Petition for Writ of Certiorari — DaimlerChrysler Corp. v. Ysbrand

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FILED

031342MAR 19 2004

Gres oF Heer my —

~ IN THE

Supreme Court of the United States

DAIMLERCHRYSLER CORPORATION,

Petitioner,

Vv.

SHERYL YSBRAND AND MARY COONEY,

INDIVIDUALLY AND ON BEHALF OF ALL OTHERS

SIMILARLY SITUATED,

Respondents.

On Petition For A Writ Of Certiorari

To The Supreme Court Of Oklahoma

PETITION FOR A WRIT OF CERTIORARI

PETER W. HERZOG

JAMES F. BENNETT

MIGUEL A. ESTRADA

Counsel of Record

BRYAN CAVE LLP THEODORE J. BOUTROUS, JR.

One Metropolitan Square PAUL DECAMP

211 North Broadway Cory J. SKOLNICK

Suite 3600 WILLIAM M. JAY

St. Louis, MO 63102 GIBSON, DUNN & CRUTCHER LLP

(314) 259-2000

ROBERT E. NORTON

MARY E. WALDRUP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 955-8500

DAIMLERCHRYSLER CORP.

1000 Chrysler Drive

Auburn Hills, MI 48326

(248) 512-4120

Counsel for Petitioner

ONC aN tt

QUESTIONS PRESENTED

This Court has repeatedly held that the Commerce and

Due Process Clauses of the federal Constitution preclude

States from regulating activities beyond their borders. In

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), this

Court also held that due process prohibits a court from apply-

ing in a class action the law of a single State that lacks sig-

nificant contact with the claims of each individual class

member. In this case, the Supreme Court of Oklahoma ruled

that—in order to facilitate the certification of a nationwide

class—Michigan law, the law of the defendant’s principal

place of business, should apply to the state-law claims of any

plaintiff who bought or possessed one of the defendant’s mi-

nivans anywhere in the United States. The questions pre-

sented are:

1. Is the lower court’s application of a special choice-of-

law analysis, applicable only to class actions, to facilitate cer-

tification of a nationwide class inconsistent with the Due

Process or Commerce Clause of the federal Constitution?

2. Is the lower court’s application of a single State’s law

to the claims of all class members nationwide inconsistent

with the Due Process or Commerce Clause of the federal

Constitution?

PARTIES TO THE PROCEEDINGS

Petitioner DaimlerChrysler Corporation was formerly

Chrysler Corporation, which was also named as a party in the

courts below.

The membership of the class certified by the trial court,

of which the named respondents are members, is defined in

the Appendix, infra, at 40a-41a.

RULE 29.6 STATEMENT

Petitioner is a wholly owned subsidiary of Daimler-

Chrysler Motors Company LLC, which is a wholly owned

subsidiary of DaimlerChrysler North America Holding Cor-

poration, which is a wholly owned subsidiary of Daimler-

Chrysler AG, a publicly traded company organized under the

laws of the Federal Republic of Germany.

ill

TABLE OF CONTENTS

Page

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PARTIES TO THE PROCEEDING ...............ccccsssssssssseseees ll

RE Pe OPE PANNE © ccscnccnsanesassesconvosevoronscoosncsossensonebes il

MRE I PRRs BEPAII EE Rover cc cevevonsenseorsesscosonsevscossosesorssseces Vv

ye ania ese sncengpiniinindinasanmiicencst 1

I ais acchlaiaeeavsiccenonesiaekntieresenssnsenentionnerenssoronsons 1

CONSTITUTIONAL PROVISIONS INVOLVED............... 1

RMR MMEIOT ER SOP BEE CAGE.....2.....ccosscccsccaconesssssceseovensasses 1

REASONS FOR GRANTING THE WRIT ..........ccccceeeeee 7

I. The Oklahoma Court’s Classwide Analysis

Conflicts With Decisions Holding That Due

Process Requires A Choice-Of-Law Analysis

|, ee 8

A. This Court’s Decisions Preclude Applying

A State’s Law To Transactions In Which It

Has No Significant Regulatory Interest ................... 8

B. Federal Courts Of Appeals And State

Courts Have Adopted Conflicting Interpre-

tations Of This Court’s Decision In Shutts ............ 13

II. The Oklahoma Court’s Nationwide Certification

Conflicts With Decisions Interpreting The

Commerce And Due Process’ Clauses’

Restrictions On Extraterritorial Regulation By

cies caitistatiinveisireisaenadesbedoieiivdusesceadeinxereeess ioe

II. The Questions Presented Are Important And

Recur Frequently, And Courts Conducting

Nationwide Class Certification Proceedings

Require This Court’s Guidance At The Earliest

Fe irae eniiccsiicssnsubiaxessicnsailiin acd iniiaiiarecasldiecns 24

IV. The Judgment Below Is Final For Purposes Of

This Court’s Review Under 28 U.S.C. § 1257(a)......... 26

STL iinscrstsiercharnicdiuniseaaacsunnaaeeneaaraneesen cso 30

TABLE OF AUTHORITIES -

Page(s)

Cases

’ Allstate Insurance Co. v. Hague, 449 U.S. 302

CRIED iictidensacsinennidgnaeicinmenaiteniaaaiemuianata 6, 10, 12, 23

Amchem Prods. v. Windsor, 521 U.S. 591 (1997)..........0008 14

American Motorists Insurance Co. v. Starnes, 425

Beas Ge FO Pe snscsicticiteateedeidbsaiemieiaenencuseon die 28

Avery v. State Farm Mutual Automobile Insurance

Co., 746 N.E.2d 1242 (Ill. App. Ct. 2001),

appeal allowed, 786 N.E.2d 180 (Ill. 2002)............... 18, 22

Bigelow v. Virginia, 421 U.S. 809 (1975) ........cesseesessseesseees 23

Blair v. Equifax Check Services, Inc., 181 F.3d

Be. FO GAG SII sinsiniensdsntainiionaicnmmedeas 29, 30

BMW of North America, Inc. v. Gore, 517 U.S.

PE NED sivtsiccninsasacgunigtaipaedea en ene 21, 23, 24

Burlington Northern R.R. Co. v. Ford, 504 USS.

aE | | ee NET REED cane uLNnars Bee Cc Ign 28

Calder v. Jones, 465 U.S. 783 (1984) .....ccccccsecsssceseceseseeeees 28

Castano v. American Tobacco Co., 84 F.3d 734

ak CE, TIPE iisessiesiacscsaniinsadedciacag retaeonnalen 14

Clark v. TAP Pharmaceutical Products, 798

PRS 0 Ce. FD GU Fe iistiiienrcatratimntanss 18, 22

Collins Radio Co. of Dallas, Texas v. Bell, 623

Fe TOS COM. CC, I 1 hiv vsisictivcsetincsserseoscesennensas 11

Container Corp. of America vy. Franchise Tax

SN, RS BE. TP CE isi chwisncivninerceriscidsetaamcnnn 12

Coopers & Lybrand vy. Livesay, 437 U.S. 463

(FEED cvxnnsensissnenconhcennt pneiiniiuaieanstanbintaiasadaasgnliaamaaae 29

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

GROW OE cininesiaccnstscanimiciaiann bcpuramumeniendianaate 26, 27, 29, 30

Debbs v. Chrysler Corp., 810 A.2d 137 (Pa. Super.

PTE cctieisnlnissciiieaplncicsadnigomtaiaien eaheiea detect e 16

Flory v. Silvercrest Industries, 633 P.2d 383 (Anz.

SPE Pnitehsictiiinesaemisdipeheegiae ania adiaied te Eins 22

Georgine v. Amchem Products, 83 F.3d 610 (3d

Cir. 1996), aff'd sub nom. Amchem Prods. y.

Windsor, 521 U.S. 591 (1997)... .ccccccessscsesessseccecececececececc, 14

Gillette Co. v. Miner, 459 U.S. 86 (1982) (per

IID vsricccnssoninsnchidiicietencacemee aan tee 29

Goodyear Atomic Corp. v. Miller, 486 U.S. 174

QI iisenisokistsioiopicenlakiedieaeaa tae a ens 26

Healy v. Beer Institute, 491 U.S. 324 aE 21, 23

Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675

(OS I x vessrensenietiedceeetcettae ne eee 17, 25

Home Insurance Co. v. Dick, 281 U.S. 397 (1930)........ 10, 12

Huntington v. Attrill, 146 U.S. 657 ( Re itiiietiuitisdeesinedatades 23

In re Air Bag Products Liability Litigation, 7 F.

Supp. 2d 792 (E.D. La. 1998) ...c.cccscosessosessececsseeoeccsse.. 2, 22

In re Bridgestone/Firestone, Inc. Tires Products

Liability Litigation, 155 F. Supp. 2d 1069 (S.D.

Ind. 2001), rev'd, 288 F.3d 1012 (7th Cir. BUOZ)..02s00000. 4,5

In re Lorazepam & Clorazepate Antitrust

Litigation, 289 F.3d 98 (D.C. Cir. |_| SC me 30

J.P. Morgan & Co. v. Superior Court, 6 Cal. Rptr.

SG 214 (CL. Appr. 2OOB),.csassecscovsrsesesovevecennenesesenosoesce...., 19

John Hancock Mutual Life Insurance Co. v. Yates,

Om UPR IID vissscticsnietoiniecnncien aches 10

Vil

Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718

Cs SIE Bacinicisnsesascenieneocsentesinsaiecbeandesvenreeenaes 15

Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487

re icsctionssasnnpaitanen'csuedbieun dil dcncsinneihmentasanasaiganinoiialeainaninnnh 14

Martin v. Heinold Commodities, Inc., 510 N.E.2d

I: SET Di cpssidiisnenciansenniseshoviatanionaabansaninaciannns 18

Mercantile National Bank v. Langdeau, 371 U.S.

Fee cinteiasbicaenivinicanassbnuininascomnedpniandacalemmaticcanetinns 28, 29

New York Life Insurance Co. v. Head, 234 US.

IT sissetapncsodnasensipadanennsasaaadlaciachrcebabiindeamastemiantaaes 23

P.J.’s Concrete Pumping Serv. v. Nextel West

Corp., 803 N.E.2d 1020 (Ill. App. Ct. 2004) oe. 18

Puerto Rico Aqueduct & Sewer Authority v.

Metcalf & Eddy, 506 U.S. 139 (1993)... eeesssssseeeseeee 28

Phillips Petroleum Co. v. Shutts, 472 U.S. 797

SS IETUIITED Latnsseshaniiceccheaniuntiacaaapomiaialeieneaiansaeebalamibensanlteia ta passim

Prado-Steiman v. Bush, 221 F.3d 1266 (11th Cir.

Piel antrdeelancdiabatfadaieiouandolsencaceibalagimeeanmaiiaie 30

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120

RE sesaisirsccecbassat cmc cacdbiesellciceilpsaalpedta tallest aicsd ta 30

Republic Natural Gas Co. v. Oklahoma, 334 US. .

REMI RES he ktente Oo eee an md aw aE OUT EON ME 30

Shaffer v. Heitner, 433 U.S. 186 (1977).............sssssscssssseeees 28

Southerland v. Northeast Datsun, Inc., 659 S.W.2d

gg a 8g, | | Ee eR mn OnE nn TET 22

Southland Corp. v. Keating, 465 U.S. 1 (1984)....... 27, 28, 29

State ex rel. Mobil Corp. v. Gaughan, 565 S.E.2d

794 (W. Va.), cert. denied sub nom. Mobil

Corp. v. Adkins, 537 U.S. 944 (2002) .....0csecccsossssscscesseees 20

SS Te

Vill

State Farm Mutual Automobile Insurance Co. v.

Campbedl, 123 &. Ct. 1513 (20GB).....ccccccessccsosnesseessoess 23, 24

Tilley v. TJX Cos., 345 F.3d 34 (1st Cir. 2003)... 30

Tracker Marine, L.P. v. Ogle, 108 S.W.3d 349

Cs ee FE. MED scuictiiss neniniiapsedcibeaseontaliowvadiaaimeaskens 17

Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C.

ORM ae RODIS AU CAD HA anR AA METRE 15

Washington Mutual Bank v. Superior Court, 15

ee PE 8 ae EE diss sehiccteddancnieectactssraiiaoee lens: 19 :

~ Zinser v. Accufix Research Institute, 253 F.3d ;

1180 (9th Cir. 2001) ...ccseccssecssee. SERB ALIS eee 14

Statutes

2B U.S.C. § 12578) seossssccsscsessscssssserssessssssssesseseesesee -..1, 26

2B U.S.C. § 1291 cssccscssccscsssssssssssssssssesesssessisssssessssseeeeenee 29 )

Rules

AE a a ache airs tansnoinnivanciesendicttantanseatccnneavanimasee 6 i

FED. R. CIV, P. 23(a)(2)ecccccccsesssssssessssssssossessusesessseceeececeee 25

Fa Be ats Wy IEE sak tsudanebcesaenduanaie nue vonmamiavccsacecuiuatie a

FED. R. CIV. P. 23(6)(3) sossssstsesssssssnsssssstsetnneensentcee 25 |

FED. R. CIV. P. 23(b)(3)(D) -vvossssssscsssssssssnsseneeenetnsssne 25

en, Pa ee 30

State Statutes |

Cont. CHV. CORB UTGEN cco ececccscacscescseccesiaceoseane 22

Agency Decisions

Denial of Motor Vehicle Defect Petition, 62 Fed.

Reg. 41,477 (Aug. 1, 1997) ..scscccccccsssssssessssesssssssesesecsssseveces 2

Other Authorities

John H. Beisner & Jessica Davidson Miller,

They're Making a Federal Case Out of It... In

State Court, 25 HARV. J.L. & PuB. PoL’y 143

RTD vescdunicisas tvcbenvavieansannitinoustiiea aaheeaeeaneiie ee: 19, 24

DEBORAH R. HENSLER ET AL., RAND INST. FOR

CIVIL JUSTICE, CLASS ACTION DILEMMAS

Arthur R. Miller, Of Frankenstein Monsters and

Shining Knights: Myth, Reality, and the “Class

Action Problem,” 92 HARV. L. REV. 664 (1979)... 7

RESTATEMENT (SECOND) OF CONFLICT OF LAWS

ee iii iataseiemanen piulaladtiad ne tee ote 11

J. WHITE & R. SUMMERS, UNIFORM COMMERCIAL

ee es I esivvevicnsibeareteiiccinkiteeas 16

PETITION FOR A WRIT OF CERTIORARI

Petitioner DaimlerChrysler Corporation (“DCC”) re-

spectfully prays that a writ of certiorari issue to review the

judgment of the Supreme Court of Oklahoma in this case.

OPINIONS BELOW

The opinion of the Supreme Court of Oklahoma (App.,

infra, 1a-20a) 1s reported at 81 P.3d 618 (Okla. 2003). The

opinion and order of the District Court in and for Sequoyah

County, Oklahoma, granting respondents’ motion for class

certification (App., infra, 21a-42a) is unreported.

JURISDICTION

The judgment of the Supreme Court of Oklahoma was

entered on February 25, 2003. DCC filed a timely petition

for rehearing, which the Supreme Court of Oklahoma denied

on November 6, 2003. App., infra, 43a. On January 26,

2004, Justice Breyer extended the time for filing a petition

for a writ of certiorari to and including March 26, 2004.

App. No. 03A624. The jurisdiction of this Court is invoked

under 28 U.S.C. § 1257(a).

CONSTITUTIONAL PROVISIONS INVOLVED

The relevant provisions of the federal Constitution are

set out in the Appendix, infra, at 45a-46a.

STATEMENT OF THE CASE

The fifty States have decided to adopt widely divergent

limitations on actions for breach of warranty. The issue

raised in this case is whether a single State can use its choice-

of-law rules to circumvent those limitations. With the ex-

press purpose of allowing certification of a nationwide plain-

tiff class, the Oklahoma Supreme Court ordered the applica-

tion of the law of Michigan to every one of the millions of

warranty claims at issue, including the claims of the vast ma-

jority of class members who have essentially no contact with

either Oklahoma or Michigan. In doing so, the court below

refused to consider which State had the greatest connection

to or interest in any individual plaintiff's claim, and essen-

tially acknowledged that the outcome of the choice-of-law

analysis would differ if conducted on an individualized basis

rather than en masse. Moreover, the warranty claims that the

lower courts certified are unrecognized by—indeed, contrary

to—the laws of many States, laws that under a conventional

choice-of-law analysis would govern the claims of a large

segment of the certified class had those plaintiffs sued indi-

vidually rather than collectively.

1. This litigation involves allegedly defective airbags in

minivans. Airbags deploy rapidly when sensors detect an

impact with the vehicle; the plaintiffs in this case allege that

the passenger-side airbags installed in certain DCC minivans

can deploy too forcefully. The National Highway Traffic

Safety Administration had previously rejected an identical

claim relating to the same passenger vehicles, concluding

that there was no evidence of a defect that would warrant a

recall. See Denial of Motor Vehicle Defect Petition, 62 Fed.

Reg. 41,477, 41,478 (Aug. 1, 1997). A number of plaintiffs

continued to press the theory that the airbags were defective,

bringing claims against DCC and other manufacturers under

Louisiana and Texas law, including Texas’s version of the

Uniform Commercial Code. The federal district court in

which these claims were consolidated rejected the claims on

their merits. Jn re Air Bag Prods. Liab. Litig., 7 F. Supp. 2d

792, 799, 802-04 (E.D. La. 1998).

2. This lawsuit was brought in state court in Sequoyah

County, Oklahoma, as a putative nationwide class action,

with respondents Ysbrand and Cooney as the named class

members. Only Ysbrand is an Oklahoma resident; Cooney

resides in Delaware, DCC’s state of incorporation. App., in-

fra, 48a. Respondents’ complaint alleged that the airbags in

respondents’ minivans were defective because they might

deploy forcefully and cause injury. Respondents did not al-

lege actual physical injury and, indeed, excluded from the

definition of the proposed class anyone who had been injured

by an air bag deployment. /d. at 50a, 63a-64a.

