a
technical procedural barrier to deny claimants the opportunity
to litigate the case on the merits.”); City of Wichita v. U.S.
Gypsum Co., 828 F. Supp. 851, 857 (D. Kan. 1993)(“For example,
“‘fa] comparably strict application of the notice requirement
. .. May not be appropriate in a case involving a consumer’s
claim of breach.’) rev'd on other grounds, 72 F.3d 491 (10™ Cir.
1996); Shooshanian v. Wagner, 672 P.2d 455, 462 (Alaska
1983)(“We ... are of the opinion that a complaint filed by a
retail consumer within a reasonable period after goods are
accepted satisfies the statutory notice requirement.”).
17. “We have consistently held that the question of
submitting special interrogatories to a jury is within the sound
discretion of the trial court.” Shearer v. Morgan, 240 Ark. 616,
623, 401 S.W.2d 21, 23 (1966) (citing Missouri Pacific
Transportation Co. v. Parker, 200 Ark. 620, 140 S. W. 2d 997
(1940)).
99a
Appendix B
variations, if any, concerning non-individualized
elements of fraudulent concealment, ie. GM’s knowledge
of the defect and its scienter (ie. whether its withholding
of knowledge was done with the fraudulent purpose to
induce class members to buy defective vehicles or avoid
paying warranty claims). The more individualized issues
of whether GM owed a given class member a duty to
disclose or whether a particular class member relied on
GM’s failure to disclose can be reserved for a
“phase II” trial. The issue of damages can also be
reserved for “phase II”.
36. Finally, Mr. Bryant envisions trying nearly all
elements of unjust enrichment in “phase I”. The Court,
at this point, cannot say this would be an altogether
impossible task. During such a trial Mr. Bryant may
present evidence not only of GM’s alleged defective
design, but also of its alleged cover up. Mr. Bryant may
then submit jury interrogatories, appropriately
accounting for state-law variations, if any, concerning
the basic liability issue of whether GM was unjustly
enriched by its alleged conduct. Mr. Bryant also believes
that during “phase |” it can ask the jury, for purposes
of disgorgement, to calculate the sum of money GM
wrongfully retained. The jury in “phase I” may also
make individual fault determinations regarding class
members residing in states, if any, which recognize
comparative fault or the like as a defense to unjust
enrichment. Finally, the equitable division of the
disgorged sum amongst deserving class members can
be reserved for a “phase II” trial.
100a
Appendix B
37. GM attacks Mr. Bryant’s bifurcated trial plan
as unconstitutional under Castano and similar cases.
See Castano v. The American Tobacco Co., 84 F.3d 734
(5 Cir. 1996). GM cites Castano for the Seventh
Amendment “mandate” that “parties || have fact issues
decided by one jury, and prohibits a second jury from
reexamining those facts and issues.” Castano, 84 F.3d
at 750. The Court agrees Castano provides authority
for this general rule. See also In re Rhone-Poulenc Rorer,
Inc., 51 F.3d 1293, 1303 (7 Cir.), cert denied, 133 L.Ed.
2d 122, 116 S.Ct. 184 (1995) (“The right to a jury trial
....is aright to have juriable issues determined by the
first jury impaneled to hear them (provided there are
no errors warranting a new trial), and no reexamined
by another finder of fact.”) But the court in Castano
also noted bifurcated trials are permissible when “....
[the] issues are so separable that the second jury will
not be called upon to reconsider findings of fact by the
first|.]” Jd. GM is not in a position argue Mr. Bryant’s
trial plan in this case is unconstitutional. The reason is
obvious: the final trial plan, if one is even required, has
not been developed by the Court. The issue is simply
not ripe for determination. Still, the trial plan Mr. Bryant
has described, in the Court’s view, creates no
constitutional concerns at all. Mr. Bryant contemplates
trying fundamental or core liability issues in “phase 1”,
leaving “phase II” for the individualized issues such as
GM’s affirmative defenses, reliance and the like. In some
cases damages may also be tried in “phase II.” The
issues tried in each phase will be sufficiently separable;
there will be no risk the jury in “phase II” will reconsider
findings by the “phase I” jury. The Court is confident it
10la
Appendix B
can, as Judge Posner described in Rhone-Poulenc,
“carve at the joint” in such a way that the same issues
are not reexamined by different juries.
38. In sum, Mr. Bryant’s trial plan, while not
necessary at this stage, is appropriate and adequately
accounts for potential application of multiple states’
laws. GM’s arguments to the contrary are rejected. The
Court concludes Mr. Bryant has established Rule 23(b)
predominance.
