# Opposition Brief — Gustafson v. Bridgestone/Firestone, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0524%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2003
- **Citation:** 537 U.S. 1105

## Text

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Supcome One, U8.
; PILES i
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Nos. 02-530 DEC 6 20
IN THE OFFICE OF THE CLER: |

Supreme Court of the United States ~~

GARY L. GUSTAFSON, et al.,

Petitioners,
Ve
BRIDGESTONE/FIRESTONE, INC.,
BRIDGESTONE CORPORATION
AND FORD MOTOR COMPANY, et ai.,
Respondents.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Seventh Circuit

BRIEF IN OPPOSITION TO PETITION
FOR WRIT OF CERTIORARI

Of Counsel: HUGH R. WHITING

JONES, DAY, REAVIS & POGUE
JP Morgan Chase Tower

600 Travis Street, Suite 6500
Houston, Texas 77002

MARK J.R. MERKLE
KRIEG DEVAULT, LLP
One Indiana Square

Suite 2800
Indianapolis, Indiana 46204 is edalatata
(317) 636-4341 EDWARD K.M. BILICH

Counsel of Record
MARK C. CAWLEY
JONES, DAY, REAVIS & POGUE
51 Louisiana Avenue, N.W.
Washington, D.C. 20001
(202) 879-3939

Counsei for Respondent Bridgestone/Firestone North
American Tire, L.L.C. (successor to Bridgestone/
Firestone, Inc.)

{Additional Counsel Listed On Inside Cover]

Of Counsel: THOMAS S. KILBANE

ROBIN G. WEAVER

JOSEPH C. WEINSTEIN

SQUIRE, SANDERS & DEMPSEY,
BE

4900 Key Tower

127 Public Square

Cleveland, Ohio 44114

(216) 479-8500

THOMAS G. STAYTON
ELLEN E. BOSHKOFF
BAKER & DANIELS

300 North Meridian Street
Suite 2700

Indianapolis, Indiana 46204
(317) 237-0300

Counsel for Respondent Bridgestone Corporation

i
QUESTIONS PRESENTED

1. Petitioners are plaintiffs who brought a proposed
nationwide class action involving purchasers of about 60
million different Firestone tires involved in a safety
investigation conducted by the National Highway Traffic
Safety Administration (“NHTSA”), arguing that they were
entitled to compensation because the tires had some undefined
“propensity” to fail. The district court granted nationwide
class certification of plaintiffs’ warranty, unjust enrichment,
and consumer fraud claims, ruling that Tennessee law applied
to all of these claims. The Seventh Circuit reversed the
district court’s choice-of-law ruling, found that the laws of 51
different jurisdictions would apply to the millions of claims at
issue, and ruled that because the laws of different jurisdictions
varied materially, class treatment would be unmanageable.
Under these circumstances, did the Seventh Circuit err in
reaching that conclusion?

2. The Seventh Circuit further ruled that the NHTSA
administrative process was superior to class treatment of
plaintiffs’ claims. Plaintiffs’ second, third, and fourth
questions presented each distort this superiority holding. The
core question is, did the Seventh Circuit err in ruling that class
treatment was not superior where the case raised
individualized legal and factual issues that would make it
unmanageable as a class action, plaintiffs seek to pursue a
novel “propensity-to-fail” theory that should be developed (if
at all) through individual litigation, and the NHTSA
administrative process had already provided relief to those
members of the proposed class who owned the specific sizes
and types of tires ‘that NHTSA determined should be replaced
through a product recall?

il
PARTIES TO THE PROCEEDINGS

Petitioners are 229 alleged individual purchasers or lessees
of certain Ford Explorers or Firestone tires. See Pet. App.
82a-85a.

Respondents are (1) Bridgestone/Firestone North American
Tire, L.L.C., as successor to Bridgestone/Firestone, Inc.; (2)
Bridgestone Corporation; and (3) Ford Motor Company.
Bridgestone/Firestone North American Tire, L.L.C. is wholly
owned by its parent corporation, Bridgestone/Firestone
Americas Holding, Inc., which in turn is wholly owned by its
parent corporation, Bridgestone Corporation. Bridgestone
Corporation has no parent corporation, and no publicly-held
company owns ten percent or more of its stock. This brief is
filed on behalf of Bridgestone/Firestone North American Tire,
L.L.C. (as the successor to Bridgestone/Firestone, Inc.) and
Bridgestone Corporation.

ili

TABLE OF CONTENTS

QUESTIONS PRESENTED ...................0-0-.
PARTIES TO THE PROCEEDINGS ................ ii
TABLE OF AUTHORITIES ...............-0.0005. V
OTRO sn 65s vadcexncus boneknd aceon I
COUNTER-STATEMENT OF THE CASE ....,...... 2
REASONS FOR DENYING THE WRIT ....... Reta 7

I. THE SEVENTH CIRCUIT’S CHOICE-OF-LAW
RULING DOES NOT CONFLICT WITH THE LAW
CAE CORR CO 66 6 5a viens ee eaecevedeks 7

A. The Seventh Circuit Properly Determined That
Because The Laws Of The Jurisdictions At Issue
Would Vary Concerning Plaintiffs’ Claims,
Nationwide Class Certification Would Be
RIED 6 63 dwades saunas cides 7

B. The “Conflicts” Cited By Plaintiffs Are Illusory .. 9

C. The Seventh Circuit’s Choice-Of-Law Ruling
Is Consistent With The Overwhelming Trend
In Contemporary Federal Class-Action
Fn OTe a eee 14

II. PLAINTIFFS’ CHALLENGES TO THE SEVENTH
CIRCUIT’S SUPERIORITY ANALYSIS ARE
BASED UPON DISTORTIONS OF THE SEVENTH
CRRA MY oon ka kde bne vce eneeennn 17

A. The Seventh Circuit Did Not “Usurp” State Law-
making Power In Violation Of Erie v. Tompkins
Or Settled Principles Of Federalism ........... 17

iV
TABLE OF CONTENTS
(Continued)

B. The Seventh Circuit’s Treatment Of Plaintiffs’
Allegedly “Negative-Value” Claims Does Not
Conflict With The Law Of This Court Or Any
PPT EO Ee een See ee ee 22

C. The Seventh Circuit’s Assessment Of The District
Court’s Misguided View Of Litigation
“Efficiency” Does Not Conflict With The Law
COE Fi TTA on bn cess sesaneneeee ues 24

Il. THE SEVENTH CIRCUIT’S RULING THAT
INDIVIDUAL FACTUAL ISSUES
PREDOMINATE PROVIDES FURTHER
GROUNDS FOR DENYING REVIEW ........ 25

CAM AAR 60550 os dbane kode r dese ereeeeee 28

v

TABLE OF AUTHORITIES ~
Page

Cases
Adams v. Kan. City Life Ins. Co., 192 F.R.D. 274

Ce Ee eed cd Sb uacsaveuxeund cuakeees 16
In re Air Bag Prods. Liab. Litig., 7 F. Supp. 2d 792

Up ioe d bec vanes secs cave saban eens 20
In re Am. Med. Sys., 75 F.3d 1069

ee SE hos ve eran ees bs ces baleen scuk 14, 25
Amchem Prod., Inc. v. Windsor,

se es ae 6, 12, 15, 23,
Am. Suzuki Motor Corp. v. Superior Court,

44 Cal. Rptr. 2d 526 (Ct. App. 1995) .......... 19, 21
Andrews v. Am. Tel. & Tel. Co., 95 F.3d 1014

Pes SEE bo Net Nane sewed oroawdieets 15, 23
Angus v. Shiley, Inc., 989 F.2d 142 (3d Cir. 1993) ..... 19
Arch v. Am. Tobacco Co.,

17S Fad. 469 (ED. Pa. 1997)... ccc cecccccess 23
Barbarin v. Gen. Motors Corp., No. CIV.A.84-0888,

1993 WL 765821 (D.D.C. Sept. 22, 1993) ......... 16
Barreras Ruiz v. Am. Tobacco Co.,

180 F.R.D. 194 (D.P.R. 1998)... 0. eee 23
Begley v. Acad. Life Ins. Co., 200 F.R.D. 489

EE ci vcec has soe e ence teeehiecees 16
Borskey v. Medtronics, No. CIV.A.94-2302,

1998 WL 122602 (E.D. La. Mar. 18, 1998) ........ 16
In re Bridgestone/Firestone, Inc. Tires Prods. Liab.

Litig., 155 F. Supp. 2d 1069 (S.D. Ind. 2001) ........ 8
Briehl v. Gen. Motors Corp.,

eg ee ee 19
Broussard v. Meineke Discount Muffler Shops, Inc.,

15S FG S28 COM Civ. 1998) ... ce ccccescccvcecs 25
California v. Rooney, 483 U.S. 307 (1987) ........... 19