The complaint asserted four claims, none specifically

based on the law of any individual State (although the plain-

tiffs specifically noted duties allegedly owed under Okla-

homa and Delaware law, App., infra, 58a). Counts alleging

“breach of express warranty,” “breach of implied warranty of

merchantability,” and “breach of implied warranty of fitness”

relied on provisions of the Uniform Commercial Code

(UCC)—which is not itself law,-except insofar as States

adopt it. Jd. at 60a-62a. The fourth count asserted a claim

for common-law “fraud and deceit.” Jd. at 62a-63a.

The state trial court issued an order inviting the plaintiffs

to move for certification of a nationwide class, which they

did. DCC opposed the motion on federal-law grounds, as-

serting, inter alia, that the laws of different States must be

applied to the various class members’ claims. See App., in-

fra, 69a-73a; see also id. at 75a. After briefing, the trial court

entered an order drafted by the plaintiffs (id. at 19a-20a),

which certified a nationwide class comprising all current

owners of several models of minivans but excluding anyone

injured by his airbag. Jd. at 40a-41a.' The class includes in

excess of one million potential claimants. See id. at 27a.

' The class definition included:

[ajll entities and adult persons domiciled or residing in any of

the fifty states of the United States of America or in the Dis-

trict of Columbia, who purchased and who, according to motor

vehicle registration records maintained by their respective

states or districts of residence or domicile, can be identified as

the current owner of at least one (1) model year 1996-1997

“minivan” automobile marketed by defendant as Chrysler

alas niin

The trial court’s opinion relied on the subsequently re-

versed decision of the Southern District of Indiana in Jn re

Bridgestone/Firestone, Inc. Tires Products Liability Litiga-

tion, 155 F. Supp. 2d 1069 (S.D. Ind. 2001), rev'd, 288 F.3d

1012 (7th Cir. 2002), for the proposition that choice-of-law

issues need not impede class certification. App., infra, 36a.

Save for this citation of a now-reversed decision discussing

Indiana choice-of-law rules, the trial court’s opinion con-

tained no choice-of-law analysis at all and did not identify

which State’s law it intended to apply. The opinion con-

cluded only that “the alleged choice of law problems identi-

fied by the defendants does [sic] not bar certification.” Jd.

3. DCC appealed the class certification to the Oklahoma

Supreme Court, which by a 6-3 vote affirmed the certifica-

tion of a nationwide class as to the warranty claims, but re-

versed as to the fraud claim.” The court concluded that under

Oklahoma choice-of-law principles, the law of each plain-

tiff's home State would apply to the fraud claim. Applying

the laws of all 50 States would “present[] an overwhelming

burden which would make the class unmanageable and a

class action determination of that claim inappropriate.”

Town & Country or Chrysler Minivan or Plymouth Voyager or

Plymouth Grand Voyager or Dodge Caravan, which was

manufactured by defendant for sale in any of the fifty states of

the United States of America or the District of Columbia, or

which defendant marketed in any of the fifty states of the

United States of America or the District of Columbia as a

product of its own manufacture, ... which contains on the

driver side and/or passenger side of the forward seating area a

passive restraint system commonly known as an “air bag” . . . .

App., infra, 40a-41a.

2 DCC raised federal-law issues in its initial statement of

issues on appeal and again throughout its appellate briefing. £.g.,

App., infra, 88a-89a, 96a, 99a-100a, 1lla n.18.

App., infra, 16a. The court accordingly held that certifying

the fraud claims was an abuse of discretion. See id. How-

ever, the court reached a different conclusion as to the war-

ranty claims.

The court accepted respondents’ contention, raised for

the first time in their appellate briefing, that the trial court

had intended to create a manageable class, in which common

issues of law predominate, by applying Michigan law to the

warranty claims of every single plaintiff in the nationwide

class. The state Supreme Court discerned this intent from the

trial court’s citation of Bridgestone/Firestone. App., infra,

10a-lla. The court conceded in a footnote that that deci-

sion’s choice-of-law analysis had been reversed by the Sev-

enth Circuit, but asserted that the classwide application of

Michigan law—without any individualized analysis—was

nonetheless permissible in a state that, like Oklahoma, ap-

plies the “most significant relationship” test to determine the

law governing a contract claim. Jd. at llan.4.

Reviewing the trial court’s implicit holding, the court

proceeded to apply the “most significant relationship” test,

but did so on a classwide rather than individual basis. Al-

though the court conceded that the home State of each indi-

vidual plaintiff had a “significant” interest in applying its

own law to the claims of its citizens, or to transactions con-

ducted within its borders, the court stated that no one plain-

tiffs home State had a more significant interest than any

other in applying its law to the claims of the entire class.

App., infra, 13a (“[T]he relative interest of each buyer’s

home state in applying its version of the UCC is more or less

equal.”). Michigan, the State in which DCC maintains its

principal place of business, was “the only state where con-

duct relevant to all class members occurred.” Jd. Citing fac-

tors from the Restatement (Second) of Conflict of Laws, the

court stated that “[t]he needs of the interstate system and the

basic policies of predictability and uniformity of result re-

aa aa ae

quire that the issue of product defect be determined in one

forum with one result rather than in 51 jurisdictions with the

very real possibility of conflicting decisions.” Id. The court

concluded, “Michigan law applies.” Jd. at 13a-14a.

In reaching that conclusion, the court rejected DCC’s ar-

gument that the Constitution precluded applying the law of a

single State—whether Oklahoma, Michigan, or any other—

without conducting an individualized choice-of-law analysis

to verify that the State in question has sufficient contact with

each plaintiff's claim to justify imposing its regulatory re-

gime on the parties. The court stated that its application of

Michigan law was “consistent with the constitutional impera-

tive that ‘for a state’s substantive law to be selected in a con-

stitutionally permissible manner, that state must have a sig-

nificant aggregation of contacts, creating state interests, such

that choice of its law is neither arbitrary nor fundamentally

unfair.”” App., infra, 14a (quoting Phillips Petroleum Co. v.

Shutts, 472 U.S. 797, 818 (1985), and Allstate Ins. Co. v.

Hague, 449 U.S. 302, 312-13 (1981) (plurality opinion)).

Having determined that Michigan law applied to the

warranty claims, the state Supreme Court affirmed the trial

court’s certification of a nationwide class with respect to

those claims. The court found that common questions of law

predominated, in light of its conclusion that Michigan law

governed the claims of every member of the plaintiff class.

The other requirements of Oklahoma’s class-certification rule

(which mirrors Rule 23 of the Federal Rules of Civil Proce-

dure) were satisfied with respect to the warranty claims, the

court believed, leaving the decision to certify the class within

the trial court’s discretion. App., infra, 17a-20a.

Chief Justice Watt and Justices Hargrave and Winchester

each registered full or partial dissent from the majority opin-

ion. None filed a separate opinion. App., infra, 20a.

DCC sought rehearing, supported by the State of Michi-

gan and numerous other amici. Michigan’s brief pointed out

that applying the plaintiffs’ novel theory of Michigan prod-

ucts-liability law to the entire nationwide class violated basic

constitutional principles of federalism and State sovereignty

and undermined the same Michigan interests that the Okla-

homa court had purported to protect. The Supreme Court of

Oklahoma denied rehearing by a 5-4 vote, with Justice Kau-

ger—who had previously joined the majority opinion—

voting with the dissenters. App., infra, 43a. The state court

has stayed the effectiveness of its mandate pending this

Court’s disposition of the petition for a writ of certiorari.

REASONS FOR GRANTING THE WRIT

The decision below creates a true Frankenstein monster

of mismatched parts: Michigan law, Oklahoma forum, na-

tionwide adjudication.» The Supreme Court of Oklahoma

sanctioned an application of choice-of-law principles that,

applied to an individual plaintiff, plainly would be constitu-

tionally inadequate. But the protections of the Due Process

and Commerce Clauses are no weaker in the context of a

class action. In addition, Oklahoma’s use of a nationwide

class to override the conflicting warranty laws of other juris-

dictions violates the Due Process and Commerce Clauses’

restrictions on individual States’ ability to extend their regu-

latory reach beyond their own borders.

Notwithstanding this Court’s prior guidance, state courts

are increasingly receptive to the argument that Due Process

and Commerce Clause protections should be diluted when

needed to expedite classwide adjudication. These courts are

becoming the forum of choice for counsel representing na-

tionwide plaintiff classes, and their choice-of-law decisions

are becoming a means of overriding the regulatory decisions

> Of, Arthur R. Miller, Of Frankenstein Monsters and Shin-

ing Knights: Myth, Reality, and the “Class Action Problem,” 92

HARV. L. REV. 664 (1979).

cineeeetiinmaisiiiiiaiieaaianiiiins

of their sister States. This Court should grant review to pro-

vide much-needed guidance to courts considering requests to

certify multistate plaintiff classes in actions premised on state

law, an increasingly common phenomenon.

I. The Oklahoma Court’s Classwide Analysis Conflicts

With Decisions Holding That Due Process Requires

A Choice-Of-Law Analysis Specific To Each Plaintiff

This Court has consistently held that plaintiffs in both

individual and class actions do not enjoy an unfettered nght

to select the substantive law that governs their claims.

Choice-of-law principles may not direct the application of a

State’s body of law to a plaintiff's claim if the State has little

or no connection with the underlying conduct: the Due Proc-

ess Clause precludes such an unforeseeable and unfair result.

Lower federal and state courts have interpreted this Court’s

cases to require, in the context of a putative nationwide class

action, that choice-of-law principles be applied to each po-

tential plaintiff, not to the litigation as a whole with the goal

of certifying a class. The decision below contravenes these

decisions and threatens to draw in litigants seeking a jurisdic-

tion friendly to classwide adjudication.

A. This Court’s Decisions Preclude Applying A

State’s Law To Transactions In Which It Has No

Significant Regulatory Interest

The Due Process Clause places a substantive limitation

on choice-of-law determinations: although the forum State ;

has some freedom to select among the applicable rules of de-

cision, the selection must be made from among bodies of law

to which the parties may constitutionally be subjected. This

constitutional requirement cannot be subordinated to the state

forum’s desire to apply its lenient class-certification rules.

The Oklahoma Supreme Court thus erred by applying a dif-

ferent choice-of-law rule expressly to make a nationwide

class possible.

1. The starting point for analyzing constitutional limits

on choice-of-law rules in class actions is this Court’s deci-

sion in Phillips Petroleum Co. v. Shutts, 472 U.S. 797

(1985), which the court below cited but ignored. In Shutts

this Court considered the claims of a multistate class of plain-

tiffs who brought suit in Kansas state court against an out-of-

state corporation. The state courts agreed with plaintiffs that

Kansas law should govern the claims of the entire class, cit-

ing the plaintiffs’ choice of Kansas as the forum and that

State’s preference for applying its own law in its own courts

absent exceptional circumstances. Jd. at 803.

This Court reversed, holding that Kansas could not con-

stitutionally apply its own law to the claims of the entire

class. Even though Kansas had personal jurisdiction over

both the defendant (through its conduct of business in that

State) and the plaintiff class members (through their named

representatives), these contacts were insufficient to justify

applying Kansas law to the dispute, which involved a set of

oil and gas leaseholds located in other States. 472 US. at

819-20. Moreover, the choice of law was anything but aca-

demic: choosing one of the other potentially applicable rules

of decision would change the outcome. Because there was a

material conflict between the substantive law of Kansas and

that of Texas and Oklahoma (the other possible sources of

law), the due process rights of the parties were violated by

imposing Kansas law upon them. Jd. at 817-18.

This Court specifically rejected the notion that these

limitations should be relaxed in order to give effect to the

class action as a favored form of adjudication. Rather, these

constitutional principles must be applied to the claims of

each class member: the State whose law is applied “must

have a ‘significant contact or significant aggregation of con-

tacts’ to the claims asserted by each member of the plaintiff

class, contacts ‘creating state interests,’ in order to ensure

that the choice of [that] law is not arbitrary or unfair.” 472

U.S. at 821-22 (quoting Allstate Ins. Co. v. Hague, 449 U.S.

302, 312-13 (1981) (plurality opinion)) (emphasis added). If

the claims of some class members are based on “a transaction

with little or no relationship to the forum,” the forum State

may not apply its own law solely to homogenize the plain-

tiffs’ claims artificially and make them suitable for class-

action adjudication. /d. at 821. The class action, the Court

stressed, is nothing more than a procedural device; the Con-

Stitution’s substantive restrictions on a State’s power to apply

its own law beyond its borders are “not altered by the fact

that it may be more difficult or more burdensome to comply

... because of the large number of transactions which the

State proposes to adjudicate” in a single action. Jd.

The Court in Shutts also stressed the general principle

that even a named plaintiff's choice of the forum is not con-

trolling as to choice of law. 472 U.S. at 820 (citing John

Hancock Mut. Life Ins. Co. v. Yates, 299 U.S. 178, 182

(1936), and Home Ins. Co. v. Dick, 281 U.S. 397, 408

(1930)). Simply because the plaintiff chooses a court into

which the defendant may be haled does not mean that the

plaintiff may also choose his preferred body of Jaw without

limitation: “If a plaintiff could choose the substantive rules

to be applied to an action ... the invitation to forum shop-

ping would be irresistible.” Jd. (quoting Allstate, 449 U.S. at

337 (Powell, J., dissenting)) (internal quotation marks omit-

ted; alteration in original). Due process does not permit a

state court to subject a party to a body of substantive law that

is SO contrary to its expectations as to be “arbitrary and un-

fair.” Jd. at 822. That constitutional limitation precluded

applying Kansas law to transactions involving property out-

side Kansas, an out-of-state defendant, and, for the most part,

non-Kansas plaintiffs.

2. Shutts makes clear that the Supreme Court of Okla-

homa erred by certifying a nationwide class according to an

Oklahoma choice-of-law principle favoring classwide adju-

dication. The state court failed altogether to examine

whether either Oklahoma or Michigan had a sufficient nexus

with “each member of the plaintiff class,” Shutts, 472 US. at

821, to justify applying its law on an individual basis.

Rather, the state court committed precisely the error that

Shutts condemns: forsaking individualized assessment of

contacts for the sake of classwide adjudication.

The Oklahoma court’s selection of Michigan law to gov-

em the claims of every minivan-owning plaintiff in the coun-

(ry, contrary to customary choice-of-law principles and

DCC’s reasonable expectations, gives rise to exactly the sort

of unfair arbitrariness that Shutts forbids. As even the state

Supreme Court conceded, applying ordinary choice-of-law

principles to a warranty claim results in selecting the law of

the place of delivery, which for nearly every member of the

plaintiff class would mean the law of her home State—nor

the law of Michigan. See App., infra, 13a (“‘[I]n a contract

for a sale of goods the most significant contact is the place of

delivery unless another state has a more significant relation-

ship.’” (quoting Collins Radio Co. of Dallas, Tex. v. Bell,

623 P.2d 1039, 1047 (Okla. Ct. App. 1980)); RESTATEMENT

(SECOND) OF CONFLICT OF LAWS § 191 & cmts. e, f. Thus,

had respondent Cooney, a Delaware resident, filed this law-

suit in Sequoyah County as an individual rather than a Class

representative, the Oklahoma courts never would have se-

lected Michigan law to govern her claim. As the state Su-

preme Court recognized, every State retains a Significant in-

terest in applying its own warranty law to products sold

within its borders. App., infra, 13a. That interest cannot be

trumped by the desire of two named plaintiffs to invoke the

procedural rules of the courts of Sequoyah County.

3. Although conducting the choice-of-law analysis on a

classwide basis would conflict squarely with this Court’s

holding in Shutts irrespective of what body of law the state

court ultimately selected, the application of Michigan law to

respondents’ claims also contravenes other decisions of this

Court. For example, in Home Insurance Co. v. Dick, 281

U.S. 397 (1930), this Court held that Texas could not consti-

tutionally apply its own law to a Texas resident’s contract

claim that arose entirely outside Texas. See id. at 404, 407-

10. Texas law, if applied, would have modified the insurance

contract, “abrogat[ing] a contractual right and impos[ing] li-

ability [where] the parties ha[d] agreed that there should be

none.” Jd. at 406-07. Although the plaintiff suing on the

contract was a permanent resident of Texas, “nothing in any

way relating to the policy sued on ... was ever done or re-

quired to be done in Texas.” Jd. at 408. This Court accord-

ingly held that applying Texas law would violate the defen-

dant’s due process rights. See also, e.g., Allstate, 449 US. at

310-11 (plurality opinion) (Dick stands “for the proposition

that if a State has only an insignificant contact with the par-

ties and the occurrence or transaction, application of its law

is unconstitutional”); id. at 333 n.1 (Powell, J., dissenting)

(Dick “is a case where the reasonable expectations of a liti-

gant were frustrated” by the state court’s application of a dif-

ferent body of law).

Dick makes clear that even in an individual action, the

Constitution restricts courts from applying the substantive

law of a State that lacks sufficient connection to the subject |

matter of the litigation. (Dick applied the Due Process

Clause, but the same result would follow a fortiori under the :

Commerce Clause’s restrictions on extraterritorial regulation.

See infra Section II; cf Container Corp. of Am. v. Franchise

Tax Bd., 463 U.S. 159, 164 (1983).) The residence of one of

the parties is insufficient, standing alone, when the litigation

turns on actions that that party performed elsewhere—as in

this case, in which plaintiffs’ contract-based theory turns on

the alleged breach of express and implied warranties that

supposedly attended DCC’s nationwide sale of minivans.