G. Rule 23(b) Superiority.
39. Rule 23(b) requires that a class action be
superior to other available methods for the fair and
efficient adjudication of the controversy. Ark. R. Civ. P
23(b); see USA Check Gushers, 349 Ark. at 71, 76S.W.3d
at 243. The superiority requirement is satisfied if class
certification is the more efficient way of handling the
case, and it is fair to both sides. 7d. The Arkansas
Supreme Court has held that where a cohesive and
manageable class exists, “real efficiency can be had if
common, predominating questions of law or fact are first
decided, with cases then splintering for the trial of
individual issues, if necessary.” BPS, Inc., 20 S.W.3d at
410; Lender’s IJ, 2004 Ark. LEXIS at *18. The Court,
for several reasons, concludes Mr. Bryant has satisfied
the Rule 23(b) requirement of superiority.
40. First, the Arkansas Supreme Court affirmed the
trial court’s finding of superiority in Jacola, Seeco,
Fraley, BNL Equity, Hicks, Lenders Il, American
102a
Appendix B
Abstract & Title Co., and Snowden cases cited in
footnote 11, supra. This speaks volumes to the wide
discretion trial judges possess in deciding class
certification issues, managing class trials, to superiority
being found even where numerous individualized issues
exist, and to the fact real efficiency can be gained by
disposing of basic liability questions on a class-wide basis.
See Cheqnet Systems, Inc. v. Montgomery, 322 Ark. 742,
911 S.W.2d 956, 960 (1995) (“The question of
predominance of common questions and of superiority
are ‘very much related to the broad discretion conferred
on a trial court faced with them.””’) (Citation omitted)
(Emphasis added). In its first modern-era class action
opinion, Hudson, the Arkansas Supreme Court
addressed all of these concepts thusly:
By limiting the issue to be tried in a
representative fashion to the one that is
common to all, the trial court can achieve real
efficiency. The common question here is
whether the unions can be held liable for the
actions of their members during the strike. If
that question is answered in the negative,
then the case is over except for the claims
against the named individual defendants
which could not be certified as a class action.
If the question is answered affirmatively, then
the trial court will surely have “splintered”
cases to try with respect to the damages
asserted by each member of each of the
subclasses, but efficiency will still be achieved,
as none of the plaintiffs would have to prove
the unions’ basic liability.
103a
Appendix B
Is that unfair? It is not unfair to the unions,
as they will be able to defend fully on the basic
liability claim, and they will have the
opportunity to present individual defenses to
the claims of individual class members if their
liability has been established in the first phase
of the trial. They lose nothing. Would it be fair
to the class members to require them to sue
individually? The evidence so far shows that
each putative class member has a claim that
is too small to permit pursuing it economically.
If they cannot sue as a class, the chances are
they will not sue at all. We agree with the
unions’ argument that the sole fact that the
claims are small is not a reason to permit a
class action, but it is a consideration which has
appeared when other courts, as we must do,
have considered whether the class action is
superior to other forms of relief. See C. Wright,
A. Miller, and M. Kane, supra, § 1779, n. 21,
citing Roper v. Consurve, Inc., 578 F.2d 1106
(5th Cir. 1978), affirmed on other grounds, sub
nom. Deposit Guar. Nat'l Bank v. Roper, 445
U.S. 326 (1980); Werfel v. Kramarsky, 61
FE.R.D. 674 (D.C.N.Y. 1974); and Buchholtz v.
Swift & Co., 62 FR.D. 581 (D.C. Minn. 1973).
We recognize that the trial court has
substantial power to manage a class action
even though the directions given in our Rule
23 are not as extensive as those given in the
comparable federal rule. This power to
104a
Appendix B
manage the action contributes to the
discretion we find-in the trial court to
determine whether a class should be certified.
We conclude there was no abuse in this case.
Intl Union of Electrical, Radio, and Machine Workers
v. Hudson, 295 Ark. 107, 747 S.W.2d 81, 87 (1988).
41. Second, the uniform relief sought by Mr. Bryant
and the class is relatively small if sought on an individual
basis. Accordingly, it is not economically feasible for
members of the class to pursue GM on an individual
basis. The Arkansas Supreme Court has recognized real
efficiencies and benefits inure to plaintiffs and class
members in small-individual-damages cases. Lenders I,
2004 Ark. LEXIS 399 at *18 (“The smallness of the
claims is a factor to be considered in deciding superiority;
however, it may not be the sole basis for certifying a
class.”)'®; BNL Equity, 10 S.W.3d at 844.