Capital Holding Corp. v. Bailey,
C75 BW. 167 (Ry. 1996)... ccc ncscccieccs 19, 20

vi

TABLE OF AUTHORITIES
(Continued)
Page
Carlson v. Gen. Motors Corp., 883 F.2d 287
i eee re ere errr 19
Carpenter v. BMW of N. Am., Inc., No. 99-CV-214,
1999 WL 415390 (E.D. Pa. June 21, 1999) ..... - 16,17
Castano v. Am. Tobacco Co.,
84 F.3d 734 (Sth Cir. 1996) .. 0... cece neces 10, 15, 23
Chilton Water Auth. v. Shell Oil Co..,
No. CIV.A.98-T-1452-N, 1999 WL 1628000
ee ee, ER OES Ce oo sv cck oaks esas 60% 16
Chin v. Chrysler Corp.,
PGS FRED. SOG CRIS. TSE) oc cccevccccceses 16, 21
In re Citigroup, Inc., No. CIV.A.10011912REK,
2001 WL 1682865 (D. Mass. Dec. 19, 2001) ....... 15
Clay v. Am. Tobacco Co.,
188 F.R.D. 483 (S.D. Tl. 1999) 0... csecccccneess 16
Clement v. Am. Honda Fin. Corp., 176 F.R.D. 15
i. A CEE a +056 6n bee bs nesebesceteueueees 16
Coughlin v. Wellcraft Marine Corp.,
Bee FO ee CG: BOOED onc c cc veceséanceeess 20
Dhamer v. Bristol-Myers Squibb Co.,
FES FA. SRO CTREA Me BOER ccc cceeccevacecen 16
Dubose v. First Sec. Sav. Bank,
EGS FIRE SEP Cee Fs SUED 6 v6 ee Mose sedeces 16
Duncan v. N.W. Airlines, Inc., 203 F.R.D. 601
vf § Peer rere Tree TTS 16
Feinstein v. Firestone Tire & Rubber Co.,
$35 F. Supp. 595 (S.D.N.Y. 1962) ........00%, 20, 21
Fisher v. Bristol-Myers Squibb Co.,
181 F.R.D. 365 (N.D. Ill. 1998) ................. 16
In re Ford Motor Co. Bronco II Prod. Liab. Litig.,
ETF Fee BOO Ce EA, TR ED hoc cccencneces 16, 22

In re Ford Motor Co. Ignition Switch Prod. Liab.
Litig., 174 F.R.D. 332 (D.N.J. 1997) ........... 16, 21

Vil
TABLE OF AUTHORITIES
(Continued)

Ford Motor Co. v. Magill, 698 So. 2d 1244

ee 21
Ford Motor Co. v. Rice, 726 So. 2d 626 (Ala. 1998) ...20
In re Ford Motor Co. Vehicle Paint Litig.,

182 F.R.D. 214 (E.D. La. 1998) .............. 11, 16
Frank v. DaimlerChrysler Corp., 741 N.Y.S.2d 9
SEE 8 oy 5s RGU b ox Wie 0645 06 se 05 0s 21

Georgine v. Amchem Prods., Inc., 83 F.3d 610
(3d Cir. 1996), aff'd sub nom. Amchem Prods.,

Inc. v. Windsor, 521 U.S. 591 (1997) ....... 12, 13,14
Hallaba v. Worldcom Network Serv. Inc.,

196 F.R.D. 630 (N.D. Okla. 2000) ............... 16
Hammett v. Am. Bankers Ins. Co..,

203 F.R.D. 690 (S.D. Fla. 2001) ................. 16
Hanlon v. Chrysler Corp.,

150 F.3d 1011 (9th Cir. 1998) .......00..00.. 11,12
Harding v. Tambrands Inc.,

165 F.R.D. 623 (D. Kan. 1996) .................. 16
Herb v. Pitcairn, 324 U.S. 117 (1945)... 00.0000... 19

Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir. 2001) ...14
In re Jackson Nat'l Life Ins. Co. Premium Litig.,

183 F.R.D. 217 (W.D. Mich. 1998) ............... 16
Jones v. Allercare, Inc.,
203 F.R.D. 290 (N.D. Ohio 2001) ................ 16

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

(11th Cir. 1987), cert. denied, 485 U.S. 959 (1988) .. 14
Lewallen v. Medtronic USA, Inc., No. C 01-20395

RMW, 2002 WL 31300899 (N.D. Cal.

ee a een eee 15
In re Life'JSA Holding Inc.,
242 F.3d 136 (3d Cir. 2001) .......... 13, 14, 15, 23

Lyon v. Caterpillar, Inc., 194 F.R.D. 206
LEE Sata ten sauce cuesd eer weat erence 16

tear

Vili
TABLE OF AUTHORITIES
(Continued)
Page
Marascalco v. Int’l Computerized Orthokeratology
Soc’y, Inc., 181 F.R.D. 331 (N.D. Miss. 1998) ...... 16
In re Masonite Corp. Hardboard Siding Prods. Liab.
Litig., 170 F.R.D. 417 (E.D. La. 1997) ......... 16, 23
Neely v. Ethicon, Inc., No. 1:00- CV-00569, 2001
WL 1090204 (E.D. Tex. Aug. 15, 2001) ........... 16
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Foo 3g Ba) re 13
Oxford v. Williams Cos., 137 F. Supp. 2d 756
i eC ahi ek cheered Cee e cae ees 16
Peoples v. Am. Fid. Life Ins. Co., 176 F.R.D. 637
ee a oy ca cava reer e ts ee es Oo 16
Powers v. Gov't Employees Ins. Co., 192 F.R.D. 313
EN rr er er er ee re 16
In re Prudential Ins. Co. of Am. Sales Practices
Litig., 148 F.3d 283 (3d Cir. 1998) ............ 12, 13
In re Rezulin Prods. Liab. Litig., 210 F.R.D. 61
I ico hie heel y Vanek s ox ORE RS 15
In re Rhone-Poulenc Rorer, 51 F.3d 1293 |
ek | ee ene Saree eee 13, 14, 15
Rohlfing v. Manor Care, Inc., 172 F.R.D. 330
re me eee ne 16
Rothwell v. Chubb Life Ins. Co. of Am.,
De © ey ee RE. TUE bik ch ened bee eeeeers 16
Ruhlin v. New York Life Ins. Co., 304 U.S. 202 (1938) ...7
Sanneman v. Chrysler Corp., 191 F.R.D. 441
8 8 ee end coe rere re ee 22
In re School Asbestos Litig., 789 F.2d 996
Os ee re ee re ere 12, 13 |
Shelley v. AmSouth Bank, No. CIV.A.97-1170-RV-C,

2000 WL 1121778 (S.D. Ala. July 24, 2000)
Od, B0t £50 Zoe CLIC: FOOT) cies iesecees 16

ix

TABLE OF AUTHORITIES
(Continued)
Page
Sikes v. Teleline, Inc., 281 F.3d 1350 (11th Cir.),

cert. denied sub nom. Sikes v. Am. Tel. & Tel. Co.,

ee eS Be | ee ee 14,15
Smith v. Brown & Williamson Tobacco Corp.,

174 F.R.D. 90 (W.D. Mo. 1997) ..............0.- 16
Spence v. Glock, 227 F.3d 308 (5th Cir. 2000) ..... 14, 23
Stipelcovich v. DirecTV, Inc., 129 F. Supp. 2d 989

Ee re rns 16

Stirman v. Exxon Corp., 280 F.3d 554 (5th Cir. 2002) .. 14
In re Stucco Litig., 175 F.R.D. 210 (E.D.N.C. 1997) ... 16
Szabo v. Bridgeport Machs., Inc., 249 F.3d 672

(7th Cir.), cert. denied, 122 S. Ct. 348 (2001) ....... 14
In re Trans Union Corp. Privacy Litig., No. 00 C 4729,

2002 WL 31028234 (N.D. Ill. Sept. 10,2002) ...... 15
United States v. Gen. Motors Corp., 518 F.2d 420

Sas eG OI oie late Wa wx kw ek ox oc :

Velasquez v. Crown Life Ins. Co., MDL-1096

No. CIV. A.M-97-064, 1999 WL 33305652

(5.0. Tex. Aug. 10, 1999)... cc cee encees 16
Walsh v. Ford Motor Co., 807 F.2d 1000

(D.C. Cir. 1986), cert. denied, 482 U.S. 915

Ses oes ce etek ae eee ee cee ek 1]
Walsh v. Ford Motor Co., 130 F.R.D. 260

EE SE ee ee 1]
Weaver v. Chrysler Corp., 172 F.R.D. 96

ec WO gk oc ce Aa cece ea ein eke en 20
Weikel v. Tower Semiconductor Ltd., 183 F.R.D.

PF ED ci dig ors Pep Bw eo eo eed tba 16
Willett v. Baxter Int’l, Inc., 929 F.2d 1094

ee OEE iis i's 00-044 20a dake eR oeever ivan 19
The Wharf (Holdings) Ltd. v. United Int’l Holdings,

lg Oe rs ED 5k 6-6 ven wo va vce nceeaka es 7

Yu v. IBM Corp., 732 N.E.2d 1173 (Ill. App. Ct. 2000) . 19

X

TABLE OF AUTHORITIES
(Continued)
Page

Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180

(9th Cir.), as amended, 273 F.3d 1266

i Le | re nana ey ere rari te a 11, 14, 25
Statutes
Pe Ghee IEE Ds 6 k's we dew daeueGeb aol 8
ee ee OY 8k as oe x eo a ieee eee 3
Re Us Be OD, 6k. 00 caeecuee ene 2
PRED 04465550008 eee Oe eee passim

INTRODUCTION

The petition provides no reason to grant review of the
unanimous panel opinion of the Seventh Circuit reversing the
district court’s erroneous and unprecedented nationwide class
certification decision. In attempting to justify review,
plaintiffs misstate controlling law, misstate the Seventh
Circuit’s opinion, and misstate the facts of record.