Thus, had respondent Cooney, the Delawarean, sued indi-

vidually in Sequoyah County, the Due Process Clause (and,

as noted above, Oklahoma’s choice-of-law rules) would have

precluded her from demanding the application of Michigan

warranty law. Indeed, a contrary holding would have al-

lowed a State’s regulatory authority over its residents’ com-

mercial transactions to extend wherever the residents might

roam, reasoning altogether inconsistent with this Court’s Due

Process and Commerce Clause cases. This constitutional

problem is only heightened in the context of a nationwide

class action like this one, in which a state court proposes to

“bootstrap” one State’s constitutionally insufficient contacts

with individual litigants into constitutionally sufficient con-

tacts with an entire class. Shutts, 472 U.S. at 821. Such a

course of action is precisely what Shutts forbids. See id. at

822-23 (applying Dick in the class context).

B. Federal Courts Of Appeals And State Courts

Have Adopted Conflicting Interpretations Of

This Court’s Decision In Shutts

This Court made clear in Shutts that due process pre-

cludes courts from applying by rote the law of the forum, the

law that facilitates class certification, or the law of the plain-

tiffs’ election. The federal courts of appeals and several state

courts have faithfully applied that teaching and hold that an

individualized choice-of-law analysis is required before any

multistate class involving state-law claims may be certified.

Other jurisdictions, however, have adopted rules similar to

that espoused by the court below. Ordering the classwide

application of a single State’s law in order to facilitate the

adjudication of nonresidents’ claims conflicts with these well!

reasoned precedents from sister jurisdictions. This Court’s

review is warranted to resolve this conflict.

1. The federal courts of appeals, which frequently are

called upon to examine the certification of plaintiff classes in

actions under state law, continue to apply Shutts faithfully,

requiring an individualized choice-of-law analysis as part of

the inquiry into the “commonality” and “predominance” re-

quirements for class certification. Because Oklahoma and a

few other jurisdictions have departed from this rule, the dif-

ference in result that comes from adjudicating state-law

claims in federal court rather than state court—a forum-

shopping incentive that federal Erie rules are designed to

mitigate, see, e.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313

U.S. 487, 496 (1941)}—becomes all the more stark.

The Third Circuit has spoken most directly to this issue.

In Georgine v. Amchem Products, 83 F.3d 610 (3d Cir.

1996), aff'd sub nom. Amchem Prods. v. Windsor, 521 U.S.

591 (1997), the court of appeals reversed the certification of

a nationwide settlement class to resolve the claims of plain-

tiffs exposed to asbestos. The Third Circuit held, citing

Shutts, that adjudication of the claims of the class members

would require the court to “apply an individualized choice of

law analysis to each plaintiff's claims.” Id. at 627 (emphases

added); accord, e.g., Castano v. Am. Tobacco Co., 84 F.3d

734, 742 n.15 (Sth Cir. 1996). The court reached this conclu-

sion despite arguably compelling policy reasons for nation-

wide adjudication in the context of asbestos, which both the

Third Circuit and several members of this Court viewed as

desirable, though legally unworkable. Amchem, 521 U.S. at

628-29; id. at 633-34 (Breyer, J., concurring in part and dis-

senting in part); Georgine, 83 F.3d at 634. The Third Cir-

cuit’s reasoning applies with even greater force to cases like

this one: “no injury” class actions that do not even arguably

address any nationwide problem. As this Court held in

Shutts, the constitutional restrictions on choice of law do not

yield to the procedural convenience of unified adjudication.

In a similar vein, the Ninth Circuit has rejected an at-

tempt, much like respondents’, to satisfy the commonality

and predominance requirements for class certification by

demanding the application of a single State’s law. The puta-

tive plaintiff class in Zinser v. Accufix Research Institute, 253

F.3d 1180 (9th Cir. 2001), asked the district court to certify a

nationwide class and to apply the products-liability law of

California, the forum State. Jd. at 1185, 1187. The district

court and the Ninth Circuit both recognized, and the plaintiffs

ultimately conceded, that under Shutts, California law could

not “be constitutionally applied to all putative class mem-

bers.” Jd. at 1187. The court also rejected the plaintiffs’

fallback position, to apply the law of the defendant’s princi-

pal place of business to the entire class on the ground that

“the application of a single state’s law will allow claims to be

adjudicated on a class basis.” The court held that choice-of-

law rules did not permit such a selection. Jd. at 1187-88; id.

at 1198-99 & n.3 (B. Fletcher, J., dissenting) (agreeing with

the majority on the choice-of-law issue); see also Kirkpatrick

v. J.C. Bradford & Co., 827 F.2d 718, 725 n.6 (11th Cir.

1987) (affirming denial of certification because multiple

States’ laws applied, and citing Shutts to show that even if

Georgia (the forum) “would require application of its own

common law rules to some claims involving purchases in

other states, the law of Georgia could be applied consistent

with due process only if the particular transaction had some

significant relation to Georgia”).

The D.C. Circuit likewise has recognized the impropri-

ety of assuming away the variations in the laws of the 50

States in order to facilitate class certification. In another

product-defect case against an automaker in which, as here,

UCC warranty provisions adopted by the various States pro-

vided the rule of decision, the court of appeals reversed the

district court’s certification of a nationwide class based on its

failure to conduct a searching choice-of-law inquiry. Walsh

v. Ford Motor Co., 807 F.2d 1000, 1016, 1019 (D.C. Cir.

1986) (Edwards and R.B. Ginsburg, JJ.). The district court

certified the class without “inquir[ing] further into the exis-

tence and character of differences in state warranty laws.”

To “look to the [laws of] the many States” would make class

certification “virtually impossible,” the district court wrote,

which suggested that it might apply the law of a single State,

or of selected States. /d. at 1016 & n.90. As in this case, the

lower court allowed the perceived virtue of unified adjudica-

tion to trump any conflict of law.

The D.C. Circuit reversed, refusing to take “on faith” the

plaintiffs’ assertion that no state-law variation would impede

adjudication. The Uniform Commercial Code, the court

noted, “is not uniform.” 807 F.2d at 1016 (quoting J. WHITE

& R. SUMMERS, UNIFORM COMMERCIAL CODE 7 (2d ed.

1980)). Material variations in state law would prevent class

certification on common questions of law. With respect to

the possibility of applying a single State’s law, the court of

appeals noted Shutts’s holding that selecting the law of a sin-

gle State would be unconstitutional without a showing that

that State “had a significant relationship to each class mem-

ber’s claim.” Jd. at 1016 n.90.

2. The state courts, which in recent years have been the

preferred forum for putative nationwide class actions, have

for the most part followed the federal courts in interpreting

Shutts to require a choice-of-law analysis specific to each

plaintiff. For example, another multistate class alleging air-

bag defects was decertified on appeal precisely because the

trial court applied the law of the forum, Pennsylvania, to the

claims of the entire class for breach of warranty and violation

of state consumer-protection statutes. Debbs v. Chrysler

Corp., 810 A.2d 137, 158-59 (Pa. Super. 2002). The appel-

late court held that the trial court’s failure to conduct a

choice-of-law analysis before certifying the class violated the

parties’ “‘due process right to have their claims governed by

the state law applicable to their dispute.’” Jd. (quoting

Shutts, 472 U.S. at 821). The court also noted that “a trial

court cannot sidestep choice-of-law issues by declaring that

the class action would be governed by Pennsylvania law” in

the interest of “administrative convenience.” Jd. at 159.

The courts of Texas have taken a similar approach. The

Supreme Court of Texas recently clarified that it would not

Wh Mele AAD Bee 4 a

“apply the law of the state where a defendant is headquar-

tered to every claim for economic damages that can be al-

leged against the defendant,” and decertified a nationwide

class accordingly. Henry Schein, Inc. v. Stromboe, 102

S.W.3d 675, 698 (Tex. 2002). The Texas courts have inter-

preted Henry Schein, read together with Shutts, to bar pre-

cisely the sort of class-driven choice-of-law analysis that the

Oklahoma Supreme Court engaged in here. For example, in

rejecting a Texas trial court’s certification of a nationwide

class based on the law of Missouri (defendant’s principal

place of business), the state Court of Appeals recently cau-

tioned that such an approach was unconstitutional: “The

analysis must be conducted on an individual basis; a nation-

wide class is not entitled to a ‘looser’ analysis merely be-

cause applying one state’s law would be easier than applying

many.” Tracker Marine, L.P. v. Ogle, 108 S.W.3d 349, 352

(Tex. Ct. App. 2003) (citing Shutts, 472 U.S. at 821-22)

(footnote omitted). The court concluded that applying the

law of each consumer’s home State, in accord with accepted

choice-of-law principles, “would protect the parties’ justified

expectations.” Jd. at 357; see also Shutts, 472 U.S. at 822

(“When considering fairness in this context, an important

element is the expectation of the parties.”). The Oklahoma

court in this case, by contrast, skewed those accepted choice-

of-law principles and overrode DCC’s and class members’

justified expectations.

3. However, not every state court has so faithfully ap-

plied Shutts. Some States have joined Oklahoma in imple-

menting choice-of-law rules that expressly facilitate the certi-

fication of a nationwide class by applying a body of substan-

tive law that would not apply to an individual claim. These

States are rapidly becoming magnets for putative plaintiff

Classes and their counsel.

For example, the Illinois courts have repeatedly upheld

certification of nationwide classes based on Illinois law. See,

e.g., Martin v. Heinold Commodities, Inc., 510 N.E.2d 840,

846-47 (Ill. 1987). Indeed, in a number of instances the IIli-

nois courts have affirmed precisely what the Oklahoma Su-

preme Court allowed plaintiffs to accomplish in this case:

application of the law of a single State based solely on the

location of the defendant’s headquarters. E.g., id.; Clark v.

TAP Pharm. Prods., 798 N.E.2d 123, 129 (Ill. App. Ct.

2003); Avery v. State Farm Mut. Auto. Ins. Co., 746 N.E.2d

1242, 1254-55 (Ill. App. Ct. 2001), appeal allowed, 786

N.E.2d 180 (Ill. 2002). In Clark, for example, the court up-

held the application of Illinois law to transactions between

“non-Illinois class members” and “non-Illinois medical care

providers,” which “occurred in states other than Illinois.”

798 N.E.2d at 129. This posed no constitutional problem, the

court held, because the defendant was a corporation head-

quartered in Illinois. “‘Illinois has a legitimate interest in

applying its law ... to insure that its residents [i.e., corpora-

tions headquartered there] comply with its consumer-

protection laws while serving Illinois and out-of-state con-

sumers.’” Id. at 129-30 (quoting Avery, 746 N.E.2d at 1255)

(emphasis added). The Illinois courts have consistently re-

fused to concede the extraterritorial impact of this form of

classwide imposition of Illinois’s substantive law.

The effect of these choice of law rules has been dra-

matic, if predictable. Illinois state courts have become a pre-

ferred venue for plaintiffs seeking to represent nationwide

classes. Citing the state courts’ choice-of-law decisions, the

Appellate Court of Illinois recently noted that “50-state class

actions are not uncommon in Illinois.” P.J.’s Concrete

Pumping Serv. v. Nextel W. Corp., 803 N.E.2d 1020, 1030

(Ill. App. Ct. 2004). Indeed not: “In the Third Judicial Dis-

trict of Madison County, Illinois, seventy purported class ac-

tions were filed between February 1998 and March 2001, of

which eighty-one percent (fifty-seven cases) were brought on

behalf of putative nationwide classes.” John H. Beisner &

Jessica Davidson Miller, They're Making a Federal Case Out

—————— sciiaieiaiaeaimeaaaaiaaiil

of It... In State Court, 25 Harv. J.L. & PuB. PoL’y 143,

169 (2001). The Illinois experience demonstrates the likely

effect of a constitutionally erroneous choice-of-law rule like

the one announced in this case: litigants dissatisfied with the

rules that would govern them under ordinary choice-of-law

principles will seek out jurisdictions with which they have no

constitutionally significant contact but which will adjudicate

their claims under a more favorable body of substantive law.

4. The courts of California have taken an intermediate

approach to the choice-of-law problem that putative nation-

wide classes present. The California Supreme Court has rec-

ognized, correctly, that applying California law to the claims

of a nationwide class requires a showing that California has

significant contacts with “the claims of each class member.”

Wash. Mut. Bank v. Superior Court, 15 P.3d 1071, 1080

(2001). However, the court has permitted the application of a

different choice-of-law rule to nationwide classes by creating

a burden-shifting procedure. First, the proponent of class

certification must show that “the requisite significant con-

tacts” exist between California and the claims asserted by the

class. Jd. at 1081. Once the proponent makes that showing,

California law presumptively applies to the class claims

unless the opposing party can show that the interests of other

States outweigh California’s and that the law of one or more

foreign States should therefore control. The court rejected

the argument that “California may not constitutionally weigh

the scales in favor of applying its own law.” Jd.*

* Even under this approach, the decision below could not

stand, because the Oklahoma court itself acknowledged that States

other than Oklahoma and Michigan have a significant interest in

applying their own laws to the product sales at issue in this case,

an interest that the court subordinated to the perceived benefits of

class certification. See, e.g., J.P. Morgan & Co. v. Superior Court,

6 Cal. Rptr. 3d 214, 234-35 (Ct. App. 2003) (applying Washington

Mutual and rejecting certification of a nationwide class with mem-

Justice Maynard of the West Virginia Supreme Court of

Appeals recently offered a neat summation of the ongoing

problem in the lower courts of that State, and others. He

warned that the availability of liberal choice-of-law rules was

causing an “improper pilgrimage” into West Virginia state

court by plaintiffs seeking collective adjudication. State ex

rel. Mobil Corp. v. Gaughan, 565 S.E.2d 794, 795 (W. Va.)

(Maynard, J., concurring), cert. denied sub nom. Mobil Corp.

v. Adkins, 537 U.S. 944 (2002). “[B]Jecause so many of the

plaintiffs have NO connection whatsoever with West Vir-

ginia, and because the United States Supreme Court was so

clear in the [Shutts] case,” he wrote, he was fearful of “even-

tual reversal” on due process grounds. Jd. Justice Maynard

was confident that the due process violation would prove se-

rious, and that “some federal court will eventually tell us so.”

Id. at 794.° Justice Maynard’s opinion makes clear that some

state appellate courts cannot or will not intervene to correct

constitutional error in the aggregation of plaintiffs’ claims;

both they and the trial courts they supervise require further

guidance from this Court on the constitutional principles elu-

cidated in Shutts and implicated in every multistate class ac-

tion applying state law.

bers from States with laws materially different from California’s,

because it was “necessary to weigh the interest of those states as

against the interest of California in resolving the classwide claims

of nonresident class members,” and because these claims “lack[ed

a] significant connection ... to California”). The decision below

therefore conflicts with California’s intermediate approach to the

due process issue, as well as with the holdings of state courts that

more squarely apply this Court’s decision in Shutts.

> Justice Maynard concurred in the court majority’s opinion

denying relief because the case was before the court on a petition

for an extraordinary writ, rather than on a direct appeal.

II. The Oklahoma Court’s Nationwide Certification

Conflicts With Decisions Interpreting The Commerce

And Due Process Clauses’ Restrictions On Extrater-

ritorial Regulation By The States

The Oklahoma court’s decision has a substantive impact

in all 49 other States and the District of Columbia. The

plaintiffs’ causes of action under the Uniform Commercial

Code cannot succeed unless the UCC warranty provisions are

construed broadly, in a variety of ways. A number of the

plaintiff class members’ home States—where their minivans

were advertised, purchased, driven, and owned to this day

without incident—have already definitively rejected one or

more of the constructions of warranty law on which the

plaintiffs’ claims rest. Those States are entirely within their

rights to provide that DCC has breached no duty to their citi-

zens. Yet the Oklahoma court’s application of Michigan

substantive law to those transactions has the effect of displac-

ing those States’ own regulatory regimes and replacing them

with one into which the Oklahoma courts may read a viable

claim. “State power may be exercised as much by a jury’s

application of a state rule of law in a civil lawsuit as by a

statute,” BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 572

n.17 (1993), and no State may apply a rule of law that con-

flicts with this Court’s decisions interpreting the constitu-

tional constraints on extraterritorial regulation.

1. The Commerce Clause prohibits States from engag-

ing in precisely this sort of extraterritorial regulation without

the consent of Congress. In Healy v. Beer Institute, 491 U.S.

324 (1989), this Court struck down Connecticut’s attempt to

project its alcoholic beverage control regime into its neighbor

States. Jd. at 337. As in this case, Connecticut had adopted a

regulatory regime that had the “undeniable effect of control-

ling commercial activity occurring wholly outside the bound-

ary of the State.” Jd.

“mmm LL ae

The certification of a single body of law to govern the

entire class threatens to extinguish the contrary regulatory

regimes of Oklahoma and Michigan’s sister States—regimes

under which many class members’ claims against DCC are

plainly barred. For example, many class members cannot

recover under their own States’ laws on a “no-injury” claim

for breach of warranty like the one they assert here, a claim

premised on an alleged, as-yet unmanifested product defect

that has caused no harm. E.g., In re Air Bag Prods. Liab.

Litig., 7 F. Supp. 2d at 803-04. Other class members could

not recover because they purchased their minivans from re-

tailers, rather than from DCC, and their home States require

plaintiffs suing for breach of express warranty, implied war-

ranty, or both to show vertical privity with the defendant.

E.g., Flory v. Silvercrest Indus., 633 P.2d 383, 387 (Ariz.

1981). Other States preclude class members who purchased

a used minivan from suing DCC, the original manufacturer,

for breach of implied warranty. See, e.g., CAL. Clv. CODE

§ 1791.1; Southerland v. Northeast Datsun, Inc., 659 S.W.2d

889, 891 (Tex. Ct. App. 1983).

