"Cognitive dissonance" is the anxiety resulting from holding two conflicting ideas in one's head at the same time. You would have to think that Judge James M. Smart, Jr. experienced cognitive dissonance when he wrote the opinion in Hope v. Nissan North America, Inc., No. WD73299, Slip op. (Mo. App. -- W. Dist. Sept. 20, 2011). I know I sure suffered from cognitive dissonance in reading it.
Hope is another one of those no-injury, BS class actions in which no one has actually experienced a product defect, but the plaintiffs' lawyers bring the suit claiming everyone suffered some "diminished value" of the product and thus are entitled to some small payment, while the lawyers make off like bandits.
Apparently Nissan Infiniti FX35 and FX45 models for the model years 2003 through 2007 had dashboards made of a particular material that had some propensity to exhibit surface bubbling in extreme heat and humidity. Nissan, of course, would repair the problem when it occurred, and it revised the manufacturing process and changed the material composition for replacement dashboards by 2009. In early 2010, Nissan extended the warranty for the FX vehicles to 8 years and unlimited mileage, so that it would replace any bubbled dashboards at no cost to the consumer, providing free loaner vehicles while doing so. This warranty was fully transferrable with the vehicle. Nissan even agreed to reimburse any customer who previously might have paid for a replacement. And the problem was not rampant; as of the date of the filing of the lawsuit, only 54 of the 1,200 registered vehicles in Missouri had received a dashboard replacement. Slip op. at n.12. Plainly, Nissan had behaved as a responsible manufacturer and stood behind its product even though it was faced with a purely cosmetic issue.
Some creative class action lawyers sued Nissan for breach of express and implied warranties, as well as violation of Missouri's Merchandising Practices Act. The trial court certified a class action for each of those causes of action, defined as: "All persons who purchased and currently own an Infiniti FX35 or FX45, model years 2003 through 2007 inclusive, in the State of Missouri, with the dashboard installed as original manufacturer's equipment."
On appeal, Nissan challenged the class definition and the fact that the trial court had ordered it to propose its own class definition. The court held that a "defendant cannot be coerced into assisting the success of the plaintiff's attempt to obtain class certification," that it had no duty to give such assistance, and that the trial court was without authority to compel Nissan to define the class. Slip op. at 9.
As for the challenge to the definition itself, the court began by noting that although there is no express requirement in the rules regarding a class definition, such a requirement clearly exists because a proper class definition is necessary to define who is going to receive relief, who is going to be bound by the judgment, and who deserves notice and an opportunity to be heard. Slip op. at 10. The class cannot be vague, amorphous or indefinite, and must not sweep into its ambit a large number of uninjured people. Such a definition would be " impermissibly overbroad."
The court relied on a classic class definition case, State ex rel. Coca-Cola Co. v. Nixon, 249 S.W.3d 855, 860-61 (Mo. banc 2008). In that case, plaintiffs had sued the defendant because it did not inform consumers that fountain Diet Coke contained saccharin in addition to aspartame, unlike bottled Diet Coke, which contained only aspartame. They defined the class as everyone who drank fountain Diet Coke in Missouri during a particular date range. But the Nixon court had held that the class definition was impermissibly overbroad because it contained a large number of people who were uninjured -- they drank the Diet Coke and liked it, and would drink it again. They had gotten the benefit of their bargain. Id. at 862. The Nixon court granted mandamus to decertify the class because there was no way the class definition could be modified to include only those people who dislike saccharin, as that would make the class indefinite and subject to thousands of individual determinations. Id. at 863.
The Hope court ultimately held that the case before it was distinguishable from the Diet Coke case. The car owners were identifiable, and they alleged that they were damaged by the "stigma" associated with the bubbling problem and a "'diminished resale value' . . . regardless of the manifestation of the defect." Slip op. at 13. The court thus rejected Nissan's challenge to the class definition -- but it seemed to do so more as a function of the state of the record:
While it is possible that a significant number of FX owners may not feel cheated or injured in any way, at this stage we do not have that information. . . . Thus, the putative class is not so overbroad or indefinite within the parameters of an initial test of the class definition by the trial court, at least for present purposes, that we discern an abuse of discretion in the initial definition.
. . . While we agree with Nissan that the definition is subject to difficulties, we do not believe we can say at this point that the class definition was clearly overbroad or indefinite.
* * *
. . . Because the record is not developed at this point as to how Plaintiffs will seek to objectively prove the existence of the damage they assert, we cannot speculate on whether Plaintiffs can establish the economic injury they claim. As a result, we cannot say categorically that the trial court abused its discretion in certifying the class.
Slip op. at 13-15 (emphasis in original).
The court then went on to analyze predominance. Relying heavily on Plubell v. Merck & Co., Inc., 289 S.W.3d 707 (Mo. App. 2009), the Hope Court concluded that -- based on the rather undeveloped state of the record -- the trial court did not abuse its discretion in concluding that common issues predominated on the Merchandising Practices Act. Under Plubell, the court reasoned, plaintiffs would not have to offer proof of Nissan's knowledge or intent for certain MMPA claims, and Plubell would allow the plaintiffs to meet the "ascertainable loss" requirement of the MMPA by pleading that they did not get the full benefit of their bargain (i.e. suffered "diminished value" of their product). Slip op. 20-24.
But the court did a 360 on the issue of warranties, holding that the trial court abused its discretion in certifying a class action on breach of express and implied warranty claims. To begin with, the court noted that subsequent purchasers -- people who bought the cars used from people other than Nissan -- could not establish that Nissan made an express warranty to them that they could rely on. Slip op. at 25.
But more important, the court analyzed the decisions from across the country and Missouri holding that a buyer has no breach of express or implied warranty claim where the alleged defect has not manifested in the product. See Slip op. at 27-31. The reason, of course, is as simple as it is clear: if the product has not broken, then the user has received exactly what he paid for. Thus, where a product performs satisfactorily during the warranty period and never exhibits an alleged defect, no cause of action lies for breach of express or implied warranty. Slip op. at 27. The court, in discussing an Eighth Circuit case, observed that where a plaintiff brings what is really a "no injury product liability suit," she cannot recover economic loss, because that kind of loss is only recoverable in contract, and the contract (i.e. warranty) does not provide for recovery of loss where the product works properly.
Thus, Missouri warranty law, at least, still requires a plaintiff to establish that he suffered a product malfunction in order to have a cause of action, and this individual issue -- along with the many other elements of warranty causes of action -- are individual issues that preclude an express or implied warranty suit. See slip op. at 34-35 ("Class membership would require individual determinations of whether each putative class member actually experienced manifestation of the bubbling defect, so as to be able to maintain a cause of action for breach of implied warranty of merchantability, and then subsequently, individual inquiries into the extent of the damage sustained, whether the alleged defect was the cause in fact or proximate cause of the damage sustained, and finally, whether each individual class member notified Nissan.").
Although the Hope Court's decision on the express and implied warranty claims seems well within the mainstream of American jurisprudence, I have a hard time simultaneously holding in my head its apparent suggestion that an unmanifested defect can give rise to an MMPA claim that can be treated on a classwide basis. As a practical matter, I don't think such an "unmanifested defect" MMPA claim actually can be tried manageably on a classwide basis.
I'm from Missouri, and you have to show me.