No federal appellate court has ever approved certification
of a litigation class as sprawling and unusual as the one
certified by the district court here—a nationwide class of
millions of “persons whose tires did not fail, whose vehicles
did not roll over.” Pet. App. 4a (emphasis in original). As the
Seventh Circuit recognized, the district court improperly
lumped together warranty, unjust enrichment, and consumer
fraud claims relating to 60 million tires made to scores of
different design specifications and sold nationwide over more
than a decade. Plaintiffs cite no federal precedent that is even
vaguely similar to this case. There is none.

The district court granted class certification based upon a
misapplication of Indiana choice-of-law rules, under which all
of these nationwide claims against Firestone would be
governed by Tennessee law, and on a skewed factual
predominance analysis that ignored significant portions of the
record. The district court also ignored the reality that most of
the tires at issue had been used without incident for many
years and for thousands of miles. The district court thus
breathed life into millions of “no-injury” claims that likely
would have been barred by the laws of most states.

It is unsurprising that the Seventh Circuit reversed class
certification: reversal is consistent with the mandates of Rule
23 and the settled law of this Court and circuit courts around

the nation. There is no basis for review.

2

COUNTER-STATEMENT OF THE CASE

In May 2000, the National Highway Traffic Safety
Administration (“NHTSA”) began an investigation into
certain ATX and Wilderness brand tires made by
Bridgestone/Firestone, Inc.' That investigation was very
broad, including about 60 million tires made in 41 different
sizes and 53 different lines, to scores of different design
specifications, at seven plants, over a decade.

On August 9, 2000, during the course of the NHTSA
inquiry and with that agency’s oversight, Firestone began a
recall of about 14 million P235/75R15-sized ATX and
Wilderness AT tires that had been sold, beginning in 1991,
primarily to Ford Motor Company for use as original
equipment on Explorer vehicles.” Although Firestone was
unable to identify any defect in the recalled tires, a tiny
fraction of them—fewer than 1%—had experienced tread
separation failures.°

' The entity that conducted the recall and was named as a defendant in this
litigation is Bridgestone/Firestone, Inc. Due to a November 2001
restructuring, that entity has been succeeded by Bridgestone/Firestone
North American Tire, L.L.C. For ease of reference, however, we refer to
both as “Firestone” throughout this brief. Bridgestone Corporation, which
was also named as a defendant in this lawsuit, joins in this opposition brief.

* Different tires are identified by brand or tire line and by alpha-numeric
indicators that detail certain features of the tire. For example,
“P235/75R15” conveys the following information: the “P” ordinarily
indicates a passenger tire; “235” is the tire’s section width (from sidewall
to sidewall) in millimeters; “75” is the tire’s aspect ratio (i.e., the tire’s
section height expressed as a percentage of the tire’s section width); “R”
denotes a radial tire; and “15” is the rim diameter in inches.

> Under the Motor Vehicle Safety Act, 49 U.S.C. § 30101 ef seqg., a
“determination of ‘defect’ may be based exclusively on the performance
record of the vehicle or component” (United States v. Gen. Motors Corp.,
518 F.2d 420, 432 (D.C. Cir. 1975)), and NHTSA need only establish a
“non-de minimus number of failures” to order a product recall (id. at 438
n.84). Thus, “[d]eterminations of fault or liability relevant to the award of

3

When Firestone announced the August 2000 recall, it
estimated that about 6.5 million of these tires were still on the
road—the others having been worn out and replaced after
regular use. To expedite the recall, Firestone replaced recalled
tires with new Firestone tires, and also reimbursed tire owners
up to $100 per tire if they replaced recalled tires with
competitive brands. By December 2000, the recall was
essentially complete.

In October 2001, NHTSA determined that approximately
3.5 million Wilderness AT P235/75Ri5 and P255/70R16-
sized tires that had been manufactured prior to May 1998 and
used on sport utility vehicles should be recalled. Firestone
estimated that about 768,000 of those tires might still be on
the road; it agreed to replace those tires as well. NHTSA
subsequently closed its investigation as to all other tires.
When all was said and done, less than a third of the tires in the
NHTSA investigation were subject to recall.

In the wake of the August 2000 recall, numerous consumer
class action complaints were filed in state and federal courts
against Firestone, Bridgestone, and Ford Motor Company.
The defendants removed many of the state-court actions and
sought pretrial consolidation of all federal cases under 28
U.S.C. § 1407. Ultimately the cases were consolidated before
Judge Sarah Evans Barker of the United States District Court
for the Southern District of Indiana.

Thereafter, more than 200 plaintiffs filed a consolidated
master class action complaint. These plaintiffs are a disparate
group of individuals. They owned tires of different sizes and

damages at common law” do not enter into the defect inquiry under the
Safety Act. /d. at 434.

* In May 2001, Ford separately announced that it would provide free
replacement of all Wilderness AT tires on Ford vehicles, regardless of
whether those tires were subject to any NHTSA order or had been recalled
by Firestone.

4

types that were used on different vehicles. They bought their
vehicles or tires both new and used, at different times, and in
different places. With three exceptions, none of them alleged
any failure of any kind in any Firestone tire or any Ford
Explorer. Rather, plaintiffs claimed generally that their
Firestone tires have a “propensity to fail” from tread/belt
separation. Relying on this novel theory, they sought damages
and injunctive relief based on fraud and contract theories.
Although plaintiffs focused their allegations upon alleged
conduct relating to Ford Explorers and recalled P235/75R15
tires, they nevertheless sought to have the trial court certify a
massive class of millions of consumers who owned, or had
owned, any of the 60 million tires that NHTSA included in its
investigation.

In July 2001, the district court granted in part and denied in
part defendants’ motion to dismiss. Rejecting the position that
the law of each plaintiff's state of residence and/or purchase
governed his or her claims, the court ruled as a matter of
Indiana choice of law that Tennessee law would apply to all of
plaintiffs’ claims against Firestone and Michigan law to their
claims against Ford. It then determined that plaintiffs failed
to state valid claims for violations of RICO, negligence, or
breach of redhibitory defects under Louisiana law, but could
proceed on claims for breach of express and implied warranty,
unjust enrichment, and consumer fraud.”

In December 2001, the district court certified three classes
of owners of Firestone tires and Ford Explorers. In doing so,
it rejected prior Seventh Circuit decisions instructing that
nationwide purchaser classes aileging fraud and warranty
theories raised manageability problems at odds with Rule
23(b)(3). Instead, the district court incorporated its ruling that
Tennessee and Michigan law would govern claims against

* In a ruling denying Bridgestone’s separate motion to dismiss, the district
court ruled that Tennessee law would apply to all claims against
Bridgestone.

5

Firestone and Ford, respectively, and with minor exceptions,
ruled that the proposed classes should be certified for all of the
legal theories remaining in the case. Thus, after the August 9,
2000 recall was complete and after NHTSA’s investigation
was closed, the district court certified a massive class of
owners of all 60 million Firestone tires that had been subject
to the NHTSA inquiry.

Defendants sought review under Rule 23(f). In a
unanimous panel decision written by Judge Frank Easterbrook,
the Seventh Circuit reversed. The Seventh Circuit first ruled
that the district court erred as a matter of Indiana law in its
choice-of-law analysis. | Under Indiana choice-of-law
principles, the laws of all 50 states and the District of
Columbia would apply to class members’ claims. The
Seventh Circuit then determined that the various jurisdictions’ :
laws differed with respect to the elements of plaintiffs’ claims.
It thus concluded that “[b]ecause [plaintiffs’] claims must be
adjudicated under the law of so many jurisdictions, a single
nationwide class is not manageable.” Pet. App. 9a.

The Seventh Circuit also ruled that numerous factual
differences among members of the class made class
certification inappropriate. The tires included in the class
“exhibit variability.” Jd. 10a. “[F]ewer than half of those
included in the tire class were recalled,” and “the six trade
names listed in the class certification order comprise 67 master
tire specifications: ‘Firehawk ATX’ tires, for example, come
in multiple diameters, widths, and tread designs; their safety
features and failure modes differ accordingly.” Jd. And,
although plaintiffs claimed that all of the tires lacked certain
design characteristics, “whether a particular feature is required
for safe operation depends on other attributes of the tires, and
as these other attributes varied across the 67 master
specifications it would not be possible to make a once-and-for-
all decision about whether all 60 million tires were defective,
even if the law were uniform.” Jd. (emphasis in original).
After noting that “there are other differences” in the factual

ee

6

circumstances of class members, the court held that the factual
differences “preclude[d] any finding ‘that the questions of law
or fact common to the members of the class predominate over
any questions affecting only individual members.’” /d.
(quoting Fed. R. Civ. P. 23(b)(3)).