A substantial number of plaintiff class members assert

claims that, if brought individually, would be governed by

state law that precludes their recovery. For example, to_per-

mit a California used-minivan purchaser to recover under

some other State’s law when the law of her own State pre-

cludes recovery against the manufacturer plainly amounts to

regulation of the market for used vehicles in California, a

form of regulation unjustified by any contacts between the

forum State and the transaction being regulated. Indeed, a

number of the state-court cases certifying nationwide classes

concede that the effect of such a decision is to regulate trans-

actions with customers in other States. E.g., Clark, 798

N.E.2d at 129-30 (applying Illinois consumer-protection law

to companies “‘serving Illinois and out-of-state consumers.’”

(quoting Avery, 746 N.E.2d at 1255) (emphases added)).

2. This Court has consistently applied due process prin-

ciples as well as the Commerce Clause to strike down such

extraterritorial regulatory efforts. As Justice Stevens ex-

plained in Allstate, this Court’s due process cases prohibit

States from applying their own choice-of-law principles and

substantive law with the effect of “materially enlarging the

contractual obligations of one of the parties where that party

had no reason to anticipate the possibility of such enlarge-

ment.” 449 U.S. at 327 n.16 (Stevens, J., concurring in the

judgment). Here, although California law limits a manufac-

turer’s implied warranty to the initial purchaser, the Okla-

homa court’s class-certification decision effectively rewrites

that contractual obligation and, if Michigan law contradicts

California’s rule, allows every California minivan purchaser

the additional opportunity to pass on the manufacturer’s im-

plied warranty through resale. The Oklahoma courts’ na-

tionwide certification thus rewrites DCC’s warranty obliga-

tions across the country.

Likewise, this Court’s recent punitive damages cases ex-

pressly invoke the Due Process Clause’s limitations on one

State’s power to punish conduct legal in other States. E.g.,

State Farm Mut. Auto. Ins. Co. v. Campbell, 123 S. Ct. 1513,

1522 (2003) (“A State cannot punish a defendant for conduct

that may have been lawful where it occurred.” (citations

omitted)); BMW, 517 U.S. at 571-73 & n.16 (same) (citing

Healy, 491 U.S. at 335-36; Bigelow v. Virginia, 421 U.S.

809, 824 (1975); N.Y. Life Ins. Co. v. Head, 234 U.S. 149,

161 (1914); and Huntington v. Attrill, 146 U.S. 657, 669

(1892)). Indeed, in State Farm this Court cited Shutts for the

proposition that “[ajny proper adjudication of conduct that

occurred outside Utah [the forum State] to other persons”

would be governed by the State laws applicable to those

other persons. 123 S. Ct. at 1522.°

° For this reason, this litigation may put DCC in a no-win

situation: even if DCC prevails in the Oklahoma action on Michi-

reiterate iiaaiatiiaiaiaiaiiiiaes

The Oklahoma court’s decision effectively makes an end

run around State Farm and BMW. By certifying a nation-

wide class according to a single State’s law—in a case in

which the plaintiffs demand punitive damages—the court

requires an Oklahoma court to consider awarding damages

based on conduct legal where it occurred, because the class

certification permits plaintiffs from States in which DCC is

unquestionably free of liability to pursue their claims under

Michigan law, and to seek damages.

The certification of a nationwide class in this case is a

plain circumvention of the federal system’s restrictions on

extraterritorial regulation, as set forth in this Court’s cases.

This Court should exercise plenary review to correct both the

Oklahoma court’s disregard of controlling authority and the

resulting disruption of interstate commerce.

III. The Questions Presented Are Important And Recur

Frequently, And Courts Conducting Nationwide

Class Certification Proceedings Require This Court’s

Guidance At The Earliest Possible Stage

State courts are requested to certify nationwide classes

with increasing frequency. Indeed, in certain state courts,

requests for nationwide class certification are becoming the

norm rather than the exception. E.g., DEBORAH R. HENSLER

ET AL., RAND INST. FOR CIVIL JUSTICE, CLASS ACTION DI-

LEMMAS 124 n.15 (2000) (reporting that one study found that

more than half the certified classes in Alabama courts were

nationwide in scope); Beisner & Miller, supra, at 156-57,

160-61, 169 (noting the growth of nationwide class actions

filed in state courts).

gan-law grounds, some plaintiff class members may return to their

home States to pursue warranty claims, claiming that they are not

bound by the Oklahoma courts’ application of Michigan law to

resolve their claims in DCC’s favor.

These cases create an acute need for guidance on the

correct constitutional standard for choice-of-law determina-

tions in nationwide class actions. Demands to apply the law

of a single State in such actions are likewise becoming far

more common. Choice-of-law questions are presented in vir-

tually every nationwide class action applying state law, and

in many cases the resolution of those questions will be a dis-

positive factor in the decision whether or not to certify. Most

States that allow class actions apply some version of the fed-

eral Rule 23 requirements of commonality, typicality, pre-

dominance, and manageability, see FED. R. Civ. P. 23(a)(2),

(a)(3), (b)(3), (b)(3)(D), all of which are directly implicated

by a decision that the law of multiple States governs the

claims of the class. See Henry Schein, 102 S.W.3d at 698

nn.91-92 (collecting dozens of federal and state cases in

which the need to apply multiple States’ laws was dispositive

of class certification). Thus, guidance from this Court on the

choice-of-law question will likely affect a large fraction of

class-certification decisions in multistate class actions

brought in both state and federal courts.

The conflicting decisions of those courts make the need

for review all the more urgent. Even if only a few States

misapply this Court’s Due Process and Commerce Clause

precedents to create choice-of-law rules that permit the na-

tionwide application of a particularly plaintiff- or defendant-

friendly body of law, the floodgates are opened: parties eve-

rywhere can override their home States’ public policies by

obtaining nationwide class certification in the courts of an-

other State. For this reason, the interstate conflict created by

the decision of the Oklahoma Supreme Court and a few other

state courts is of considerable significance to the federal sys-

tem, and this Court’s review is warranted to correct it.

ne ne Te enn se ann ee

IV. The Judgment Below Is Final For Purposes Of This

Court’s Review Under 28 U.S.C. § 1257(a)

The decision below finally resolved the important ques-

tions of federal constitutional law presented in this petition.

The Oklahoma Supreme Court squarely rejected DCC’s ar-

guments that the federal Constitution precludes courts from

certifying a nationwide class without conducting a choice-of-

law analysis specific to the individual class members’ claims.

If not reviewed now, the decision below threatens to erode

fundamental principles of federalism—including constitu-

tional limits on choice of law and comity among sister

States—and to evade review altogether. Accordingly, the

judgment is final for purposes of 28 U.S.C. § 1257(a).

The Court follows a “pragmatic approach” when deter-

mining whether a state court decision is “final” under

§ 1257(a). Cox Broadcasting Corp. v. Cohn, 420 US. 469,

486 (1975). There are “at least-four categories” of cases in

which a judgment is sufficiently final to justify this Court’s

review even though further proceedings remain to be held in

state court. Jd. at 477. The fourth such category involves

“those situations where the federal issue has been finally de-

cided in the state courts with further proceedings pending in

which the party seeking review here might prevail on the

merits on nonfederal grounds, thus rendering unnecessary

review of the federal issue by this Court,” and where “rever-

sal of the state court on the federal issue would be preclusive

of any further litigation.” Jd. at 482-83. In these circum-

stances, “if a refusal immediately to review the state-court

decision might seriously erode federal policy, the Court has

entertained and decided the federal issue, which itself has

been finally determined by the state courts for purposes of

the state litigation.” Jd. at 483; see also Goodyear Atomic

Corp. v. Miller, 486 U.S. 174, 178-80 (1988) (granting cer-

tiorari where the decision below “might seriously erode fed-

eral policy in the area of nuclear production”); Southland

Corp. v. Keating, 465 U.S. 1, 6-8 (1984) (granting certioran

where the decision below threatened to erode enforcement of

arbitration agreements under the Federal Arbitration Act).

The fourth Cox Broadcasting category is applicable

here. The constitutional issues presented in the petition have

been finally decided by the court below, which rejected

DCC’s contention that certification of a nationwide class ac-

tion under Michigan law, without conducting a choice-of-law

analysis specific to the individual class members’ claims,

violates several provisions of the federal Constitution. See

supra note 2. Although the state court remanded for further

proceedings, such proceedings will not crystallize or finalize

the disposition of the federal questions; to the contrary, the

litigation may well terminate on the basis of nonfederal is-

sues, thereby depriving this Court of the opportunity to de-

cide the important constitutional issues at stake. Cox Broad-

casting, 420 US. at 482.

Furthermore, reversal of the decision below would be

“preclusive of any further litigation on the relevant cause of

action.” Cox Broadcasting, 420 U.S. at 482-83. A determi-

nation by this Court that the Constitution requires that the

laws of all 50 states and the District of Columbia be applied

to the nationwide class members’ claims would terminate this

litigation as a practical matter. As the opinion below ac-

knowledges, “[a]pplying the law of 51 jurisdictions . . . pre-

sents an overwhelming burden which would make the class

unmanageable and a class action determination ... inappro-

priate.” App., infra, 16a. Moreover, following a constitu-

tionally adequate choice-of-law analysis, neither named re-

spondent could maintain any cause of action under Michigan

warranty law in the Oklahoma court. Accordingly, reversal

of the decision below would terminate this lawsuit.

Finally, it is readily apparent that “a refusal immediately

to review the state-court decision might seriously erode fed-

eral policy.” Cox Broadcasting, 420 U.S. at 483. The Okla-

homa courts’ certification of a nationwide class under Michi-

gan law, without conducting a choice-of-law analysis specific

to individual class members’ claims, heavily undermines

constitutional interests in federalism. These interests,

through the Commerce and Due Process Clauses, restrain an

individual state court’s authority within our federal system.

Where, as here, the federal issue concerns the basic au-

thority of the state court to adjudicate specific claims be-

tween specific litigants, this Court consistently has exercised

jurisdiction despite the availability of further state court pro-

ceedings that might lead to the termination of the dispute on

non-federal grounds. For example, this Court has taken ju-

risdiction to decide whether the state court in which further

proceedings would be held had the authority to adjudicate a

dispute or instead was required by federal law to refer it to

arbitration. Southland Corp., 465 U.S. at 6-7. Similarly, this

Court has reviewed the question whether the state court

lacked personal jurisdiction over a defendant and thus, under

the Due Process Clause, could not adjudicate the dispute.

Calder v. Jones, 465 U.S. 783, 788 (1984); Shaffer v. Heit-

ner, 433 U.S. 186, 195-96 n.12 (1977). And this Court simi-

larly exercised jurisdiction to decide whether the state court

lacked authority to adjudicate a claim because federal law

compelled a change of venue. Burlington N. R.R. Co. v.

Ford, 504 U.S. 648, 649-652 (1992); Am. Motorists Ins. Co.

v. Starnes, 425 U.S. 637, 640-42 (1976); Mercantile Nat'l

Bank v. Langdeau, 371 U.S. 555, 558 (1963).

In this case, the federalism issues implicated by the rul-

ing below are just as significant and deserving of immediate

review, if not more so. Cf, e.g., P.R. Aqueduct & Sewer

Auth. v. Metcalf & Eddy, 506 U.S. 139, 146 (1993) (review-

ing a sovereign immunity claim interlocutorily owing to the

“importance of ensuring that the States’ dignitary interests

can be fully vindicated”). The federal question is the consti-

tutionality of the state court’s proposed adjudication: not

fetes ee RNS 0 4 ie

only does further delay entail exponentially greater cost, it

imposes on DCC precisely the burden against which it is in-

voking the protections of the Due Process and Commerce

Clauses. Where federal policies affecting the scope and form

of litigation are at issue, it serves the underlying policy of

finality “to determine now [how] appellants may be tried

rather than to subject them, and appellee, to long and com-

plex litigation which may all be for naught if consideration of

the preliminary question . . . is postponed until the conclusion

of the proceedings.” Mercantile Nat’l Bank, 371 U.S. at 558;

see also Southland Corp., 465 U.S. at 7-8 (noting that de-

layed review of a state decision denying enforcement of an

arbitration contract would defeat the core purpose of a con-

tract to arbitrate).

Moreover, a grant of class status “can propel the stakes

of a case into the stratosphere,” thereby pressuring a defen-

dant to settle and precluding future review of federal issues,

“even when the plaintiff's probability of success on the mer-

its is slight.” Blair v. Equifax Check Servs., Inc., 181 F.3d

832, 834 (7th Cir. 1999) (noting that “some plaintiffs or even

’ This Court has not previously considered whether a grant

of class certification is reviewable under Cox Broadcasting. In

Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), the Court

considered whether a denial (rather than a grant) of class certifica-

tion was “final” under 28 U.S.C. § 1291, not § 1257. Similarly, in

Gillette Co. v. Miner, 459 U.S. 86 (1982) (per curiam), the Court,

which dismissed certiorari for want of jurisdiction without further

explanation, was asked to consider a federal interest different from

the one raised here. Gillette concerned the constitutionality of a

State court’s personal jurisdiction over unnamed class plaintiffs,

while this petition concerns constitutional limitations on a state’s

choice of law with respect to specific transactions. See Shutts, 472

U.S. at 821 (“The issue of personal jurisdiction over plaintiffs in a

class action is entirely distinct from the question of the constitu-

tional limitations on choice of law.”).

ae AR et

some ... judges may be tempted to use the class device to

wring settlements from defendants”). Indeed, such settle-

ment pressures were a motivating factor behind this Court’s

adoption of Rule 23(f) of the Federal Rules of Civil Proce-

dure in 1998. FED. R. Civ. P. 23(f) advisory committee’s

notes (“An order granting certification ... may force a de-

fendant to settle rather than incur the costs of defending a

class action and run the risk of potentially ruinous liability.”).

Notably, federal courts of appeals are instructed that their

discretion to conduct interlocutory review under Rule 23(f) is

“akin to the discretion exercised by the Supreme Court in act-

ing on a petition for certiorari.” Jd.* The possibility of cer-

tiorari review reduces the danger that a constitutionally erro-

neous class certification (and the resulting impact on inter-

state federalism) will never be reviewed precisely because

even a nationwide class advancing meritless claims poses a

real threat of crippling liability, ““economic waste and ...

delayed justice’” that could create undue incentives to settle.

Cox Broadcasting, 420 U.S. at 477-78 (quoting Radio Station

WOW, Inc. v. Johnson, 326 U.S. 120, 124 (1945)); see Re-

public Natural Gas Co. v. Oklahoma, 334 U.S. 62, 68 (1948).

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

All federal circuits that have interpreted Rule 23(f) have

recognized that interlocutory appeal is appropriate “when the

stakes are large and the risk of a settlement or other disposition

that does not reflect the merits of the claims is substantial.” Blair,

181 F.3d at 835; see also Tilley v. TIX Cos., 345 F.3d 34, 37 (1st

Cir. 2003); In re Lorazepam & Clorazepate Antitrust Litig., 289

F.3d 98, 105 (D.C. Cir. 2002) (same); Prado-Steiman v. Bush, 221

F.3d 1266, 1272, 1274 (11th Cir. 2000) (same).

PETER W. HERZOG MIGUEL A. ESTRADA

JAMES F, BENNETT Counsel of Record

BRYAN CAVE LLP THEODORE J. BOUTROUS, JR.

One Metropolitan Square PAUL DECAMP

211 North Broadway ‘Cory J. SKOLNICK

Suite 3600 WILLIAM M. JAy

St. Louis, MO 63102 GIBSON, DUNN & CRUTCHER LLP

(314) 259-2000 1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

ROBERT E. NORTON (202) 955-8500

Mary E. WALDRUP

DAIMLERCHRYSLER Corp.

1000 Chrysler Drive

Auburn Hills, MI 48326

(248) 512-4120

Counsel for Petitioner

March 19, 2004

APPENDIX

APPENDIX A

YSBRAND v. DAIMLERCHRYSLER CORP.

2003 OK 17

81 P.3d 618

Case Number: 97469

Decided: 02/25/2003

THE SUPREME COURT OF THE

STATE OF OKLAHOMA

Sheryl Ysbrand and Mary Cooney, individually and on be-

half of all others similarly situated, Appellees,

DaimlerChrysler Corporation, a Delaware Corporation, indi-

vidually and as successor in Interest to Chrysler Corporation

and Chrysler Corporation, a Delaware Corporation, individu-

ally, Appellants.

APPEAL FROM DISTRICT COURT,

SEQUOYAH COUNTY

Honorable John C. Garrett, Judge

{0 Buyers asserted warranty and common law fraud

claims against automobile manufacturer for alleged defects in

front passenger seat air bags of certain of its minivans. Mat-

ter was certified as class action and manufacturer appeals.

AFFIRMED IN PART;

REVERSED IN PART.

Clyde A. Muchmore, Harvey D. Ellis, Jr., Courtney K.

Warmington, Crowe & Dunlevy, Oklahoma City, Oklahoma

for Appellants.

Peter W. Herzog, III, Bryan Cave, St. Louis, Missouri, for

Appellants.

Thomas G. Wolfe, Lyndon W. Whitmire, Phillips, McFall,

‘McCaffrey, McVay & Murrah, Oklahoma City, Oklahoma,

for Appellants.

Harry Scoufos, Sallisaw, Oklahoma, for Appellees.

Darleen Jacobs, New Orleans, Louisiana, for Appellees.

James Minge, New Orleans, Louisiana, for Appellees.

Joseph J. McKernan, Baton Rouge, Louisiana, for Appellees.

Patrick W. Pendley, Plaquemine, Louisiana, for Appellees.

Robert E. Reeves, Lexington, Kentucky, for Appellees.

Anthony Majestro, Masters & Taylor, Charleston, West Vir-

ginia, for Appellees.

Stephen E. Van Gaasbeck, San Antonio, Texas, for Appel-

lees.

Hodges, J.

41 This opinion reviews the trial court’s determina-

tion that this dispute meets the requirements for a class action

found at Title 12, section 2023, of the Oklahoma Statutes.

The class certification order is affirmed as to the warranty

claims asserted but is reversed as to the claim for fraud and

deceit.