42. Third, the Arkansas Supreme Court has
identified the possibility of multiple trials supplying
inconsistent results and wasting judicial resources as a
factor supporting rather than detracting from
superiority. Lenders II, 2004 Ark. LEXIS 399 at *18
(“.... we think it is apparent from the context that the
18. The fact attorney fees may be recoverable as a
component of one or more asserted causes of action does not, in
general, affect the superiority analysis. Lender’s /], 2004 Ark.
LEXIS 399 at *20 (‘““However, we do not view the availability of
attorney’s fees, standing alone, as negating the trial court’s
analysis on superiority.”).
10Sa
Appendix B
inconsistent results envisioned by the trial court are
those that would arise from the individual cases having
to be tried in different courts, by different judges and
juries. In this respect, the trial court’s finding supports
its conclusion on the criterion of superiority.”); BNL
Equity, 10 S.W.3d at 844 (“Furthermore, here the
alternative to a class action would be numerous joinders,
wholesale intervention, and several hundred small
lawsuits which would be totally inefficient and wholly
unmanageable. Surely, neither the parties nor the
judicial system would benefit from a legion of lawsuits
that are numerous, duplicative, and time consuming.”).
43. Fourth, the Arkansas Supreme Court has
expressed concern that absent certification of a class
“numerous meritorious claims might go unaddressed.”
BNL Equity, 10 S.W.3d at 844 (citing Phillips Petroleum
Co. v. Shutts, 472 U.S. 797, 86 L.Ed. 2d 628, 105 S.Ct.
2965 (1985). This principle is of unique importance here
since, by GM’s own admission, some population of owners
of automatic-transmission class vehicles may not
regularly use their parking brake and thus be aware of
the defect. If nothing else, this class action will serve to
alert class members that their parking brakes may be
defective and need service. It would indeed be
unfortunate for one or more class members to be
deprived notice of the defect. Such deprivation could
have harmful consequences.
106a
Appendix B
44. Fifth, even GM may derive substantial benefit
from class certification. In BNL Equity, the Court wrote,
We also note that there is a real benefit to the
appellants in a class action in that they have
the opportunity to nip multiple claims in the
bud with common defenses such as the
investors’ knowledge of the investment
purchased, lack of the appellants’ knowledge
concerning the misrepresentations, anc
statute of limitations. We conclude that the
superiority requirement has been met.
BNL Equity, 10 S.W.3d at 844. There is no reason to
believe GM cannot potentially achieve some of the same
benefits the defendant in BNL achieved, post-
certification.
45. GM challenges Rule 23(b) superiority on
manageability grounds. Apart from the potential
application of multiple states’ laws, which the Court has
addressed, GM raises manageability concerns arising
from the prospect of 4,000,000 individual trials having
to be conducted in this matter.
46. First, the Court does not believe for one moment
that 4,000,000 individual, phase II trials will be
conducted in this case. Among other things, potential
opt outs and claims dismissed under a summary
disposition procedure that can be developed will greatly
reduce the number of potential phase IT trials.
107a
Appendix B
47. Second, Lenders II concerned a class of 50,000
potential members and the Arkansas Supreme Court
took no issue with it proceeding as a class action.
Lenders Title Co. v. Chandler, No. 04-41, 2004 Ark.
LEXIS 399 (Ark. June 17, 2004) (“Lender’s IT”). In the
Court’s view, the prospect of trying 50,000 cases is no
different, from a manageability standpoint, than trying
a potentially greater number of cases.
48. Third, the fact GM’s allegedly defective design
has adversely affected so many consumers is not
Mr. Bryant’s fault. Mr. Bryant and the class should not
be penalized for the widespread nature of GM’s alleged
defect and subsequent cover up. See Carnegie v.
Household Intl, Inc. , 376 F.3d 656, 660-661 (7 Cir. 2004)
(“But although the district judge might have said more
about manageability, the defendants have said nothing
against it except that there are millions of class
members. That is no argument at all. The more claimants
there are, the more likely a class action is to yield
substantial economies in litigation. It would hardly be
an improvement to have in lieu of this single class action
17 million suits each seeking damages of $15 to $ 30.”).