Finally, the Seventh Circuit rejected the district court’s
“certify-at-all-costs” approach to class certification. To begin
with, the court noted that, because the plaintiffs seek to pursue
novel, no-injury claims, “most states would not entertain the
sort of theory that plaintiffs press.” Pet. App. 7a. Thus, in
assessing whether this litigation satisfied the “superiority”
requirement of Rule 23, the district court had misconceived its
role: in an attempt to resolve all of the claims of these
millions of tire and vehicle owners in a single proceeding, the
district court had violated choice-of-law rules and proceeded
in a manner that would not allow plaintiffs’ claims to be
addressed under the various states’ laws. The Seventh Circuit
recognized that what it labeled as a “decentralized” approach
is necessary to permit a fair and efficient assessment of the
value (if any) of these nationwide consumer claims.
“Differences across states may be costly for courts and
litigants alike, but they are a fundamental aspect of our federal
republic and must not be overridden in a quest to clear the
queue in court.” /d. 12a (citing BMW of N. Am., Inc. v. Gore,
517 U.S. 559, 568-73 (1996)).

Contrary to plaintiffs’ assertions, the Seventh Circuit
neither took issue with the judgment of state lawmakers nor
derived a rule that plaintiffs’ claims should not be adjudicated.
Rather, the court assessed the manageability and superiority of
a single proceeding in which the disparate claims of millions
of tire owners located throughout the nation would be
aggregated and adjudicated under the law of one state. The
court determined that such a proceeding could not be squared
with Indiana choice-of-law rules or the requirements of Rule
23. Following this Court’s decision in Amchem Products, Inc.
v. Windsor, 521 U.S. 591, 613 (1997), the Seventh Circuit held

7

that as “[t]empting as it is to alter doctrine in order to facilitate
class treatment, judges must resist so that all parties’ legal
rights may be respected.” Pet. App. 13a. Accordingly, on the
facts presented here, “[rJegulation by the NHTSA, coupled
with tort litigation by persons suffering physical injury, is far
superior to a suit by millions of uninjured buyers for dealing
with consumer products that are said to be failure-prone.” Jd.
1 1a (emphasis in original).

Plaintiffs sought en banc review. On June 5, 2002, the full
court denied their petition, with no judge voting for en banc
consideration.

REASONS FOR DENYING THE WRIT

I. THE SEVENTH CIRCUIT’S CHOICE-OF-LAW
RULING DOES NOT CONFLICT WITH THE LAW
OF OTHER CIRCUITS

A. The Seventh Circuit Properly Determined That
Because The Laws Of The Jurisdictions At Issue
Would Vary Concerning Plaintiffs’ Claims, Nation-
wide Class Certification Would Be Unmanageable

Plaintiffs do not seek review of the Seventh Circuit’s core
state-law holding that, under a proper interpretation of Indiana
choice-of-law rules, the laws of all 51 jurisdictions would
apply to the diverse claims of millions of tire and Explorer
owners around the nation.® Based upon the record before the
Seventh Circuit, reversal of class certification correctly
followed as a matter of course.

Even the district court had recognized that the laws of the
different jurisdictions at issue vary materially with respect to
plaintiffs’ warranty, unjust enrichment, and consumer fraud

° In any event, this Court generally does not review state law rulings. See,
e.g., The Wharf (Holdings) Ltd. v. United Int’l Holdings, Inc., 532 U.S.
588, 596 (2001); Ruhlin v. New York Life Ins. Co., 304 U.S. 202, 206
(1938).

8

claims. In a portion of its motion-to-dismiss ruling that was
incorporated into its class certification decision, the district
court recognized that “the relevant substantive laws of the
different states involved are sufficiently different to require a
choice of law analysis.” Jn re Bridgestone/Firestone, Inc.
Tires Prods. Liab. Litig., 155 F. Supp. 2d 1069, 1078 (S.D.
Ind. 2001). Plaintiffs’ proposal to apply Tennessee law to all
claims nationwide against Firestone, and the district court’s
willingness to accept it, show their basic recognition of the
variability of state laws. Indeed, the district court recognized
in its class certification ruling that applying Tennessee law
nationwide was critical to finding that the case would be
manageable, since that eliminated problems of “state law
variation that plague the pursuit of class certification in many
cases.” Pet. App. 67a n.45.

Nevertheless, in addition to attempting to justify the district
court’s choice-of-law ruling, plaintiffs also argued to the
Seventh Circigipsthat the laws relating to their claims were
uniform nationwide. Plaintiffs referred to charts purporting to
show similarities among state laws, but those charts in fact
illustrated that the law differs. Defendants also submitted 33
additional pages of charts showing that plaintiffs significantly
understated material variations among the laws of different
jurisdictions.’

’ Plaintiffs did not submit defendants’ state-law charts to this Court with
their petition. But even according to plaintiffs’ own charts, for example,
some states model their consumer fraud laws after the Federal Trade
Commission Act, 15 U.S.C. § 45(a)(1); others incorporate provisions
adopted by the Commission on Uniform State Laws; others use provisions
from both sources; still others enumerate their own deceptive acts and
practices. Pet. App. 139a-156a. Some states, like Colorado, Kansas,
South Dakota, Utah, and Wisconsin, require scienter but not individual
reliance. /d. 142a, 145a, 154a, 155a. Others, like Georgia, Indiana, Texas,
Vermont, and Wyoming, require individual reliance but not scienter (id.
143a, 145a, 154a, 155a, 156a), while in the District of Columbia, the
scienter standard is unknown (id. 143a). And Iowa’s consumer protection
statute does not permit private claims at all (id. 145a).

2 tee ae

BEST AVAILABLE COPY

9

The Seventh Circuit rejected plaintiffs’ argument that the
laws were substantially similar. Pet. App. 3a (“state laws
about theories such as those presented by our plaintiffs
differ”); id. 7a (“most states would not entertain the sort of
theory that plaintiffs press”); id. (“[s]tate consumer-protection
laws vary considerably, and courts must respect these
differences”). Thus, the Seventh Circuit concluded that
nationwide class treatment would be unmanageable. Citing
four of its own prior decisions, the Seventh Circuit explained
that, “such differences [in relevant state laws] have led us to
hold that other warranty, fraud, or products-liability suits may
not proceed as nationwide classes.” /d. 3a.

The Seventh Circuit certainly did not view this conclusion
as a Close call, and it was not. As shown below, the ruling is
soundly within the body of federal decisions finding that
differences in state laws generally preclude nationwide class
certification of such claims. In short, the Seventh Circuit’s
decision was not only correct, but also in the mainstream of
contemporary Rule 23 jurisprudence.

B. The “Conflicts” Cited By Plaintiffs Are Illusory

Plaintiffs’ assertion that the Seventh Circuit’s ruling
conflicts with the decisions of other courts of appeals is
wrong.

Plaintiffs’ charts show that state unjust enrichment laws also incorporate
divergent elements—ranging from proof of fraud, to failure of
consideration, to a showing that defendant’s conduct was “morally
wrong.” Pet. App. 91a n.7; 92a n.17; 94a n.33; 95a n.45. The charts also
show that states vary in their formulation of express warranty law: at least
ten states require proof of plaintiff's reliance on the express warranty,
while seventeen have not yet addressed the question. /d. 107a-109a. With
respect to implied warranty, the charts reveal that states are split on
whether the buyer and seller must be in privity: 18 states require privity,
32 do not. /d. 114a-115a. Louisiana, which has not adopted the UCC,
does not recognize breach of implied warranty claims. /d. 123a.

ETT er el

10

Plaintiffs latch onto a single sentence in the Seventh
Circuit’s opinion: “[{nJo class action is proper unless all
litigants are governed by the same legal rules.” Pet. 14.
Plaintiffs contend that the Seventh Circuit announced an
inflexible rule that unless the unitary law of a single
jurisdiction applies, class treatment is unavailable. But that is
neither the essence of the Seventh Circuit’s holding nor
essential to its conclusion that this case would be
unmanageable under the divergent laws of 51 different
jurisdictions. The Seventh Circuit was essentially reiterating
the longstanding view of federal courts that a proposed
litigation class will be unmanageable unless there is
substantial similarity among the laws applicable to all of the
claims at issue. If the laws implicated diverge materially, “the
class cannot satisfy the commonality and superiority
requirements of Fed. R. Civ. P. 23(a) [and] (b)(3).” Pet. App.
3a. The Seventh Circuit’s holding does not conflict with any
of the decisions cited by plaintiffs.

Fifth Circuit. Contrary to plaintifis’ argument (Pet. 16),
the Fifth Circuit’s decision in Castano v. American Tobacco
Co., 84 F.3d 734, 750 (Sth Cir. 1996), is entirely consistent
with the Seventh Circuit’s ruling. In the first place, the Fifth
Circuit decertified the class action and dismissed the class
allegations, relying in part upon differences in state law. See
id. at 742-44, 752. Second, the Castano court did not remand
to the district court for “the opportunity to conduct” a choice-
of-law analysis, as plaintiffs contend the Seventh Circuit
should have done here. Pet. 16. Instead, the Castano court
assessed how “variations in state law affect predominance and
superiority” (84 F.3d at 741), and based upon that review (id.
at 741-44 & nn.15, 16), determined that the trial court’s class
certification order should be reversed (id. at 749-50). The
Seventh Circuit approached this case in the same way. There
is no conflict.