{2 Defendant, DaimlerChrysler, is a Delaware corpo-

ration with its principal place of business in Michigan. It

manufactured over one million 1996 and 1997 model “mini-

vans” equipped with front passenger seat air bags. Plaintiffs,

each an owner of one of the minivans, have asserted Uniform

Commercial Code claims for “breach of express warranty,”

“breach of implied warranty of merchantability,” and “breach

of implied warranty of fitness.” In addition, they assert a

claim for “fraud and deceit.”

43 Plaintiffs’ claims are based on their assertion that

the front passenger seat air bags are defective due to “1) their

propensity to deploy with overly aggressive force and 2) their

propensity to deploy during a low speed collision.” Plaintiffs

further assert that DaimlerChrysler failed to warn purchasers

;

that this defect has the potential to kill or seriously injure a

child or small adult seated in the front passenger seat. Ac-

cording to Plaintiffs, there are air bags available which de-

ploy with less force and at higher collision speeds. They

claim that these bags are currently used as replacements

when a bag has been deployed. Plaintiffs seek damages in an

amount sufficient to allow owners to install the “safer” air

bags or, in the alternative, replacement of the “defective” air

bags by DaimlerChrysler.

{4 Following initial discovery and a hearing, the trial

court issued a twenty-one page order certifying a class con-

sisting of Plaintiffs and

[a]ll entities and adult persons domiciled or residing in _

any of the fifty states of the United States of America or

in the District of Columbia, who purchased and who, ac-

cording to motor vehicle registration records maintained

by their respective states or districts of residence or

domicile, can be identified as the current owner of at

least one (1) model year 1996-1997 “minivan” automo-

bile marketed by defendant as Chrysler Town & Country

or Chrysler Minivan or Plymouth Voyager or Plymouth

Grand Voyager or Dodge Caravan, which was manufac-

tured by defendant for sale in any of the fifty states of

the United States of America or the District of Colum-

bia, or which defendant marketed in any of the fifty

states of the United States of America or the District of

Columbia as a product of its own manufacture, which

was configured at the time of original sale or occupancy

by at least five (5) passengers, and which contains on the

' Plaintiffs’ claim for fraudulent misrepresentation is based

not on a failure to warn of the dangers of air bags generally.

Rather, the claim is based on the failure to warn small adults

and chiidren over 12 of the dangers of over aggressive de-

ployment of the air bags and their tendancy to deploy at low

speed impacts.

driver side and/or passenger side of the forward seating

area a passive restraint system commonly known as an

“air bag,” which employs a fabric-covered envelope de-

signed to expand rapidly with sodium azide or other

gases and thus cushion a front-seat occupant when the

system is activated by a sensor during a frontal collision.

Excluded from the class were (1) those who have suffered

personal injury from air bag deployment, (2) DaimlerCrysler

employees and affiliates, (3) judges and judicial personnel,

(4) those who have had their air bags deactivated, and (5)

those who had the original air bags replaced. DaimlerChrys-

ler now appeals the class certification order and the matter

has been retained for this Court’s review.

45 _A trial court’s class certification order is reviewed

for abuse of discretion. Scoufos v. State Farm Fire & Cas.

Co., 2001 OK 113, 41 P.3d 366, 367. “An abused judicial

discretion is manifested when discretion is exercised to an

end or purpose not justified by, and clearly against, reason

and evidence.” Patel v. OMH Med. Ctr. Inc., 1999 OK 33,

* The trial court’s class certification followed the litigation of

similar issues in Louisiana and unsuccessful attempts to remove

this case to federal court. The decision in Jn re Air Bag Products

Liability Litigation, 7 F.Supp.2d 792 (E.D. La. 1998), involved

allegations of air bag defects against several automobile manufac-

turers and dealers. All claims were dismissed or summarily adju-

dicated in favor of defendants under Louisiana and Texas law. No

class certification was involved. Thus, nothing about that decision

impacts the issue of class certification presented in this litigation.

The class certification also followed the refusal of the Na-

tional Highway Traffic Safety Administration (NHTSA) to further

investigate following its determination that vehicles, including

1996 Chrysler minivans, “had rates of air bag deployments per 100

collision claims that are similar to that of many other vehicles.” In

doing so, NHTSA noted its “need to allocate and prioritize [its]

limited resources.”

987 P.2d 1185, 1194. If the record does not demonstrate that

the requisites for class action have been met, the trial court

has abused its discretion. Greghol Ltd. Partnership v. Oryx

Energy Co., 1998 OK CIV APP 111, 959 P.2d 596, 598.

“The pragmatically correct action, in the face of a close ques-

tion as to certification, has been said to sustain certification

because if it develops later during the course of the trial that

the order is ill-advised, the order is always (prior to judgment

on the merits,) subject to modification.” Perry v. Meek, 618

P.2d 934, 940 (Okla. 1980).

{6 Class action is a procedural device provided by Ti-

tle 12, section 2023, of the Oklahoma Statutes. It permits

Section 2023 provides:

A. PREREQUISITES TO A CLASS ACTION. One or more

members of a class may sue or be sued as representative par-

ties 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 will fairly and adequately

protect the interests of the class.

B. CLASS ACTIONS MAINTAINABLE. An action may be

maintained as a class action if the prerequisites of subsection A

of this section are satisfied and in addition:

1. The prosecution of separate actions by or against indi-

vidual members of the class would create a risk of:

a. inconsistent or varying adjudications with respect to

individual members of the class which would establish

incompatible standards of conduct for the party oppos-

ing the class, or

[Footnote continued on next page]

[Footnote continued from previous page]

b. adjudications with respect to individual members of

the class which would as a practical matter be disposi-

tive of the interests of the other members not parties to

the adjudications or substantially impair or impede their

ability to protect their interests; or

2. The party opposing the class has acted or refused to act

on grounds generally applicable to the class, thereby mak-

ing appropriate final injunctive relief or corresponding de-

claratory relief with respect to the class as a whole; or

3. The court finds that the questions of law or fact com-

mon to the members of the class predominate over any

questions affecting only individual members, and that a

class action is superior to other available methods for the

fair and efficient adjudication of the controversy. The

matters pertinent to the findings include:

a. the interest of members of the class in individually

controlling the prosecution or defense of separate ac-

tions,

b. the extent and nature of any litigation concerning the

controversy already commenced by or against members

of the class,

c. the desirability or undesirability of concentrating the

litigation of the claims in the particular forum, and

d. the difficulties likely to been countered in the man-

agement of a class action.

C. DETERMINATION BY ORDER WHETHER CLASS

ACTION TO BE MAINTAINED; NOTICE; JUDGMENT;

ACTIONS CONDUCTED PARTIALLY AS _ CLASS

ACTIONS.

1. As soon as practicable after the commencement of an

action brought as a class action, the court shall determine

by order whether it is to be so maintained. An order under

[Footnote continued on next page]

SE |

[Footmote continued from previous page]

this subsection may be conditional, and may be altered or

amended before the decision on the merits.

2. In any class action maintained under paragraph 3 of

subsection B of this section, the court shall direct to the

members of the class the best notice practicable under the

circumstances, including individual notice to all members

who can be identified through reasonable effort. The no-

tice shall advise each member that:

a. the court will exclude him from the class if he so re-

quests by a specified date,

b. the judgment, whether favorable or not, will include

all members who do not request exclusion, and

c. any member who does not request exclusion may, if

he desires, enter an appearance through his counsel.

Where the class contains more than five hundred (500) mem-

bers who can be identified through reasonable effort, it shall

not be necessary to direct individual notice to more than five

hundred (500) members, but the members to whom individual

notice is not directed shall be given notice in such manner as

the court shall direct, which may include publishing notice in

newspapers, magazines, trade journals or other publications,

posting it in appropriate places, and taking other steps that are

reasonably calculated to bring the notice to the attention of

such members, provided that the cost of giving such notice

shall be reasonable in view of the amounts that may be recov-

ered by the class members who are being notified. Members

to whom individual notice was not directed may request exclu-

sion from the class at any time before the issue of liability is

determined, and commencing an individual action before the

issue of liability is determined shall be the equivalent of re-

questing exclusion from the class.

3. The judgment in an action maintained as a class action

under paragraphs 1 or 2 of subsection B of this section,

whether or not favorable to the class, shall include and de-

[Footnote continued on next page]

[Footnote continued from previous page]

scribe those whom the court finds to be members of the

class. The judgment in an action maintained as a class ac-

tion under paragraph 3 of subsection B of this section,

whether or not favorable to the class, shall include and

specify or describe those to whom the notice provided in

paragraph 2 of subsection C of this section was directed,

and who have not requested exclusion, and whom the

court finds to be members of the class.

4. When appropriate:

a. an action may be brought or maintained as a class ac-

tion with respect to particular issues, or

b. aclass may be divided into subclasses and each sub-

class treated as a class. The provisions of this section

shall then be construed and applied accordingly.

D. ORDERS IN CONDUCT OF ACTIONS. In the conduct

of actions to which this section applies, the court may make

appropriate orders:

1. Determining the course of proceedings or prescribing

measures to prevent undue repetition or complication in

the presentation of evidence or argument;

2. Requiring, for the protection of the members of the

class or otherwise for the fair conduct of the action, that

notice be given in such manner as the court may direct to

some or all of the members of any step in the action, or of

the proposed extent of the judgment, or of the opportunity

of members to signify whether they consider the represen-

tation fair and adequate, to intervene and present claims or

defenses, or otherwise to come into the action;

3. Imposing conditions on the representative parties or on

intervenors;

4. Requiring that the pleadings be amended to eliminate

therefrom allegations as to representation of absent per-

sons, and that the action proceed accordingly; and

[Footnote continued on next page]

plaintiffs to “vindicat[e] the rights of individuals who other-

wise might not consider it worth the candle to embark on liti-

gation in which the optimum result might be more than con-

sumed by the cost.” Deposit Guar. Nat'l Bank v. Roper, 445

U.S. 326, 338 (1980). Section 2023 requires, as does its fed-

eral counterpart; numerosity, commonality, typicality, and

adequacy of representation. In addition, the court must find

that “questions of law or fact common to the members of the

class predominate over any questions affecting only individ-

ual members, and that a class action is superior to other

available methods for the fair and efficient adjudication of

the controversy.” Jd. at § 2023 (B)(3).

{7 DaimlerChrysler challenges the trial court’s de-

termination that each of these requirements was demon-

strated by Plaintiffs. Its challenge is focused primarily on

whether common questions of law and fact predominate and

whether a class action is superior to other available methods

of adjudicating the controversy. DaimlerChrysler also argues

that the class representatives and their counsel are inade-

quate.

[Footnote continued from previous page]

5. Dealing with similar procedural matters. The orders

may be combined with an order under Section 16 of this

act and may be altered or amended as may be desirable

from time to time.

E. DISMISSAL OR COMPROMISE. A class action shall not

be dismissed or compromised without the approval of the

court, and notice of the proposed dismissal or compromise

shali be given to all members of the class in such manner as

the court directs.

aS a

10a

I. COMMON ISSUES OF LAW OR FACT

A. Issues of Law

48 DaimlerChrysler argues that common issues of law

or fact do not predominate because varying state laws will

apply to the asserted claims and defenses. It cites KMC

Leasing, Inc v Rockwell-Standard Corp., 2000 OK 51, 9 P.3d

683, in which this Court found no abuse of discretion in the

trial court’s refusal to certify a class for lack of predominat-

ing issues. The proposed class consisted of private aircraft

owners who alleged four different product defects against

multiple defendants in different states. The matter required

application of differing terms in hundreds of nonuniform air-

craft purchase contracts. Jd. at 690-691. Because the sub-

stantive law of numerous states applied to issues which were

not common to the entire class, there was no predominance

and the trial court did not err in refusing to certify the class.

Id.

49 In this matter the trial court determined that “the

alleged choice of law problems identified by [DaimlerChrys-

ler did] not bar certification.” It relied upon Jn re Bridge-

stone/Firestone Inc Tires Liability Litigation, 155 F. Supp.2d

1069 (S.D. Ind. 2001), which granted class certification upon

a finding of predominance.

410 In Firestone, a federal district court sitting in Indi-

ana determined which state’s substantiative law applied to a

nationwide state law class action. Buyers had asserted tort

and contract claims against Ford Motor Co. and Bridge-

stone/Firestone, Inc. for alleged tire defects on Ford’s Ex-

plorer model sport utility vehicle. The court reasoned that

because “the relationship between the parties [was] simply

that of buyer and seller,” the place where the products were

purchased was not significant to the claims for product de-

fect. Jd. at 1082. Rather, it was “the conduct of Defendants

as manufacturers” which was the focus of the litigation. Jd.

Pee Te eee

lla

Therefore, the law of Michigan and Tennessee, the principal

places of business of the manufactures, controlled.

{11 The trial court’s application of Firestone to this

matter evidences its intent to apply the substantive law of

Michigan, DaimlerChrysler’s principal place of business, to

the claims and defenses asserted. Application of Oklahoma’s

choice of law rules supports that conclusion.

1. Choice of Law - UCC Claims

{12 The “most significant relationship” test applies to

an action for breach of warranty in a sale of goods under Ar-

ticle 2 of the UCC. See Collins Radio Co. v. Bell, 623 P.2d

1039, 1046-47 (Okla. Ct. Civ. App. 1980) (“The same ra-

tionale for accepting the [most significant relationship test]

for torts dictates that its application should be made to ac-

tions that fall under Article 2 of the Uniform Commercial

Code.”) See also Bohannan y. Allstate Ins. Co., 820 P.2d

787, 795 (Okla. 1991) (“[T]he UCC supports the most sig-

nificant relationship test as applied in Collins Radio.”) This

test is guided by principles and contacts from the Restate-

ment (Second) of Conflicts (1971). It determines which

, The Court of Appeals for the Seventh Circuit reversed the de-

cision. See In re Bridgestone/Firestone Inc., 288 F.3d 1012 (7th

Cir. 2002) cert. den. 71 USLW 95368 (U.S. Jan. 16, 2003). It did

so based on its determination that “Indiana is a lex loci delecti

state: in all but exceptional cases it applies the law of the place

where harm occurred.” Jd. at 1016. Asa result, “Indiana’s choice-

of-law rule selects the 50 states and multiple territories where the

buyers live, and not the place of the sellers’ headquarters, for these

suits.” Jd. at 1018. Thus, “[b]Jecause these claims must be adjudi-

cated under the law of so many jurisdictions, a single nationwide

class is not manageable.” Jd. Although the Seventh Circuit re-

jected the lower court’s conclusion as to which choice of law rule

Indiana utilizes, the lower court’s analysis under a most significant

relationship test remains persuasive.

12a

state’s law is most directly connected to the parties and the

transaction. -

413 Under section 6 of the Restatement, the factors

relevant to any choice of law decision include:

(a)

the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(0)

(d)

(e)

(f)

(g)

the relevant policies of other interested states and

the relative interests of those states in the determina-

tion of the particular issue,

the protection of justified expectations,

the basic policies underlying the particular field of

law,

certainty, predictability and uniformity of result, and

ease in the determination and application of the law

to be applied.

The contacts to be considered in applying these principles to

an issue in contract include:

(a)

(b)

the place of contracting,

the place of negotiation of the contract,

(d)

(e)

the location of the subject matter of the contract, and

the domicile, residence, nationality, place of incor-

poration and place of business of the parties. The

contacts are to be evaluated according to their rela-

tive importance with respect to the particular issue.

5 ‘ : —— : ;

This rule applies only in situations where the parties have not

chosen the applicable law. The parties have not directed this court

to a choice of law provision in their contract.

4 x “aoe ee om —e es S

iG SARC eS LO RAL ce WORE He!

13a

Id. at § 188(2) (emphasis added). However, a third provi-

sion, section 191, applies to a sale of interests in chattel. “So

in a contract for the sale of goods the most significant contact

is the place of delivery unless another state has a more sig-

nificant relationship.” Collins Radio, 623 P.2d at 1047. As

comment f. to section 191 explains: “On occasion, a state

which is not the place of delivery will nevertheless, with re-

spect to the particular issue, be the state of most significant

relationship to the transaction, the parties and the chattel and

hence the state of the applicable law.” The particular dispute

in this matter presents such an occasion in which “the local

law of some state other than that of delivery should be ap-

plied in any event because of the intensity of the interest of

that state in the determination of the particular issue.” Jd.

914 All 50 states and the District of Columbia bear

some relationship to the parties and transactions in this dis-

pute by virtue of the nationwide sales of the minivans. The

question becomes whether the relationship of each state

where the vehicles were purchased is more significant to the

parties and this litigation than that of Michigan, the principal

place of business of DaimlerChrysler.

415 The Restatement’s section 188(2) contacts of the

place of contracting, the place of negotiation and perform-

ance, and the location of the subject matter are of diminished

significance to the sales of the minivans. The UCC warran-

ties are not something which is negotiated in the purchase of

a new car. Thus, the relative interest of each buyer’s home

state in applying its vey».on of the UCC is more or less equal.

By contrast, Michigas s interest in having its regulatory

scheme applied to the conduct of a Michigan manufacturer is

most significant. Michigan is where the decisions concern-

ing the design, manufacture, and distribution of the minivans

were made. Michigan is the only state where conduct rele-

vant to all class members occurred. The principal place of

DaimlerChrysler’s business is the most important contact

with respect to the UCC warranty claims.

