Opinion ID: 2623432
Heading Depth: 1
Heading Rank: 1

Heading: common issues of law or fact

Text: ¶ 8 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 predominating 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 aircraft purchase contracts. Id. at 690-691. Because the substantive 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. ¶ 9 In this matter the trial court determined that the alleged choice of law problems identified by [DaimlerChrysler did] not bar certification. It relied upon In re Bridgestone/Firestone, Inc. Tires Liability Litigation, 155 F.Supp.2d 1069 (S.D.Ind. 2001), which granted class certification upon a finding of predominance. ¶ 10 In Firestone, a federal district court sitting in Indiana 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 Bridgestone/Firestone, Inc. for alleged tire defects on Ford's Explorer 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 defect. Id. at 1082. Rather, it was the conduct of Defendants as manufacturers which was the focus of the litigation. Id. Therefore, the law of Michigan and Tennessee, the principal places of business of the manufactures, controlled. [4] ¶ 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.
¶ 12 The most significant relationship test applies to an action for breach of warranty in a sale of goods under Article 2 of the UCC. See Collins Radio Co. v. Bell, 623 P.2d 1039, 1046-47 (Okl.Civ.App.1980) (The same rationale for accepting the [most significant relationship test] for torts dictates that its application should be made to actions that fall under Article 2 of the Uniform Commercial Code.) See also Bohannan v. Allstate Ins. Co., 820 P.2d 787, 795 (Okla.1991) ([T]he UCC supports the most significant relationship test as applied in Collins Radio. ) This test is guided by principles and contacts from the Restatement (Second) of Conflicts (1971). It determines which state's law is most directly connected to the parties and the transaction. ¶ 13 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, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) 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 [5] include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. The contacts are to be evaluated according to their relative importance with respect to the particular issue. Id. at § 188(2) (emphasis added). However, a third provision, 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 significant 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 respect 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 applied in any event because of the intensity of the interest of that state in the determination of the particular issue. Id. ¶ 14 All 50 states and the District of Columbia bear some relationship to the parties and transactions in this dispute 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. ¶ 15 The Restatement's section 188(2) contacts of the place of contracting, the place of negotiation and performance, and the location of the subject matter are of diminished significance to the sales of the minivans. The UCC warranties 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 version of the UCC is more or less equal. By contrast, Michigan's interest in having its regulatory scheme applied to the conduct of a Michigan manufacturer is most significant. Michigan is where the decisions concerning the design, manufacture, and distribution of the minivans were made. Michigan is the only state where conduct relevant to all class members occurred. The principal place of DaimlerChrysler's business is the most important contact with respect to the UCC warranty claims. ¶ 16 The selection of Michigan law furthers the relevant factors stated in section 6 of the Restatement. The needs of the interstate system and the basic policies of predictability 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 manufacturer, 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 imperative 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 fundamentally unfair. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) (quoting Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-313, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981)).
¶ 17 Section 148 of the Restatement [6] applies to actions to recover pecuniary damages for false representations 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 consider: (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, (c) the place where the defendant made 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 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. articulates 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 applicable law with respect to most issues. So when the plaintiff acted in reliance upon the defendant's representations 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 plaintiff's domicil.... ¶ 18 In this matter, each class member presumably received the representation in their home state, their place of domicile. Therefore, the contacts point to each class member'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.
¶ 19 The trial court found that the operative facts giving rise to the claims against DaimlerChrysler raise two questions which are common to the entire class: (1) whether the air bags are defective and (2) whether DaimlerChrysler withheld 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. ¶ 20 DaimlerChrysler argues that the need for individual proof of each class member's reliance on the express warranty defeats predominance. Plaintiffs respond that any need for particularized proof of reliance does not defeat the commonality and typicality of the issue of product defect. ¶ 21 Whether individual findings of reliance are required 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 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. Lobo Exploration Co. v. Amoco Productions, 1999 OK CIV APP 112, 991 P.2d 1048, 1055 (quoting Alpern v. UtiliCorp 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 ... practice or policy that affects all of the putative class members .... individual factual differences among the individual litigants 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).