DC Circuit. Nor does the Seventh Circuit’s approach
conflict with the DC Circuit’s decision in Walsh v. Ford

1]

Motor Co., 807 F.2d 1000 (D.C. Cir. 1986). Cf Pet. 17. The
Walsh court, like the Seventh Circuit here, reversed class
certification based in part upon choice-of-law problems. The
DC Circuit chose to remand to the district court for an analysis
of whether variations in state law “present insuperable
obstacles” to class treatment under Rule 23(b)(3), rather than
performing that analysis itself. 807 F.2d at 1016-17. But the
DC Circuit did not purport to hold that an appellate court
cannot perform that analysis; nor did the DC Circuit suggest
that an appellate court should ignore numerous prior decisions
consistent with its current ruling.* Here, the Seventh Circuit,
relying on its own recent decisions, chose to perform the
evaluation and decertify the class.

Ninth Circuit. Plaintiffs also err in contending (Pet. 16)
that the Seventh Circuit’s approach conflicts with the Ninth
Circuit’s decision in Hanlon v. Chrysler Corp., 150 F.3d 1011
(9th Cir. 1998). Because Hanlon was a settlement
certification, that court did not have to evaluate whether
choice-of-law problems would be insuperable at trial. See,
e.g., In re Ford Motor Co. Vehicle Paint Litig., 182 F.R.D.
214, 225 (E.D. La. 1998) (distinguishing Han/on as settlement
certification decision).? But even on its own terms, Hanlon
does not establish any conflict warranting certiorari review.
The Hanlon court stated that state-law variations “do not
necessarily preclude” Rule 23(b)(3) certification, but noted
that plaintiffs must “be prepared to demonstrate the

* On remand, the district court in Walsh ruled that differences in relevant
state warranty laws made class treatment impossible. Walsh v. Ford Motor
Co., 130 F.R.D. 260, 271-76 (D.D.C. 1990).

* By contrast, in a subsequent /itigation class decision, the Ninth Circuit
recognized that, “*[w]here the applicable law derives from the law of the
50 states, as opposed to a unitary federal cause of action, differences in
state law will ‘compound the [] disparities’ among class members from the
different states.”” Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180,
1189 (9th Cir.), as amended, 273 F.3d 1266 (9th Cir. 2001) (citations
omitted).

a ee EE

12

commonality of substantive law applicable to all class
members.” Hanlon, 150 F.3d at 1022. That approach is not
at odds with the Seventh Circuit’s decision below: the
Seventh Circuit assessed the relevant law and determined that’
there is no commonality with respect to the applicable «
consumer fraud and contract laws at issue here; it then ,
reversed nationwide class certification.

Third Circuit. Finally, plaintiffs contend that the Third
Circuit permits plaintiffs to proceed with nationwide class
certification under Rule 23(b)(3) when plaintiffs have made a
“creditable showing” that the laws can be grouped into
manageable patterns. Pet. 15. They cite Jn re School Asbestos
Litigation, 789 F.2d 996, 1010 (3d Cir. 1986), Georgine v.
Amchem Products, Inc., 83 F.3d 610, 627 (3d Cir. 1996), aff'd
sub nom. Amchem Products, Inc. v. Windsor, 521 U.S. 591
(1997), and Jn re Prudential Insurance Co. of America Sales
Practices Litigation, 148 F.3d 283 (3d Cir. 1998). The
Seventh Circuit ruling here conflicts with none of these
decisions.

The Seventh Circuit’s ruling is completely consistent with
School Asbestos. Plaintiffs here failed to show that the
specific no-injury claims at issue could be separated into
manageable subsets, let alone make a “creditable showing . . .
that class certification does not present insuperable obstacles.”
School Asbestos, 789 F.2d at 1010. The Seventh Circuit
rejected plaintiffs’ argument that the laws relating to these
claims are substantially uniform, and instead found that
differences in state law would make class certification
unmanageable.'°

'° In any event, School Asbestos is weak authority for the proposition that
nationwide class actions may readily proceed under multiple states’ laws.
The Third Circuit harbored “doubt” about whether plaintiffs could separate
the law of the different states into four categories (789 F.2d at 1010), and
noted that “‘there will be a point at which the sheer magnitude of the task
of construing the various laws will compel a court not to certify a
multistate class or to reduce it to a more manageable number of states”

13

Plaintiffs’ reliance on Georgine is also misplaced; in fact,
that decision reversed a settlement class certification, ruling
that individualized choice-of-law issues implicated there
would make the “proliferation of disparate factual and legal
issues . .. compound[] exponentially.” 83 F.3d at 627. fhere
is no conflict with Georgine.

Plaintiffs also err in relying on Prudential, which reviewed
a settlement class certification.'' The Prudential court
recognized that “relatively minor differences in state law” may
be overcome by subclassing, and ruled that the appellant
objectors “ha[d] failed to demonstrate that the differences in
applicable state law were sufficient to foreclose a similar
approach.” 148 F.3d at 315. The Seventh Circuit here found
that the state-law differences were not minor, and accepted
defendants’ argument that the differences would create
insuperable difficulties at trial. Thus, as with School Asbestos
and Georgine, Prudential creates no conflict with the Seventh
Circuit’s ruling here.

(id. at 1010 n.11 (citation omitted)). But the Third Circuit was “reluctan|t]
to vacate” because of “the highly unusual nature of asbestos litigation.”
Id. at 1011. Judge Posner of the Seventh Circuit has since noted that the
choice-of-law analysis in School Asbestos was essentially sui generis,
given that “(t]he number of asbestos cases was so great as to exert a well-
nigh irresistible pressure to bend the normal rules.” Jn re Rhone-Poulenc
Rorer, 51 F.3d 1293, 1304 (7th Cir. 1995).

'' Notably, the Third Circuit subsequently reversed nationwide class
certification of a litigation class based in part upon “individual issues”
involving, inter alia, “state laws” that “would require individual
determinations.” Jn re LifeUSA Holding Inc., 242 F.3d 136, 148 (3d Cir.
2001). In doing so, the Third Circuit specifically distinguished Prudential
on the ground that Prudential involved “certification of a settlement class
action,” noting that “[a] settlement class, as distinct from a class action to
be tried, does not implicate trial management problems.” /d. at 146 & n.10
(emphasis in original); see also Newton v. Merrill Lynch, Pierce, Fenner
& Smith, Inc., 259 F.3d 154, 192 (3d Cir. 2001) (distinguishing Prudential
as settlement certification).

14

C. The Seventh Circuit’s Choice-Of-Law Ruling Is
Consistent With The Overwhelming Trend In
Contemporary Federal Class-Action Jurisprudence

At bottom, plaintiffs attempt to suggest that the Seventh
Circuit is somehow out of step with federal case law involving
proposed nationwide class certifications of product- or
consumer-based tort and contract claims. Nothing could be
further from the truth. Federal courts of appeals have
repeatedly rejected proposed nationwide class actions under
Rule 23(b)(3). In addition to cases like Castano, Walsh, and
Georgine, at least eleven other court of appeals decisions have
reversed multistate class certifications or affirmed denials of
nationwide class actions, citing choice-of-law concerns.’
This Court denied certiorari in three of those
cases—including the petition in Sikes v. American Telephone

& Telegraph Co., No. 02-124, just two months ago, which ~

challenged, inter alia, the Eleventh Circuit’s choice-of-law
ruling. See 123 S. Ct. 117 (Oct. 7, 2002).

The rationale supporting these court of appeals decisions is
consistent and compelling: applying the different laws of
multiple state jurisdictions to claims like those at issue here
ordinarily makes class treatment unmanageable and is at odds
with the superiority requirement of Rule 23(b)(3). A district

'2 In re LifeUSA, 242 F.3d at 147 (reversing nationwide class certification);
Sikes v. Teleline, Inc., 281 F.3d 1350, 1367 n.44 (11th Cir.) (same), cert.
denied sub nom. Sikes v. Am. Tel. & Tel. Co., 123 S. Ct. 117 (Oct. 7,
2002); Stirman v. Exxon Corp., 280 F.3d 554, 564-66 (Sth Cir. 2002)
(same); saacs v. Sprint Corp., 261 F.3d 679, 682 (7th Cir. 2001) (same);
Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 677 (7th Cir.) (same),
cert. denied, 122 S. Ct. 348 (2001); Spence v. Glock, 227 F.3d 308, 313 &
n.8 (Sth Cir. 2000) (same); Andrews v. Am. Tel. & Tel. Co., 95 F.3d 1014,
1024 (11th Cir. 1996) (same); Jn re Am. Med. Sys., 75 F.3d 1069, 1085
(6th Cir. 1996) (same); Jn re Rhone-Poulenc Rorer, 51 F.3d at 1300
(same). See also Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th
Cir. 2001), (affirming denial of nationwide class certification); Kirkpatrick
v. J.C. Bradford & Co., 827 F.2d 718, 725 (11th Cir. 1987) (same), cert.
denied, 485 U.S. 959 (1988).

|

15

court would have to apply these different laws at every stage
of the proceedings, “complicat[ing] matters exponentially.”
Andrews v. Am. Tel. & Tel. Co., 95 F.3d 1014, 1024 (11th Cir.
1996). Thus, a trial court would have to learn the law relating
to multiple claims from as many as 51 different jurisdictions,
including all of the nuances of each legal regime, since even
“nuance can be important” when interpreting different states’
laws. In re Rhone-Poulenc Rorer, 51 F.3d 1293, 1300 (7th
Cir. 1995). “While [that] task may not be impossible, its
complexity certainly makes individual trials a more attractive
alternative and, ipso facto, renders class certification
treatment not superior.” Castano, 84 F.3d at 750 (emphasis
added).