416 The selection of Michigan law furthers the rele-

vant factors stated in section 6 of the Restatement. The needs

ita

of the interstate system and the basic policies of predictabil-

ity and uniformity of result require that the issue of product

defect be determined in one forum with one result rather than

in 51 jurisdictions with the very real possibility of conflicting

decisions. While the interest of each home state in applying

its local law is significant, Michigan’s interest in the conduct

of its masiufacturer, and thus its connection to the warranty

issues, is greater. Michigan law applies. It should be noted

that this conclusion is consistent with the constitutional im-

perative that “for a state’s substantive law to be selected in a

constitutionally permissible manner, that state must have a

significant aggregation of contacts, creating state interests,

such that choice of its law is neither arbitrary nor fundamen-

tally unfair.” Phillips Petroleum Co. v. Shutts, 472 U.S. 797,

818 (1985) (quoting Allstate Ins. Co. v. Hague, 449 U.S. 302,

312-313 (1981)).

2. Choice of Law - Fraud and Misrepresentation

6 ; .

417 Section 148 of the Restatement applies to actions

to recover pecuniary damages for false representations

° § 148. Fraud and Misrepresentation

(1) When the plaintiff has suffered pecuniary harm on account of

his reliance on the defendant’s false representations and when the

plaintiffs action in reliance took place in the state where the false

representations were made and received, the local law of this state

determines the rights and liabilities of the parties unless, with re-

spect to the particular issue, some other state has a more significant

relationship under the principles stated in § 6 to the occurrence and

the parties, in which event the local law of the other state will be

applied.

(2) When the plaintiffs action in reliance took place in whole or in

part in a state other than that where the false representations were

made, the forum will consider such of the following contacts,

among others, as may be present in the particular case in determin-

ing the state which, with respect to the particular issue, has the

most significant relationship to the occurrence and the parties:

[Footnote continued on next page]

Snel Bah Si Bal ba ion

15a

whether fraudulent, negligent, or innocent. Subsection (2)

applies to this dispute because the nationwide representations

in DaimlerChrysler’s advertising were made in states outside

each class member’s home state. The home state is where

each class member acted in reliance on those representations

by purchasing a minivan. Thus, this Court is directed to con-

sider:

(a) the place, or places, where the plaintiff acted in reli-

ance upon the defendant’s representations,

(b) he place where the plaintiff received the representa-

tions,

(d) the domicil, residence, nationality, place of incorpo-

ration and place of business of the parties,

(e) the place where a tangible thing which is the subject

of the transaction between the parties was situated at

the time, and

[Footnote continued from previous page]

(a) the place, or places, where the plaintiff acted in reliance

upon the defendant’s representations,

(b) the place where the plaintiff received the representations,

(d) the domicil, residence, nationality, place of incorporation

and place of business of the parties,

(e) the place where a tangible thing which is the subject of

the transaction between the parties was situated at the time,

and |

(f) the place where the plaintiff is to render performance un-

der a contract which he has been induced to enter by the

false representations of the defendant.

Re OI ar NS LOS

l6a

(f) the place where the plaintiff is to render perform-

ance under a contract which he has been induced to

enter by the false representations of the defendant.

The comments to subsection (2) describe (a), (b), (c), and (d)

as the “more important of these contacts.” Comment j. ar-

ticulates the general approach:

If any two of the above-mentioned contacts, apart from

the defendant’s . . . place of business, are located wholly

in a single state, this will usually be the state of the ap-

plicable law with respect to most issues. So when the

plaintiff acted in reliance upon the defendant’s represen-

tations in a single state, this state will usually be the state

of the applicable law, with respect to most issues, if (a)

the defendant’s representations were received by the

plaintiff in this state, or (b) this state is the state of plain-

tiffs domicil....

418 In this matter, each class member presumably re-

ceived the representation in their home state, their place of

domicile. Therefore, the contacts point to each class mem-

ber’s home state for the applicable law. Applying the law of

51 jurisdictions to the fraud claim presents an overwhelming

burden which would make the class unmanageable and a

class action determination of that claim inappropriate. The

class action certified by the trial court will go forward only

on the warranty claims asserted.

B. Issues of Fact

419 The trial court found that the operative facts giving

rise to the claims against DaimlerChrysler raise two ques-

tions which are common to the entire class: (1) whether the

air bags are defective and (2) whether DaimlerChrysler with-

held information concerning the alleged defect from those

who purchased the minivans. As the trial court observed,

“(t]he resolution of these issues will be applicable to each

and every class member and will be dispositive of every class

member’s claim.” As the fraud claim is no longer part of the

class action, factual disputes concerning that claim no longer

present litigable issues to be resolved.

17a

{20 DaimlerChrysler argues that the need for individ-

ual proof of each class member’s reliance on the express war-

ranty defeats predominance. Plaintiffs respond that any need

for particularized proof of reliance does not defeat the com-

monality and typicality of the issue of product defect.

921 Whether individual findings of reliance are re-

quired goes to the merits of the claims. It is a question of

Michigan law. A need for individual findings would not,

however, defeat class certification. “Factual variations in the

individual claims will not normally preclude class certifica-

tion if the claim arises from the same event or course of con-

duct as the class claims, and gives rise to the same legal or

remedial theory.” Lobo Explorations Co. v. Amoco Produc-

tions, 1999 OK CIV APP 112, 991 P.2d 1048, 1055 (quoting

Alpern v. Utili Corp United, Inc., 84 F.3d 1525, 1540 (8th

Cir. 1996). See also Armstrong v. Davis, 275 F.3d 849, 868

(9th Cir. 2001) (“[W]here the lawsuit challenges a... prac-

tice or policy that affects all of the putative class members

.... Individual factual differences among the individual liti-

gants or groups of litigants will not preclude a finding of

commonality.”); Newton v. Merrill Lynch, 259 F.3d 154, 183

(3d Cir. 2001) (It is not required that “class members share

every factual and legal predicate to meet the commonality

and typicality standards.”). The trial court remains free to

maintain the class with respect to particular issues or create

subclasses should the need arise. See Okla. Stat. tit 12, §

2023(C)(4) (2001).

II. SUPERIORITY

A. Class Action versus Administrative Remedy.

22 DaimlerChrysler argues that a class action is not

superior because the National Traffic and Motor Vehicle

Safety Act impliedly preempts this warranty and common

law tort action. Thus, it urges, the National Highway Traffic

Safety Administration (NHTSA) must adjudicate this contro-

versy. The Act, however, expressly provides that compliance

with its provisions does not immunize a manufacturer from

liability under common law or for warranty claims. 49

U.S.C. § 30103.

18a

4923 DaimlerChrysler also argues that, without regard

to implied administrative preemption, the administrative rem-

edy of a NHTSA complaint is superior to a class action. The

argument must fail.

924 Acclass action may be maintained only when it is

“superior to other available methods for the fair and efficient

adjudication of the controversy.” Okla. Stat. tit. 12,

§ 2023(B)(3) (2001) (emphasis added). There is no adminis-

trative method of adjudication available to Plaintiffs. The

NHTSA has declined to investigate further. See supra n.1.

An alternate method for adjudication must be available in

order for it to be superior.

§25 The question then becomes whether class action is

superior to individual litigation. As the trial court found, the

individual claims are not substantial enough to support indi-

vidual litigation. In addition, the prosecution of separate in-

dividual actions would inevitably result in inconsistent re-

sults.

B. Logistics of Class Management

926 Contrary to the assertion of DaimlerChrysler, a

“very expensive and time consuming vehicle by vehicle in-

spection” of each minivan is not required in order to deter-

mine whether an owner is a class member. The class consists

only of minivans configured for five or more passengers

which have not had the air bags deactivated or replaced. A

determination of whether a minivan retains an active factory

equipped air bag can be made at the time of replacement of

the air bag should the Plaintiffs prevail on the issue of prod-

uct defect.

927 There will be logistical problems in any nation-

wide class action. The fact that travel for counsel, parties,

and witnesses will be necessary would be true no matter

where the action was pursued. Plaintiffs have chosen Se-

quoyah County. None of the logistical problems, however,

prevent the trial court from resolving this dispute as a class

action. As the trial court observed, the advantage of adjudi-

ROL Dre Kee rnin. 6 No

Pt hee i oy 2 eh eh PO. att and

19a

cating the common issues in a single proceeding far out-

weighs the logistic demands of class treatment.

lil. ADEQUATE PROTECTION OF THE

' INTERESTS OF THE CLASS

{28 Section 2023(A)(4) requires that a class action

may be maintained only if “[t]he representative parties will

fairly and adequately protect the interests of the class.” This

requirement is met when the record demonstrates that the

class representatives interests do not conflict with those of

the class and that the class representatives will fully and ef-

fectively represent the interests of the class. See Black Hawk

Oil, 969 P.2d at 346 & 347.

29 DaimlerChrysler asserts that “the class representa-

tives and their counsel are inadequate.” Yet, it fails to iden-

tify any divergence between the interests of the class repre-

sentatives and those of the class. Rather, DaimlerChrysler

suggests that Plaintiffs are inadequate class representatives

because they were solicited to merely lend their names to a

suit entirely controlled by Plaintiffs’ counsel.

{30 The record in this matter supports the trial court’s

finding that no improper solicitation of Plaintiffs occurred as

well as its findings that Plaintiffs are adequately informed as

to the facts of the case, their responsibilities as class repre-

sentatives, and their knowledge of the litigation. As class

representatives, Plaintiffs are not required to have an attor-

ney’s knowledge of the litigation.

{31 The trial court’s finding concerning Plaintiffs’

counsel is also supported by the record. The trial court did

not, as DaimlerChrysler claims, merely parrot unsupported

assertions made by Plaintiffs’ counsel concerning counsels’

experience and success in litigation when they drafted the

20a

class certification order for the judge’s signature. The trial

court based its conclusion that counsel was competent to

prosecute the claims on counsels’ curriculum vitae and on

the fact that some of the counsel had litigated class actions in

that court. The trial court did not abuse its discretion in de-

termining that the class representatives and their counsel are

adequate to protect the interests of the class.

CONCLUSION

432 This Court’s review of the decision to certify this

matter as a class action reveals no abuse of discretion as to

the warranty claims. Common questions of law and fact

predominate, class action presents a superior method for ad-

judicating the common issues, and the representative parties

and their counsel are adequate to protect the interests of the

class. This Court expresses no opinion as to the merits of

any of the remaining claims and defenses asserted.

AFFIRMED IN PART;

REVERSED IN PART.

Opala, V.C.J., Hodges, Lavender, Kauger, Summers,

Boudreau, JJ., concur.

Watt, C.J., Hargrave, J., concur in part; dissent in part.

Winchester, J., dissents.

’ This Court rejects DaimlerChrysler’s suggestion that there is

something improper or irregular in a trial judge signing an order

which has been prepared by the prevailing party.

: The class certification remains subject to modification and

“may be altered or amended before the decision on the merits.”

Okla. Stat. tit. 12, § 2023(C)(1) (2001). If necessary the class

“may be divided into subclasses and each subclass treated as a

class. Id. at § 2023(C) (4).

——————————————————————————————————

Pree ec

Ag BRA we

2la

APPENDIX B

IN THE DISTRICT COURT

IN AND FOR SEQUOYAH COUNTY

STATE OF OKLAHOMA

SHERYL YSBRAND and

MARY COONEY,

Individually and on behalf

of all others Similarly [Filed Feb. 14, 2002]

situated,

Plaintiffs,

vs. Case No. CJ-2000-643

CORPORATION, A

Delaware corporation,

individually and as

Successor in interest to

Chrysler Corporation And

CHRYSLER CORPORATION

a Delaware corporation,

individually,

)

DAIMLERCHRYSLER )

)

Defendants.

MEMORANDUM OPINION AND ORDER GRANTING

PLAINTIFFS’ MOTION FOR CLASS

CERTIFICATION

This Cause is before the Court on Plaintiff's Motion for

Class Certification. This Court has reviewed and considered

all of the pleadings in this matter, the parties’ respective

22a

briefs, the documents, exhibits, presentations, admissions and

arguments received in evidence during the class certification

hearing commenced on October 9, 2001. Additionally, this

Court considered the post-certification hearing submissions,

motions and arguments. Based on the foregoing, the Court

GRANTS plaintiffs’ motion based upon the following Find-

ings of Fact and Conclusions of Law:

FACTUAL BACKGROUND

A. Plaintiffs’ Claims

Class certifications in Oklahoma are governed by 12 OS.

§ 2023. Before proceeding to analyze the requirements of sec-

tion 2023, it is necessary for the Court to analyze the factual

background upon which the plaintiffs’ lawsuit rests. In doing

so, the Court is cognizant of its role at this stage of the proceed-

ings. As the United States Supreme Court has stated:

[NJothing in either the language or history of Rule

23 ... gives a court any authority to conduct a prelimi-

nary inquiry into the merits of a suit in order to deter-

mine whether it may be maintained as a class action. In-

deed, such a procedure contravenes the Rule .. .”

Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 177 (1974)

(emphasis added). This Court, understanding that some dis-

covery needs to be undertaken to understand the nature of the

proposed class, has permitted the parties to conduct initial dis-

covery and file extensive evidentiary submissions. Because this

Court is heeding Section 2023’s requirement that the class certi-

fication issue be resolved “as soon as practicable,” the Court has

endeavored to carefully balance its obligation to conduct a full

and complete review of the class issues with the Eisen ’s admo-

nitions that “pre-trial hearings are to be carefully limited” and

that “the trial court’s guess as to which party would prevail at

trial should have no bearing on the allowance or disallowance

of a proposed class action.” Eisen v. Carlisle and Jacquelin,

417 U.S. at 177. Consequently, like the numerous Courts

ee a eR ee

23a

which have followed Eisen’s holding, this Court, while con-

ducting a review of the parties’ legal arguments and proposed

proof, declines to undertake an examination of the merits of

the claims and defenses in connection with a the class deter-

mination. What, follows is a description of plaintiffs’ claims

in this litigation.

Defendant DaimlerChrysler is the manufacturer of sev-

eral types of automobiles called “minivans”. The minivans

manufactured by DaimlerChrysler include the Chrysler Town

& Country minivan, Chrysler Minivan, Plymouth Voyager,

Plymouth Grand Voyager, and Dodge Caravan. Each of

these minivans is equipped a with passenger side air bag.

The named plaintiffs, Sheryl Ysbrand and Mary Cooney,

have asserted claims for breach of express warranty, breach

of implied warranty of merchantability and breach of implied

See Eggleston v. Chicago Journeyman Plumbers, 657 F.2d

890, 895 (7th Cir. 1981) (citing Eisen); Harris v. General Develop.

Corp., 127 F.R.D. 658 (N.D. Ill. 1989) (“For the purpose of ruling

on plaintiffs’ motion for class certification, plaintiffs’ allegations are

taken as true and the court may not make an inquiry into the merits of

the lawsuit.”); Peil v. National Semiconductor Corp., 86 F.R.D.

357, 365, 368 (E.D. Pa. 1980) (“The Court, when properly exercising

its discretion, may consider the pleadings and facts procured through

the discovery process to ‘identify the character or type (but not the

merits) of plaintiffs claim and-then to determine whether there was a

Class .... The Court will not engage in a discussion of the merits of

the plaintiffs case in relation to this standard. [Eisen, supra)’).

; The Court believes that, while it cannot and should not resolve

merits issues, it is important to understand the plaintiffs’ claims.

The plaintiffs have presented to the Court an outline of their evi-

dence and claims against the defendant. What follows is some of

the claims proffered by the plaintiffs. The Court is providing this

review to illustrate the nature of the claims—not because it has

concluded that the plaintiffs’ position is correct. Suffice to say that

the defendant vigorously contests the vast majority of the factual

claims made by the plaintiffs.

24a

warranty of fitness, all as provided by the Uniform Commer-

cial Code, and fraud in the omission against DaimlerChrysler

in the form of a class action suit.

Plaintiffs, Sheryl Ysbrand and Mary Cooney are both

owners of DaimlerChrysler minivans equipped with passen-

ger side air bags. Plaintiffs have based their claims on the

grounds that the passenger side air bags located in these mi-

nivans are defective in nature and/or design based on: 1)

their propensity to deploy with overly aggressive force and 2)

their propensity to deploy during a low speed collision.

Plaintiffs assert that the air bags installed in their minivans

are unreasonably dangerous and have, the potential to kill or

seriously injure a child or adult of small stature seated in the

front passenger seat of their minivans. Plaintiffs have alleged

that there now exist air bags which deploy with less force and

at higher collision speeds than the air bag originally installed

in their vehicle. Plaintiffs have requested that they and the

members of the class be compensated in an amount sufficient

to allow them to have these allegedly safer air bags installed

in their minivans, or in the alternative, that DaimlerChrysler

be ordered to establish a national inspection protocol by

which each minivan fitting the class definition would be in-

spected and retrofitted with a newer, safer air bag, as neces-

sary.

Plaintiffs seek to represent a class composed of the fol-

lowing persons:

“Themselves and all entities and adult persons domiciled

or residing in any of the fifty states of the United States

of America or in the District of Columbia, who pur-

chased and who, according to motor vehicle registration

records maintained by their respective states or districts

of residence or domicile, can be identified as the current

owner of at least one (1) model year 1996-1997 “mini-

van” automobile marketed by defendant as Chrysler

Town & Country or Chrysler Minivan or Plymouth

Voyager or Plymouth Grand Voyager or Dodge Cara-

van, which was manufactured by defendant for sale in

any of the fifty states of the United States of America or

1 peeeerreeeeal

BONDE wes

25a

the District of Columbia, or which defendant marketed

in any of the fifty states of the United States of America

or the District of Columbia as a product of its own

manufacture, which was configured at the time of origi-

nal sale or occupancy by at least five (5) passengers, and

which contains on the driver side and/or passenger side

of the forward seating area a passive restraint system

commonly known as an “air bag,” which employs a fab-

ric-covered envelope designed to expand rapidly with

sodium azide or other gases and thus cushion a front-seat

occupant when the system is activated by a sensor during

a frontal collision.”

Plaintiffs seek to certify a national class action against

DaimlerChrysler for the purpose of litigating all claims ex-

tant for the subject airbags in one forum and proceeding.