49. Finally, in at least in the context of discussing
class definition, the Arkansas Supreme Court has
rejected lack of administrative feasibility as an excuse
to avoid class certification. Lenders //,2004 Ark. LEXIS
399 at *11-12) (“We are not persuaded by the argument
that it is not administratively feasible for Lenders to
have to manually review each of the more than 50,000
closing files to identify the class members. Instead, we
108a
Appendix B
agree with Chandler that Lenders should not be allowed
to defeat class certification by relying on its inadequate
filing and record system.”). The Court believes the
Arkansas Supreme Court would similarly reject GM’s
similar argument that class size, alone, counsels against
a finding of Rule 23(b) predominance.
50. GM also argues the NHTSA recall process is
superior to Mr. Bryant’s proposed class action. However,
none of the cases GM’s cites hold the availability of a
NHTSA recall remedy ipso facto negates superiority.
See Amalgamated Workers Union v. Hess Oil Virgin
Islands Corp., 478 F.2d 540, 543 (3"¢ Cir. 1973) (“As we
view it, it would appear [Federal Rule 23(b)(3)’s
superiority component] was not intended to weigh the
superiority of a class action against possible
administrative relief.”). Rather, the courts in each of
these cases determined the class wasn’t certifiable for
other reasons, then mentioned — in dicta — that the
class members could still petition NHTSA.
51. Here, there are multiple reasons why a class
action is a superior method to resolve the claims of
Mr. Bryant and the class. Moreover, as brought to light
at the class certification hearing, the record reveals
frustrated consumers have at least twice (most recently
in mid 2006) petitioned NHTSA about the alleged
parking brake defect in automatic transmission vehicles,
and NHTSA rejected the petitions. Accordingly, the
Court does not understand why GM believes NHTSA
will provide a superior remedy to Mr. Bryant and class
members. The Court concludes GM’s NHTSA-based
109a
Appendix B
superiority argument has no merit. Mr. Bryant has
established Rule 23(b) superiority.
H. The Wallis Matter.
52. The Court also takes note of GM’s assertion in
its briefing that Mr. Bryant’s claims concerning the
allegedly defective parking brake are not cognizable
because they, at most, assert a “no injury” case against
GM barred under the Arkansas Supreme Court’s Wallis
case. Wallis v. Ford Motor Company, No. 04-506, 2005
Ark. LEXIS 301 (May 12, 2005). The Court, however, is
unwilling to rule on that assertion at this time for two
reasons.
53. First, the proper mechanism by which to raise
such an assertion is either a motion to dismiss or motion
for summary judgment. GM previously filed a motion to
dismiss based on Wallis, among other things. But that
motion is now moot, given the fact Mr. Bryant amended
his pleadings before the class certification hearing.
54. Second, the determination of whether class
certification is appropriate is essentially procedural in
nature. BNL Equity Corp., 340 Ark. at 356-57, 10 S.W.3d
at 841. Accordingly, neither the trial court nor an
appellate court may delve into the merits of the
underlying claim when deciding whether the
requirements of Rule 23 have been met. /d.; Fraley, 339
Ark. at 335, 5 S.W.3d at 481. The Court views the Wallis
“no injury” issue to be inherently merits oriented and
thus irrelevant to the class certification motion at hand.
110a
Appendix B
IV.
Conclusion and Order
On the basis of the foregoing findings of fact and
conclusions of law establishing Mr. Bryant has satisfied
all class-certification elements in Ark. R. Civ. P 23, the
Court hereby GRANTS IN ALL THINGS Mr. Bryant’s
motion for class certification and ORDERS that the
nationwide class of individuals described above (in
paragraph III. A. 2.) is certified as a class for purposes
of litigating this matter under Ark. R. Civ. P. 23.
Mr. Bryant is appointed as class representative of the
certified class and shall adhere to all duties such an
appointment entails. In addition, the law firms of Patton,
Roberts, McWilliams, & Capshaw, L.L.P (James C. Wyly
and Sean F. Rommel) and Bailey/Crowe & Kugler, L.L.P.
(David Crowe and John Arnold) are appointed
representative counsel to represent Mr. Bryant and the
class in prosecuting this matter to final judgment. The
Court, by separate order, will at some time in the near
future issue a briefing schedule regarding the manner
in which notice of class certification is to be given under
Ark. R. Civ. P 23(c) and/or (d).
Finally, the evidence the Court had before it in ruling
on the issue of class certification was evaluated only in
the context of considering the elements of Mr. Bryant’s
underlying claims in order to determine, for
example, whether questions arising from those claims
are common to the class and whether they will resolve
the issue. E.g. Williamson v. Sanofi Winthrop
llla
Appendix B
Pharmaceuticals, Inc., 347 Ark
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