No fair trial could realistically proceed under such
circumstances. Different standards of conduct would apply,
“compound[ing] the[ ] disparities” among class members from
different states. Amchem Prods., 521 U.S. at 624. And no
jury could possibly apply the laws of so many jurisdictions to
the different facts of hundreds of thousands of class members.
See, e.g., In re LifeUSA Holding Inc., 242 F.3d 136, 148 (3d
Cir. 2001) (reversing nationwide litigation class action
because, inter alia, any attempt to try plaintiffs’ claims under
varied state laws “would not only be inordinately time
consuming and difficult, but it would impermissibly transgress
upon the required standards of fairness and efficiency”).

The decisions of lower federal courts are consistent with
these appellate rulings. Thus, scores of federal district court
decisions have denied class certification based in whole or in
part upon the fact that the laws of numerous jurisdictions
would apply, making class treatment unmanageable.'? Under

> See, e.g., In re Rezulin Prods. Liab. Litig., 210 F.R.D. 61, 67-68, 71
(S.D.N.Y. 2002); Jn re Trans Union Corp. Privacy Litig., No. 00 C 4729,
2002 WL 31028234, at *14 (N.D. Ill. Sept. 10, 2002); Lewallen v.
Medtronic USA, Inc., No. C 01-20395 RMW, 2002 WL 31300899, at *5
(N.D. Cal. Aug. 28, 2002); In re Citigroup, Inc., No. CIV.A.

16

10011912REK, 2001 WL 1682865, at *3 (D. Mass. Dec. 19, 2001);
Hammett v. Am. Bankers Ins. Co., 203 F.R.D. 690, 700-02 (S.D. Fla.
2001); Duncan v. N.W. Airlines, Inc., 203 F.R.D. 601, 613-14 (W.D.
Wash. 2001); Neely v. Ethicon, Inc., No. 1:00- CV-00569, 2001 WL
1090204, at *8-11, 15 (E.D. Tex. Aug. 15, 2001); Begley v. Acad. Life Ins.
Co., 200 F.R.D. 489, 497 (N.D. Ga. 2001); Oxford v. Williams Cos., 137
F. Supp. 2d 756, 764 (E.D. Tex. 2001); Jones v. Allercare, Inc., 203
F.R.D. 290, 307-08 & n.8 (N.D. Ohio 2001); Stipelcovich v. DirecTV, Inc.,
129 F. Supp. 2d 989, 995 (E.D. Tex. 2001); Shelley v. AmSouth Bank, No.
CIV.A.97-1170-RV-C, 2000 WL 1121778, at *8-10 (S.D. Ala. July 24,
2000), aff'd, 247 F.3d 250 (11th Cir. 2001); Lyon v. Caterpillar, Inc., 194
F.R.D. 206, 219-23 (E.D. Pa. 2000); Adams v. Kan. City Life Ins. Co., 192
F.R.D. 274, 277-78 (W.D. Mo. 2000); Hallaba v. Worldcom Network
Servs. Inc., 196 F.R.D. 630, 640, 645 (N.D. Okla. 2000); Velasquez v.
Crown Life Ins. Co., MDL-1096 No. CIV.A.M-97-064, 1999 WL
33305652, at *3-*7 (S.D. Tex. Aug. 10, 1999); Clay v. Am. Tobacco Co.,
188 F.R.D. 483, 497-98, 503 (S.D. Ill. 1999); Carpenter v. BMW of N.
Am., Inc., No. 99-CV-214, 1999 WL 415390, at *4, *8 (E.D. Pa. June 21,
1999); Chilton Water Auth. v. Shell Oil Co., No. CIV.A.98-T-1452-N,
1999 WL 1628000, at *7-*8 (M.D. Ala. May 21, 1999); Powers v. Gov't
Employees Ins. Co., 192 F.R.D. 313, 319-20 (S.D. Fla. 1998); Rothwell v.
Chubb Life Ins. Co. of Am., 191 F.R.D. 25, 33 n.7 (D.N.H. 1998); Dhamer
v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 532-34 (N.D. Ill. 1998);
Weikel v. Tower Semiconductor Ltd., 183 F.R.D. 377, 402-03 (D.N.J.
1998); In re Jackson Nat'l Life Ins. Co. Premium Litig., 183 F.R.D. 217,
225 (W.D. Mich. 1998); Chin v. Chrysler Corp., 182 F.R.D. 448, 465
(D.N.J. 1998); Marascalco v. Int’l Computerized Orthokeratology Soc’y,
Inc., 181 F.R.D. 331, 339-41 (N.D. Miss. 1998); In re Ford Motor Co.
Vehicle Paint Litig., 182 F.R.D. at 222-26; Fisher v. Bristol-Myers Squibb
Co., 181 F.R.D. 365, 368 (N.D. Ill. 1998); Borskey v. Medtronics, No.
CIV.A.94-2302, 1998 WL 122602, at *3 (E.D. La. Mar. 18, 1998);
Peoples v. Am. Fid. Life Ins. Co., 176 F.R.D. 637, 646 (N.D. Fla. 1998);
In re Ford Motor Co. Bronco II Prod. Liab. Litig., 177 F.R.D. 360, 370-
72, 376 (E.D. La. 1997); Clement v. Am. Honda Fin. Corp., 176 F.R.D. 15,
23 & nn.10-12 (D. Conn. 1997); Dubose v. First Sec. Sav. Bank, 183
F.R.D. 583, 587-88 (M.D. Ala. 1997); In re Ford Motor Co. Ignition
Switch Prods. Liab. Litig., 174 F.R.D. 332, 347-52 (D.N.J. 1997); In re
Stucco Litig., 175 F.R.D. 210, 215-17 (E.D.N.C. 1997); Smith v. Brown &
Williamson Tobacco Corp., 174 F.R.D. 90, 94-96 (W.D. Mo. 1997);
Rohlfing v. Manor Care, Inc., 172 F.R.D. 330, 341-42 (N.D. Ill. 1997); Jn
re Masonite Corp. Hardboard Siding Prods. Liab. Litig., 170 F.R.D. 417,
422-27 (E.D. La. 1997); Harding v. Tambrands Inc., 165 F.R.D. 623, 629-
30 (D. Kan. 1996); Barbarin v. Gen. Motors Corp., No. CTV.A.84-0888,

17

these circumstances, it is unsurprising that one federal district
court judge could confidently report that “no federal court has
[ever] attempted to try a case under the laws of every state.”
Carpenter v. BMW of N. Am., Inc., No. 99-CV-214, 1999 WL
415390, at *6 n.11 (E.D. Pa. June 21, 1999) (quotations and
citations omitted).

In order to certify a nationwide litigation class here, the
district court ignored this consistent precedent, misread
Indiana choice-of-law rules, and applied a novel interpretation
of Tennessee law to all claims of all consumers nationwide
against Firestone. The Seventh Circuit’s ruling reversing that
erroneous and unprecedented decision was unexceptional, and
does not deserve review.

Il. PLAINTIFFS’ CHALLENGES TO THE
SEVENTH CIRCUIT’S SUPERIORITY
ANALYSIS ARE BASED UPON DISTORTIONS
OF THE SEVENTH CIRCUIT’S DECISION

Plaintiffs’ second, third, and fourth questions presented,
which challenge supposed aspects of the Seventh Circuit’s
superiority ruling, are based upon misinterpretations of the
Seventh Circuit’s decision. None of those questions
accurately reflects the decision below, and none warrants
review by this Court.

A. The Seventh Circuit Did Not “Usurp” State Law-
making Power In Violation Of Erie v. Tompkins Or
Settled Principles Of Federalism

Plaintiffs contend that the Seventh Circuit decision
reversing class certification somehow overruled or overrode
state law that would permit recovery by plaintiffs who have
suffered actual economic losses. Pet. 19-25. The court did no
such thing.

1993 WL 765821, at *3 (D.D.C. Sept. 22, 1993).

18

Plaintiffs’ argument is based upon a contrived reading of
the Seventh Circuit decision and a misleading characterization
of their claims. To begin with, plaintiffs strive mightily to
find an Erie issue in the Seventh Circuit’s rulings. There is
none. The Seventh Circuit ruled on the requirements for
application of Rule 23—a federal procedural rule—and in that
context assessed the variability of the laws of the 51
jurisdictions at issue.

Second, plaintiffs seek to cast their own allegations as
routine economic loss claims, asserting, for example, that no
state would deny a breach of warranty claim “because of the
absence of physical harm.” Pet. 21. But plaintiffs’ assertion
of such obvious points ignores the novei theory they seek to
press—a claim for damages where the product owned by the
plaintiff has functioned without incident, but a tiny fraction
(fewer than one percent) of products owned by others have
failed.