While two different model years and a number of differ-

ent names are attached to the subject vehicles, the record in

this case establishes that, at the time of manufacture, all of

the vehicles in the class contained the same front seat pas-

senger occupant restraint systems. Further, at the time of

manufacture, the alleged defects existed in each of these ve-

hicles. In addition, with respect to the front-seat occupant

protection systems, the owners manuals were the same.

The defendant has presented evidence that, subsequent

to manufacture, some of the vehicles in the proposed class

have been involved in accidents that resulted in the replace-

ment of the airbags with a newer, lower powered airbag. The

defendant also argue that some potential class members may

have not had their airbag replaced after a collision or other-

wise had it disconnected. The defendant further notes that

some of the class may have had an on/off switch installed in

the vehicle. In addition, sometime after the 1996 model ve-

hicles began to be sold, the defendant began to sell the sub-

ject vehicles with a different warning label that was subse-

quently mailed to at least some of the previous purchasers.

Saree ere ns earner Veen er Oe

26a

CONCLUSIONS OF LAW

A. General Legal Standards Governing Class Certi-

fication

Class actions are an “invention of equity” born of the

need to provide a procedural device so that large groups of

individuals would not be disabled by their sheer number from

enforcing their rights. See WRIGHT & MILLER, FEDERAL

PRACTICE AND PROCEDURE § 1751 (2" Ed. 1986). Because

Oklahoma’s class action procedure closely mirrors Federal

Rule 23, Oklahoma courts are to look to federal law for guid-

ance and enlightenment on class action issues. See Shores v.

First City Bank Corp., 689 P.2d 299, 300 (Okla. 1984). The

United States Supreme Court has noted that “[c]lass actions

serve an important function in our system of civil justice.”

Gulf Oil. Co. v. Bernard, 452 U.S. 89, 99 (1981). This is be-

cause class actions permit plaintiffs to “vindicate the rights of

individuals who otherwise might not consider it worth the

candle to embark on litigation in which the optimum result

might be more than consumed by the cost.” Deposit Guar.

Nat’! Bank v Roper, 445 U.S. 326, 338, reh’g denied, 446

U.S. 947 (1980).

Class certification is a procedural issue that should be re-

solved expeditiously. |The Oklahoma Pleading Code

§ 2023(c)(1) mandates that the determination of class certifi-

cation shall be determined “as soon as practicable after the

commencement” of the action. In the face of a close ques-

tion regarding certification, the pragmatically correct ac-

tion is to sustain certification because, if it develops later

during the course of the trial that the order is ill-advised,

the order is always subject to modification. Perry v. Meek,

618 P.2d 934,940 (Ok. 1980), citing Esplin v. Hirschi, 402

F.2d 94 (10th Cir. 1968), cert. denied 394 U.S. 928, 89

S.Ct. 1194, 22 L.Ed.2d 459 (1969).

B. Legal Standard Governing Class Certification

The statutory requirements for maintaining a class ac-

tion are listed in section 2023 of Title 12 of the Oklahoma

Pleading Code. The four prerequisites of Subsection A of

27a

the Oklahoma class action statute are commonly referred

to as numerosity, commonality, typicality and adequacy of

representation. Each of these requirements will be consid-

ered below.

1. Numerosity.

Section 2023(A)(1) requires that the proponent of a

class action demonstrate that “the class is so numerous that

joinder of “all members is impracticable.” 12

OkI.Stat.Ann. § 2023(A). The record in this case indicates

that there there were at least 1,000,000 minivans produced

in the 1996-1997 model years which fit the class defini-

tion. This Court recognizes that not all of the minivans

produced during this time will still be in service; however,

it is reasonable to expect that a very large proportion of

these vehicles are still on the road; as only four to five

years have elapsed since the time of manufacture. More-

over, this Court finds that it is reasonable to expect that a

large portion of the subject minivans still in use today will

have the original passenger air bag in place. Daimler-

Chrysler has not adduced any evidence to the contrary.

The numerosity test is satisfied by numbers alone, when

the size of the class is in the hundreds. Black Hawk Oil Co.

v. Exxon Corp., 969 p.2d 337 (Okla. 1998). This Court finds

that joinder is impracticable due to the sheer volume of mini-

van owners involved.

Defendants argue that numerosity cannot be established

because the class definition requires that an individual in-

spection occur to determine whether a person is a member of

the class which they contend will take over twenty years.

The Court rejects this argument. While the Court will exer-

cise its discretion to exclude certain purchasers of the subject

vehicles no individual inspection is necessary. The Court

can direct notice via publication and/or direct mail to all po-

3 cL ae

See Conclusion, infra.

28a

tential members of the class and inform them that they are

not members of the class if they do not meet the requirements

of the class definition. If so, they will know they are not

members of the class. For example, if the potential class

member has a vehicle with only two seats, they would know

this and know that they are excluded. Similarly, those who

have had an on/off switch installed also are aware as are the

majority of those who have had accidents resulting in airbag

deployment. No inspection is necessary to reach this conclu-

sion for the vast majority of the class members. It would

only be at the remedy stage that it would be necessary to de-

termine whether a replacement airbag had been installed and

that could occur when the vehicle was brought in to be retro-

fitted.

The Court is not required to leave its common sense at

the courthouse steps. From the record in this case it is clear

that a class exists and can be defined. Accordingly, the nu-

merosity requirement is satisfied.

2. Common Questions of Law and Fact.

Section 2023(A)(2) requires that the proponent of the

ctass action demonstrate that “there are questions of law or

fact common to the class.” 12 Okl.Stat.Ann. § 2023(A).

Section 2023(A) does not require that all questions be com-

mon or that common questions predominate. Indeed, in the

court’s Rule 23(A) inquiry, a single common question is suf-

ficient to satisfy this requirement. See Perry v. Meek, 618

P.2d 934 (Ok. 1980).

A common question is one which “arises from a com-

mon nucleus of operative facts regardless of whether the un-

derlying facts fluctuate over the class period and vary as to

individual claimants. Cohen v. Uniroyal, Inc., 77 F.R.D.

685, 690-91 (E.D. Pa.. 1977). Indeed, the presence of one

common question of law or fact is sufficient to certify a class.

Perry v. Meek; 618 P.2d 934 (Okla. 1998); Jn re: Prudential

Ins. Co. of America Sales Practice Litigation Agent Action,

148 F.3d 283, 310 (3rd Cir. 1998); Stewart v. Winter, 669

i ee Os ea i a

He RL IN RR ill al NS

29a

F.2d 328 (5th Cir. 1982); Johnson v. American Credit Co. of

Georgia, 581 F.2d 526 (5th Cir. 1978).

Plaintiffs have argued that commonality exists among

the class members because the claims of each potential class

- member relate to the installation of an allegedly dangerous

air bag in their minivan, and the act of withholding this in-

formation from the vehicle owners by DaimlerChrysler.

Plaintiffs argue that the questions of law and fact common to

the class include:

1) Whether the air bags installed in the minivans sold

to the named plaintiffs and members of the class are

defective and unreasonably dangerous for their in-

tended use;

2) Whether defendants adequately warned named

plaintiffs and members of the class of the alleged

defects and dangers inherent in their minivans, air-

bags systems prior to sale;

3) Whether defendants deliberately withheld from

named plaintiffs and the members of the class vital

information regardir.g the dangerous characteristics

of the air bags systems insta'ied in their minivans;

4) Whether plaintiffs have been harme’ economically

by being forced to beat the cost of “rofitting their

minivans with air bags, related sen‘ors and elec-

tronic components, and by being required to absorb

the diminution of value in resale of their vehicle, as

well as its diminished utility.

Plaintiffs aver that the central issue for all class members

is whether or not the air bags originally installed in their mi-

nivans are unreasonably dangerous. It is this determination

that will ultimately decide whether plaintiffs’ claims have

merit. Plaintiffs argue that their claims against Daimler-

Chrysler arise from the same set of alleged operative facts,

i.¢., the installation of the air bag in their vehicle and the act

of withholding safety related information from them. Plain-

tiffs contend that none of the class members were ever in-

30a

formed about the true nature of their defective airbags. Thus,

the operative facts present give rise to claims against Daim-

lerChrysler that are common to the entire class. A determi-

nation regarding whether the subject air bags installed in the

Plaintiffs and other members of the class vehicles are unrea-

sonably dangerous, and whether DaimlerChrysler withheld

that information from the Plaintiffs and members of the class

are the issues to be determined. The resolution of these is-

sues will be applicable to each and every class member and

will be dispositive of every class member’s claims. How-

ever, it is the opinion of this Court that forcing thousands of

individuals to file identical individual actions would burden

the courts of this state (and every other state) unnecessarily

if, and it is unlikely, those individuals discovered their legal

rights and retained counsel. This Court finds that, given the

presence of questions of law or fact common to the plaintiffs

and members of the class, the requirement for the existence

of common questions of fact or law is satisfied.

3. Typicality

Section 2023(A)(3) requires that the proponent of the

class action demonstrate that the claims or defenses of the

representative parties are typical of the claims or defenses of

the class. 12 Okl.Stat.Ann. § 2023(A). The measure of

whether a plaintiffs claims are typical is whether the nature

of plaintiff's claims, judged from both a factual and legal

perspective, are such that in litigating his personal claims, he

can reasonably be expected to advance the interest of absent

class members. See Lobo Explorations Co. v. Armoco Pro-

ductions, 1999 OK CIV APP 112, 991 P.2d 1048, 1055.

“Factual variations in the individual claims will not normally

preclude class certification if the claim arises from the same

event or course of conduct as the class claims, and gives rise

to the same legal or remedial theory.” Jd. (quoting Alpern v.

UtiliCorp United Inc., 84 F.3d 1525, 1540 (8th Cir. 1996)).

The plaintiffs have argued that their claims against

DaimlerChrysler arise out of the same course of conduct (i.e.,

installation of unreasonably dangerous air bags and withhold-

ing of information regarding the safety of these air bags), and

Fe a Ce Se Te EE, hee at Ra ee ee NED ee en So ORE |

3la

are based on the same legal theories as those of the class

(breach of UCC warranties and fraud). Both Ysbrand and

Cooney own 1996-1997 minivans equipped with the alleg-

edly defective air bags, as do all prospective members of the

class. The central issues in this case are whether the subject

air bags are unreasonably dangerous due to either their nature

or an inherent design defect so as to be unfit for their in-

tended use, and whether DaimlerChrysler intentionally with-

held knowledge of the dangerous nature of the air bags from

consumers. The question of whether the subject air bags are

dangerous due to either their nature or an inherent design de-

fect is one common to all class members, as these air bags

were installed in minivans covered by the class definition.

Additionally, the question of whether DaimlerChrysler with-

held information regarding the allegedly dangerous air bags

from the class members in general is one that is also common

to the class. If Ysbrand and Cooney prevail on their claims,

the class will benefit from the determination. Likewise, if

DaimlerChrysler prevails, the class will also be bound by that

determination. This is precisely the type of situation envi-

sioned by the iegislative branch, wherein a class action effec-

tively and efficiently resolves issues common to many with

efficient utilization of judicial resources.

The defendants have identified certain defenses that

they contend destroy the commonality of the class repre-

sentatives’ claims. The Court has reviewed these claims

and finds that, to least at this stage, the defendants have

failed to establish that these alleged differences are suffi-

cient to destroy the commonality of the class.

The common issues presented here are such that in

litigating the liability issues, the representative plaintiffs

may reasonably be expected to advance the interests of al]

class members toward a favorable determination with re-

spect to each such issue. Therefore, this Court finds that

the claims of the representative plaintiffs are typical of the

claims of the class.

32a

4. The Plaintiff will Fairly and Adequately Pro-

tect the Interests of the Class.

The adequacy inquiry focuses on whether the repre-

sentative parties will fairly and adequately protect the in-

terest of .the class. Blackhawk v. Exxon, supra 969 P.2d

337. This requirement is met if (1) plaintiffs attorneys are

qualified, experienced and generally able to conduct the

litigation and (2) plaintiffs interests are not antagonistic to

those of the class he seeks to represent. See, e.g., Pruden-

tial, 148 F.3d at 312; Lewis v. Curtis, 671 F.2d 779, 788

(3d Cir.), cert. denied, 459 U.S. 880 (1982).

It is evident that plaintiffs have retained counsel

highly experienced in class action litigation to prosecute

their claims. All counsel for plaintiffs have been ap-

pointed class counsel in successful consumer litigation in

numerous states, including the State of Oklahoma. Some

of the counsel for the plaintiffs have previously practiced

before this Court on several occasions regarding class is-

sues. In addition, the curriculum vitae submitted by class

counsel evidence the experience necessary to competently

litigate this matter. Therefore, this Court finds that the

first prong of the adequacy inquiry has been satisfied.

Second, there is nothing in the record to suggest that ei-

ther Ysbrand or Cooney have any interests antagonistic to the

claims advanced on behalf of the class. To the contrary, their

depositions demonstrate that they are familiar with the claims

advanced in this litigation and are fully prepared to-

vigorously pursue the litigation on behalf of the class.

The defendants argue that plaintiffs have failed to keep

their clients adequately informed as to the facts of this case.

Reviewing the record of the plaintiffs’ depositions as a

whole, the Court finds that the plaintiffs have been ade-

quately informed as to the nature of the litigation and their

responsibilities as class representatives. Plaintiffs who seek

33a

: to be class representatives do not need to be attorneys or have

an attorney’s knowledge of the litigation.

This Court believes the representative Plaintiffs will

adequately represent the interests of the Class, and have no

interests antagonistic to the Class they seek to represent;

therefore, this Court finds that the adequacy requirement of

§ 2023(A) has been satisfied.

With respect to the requirements of § 2023(B), plaintiffs

seek certification of an “opt out” class with regard to the

. “damages” claims pursuant to § 2023(B)(3), which states that

certification is appropriate when:

The court finds that the questions of law or fact common

to the members of the class predominate over any ques-

tions affecting only individual members, and that a class

action is superior to other available methods for the fair

and efficient adjudication of the controversy. The mat-

ters pertinent to the findings include:

(a) the interest of the members of the class in indi-

vidually controlling the prosecution or defense of

separate actions,

(b) the extent and nature of any litigation concerning

the controversy already commenced by or against

members of the class,

the litigation of the claims in the particular fo-

rum, and

; Similarly, the Court rejects the defendants’ contention that

plaintiffs were improperly solicited. The Court has thoroughly

reviewed the facts concerning the plaintiffs’ decisions to bring this

action and finds no actions on the part of counsel that amount to

improper solicitation.

34a

(d) the difficulties likely to be encountered in the

management of a class action.

Okla. Stat. Ann. Tit. 12 § 2023(B)(3) (1991).

This subsection requires that two basic findings be

made: (1) that common questions of law and fact predomi-

nate (commonly referred to as “predominance”); and (2) that

a class action is superior to other forms available for fair and

efficient adjudication (commonly referred to as “superior-

ity”). Okla. Stat. Ann. Tit. 12, § 2023 (1991); Lobo Explora-

tion Co. v. Amoco Productions, 991 P.2d at 1052. Both find-

ings simply call for a qualitative and relative analysis of the

case. See Matton v. City of Norman, 1981 OK 92; 633 P.2d

735, 739 (Predominance “is a qualitative rather than a quanti-

tative matter’’).

Those members of the Class interested in pursuing their

own actions have the right and ability to do so under a (B)(3)

certification. Thus, the inquiry becomes a pragmatic one

which asks whether there are enough common questions to

justify a common adjudication. Copley, 158 F.R.D. at 491.

The plaintiffs have argued that both predominance and supe-

riority are satisfied in the case at hand, and that this case is

due to be certified pursuant to § 2023(B)(3). The Court

agrees.

Predominance of Common Questions of Law and

Fact

The Court in Hanlon v. Chrysler Corp., 150 F.3d 1011

(9th Cir. 1998), examined predominance and held that “It}he

Rule 23(b)(3) predominance inquiry tests whether proposed

classes are sufficiently cohesive to warrant adjudication by

representation, and focuses on the relationship between the

common and individual issues.” 150 F.3d at 1022 (citations

omitted). In the case sub judice, Ysbrand, Cooney and the

class members all had passenger side air bags installed in

their DaimlerChrysler-manufactured minivans; if they did

not, or no longer have such an air bag present in their mini-

van, they are not members of the class. If the Plaintiffs pre-

vail on the merits and establish that these air bags are unrea-

35a

sonably dangerous, then it follows that each of these minivan

owners and/or their passengers are being exposed to unrea-

sonably dangerous air bags each time they use the vehicle.

Thus, the question of whether the subject air bags are unrea-

sonably dangerous will predominate over questions affecting

only individual members; if the air bags are not unreasonably

dangerous, no minivan owner will have a viable claim. Since

each class member has the same allegedly defective air bag,

there exist no individual questions.

The question of whether the subject air bags are danger-

ous is the threshold question when addressing Plaintiffs

claims for fraud as well. To prevail on their claim for fraud

based on DaimlerChrysler’s alleged acts of withholding in-

formation regarding the safety of the subject air bags, Plain-

tiffs will have to first prove that the subject air bags are, in

fact, unreasonably dangerous. If they, fail to prove this, their

claim for fraud must also fail. In addition, Plaintiffs must

show that their claim for fraud will not entail individual ques-

tions of fact that predominate over those questions common

to the class.

Plaintiffs have made a claim against DaimlerChrysler for

consumer fraud based on silence or omission. Plaintiffs have

not claimed that DaimlerChrysler misrepresented any par-

ticular fact regarding the subject minivans to them in an indi-

vidual setting. For example, Plaintiffs do not claim that a rep-

resentative of DaimlerChrysler misrepresented the true nature

of the air bags to them at any particular time and place; indeed,

it has never been claimed by either party that the Plaintiffs or

any member of the class has ever met a representative of

DaimlerChrysler before or after purchasing their minivan. As

such, it is the opinion of this Court that individual questions

regarding the facts and circumstances of the acts constituting

fraud are not extant in the case sub judice, as would be the

case in many traditional claims for fraud. Thus, the type of

claim set forth by Plaintiffs against DaimlerChrysler for fail-

ing to inform the public as a whole of the dangers inherent in

the passenger side air bags located in their minivans will not

necessitate the type of individual factual inquiry which would

36a

necessarily predominate over common questions. This Court

finds that the questions of law and fact common to the class

will predominate over questions affecting only individuals,

and the requirement of § 2023(h)(3) is satisfied.

