Opinion ID: 3151871
Heading Depth: 3
Heading Rank: 2

Heading: Class Action Lawsuit

Text: With respect to Hendrick's claim regarding class certification, we find that Freeman's decision to proceed under the provisions of the Dealers Act rather than Rule 23 of the South Carolina Rules of Civil Procedure was permissible and does not warrant the granting of a new trial to Hendrick. 10 Even if we assume that Hendrick is correct in its averment that the SCCPC provides the sole remedy for Freeman, we question what would happen in cases of cash or non-credit financed sales. Taken to its logical extreme, a person who did not use credit financing to purchase a vehicle would have no method of recovery for a violation of the Closing Fee Statute. We do not believe the Legislature intended to leave these consumers without a remedy. By enacting the Dealers Act, the Legislature clearly sought to protect all automobile purchasers regardless of the method of purchase. Although the South Carolina Rules of Civil Procedure are broadly worded to apply to all suits of a civil nature,11 Rule 23 is not necessarily applicable to class action lawsuits brought under the Dealers Act. As previously stated, the Legislature enacted section 56-15-110(2) of the Dealers Act to create a statutory right for a person to sue in a representative capacity. Clearly, at the time the Legislature enacted section 56-15-110(2), it was aware of the existence of the general class action statute codified in section 15-5-50. See Whitner v. State, 328 S.C. 1, 6, 492 S.E.2d 777, 779 (1997) (recognizing the basic presumption that the Legislature has knowledge of previous legislation). Notably, the language of section 56-15-110(2) mirrors that of section 15-5-50.12 By enacting nearly identical provisions, we believe the Legislature intended for the statutes to operate independently. If the Legislature deemed section 15-5-50 sufficient to cover all class action lawsuits, it would have been unnecessary to incorporate identical language into section 56-15-110(2). We believe the inclusion of the class action language in section 56-15-110(2) was a purposeful decision by the Legislature to create an alternative method for a consumer to sue in a representative capacity under the Dealers Act. After Rule 23 was adopted to replace section 15-5-50,13 the Legislature did not repeal section 56-15-110(2). By leaving intact section 56-15-110(2), we believe the Legislature intended to provide those harmed by violations of the Dealers Act a specific procedural avenue to pursue their claims. The adoption of 11 See Rule 1, SCRCP (providing that the South Carolina Rules of Civil Procedure govern the procedure in all South Carolina courts in all suits of a civil nature whether cognizable as cases at law or in equity, with the exceptions stated in Rule 81). 12 See S.C. Code Ann. § 15-5-50 (1976) (repealed 1985)(When the question is one of common or general interest to many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole.); id. § 56-15-110(2) (2006) (When such action is one of common or general interest to many persons or when the parties are numerous and it is impracticable to bring them all before the court, one or more may sue for the benefit of the whole, including actions for injunctive relief.). 13 Act No. 100, 1985 S.C. Acts 277 (adopting South Carolina Rules of Civil Procedure on July 1, 1985). Rule 23, as a general procedural rule, cannot operate to eliminate the statutory right found in section 56-15-110(2). Moreover, we discern no conflict between Rule 23 and section 56-15110(2). While the requirements for class certification in Rule 23 are expressly enumerated, we interpret subsection (2) of section 56-15-110 to be the functional equivalent of the Rule 23 requirements. Similar to the provisions of Rule 23, section 56-15-110(2) authorizes a consumer to sue in a representative capacity if the following prerequisites are met: (1) the action is one of common or general interest; (2) the class is so numerous that it would be impracticable to bring them all before the court; and (3) the representative party can obtain relief for the benefit of the class as a whole. Accordingly, we conclude that Rule 23 and section 56-15110(2) present independent, alternative methods for which a claimant may, in a representative capacity, pursue a cause of action under the Dealers Act on behalf of those similarly situated. Even assuming that Rule 23 is applicable, the facts of the instant case satisfied the prerequisites of this rule. In his order denying Hendrick's post-trial motions, the trial judge found: (1) the lawsuit involved common claims on behalf of a large number of purchasers; (2) the testimony established that Freeman's claim was typical of every other customer's claim regarding the payment of a closing fee; and (3) the parties provided notice to all of the affected customers and provided a sufficient time period to allow those customers to opt out of the lawsuit. We agree with these findings and would add that the amount in controversy for each claimant exceeded $100 as Hendrick registered closing fees ranging from $249 to $399. Therefore, we conclude the class action lawsuit was properly brought under the Dealers Act. Cf. Gardner, 304 S.C. at 331, 404 S.E.2d at 202 (recognizing, in a case pre-dating the Closing Fee Statute, car buyers' suit seeking recovery under the Dealers Act against car dealer for charging a closing fee met all the class certification requirements of Rule 23).