Thus, in the course of analyzing whether Tennessee law
could be applied to the propensity-to-fail, no-injury claims of
class members around the nation, the Seventh Circuit
acknowledged plaintiffs’ position that their claims are not
based on a product-liability theory. Pet. App. Sa-6a. The
Seventh Circuit also recognized plaintiffs’ assertions about
breach of warranty and fraud, but expressed doubts about the
strategy, observing that “most states would not entertain” a
theory under which a consumer whose product has performed
without incident, and who therefore got substantial
uninterrupted use from the product, can nevertheless sue for
damages. Jd. 7a. But the Seventh Circuit’s statement was
made in the context of evaluating plaintiffs’ claims to
determine which states’ laws would apply and whether those
laws varied. Jd. Thus, in observing the state of “no-injury/no-
manifestation” law, the Seventh Circuit did not purport to
supplant state law. Nor did it even predict state law in a
manner that implicates Erie. The court did not definitively
determine any particular state’s law relating to plaintiffs’

19

claims, and it certainly did not purport to overrule or
undermine the actions of any state court or legislature in
defining the substance of any particular state’s laws. It merely
cited to existing case law on the issue. Thus, when the actual
opinion is examined, plaintiffs’ rhetoric about the court having
“accreted to itself... the power to judge the wisdom of state
lawmakers in creating various causes of action” (Pet. 20) rings
hollow."

Furthermore, the Seventh Circuit’s observation about the
state of “no-injury/no-manifestation” law was absolutely
correct. The observation was based upon decisions from four
federal appellate courts and four state courts.'> And although

'* Plaintiffs take issue with Judge Easterbrook’s observations about the
economic effects of competing legal rules. E.g., Pet. 20, 23. While Judge
Easterbrook’s analysis (see Pet. App. 6a & n.1) is correct, it is also dictum,
and does not rise to something reviewable by this Court. See California
v. Rooney, 483 U.S. 307, 311-14 (1987) (per curiam); Herb v. Pitcairn,
324 U.S. 117, 126 (1945) (“[O]ur power is to correct wrong judgments,
not to revise opinions.”’).

'° Plaintiffs’ attempt to distinguish the case law cited by the Seventh
Circuit is unavailing. Plaintiffs do not even address two of the cases,
American Suzuki Motor Corp. v. Superior Court, 44 Cal. Rptr. 2d 526 (Ct.
App. 1995), and Yu v. IBM Corp., 732 N.E.2d 1173 (Ill. App. Ct. 2000).
Cf. Pet. App. 7a. In Briehl v. General Motors Corp., 172 F.3d 623 (8th
Cir. 1999), the Eighth Circuit ruled that “[w]here . . . a product performs
satisfactorily and never exhibits an alleged defect, no cause of action lies.”
Id. at 628 (emphasis added). Similarly, in Angus v. Shiley, Inc., 989 F.2d
142 (3d Cir. 1993), and in Willett v. Baxter Int’l, Inc., 929 F.2d 1094 (Sth
Cir. 1991), plaintiffs with properly functioning artificial heart valves
sought recovery because artificial heart valves implanted in other people
had failed. Both courts of appeals refused to recognize such claims.
Angus, 989 F.2d at 148; Willett, 929 F.2d at 1099-1100 & n.20. In
Carlson v. General Motors Corp., 883 F.2d 287 (4th Cir. 1989), plaintiffs
sought recovery under the implied warranty of merchantability for loss of
vehicle resale value due to mechanical failures of GM diesel engines in
other people’s automobiles. The Fourth Circuit called this theory “novel”
and affirmed the district court’s dismissal of those no-injury claims. /d. at
297-98. In Capital Holding Corp. v. Bailey, 873 S.W.2d 187 (Ky. 1994),
the Supreme Court of Kentucky rejected plaintiffs’ no-injury negligence

20

plaintiffs assert that “it is incontrovertible that states do
provide such causes of action for purchasers of defective
products who have not (or not yet) been physically injured”
(Pet. 23), that assertion, like the one quoted above, is off the
mark. The question is the variability of a “no-injury” claim;
on that, plaintiffs plainly did not persuade the Seventh Circuit,
and do not cite any case law in the petition showing that states
have uniformly adopted a propensity-to-fail approach like
plaintiffs assert here. In fact, they have not.'®

The Seventh Circuit did, in fact, conclude that the NHTSA
process was superior to the district court’s nationwide class

claims and held that “with a substance capable of causing cancer, just as
with any other defective product, no cause of action accrues until the
potentially harmful exposure actually ‘causes injury that produces loss or
damage.”” Id. at 192 (emphasis added) (citation omitted). And in Ford
Motor Co. v. Rice, 726 So. 2d 626, 631 (Ala. 1998), the Alabama Supreme
Court explicitly noted that “courts have generally concluded that claims
based upon allegations of inherent product ‘defects’ that have not caused
any tangible injury are not viable.” /d. at 629. Thus, each of the cases
cited by the Seventh Circuit supports the proposition that consumers who
bought and received tires that functioned without incident for thousands
of miles of actual use have no injury and no viable claim.

Indeed, numerous other cases not cited by the Seventh Circuit support
the same basic principle that people whose products function without
incident cannot recover on the theory that a small number of products
owned by other people have failed. See, e.g., In re Air Bag Prods. Liab.
Litig., 7 F. Supp. 2d 792, 806 & n.21 (E.D. La. 1998); Weaver v. Chrysler
Corp., 172 F.R.D. 96, 99-100 (S.D.N.Y. 1997); Feinstein v. Firestone Tire
& Rubber Co., 535 F. Supp. 595, 602 (S.D.N.Y. 1982).

'® Plaintiffs err in relying (Pet. 22) on Coughlin v. Wellcraft Marine Corp.,
240 F.3d 449, 452 (Sth Cir. 2001). That case did not purport to rule that
courts around the nation permit recovery by plaintiffs whose products have
performed without incident. Furthermore, Coughlin is inapposite: it dealt
with someone who thought he had bought a boat made of one material,
then found out that it was made of another. 240 F.3d at 451. By contrast,
plaintiffs here thought they were purchasing—and did in fact
purchase—tires that would function without incident for thousands of
miles.

en ow SS a

a

21

action, which was based upon announcing new law (by finding
that Tennessee and Michigan would permit “no-injury/no-
manifestation” claims to proceed), declaring that law to
control all of the claims of consumers throughout the land, and
then applying that law to facts that varied materially from
purchaser to purchaser.'’ In doing so, the Seventh Circuit
aligned itself with numerous other courts that have found the
NHTSA process to be superior to sprawling and
unmanageable class actions by those whose products have
performed without incident. See, e.g., Chin v. Chrysler Corp.,
182 F.R.D. 448, 464 (D.N.J. 1998) (“the administrative
remedy provided by NHTSA .. . is more appropriate than civil
litigation seeking equitable relief and money damages in a
federal court”); Jn re Ford Motor Co. Ignition Switch Prods.
Liab. Litig., 174 F.R.D. 332, 353 (D.N.J. 1997) (same).'8

Finally, plaintiffs’ assertion of some sort of conflict
between the Seventh Circuit’s ruling and Hanlon or School
Asbestos on this issue (Pet. 24) is frivolous. Neither Hanlon
nor School Asbestos addressed whether the NHTSA process is
superior to a nationwide class action lawsuit by those whose
products have performed without incident, and whose claims
would therefore be subject to dismissal under many, if not all,
states’ laws.

'’ Neither Tennessee nor Michigan case law authorized plaintiffs to
proceed with warranty-based claims, unjust enrichment claims, or
consumer fraud claims when the product at issue had performed without
incident. No Tennessee or Michigan court had recognized plaintiffs’
novel, propensity-to-fail theory of product defect. And plaintiffs had not
cited a single federal nationwide litigation class action of no-injury product
defect claims that would serve as a model for litigation.

'* Accord, e.g., Feinstein, 535 F. Supp. at 607 n.18; Frank v. Daimler/
Chrysler Corp., 741 N.Y.S.2d 9, 17 (App. Div. 2002); Ford Motor Co. v.
Magill, 698 So. 2d 1244, 1245 (Fla. Dist. Ct. App. 1997); Am. Suzuki
Motor Corp., 44 Cal. Rptr. 2d at 531-32.

22

B. The Seventh Circuit’s Treatment Of Plaintiffs’
Allegedly “Negative-Value” Claims Does Not
Conflict With The Law Of This Court Or Any
Circuit

Plaintiffs also err in suggesting that the Seventh Circuit
held that small-value claims weighed against class
certification. Pet. 25-29. Again, the Seventh Circuit did
nothing of the sort.

At the threshold, plaintiffs’ claims are not “negative-value”
claims. Attorneys’ fees provisions in most consumer fraud
statutes provide ample incentive to ensure that, if a claim has
merit, it will be pursued. See, e.g., Sanneman v. Chrysler
Corp., 191 F.R.D. 441, 456 (E.D. Pa. 2000) (ability to recover
attorneys’ fees belies the projected problems of a negative
value suit); /n re Ford Motor Co. Bronco II Prod. Liab. Litig.,
177 F.R.D. 360, 375 (E.D. La. 1997) (same).

The Seventh Circuit, however, did not address whether
plaintiffs’ claims were large- or small-value. It did not take
the small value of plaintiffs’ claims “as a basis for finding that
a class action would not be superior... .” Pet. 26 (emphasis
in original). Rather, the court recognized that the novel and
speculative nature of plaintiffs’ claims—the fact that
purchasers’ products “have so far performed properly,” and
whose owners seek compensation based only on “the risk of
failure, which may be reflected in diminished resale
value .. . and perhaps mental stress” (Pet. App. 2a) (emphasis
in original}—made class certification inferior to alternatives.
In deciding that plaintiffs’ claims could proceed, the district
court had broken new ground. The district court had no
precedent—from Tennessee, Michigan, or
otherwise—showing how a class action asserting such novel
claims could be tried. The district court was thus essentially
flying blind, and any assessment of manageability or
superiority was pure speculation.