Defendant also argues that the need to apply different

states’ laws destroys the predominance finding. The plaintiffs

and the defendants have each presented an indepth analysis of

the choice of law issues. The plaintiffs have also presented a

number of decisions where the court, in similar cases, has

found. the predominance requirement met despite the choice

of law problems. After reviewing these the Court concludes

that the alleged choice of law problems identified by the de-

fendants does not bar certification. The Court notes that most

recently, the United States District Court in Indiana certified

national clauses against these same objections regarding the

Firestone Tire/Ford Explorer claims nationwide. See Bridge-

stone/Firestone, Inc. Tires Product Liability Litigation, ___

F.Supp.2d __ (SD. Ind. November 28, 2001); see also Plain-

tiffs’ Supplemental Submission Regarding Defendant’s Mo-

tion to Dismiss (citing and attaching cases).

A Class Action as the Superior Method for Ad-

judication

In assessing superiority, courts acknowledge that case

management challenges may flow from a grant of class

certification. However, courts also recognize that the

broad discretion vested in the trial court, by § 2023 pro-

vide the framework and flexibility to meet such chal-

lenges. See, Okla. Stat. Ann. Tit. 12 § 2023(C) (1991).

The ability of the class action device to bring all claimants

together for adjudication of their common issues in a sin-

gle proceeding far outweighs the logistical demands of

class treatment, particularly since the class mechanism

“reduces the systemic burden” on the court system and

litigants by reducing the time and costs which must other-

wise be spent in replicating the same case many times

over. Copley, at 473.

ea. ees SS ee SS er SU Oe Le

37a

The named plaintiffs aver that DaimlerChrysler owes

the class members either appropriate compensation for the

cost of retrofitting their vehicles with safe air bags, or the

opportunity for each class member to have their minivan

inspected to determine if the subject air bag is present in

their vehicle and, if so, to have it replaced by Daimler-

Chrysler at no personal cost.

DaimlerChrysler has argued at length that the costs,

both monetary and in time, of inspecting and retrofitting,

when necessary, each minivan within the class definition

would make class action treatment unworkable. This

Court finds such argument to be without merit. Through-

out recent history, automobile manufacturers have volun-

tarily recalled hundreds of thousands of vehicles for the

purposes of rectifying some defect therein without incur-

ring the astronomic costs in time and money described by

DaimlerChrysler. In fact, exactly such a situation existed

in the Hanlon case. In Hanlon, DaimlerChrysler was or-

dered to redesign and replace the rear latch on various

model minivans. This was accomplished by having a mi-

nivan owner bring their minivan to a DaimlerChrysler

dealership where a newly designed rear latch was installed.

If the plaintiffs are successful, this Court sees no reason why

a similar procedure could not be established in the case at

hand.

It has been argued by the plaintiffs that the cost of retro-

fitting a minivan with a new air bag will range from three to

five hundred dollars. DaimlerChrysler has not disputed this

calculation. It is not conceivable that an individual plaintiff

would bring suit, or even be able to find an attorney willing

to handle a case with such a low potential recovery, on

his/her own behalf. As such, it is clear that most individual

claims are not sufficiently substantial to support individual

litigation, a factor in support of plaintiffs’ argument that a

Class action is superior to other means of adjudication.

The alternatives to a class action are either no recourse

for tens of thousands of vehicle Owners, or even in the

. unlikely event that they all become aware of their rights and

38a

could locate counsel, a multiplicity of scattered suits result-

ing in the inefficient administration of litigation. See, Fire-

stone v. Penn Central Corporation, No. 29D03-9210-CP-500

(Sup. Ct. Ind. April 15, 1998).

DaimlerChrysler has also argued that the class would be

unmanageable because the individual issues will swallow any

efficiencies derived from common adjudication. Specifi-

cally, DaimlerChrysler has argued that the individual factual

inquiry and associated time and expense necessary to estab-

lish the existence of the original air bag in any given minivan

will serve to diminish the desirability of class management.

But the presence of potential individual issues does not

automatically render a class unmanageable. Perry v. Meek,

1980 OK 151, 618 P.2d 934, 938 (fact that judgment may

differ in amount as to individual members does not defeat

right to class relief). It will not be the individual minivan

owner’s burden to establish the presence of the minivan’s

original air bag. It is DaimlerChrysler who will inspect the

vehicle, determine if the original air bag is present, and retro-

fit it with a new air bag if necessary. As DaimlerChrysler

has done in Hanlon and many other cases in the past, Daim-

lerChrysler, as the manufacturer, will bear the burden of

identifying and replacing faulty air bags in the event of an

adverse ruling.

The defendant contends that administrative remedies are

superior to plaintiffs’ claims. The premise of this argument

: is that these remedies preempt plaintiffs’ claims, an argument

that the Court has rejected in denying defendant’s motion to

dismiss. In addition, the Court finds that the same problems

with pursuing individual remedies will exist if administrative

remedies are pursued by individual class members. Finally,

the Court finds that the common law and statutory remedies

advanced by plaintiffs are broader and potentially superior to

those provided by the administrative regulations.

CONCLUSION

Because this Court finds that class certification will pro-

vide a just, speedy, and inexpensive determination of this

39a

case, and because plaintiffs’ request complies with section

2023 of Title 12 of the Oklahoma Pleading Code, the plain-

tiffs Motion for Class Certification is GRANTED.

The Court believes that it important to note the scope

and nature of plaintiffs’ certification request and this ruling.

The plaintiffs have not requested that the Court try every

facet of each claim in this case on a class basis. Nor must the

Court do so in order to certify a class. Instead, the Court

FINDS that it can and will certify the case as a class action,

and through § 2023(c)(4), determine and try the common is-

sues and the common claims on a class basis and address the

individual issues in either single or consolidated trials should

that be necessary. The Court notes that Section 2023(c)(4)

explicitly authorizes this procedure:

When appropriate (A) an action may be brought or main-

tained as a class action with respect to particular issues

or (B) a class may be divided into subclasses and each

subclass treated as a class, and the provisions of this rule

shall then be construed and applied accordingly.

The Court, however, declines at this time to decide the scope

of any Rule 23(c)(4) subclasses. In the exercise of its discre-

tion, the Court HOLDS that it will defer identification of any

subclasses until after the class has been notified. Opt outs by

class members and other information received during the no-

tice process will allow the Court to more accurately evaluate

the need for and the exact contours of any subclasses. The

supposed problems noted by the defendants in their attack on

typicality, if they do arise, can be addressed at that time.

Moreover, the need for further trials, etc., can also be more

accurately established. In Black v. Rhone-Poulenc, Inc., 173

F.R.D. 156 (S.D.W.Va. 1996), Judge Haden adopted this

course noting:

Plaintiffs also seek certification of certain subclasses.

The court concludes the suggested division is premature.

The better course is to withhold a decision on subclass

certification pending responses, if any, to the notice

mandated by Rule 23(c)(2).

renee earn cee

40a

173 F.RD. at 157 nj. Similarly, in Merk v. Jewel Food

Stores, 702 F.Supp. 1391 (N.D.IIl. 1988), the Court followed

this course of action:

Rule 23 provides specific mechanisms, such as the certi-

fication of subclasses, 23(c)(4), as well as a general au-

thorization to “prescrib[e] measures to prevent undue

repetition or complication.” Rule 23(d). Courts have

not been reluctant to devise a litigation procedure that al-

lows a class action to proceed despite early perceived

certification problems as long as all of the requirements

of Rule 23 are ultimately satisfied at later stages in the

litigation. Thus, a court may delay narrowing the class

by fashioning appropriate procedures, such as a split

trial, and deferring the disposition of uncommon issues.

Newberg, Herbert B., Newberg on Class Actions, § 9.47

(2d ed. 1985). This is especially prudent when the dis-

position of the common issues may obviate the need to

resolve those issues that affect only a subset of the class.

Id., § 953 at 320, §§ 9.63 et seq. If at a later point in the

litigation it is apparent that modification of the class is

necessary or advised, the court may then exclude certain

members or certify a subclass. Bryan v. Amrep Corp.,

429 F.Supp. 313 (S.D.N.Y. 1977)

Id. at 1395; see also Heastie v. Community Bank, 125 F.R.D.

669 (N.D. Ill. 1989) (“Thus, it may be appropriate to divide

the class members into subclasses, depending on which con-

tractor they dealt with, but we can defer a decision on this

matter to a later date.”’).

The Court hereby CERTIFIES the following class

against all defendants:

All entities and adult persons domiciled or residing

in any of the fifty states of the United States of America

or in the District of Columbia, who purchased and who,

according to motor vehicle registration records main-

tained by their respective states or districts of residence

or domicile, can be identified as the current owner of at

least one (1) model year 1996-1997 “minivan” automo-

4la

bile marketed by defendant as Chrysler Town & Country

or Chrysler Minivan or Plymouth Voyager or Plymouth

Grand Voyager or Dodge Caravan, which was manufac-

tured by defendant for sale in any of the fifty states of

the United States of America or the District of Colum-

bia, or which defendant marketed in any of the fifty

States of the United States of America or the District of

Columbia as a product of its own manufacture, which

was configured at the time of original sale or occupancy

by at least five (5) passengers, and which contains on the

driver side and/or passenger side of the forward seating

area a passive restraint system commonly known as an

“air bag,” which employs a fabric-covered envelope de-

signed to expand rapidly with sodium azide or other

gases and thus cushion a front-seat occupant when the

system is activated by a “sensor during a frontal colli-

sion.

Excluded from the class are those persons who were ex-

cluded from the definition set forth in plaintiffs’ petition in-

cluding (a) those who have suffered a personal injury as a

result of the airbag deployment; (b) Chrysler employees and

affiliates; and (c) judges and judicial personnel. Petition at

{J 11, 68, & 69.

After carefully considering the arguments raised by the

parties, the Court excludes those who have had their airbags

deactivated (either by an on/off switch or otherwise) and

those who have had the original equipment airbags in their

vehicles replaced.

The Court hereby appoints the following law firms as

Class Counsel for the plaintiffs and the class: James Minge

of James Minge & Associates, Patrick W. Pendley of, Pen-

dley Law Finn, Anthony J. Majestro of Masters & Taylor,

L.C., Darleen Jacobs of Law Offices of Darleen Jacobs, Jerry

McKeman of Mckernan Law Firm, Robert E. Reeves of

Reeves Law Office, and Harry Scoufos of Law Offices of

Harry Scoufos, P.C. °

42a

The Court notes that this certification, like all class certi-

fications, is conditional and may be reconsidered if the sane

proves to be improvident.

The Court, having fully considered the positions of all

the parties, notes the complete objection and exception to any

party to any ruling that is adverse to that party.

The Clerk is directed to send a certified copy of this Or-

der to all counsel of record.

ENTERED this 14th day of Feb, 2002.

/s/

DISTRICT JUDGE

[Seal Omitted]

424

APPENDIX C

Rec’d (date) 11-6-03 FILED

SUPREME COURT

Posted PE STATE OF OKLAHOMA

NOV 6 2003

Dated PE

MICHAEL S. RICHIE

Distrib . a CLERK

Publish yes X sno

IN THE SUPREME COURT OF THE

STATE OF OKLAHOMA

Thursday, November 6, 2003

THE CLERK IS DIRECTED TO ENTER THE

FOLLOWING ORDER OF THE COURT:

97,469

99,087

Sheryl Ysbrand and Mary Cooney, individually

and on behalf of all others similarly situated v.

Diamlerchrysler Corporation, individually and as

successor in interest to Chrysler Corporation, a

Delaware corporation.

Petition for rehearing is denied.

CONCUR: Opala, V.C.J., Hodges, Lavender,

Summers, Boudreau, JJ.

DISSENT: Watt, C.J., Hargrave, Kauger, Win-

chester, JJ.

Graham John Geary v. Beverly Darlene Geary.

On notice that appellee has filed for bank-

ruptcy protection under Chapter 7 of United

States Bankruptcy Code, this appellate pro-

99,430

99,432

99,941

44a

ceeding is stayed by operation of the automatic

stay of 11 U.S.C. § 362. The parties to this ap-

peal are directed to report any matter arising

in the course of the bankruptcy which may af-

fect the continued operation of the automatic

stay and shall file a report advising this court

of the general status of the bankruptcy pro-

ceeding by March 6, 2004.

Joe Womack, Guardian Ad Litem for Georgette

Rosa Gomes, an Incompetent Person v. HCA

Health Services of Oklahoma, Inc. etc, et al.

Parties may proceed before trial court to re-

solve controversy regarding proper contents of

record.

Estate of Llar Hicks, et al., v. Urban East, Inc., et

al.

Respondent is granted leave to file a combined

brief of fifty (50) pages in length by Decem-

ber 15, 2003.

Paula Stites v. Lee Huneryager Ward

Appellee may proceed before trial court to re-

solve controversy regarding exhibits and

proper contents of designation of record. Ap-

pellant is cautioned that failure to advance

costs may result in dismissal of appeal.

/s/

CHIEF JUSTICE

45a

APPENDIX D

The Fourteenth Amendment to the federal Constitution

provides in pertinent part: “No State shall ... deprive any

person of life, liberty, or property, without due process of law

....” U.S. CONST. amend. XIV, § 1.

46a

APPENDIX E

The Commerce Clause of the federal Constitution pro-

vides: “The Congress shall have Power ... To regulate

Commerce with foreign Nations, and among the several

States, and with the Indian Tribes ....” U.S. CONST. art. L

§ 8, cl. 3.

47a

APPENDIX F

IN THE DISTRICT COURT IN AN FOR

SEQUOYAH COUNTY

STATE OF OKLAHOMA

SHERYL YSBRAND and

MARY COONEY,

individually and on behalf of

all others similarly situated,

Plaintiffs,

[Filed August 7, 2000]

V. Case No. CJ-00-643

DAIMLERCHRYSLER

CORPORATION, a

Delaware Corporation,

individually and as

successor in interest to,

CHRYSLER CORPORATION,

a Delaware Corporation,

individually,

Nee Nee Ne ee ee ee (we wee wa ~s S S

Defendants.

48a

PETITION

Plaintiffs, Sheryl Ysbrand and Mary Cooney, individu-

ally and on behalf of all others similarly situated, file their

Class Action Petition and, in support thereof, state as fol-

lows:

PARTIES, JURISDICTION, AND VENUE

1. Plaintiff Sheryl Ysbrand is an adult resident of Se-

quoyah County and the State of Oklahoma and the owner of

a 1996 Chrysler Town & Country minivan designed, manu-

factured, warranted, advertised, sold, and distributed by

Chrysler Corporation (“Chrysler”).

2. Plaintiff Mary Cooney is an adult resident citizen

of New Castle County and the State of Delaware and the

owner of a 1996 Chrysler Town & Country minivan de-

signed, manufactured, warranted, advertised, sold, and dis-

tributed by Chrysler.

3. Defendant. DaimlerChrysler Corporation (“Daim-

lerChrysler”) is a Delaware corporation with its principal

place of business in the State of Michigan. DaimlerChrysler

is the successor in interest to Chrysler with respect to the ve-

hicles at issue in this litigation. DaimlerChrysler may be

served with process upon its registered agent Corporation

Company, 735 First National Building, Oklahoma city,

Oklahoma, 73102.

4. Defendant Chrysler is a Delaware corporation with

its principal place of business in the State of Michigan.

Chrysler may be served with process upon its registered

agent Corporation Company, 735 First National Building,

Oklahoma City, Oklahoma, 73102.

a At all relevant times, each defendant was the

agent, servant, or employee of the other Defendant and in

acting and/or omitting to act as alleged in this Complaint did

so within the course and scope of that agency or employ-

ment. Each defendant is sued individually as a co-

conspirator and aider and abettor. Defendants knowingly

OT Le ee ee ee

49a

and/or recklessly conspired in, and/or aided and abetted, the

common course of conduct set forth in this complaint.

6. This Court has subject matter jurisdiction over the

claims set forth in this Petition, as the claims do not arise out

of federal law. Further plaintiffs state that each individual

plaintiffs claim does not exceed the sum of $75,000.00, ex-

clusive of interest and costs. The plaintiffs seek no punitive

damages, injunctive relief, attorney fees or any damages from

the defendants to the extent that to do so would cause the

amount in controversy in this action to exceed the sum of

$75,000 exclusive of interest and costs, and to the extent that

it may be construed to include such claims, the same are ex-

pressly disclaimed.

7. The plaintiffs seek no relief under any federal laws

or regulations, assert no federal claims, and withdraw any

asserted state claim that is completely preempted by federal

law such that the claim would confer federal question juris-

diction. The claims herein are brought solely under state

common and state statutory law. Any and all claims or pos-

sible claims under any federal law, code, regulation, rule,

and/or otherwise are expressly not brought herein and are

disclaimed.

8. The United States District Court does not have

subject matter jurisdiction over this action as this case does

not arise out of the constitution or laws of the United States,

as there is not complete diversity of citizenship between the

parties, and as the amount in controversy does not exceed the

sum of $75,000.00, exclusive of interest and costs.

9. This Court has personal jurisdiction over the plain-

tiffs’ claims against these defendants as they are licensed to

conduct and are conducting business in this State and this

judicial district, and as this action accrued in whole or in part

in this State and this judicial district.

FACTUAL INTRODUCTION

10. This is a class action by purchasers of 1996 and

1997 automobil

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