23

As a result, the Seventh Circuit properly found that a class
action would not satisfy the superiority requirement of Rule
23(b)(3). That ruling is consistent with other courts that have
addressed the issue. “In the context of an immature” legal
theory, “any savings in judicial resources is speculative.”
Castano, 84 F.3d at 749; In re Masonite Corp. Hardboard
Siding Prods. Liab. Litig., 1}0 F.R.D. 417, 425 (E.D. La.
1997) (finding plaintiffs’ theory that siding is “prone to
fail . . . runs into Castano’s admonition not to certify novel
tort classes”); see also, e.g., Arch v. Am. Tobacco Co., 175
F.R.D. 469, 494-95 (E.D. Pa. 1997).

In any event, the supposed “negative value” of plaintiffs’
claims does not change the analysis under Rule 23(b)(3). The
rule does not distinguish between litigation involving large
and small claims, and courts “lack authority to substitute for
Rule 23’s certification criteria a standard never adopted . . . .”
Amchem, 521 U.S. at 622. None of the cases cited by the
plaintiffs (Pet. 25-27) held that either Rule 23 standards or
appellate scrutiny of any particular consumer class action
should be any less demanding because of the type or size of
the claims. And “the negative value of [a] case cannot justify
the headlong plunge into an unmanageable and interminable
litigation process ....” Barreras Ruiz v. Am. Tobacco Co.,
180 F.R.D. 194, 199 (D.P.R. 1998); Masonite, 170 F.R.D. at
426-27 (“the magnitude or kind of injury does not make these
claims, by virtue of their character, any the more suitable for
class management”). Thus, the courts of appeals have not
hesitated to reverse class certifications of supposed “negative-
value” claims. See, e.g., Spence v. Glock, 227 F.3d 308, 314-
16 (Sth Cir. 2000) (reversing class certification of numerous
small-value common-law claims); Andrews, 95 F.3d at 1023-
25 (reversing class certification of small-value RICO claims);
In re LifeUSA, 242 F.3d at 148 n.13 (rejecting “relatively
modest” common-law claims, noting that size of claims is
“insufficient to overcome the hurdles of predominance and

superiority”).

24

C. The Seventh Circuit’s Assessment Of The District
Court’s Misguided View Of Litigation “Efficiency”
Does Not Conflict With The Law Of Any Other
Court

Plaintiffs further err in suggesting that the Seventh Circuit
interpreted the word “efficient” in Rule 23(b)(3) in a manner
that conflicts with the law of other courts. Pet. 27-30. Again,
that argument rests on a fundamental misreading of the
Seventh Circuit’s opinion.

The Seventh Circuit recognized that the district court’s
proposed class action was a litigation nightmare, in which
novel theories would have to be assessed under a variety of
different legal standards and then applied to countless
individualized factual circumstances. The district court was
determined to proceed despite these problems. Pet. App. 1 la-
13a. This approach, according to the Seventh Circuit, valued
“central planning” over the ordered development of.the law by
those entities primarily charged with deciding the law of the
states—namely, the states themselves. /d. According to the
Seventh Circuit, “[d]ifferences across states may be costly for
courts and litigants alike, but they are a fundamental aspect of
our federal republic and must not be overridden in a quest to
clear the queue in court.” /d. 12a (citing BMW of N. Am., Inc.
v. Gore, 517 U.S. 559, 568-73 (1996)). That view is
unassailable, and does not conflict with the law of this Court
or any other jurisdiction. None of the cases cited by the
plaintiffs (Pet. 27-30) hold, or even suggest, that a court can
override substantive law or ignore issues of fairness in an
attempt to achieve “efficiency.”

Indeed, plaintiffs’ arguments ignore the text of Rule 23,
which requires that class certification be superior to other
mechanisms for the “fair and efficient” resolution of the
controversy. Rule 23(b)(3) (emphasis added). Just as the
district court had done, plaintiffs focus entirely on speed,
costs, and available resources. The Seventh Circuit’s analysis

vcmatioaes 0 tia «

25

confirms, as it should, that speed and cost savings alone
cannot justify class certification. Fairness is critical. That
analysis is consistent with decisions of this Court and other
federal courts of appeal. See Amchem Prods., 521 U.S. at 615;
Zinser, 253 F.3d at 1192; Broussard v. Meineke Discount
Muffler Shops, Inc., 155 F.3d 331, 343-44 (4th Cir. 1998); Jn
re Am. Med. Sys., 75 F.3d at 1085.

iil. THE SEVENTH CIRCUIT’S RULING THAT ~
INDIVIDUAL FACTUAL ISSUES PREDOM-
INATE PROVIDES FURTHER GROUNDS FOR
DENYING REVIEW

In addition to its choice-of-law and superiority rulings, the
Seventh Circuit held that individualized factual issues
predominate, preventing certification of even a statewide class
action. Pet. App. 9a-1 la. This additional holding makes this
case unsuitable for certiorari review, since the nationwide
class proposed by the plaintiffs cannot proceed in any event.

The district court held, and plaintiffs conceded, that all of
their claims depend upon showing that all of the tires in the
Tire Class are defective. Pet. 5. Proving defect would require
examining how the tires were designed, how they were used,
and how they performed over time. The record before the
district court and the Seventh Circuit demonstrated that the
millions of tires in the Tire Class differed in design, use, and
performance—confounding any classwide proof of defect.

The proposed Tire Class put at issue 60 million tires,
manufactured over more than ten years. Plaintiffs’ own
submission to the district court illustrated that the multiple
different tires in the Tire Class were manufactured to scores of
different design specifications. Unrefuted evidence showed
that those specifications created tires with different sizes,
different vehicle applications (i.e., SUVs versus pick-up
trucks), and different performance characteristics.

26

The NHTSA investigation underscored that tires in the Tire
Class differed materially in design. NHTSA investigated
these tires for eighteen months. Firestone recalled 14 million
of the 60 million investigated tires in August 2000. Upon
completion of its investigation, NHTSA determined that only
about 3.5 million additional tires should be replaced, and
Firestone promptly complied. NHTSA did not think the rest
of the tires—more than 40 million—required recall.

Furthermore, even if all the tires had been identical, the
evidence established that individual issues still would
predominate. The circumstances of each class member’s
purchase and use of the tires are unique. As but one example,
tire purchasers used their tires for differing periods of time and
differing mileage, with many or most receiving full usage for
the expected lifetime of their tires. Evidence of actual use
would be relevant to issues such as the existence (or absence)
of a defect, merchantability, and the existence (if any) of an
injury.

Against this backdrop, the Seventh Circuit properly
recognized that the district court had abused its discretion by
ignoring record evidence showing that there was no factual
predominance. Pet. App. 9a-1la. The Seventh Circuit noted
the legal significance of only a limited number of the tires
being recalled (id. 10a), the fact that most tires were not
designed for Explorers (id.), and the different design
specifications put at issue (id.). The district court had not even
attempted to reconcile its predominance ruling with those
facts—let alone the rest of the record. Nor had the district
court explained how the claims relating to the 60 million
different tires could be fairly or manageably tried in a single,
all-or-nothing trial.

For these reasons, the Seventh Circuit properly found that
class certification—even on a_ statewide basis—was
impossible. /d. 9a. This renders the questions presented in the
petition ultimately superfluous: wholly apart from the Seventh

0 A PE 8 BT SO: LOE

IAA oe I Nl ea ST Bre EE, Se

27

Circuit’s manageability and superiority rulings, this case could
not proceed as a class action because individual issues of fact
predominate. Thus, if this Court were inclined to review
questions like those presented in plaintiffs’ petition, it should
await a more appropriate case for doing so.

28

CONCLUSION

The petition for a writ of certiorari should be denied.

Of Counsel:

MARK J.R. MERKLE

KRIEG DEVAULT, LLP

One Indiana Square

Suite 2800

Indianapolis, Indiana 46204
(317) 636-4341

Of Counsel:

THOMAS G. STAYTON
ELLEN E. BOSHKOFF
BAKER & DANIELS

300 North Meridian Street
Suite 2700

Indianapolis, Indiana 46204
(317) 237-0300

Dated: December 6, 2002

Respectfully submitted,

HUGH R. WHITING

JONES, DAY, REAVIS & POGUE
JP Morgan Chase Tower

600 Travis Street, Suite 6500
Houston, Texas 77002

(832) 239-3939

EDWARD K.M. BILICH
Counsel of Record

MARK C. CAWLEY

JONES, DAY, REAVIS & POGUE

51 Louisiana Avenue, N.W.

Washington, D.C. 20001

(202) 879-3939

Counsel for Respondent
Bridgestone/Firestone North
American Tire, L.L.C. (successor
to Bridgestone/Firestone, Inc.)

THOMAS S. KILBANE

ROBIN G. WEAVER

JOSEPH C. WEINSTEIN

SQUIRE, SANDERS & DEMPSEY,
LLP

4900 Key Tower

127 Public Square

Cleveland, Ohio 44114

(216) 479-8500

Counsel for Respondent
Bridgestone Corporation

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0524%3A2. Public record. Not legal advice.