Dewey v. Volkswagen Aktiengesellschaft
681 F.3d 170
| 3rd Cir. | 2012Background
- Consolidated NJ sunroof class actions against Volkswagen and related entities over defective sunroofs; two groups of plaintiffs (Dewey/Delguercio) filed suit with similar claims.
- Settlement proposed in 2010 provided three reliefs: (i) educational maintenance information; (ii) free service actions for certain models; (iii) an $8 million reimbursement fund for reimbursable repairs, with goodwill claims from remaining fund.
- The settlement divided class members into a reimbursement group (priority access to the fund) and a residual group (eligible only for goodwill claims after reimbursement group).
- Representative plaintiffs were all members of the reimbursement group, and the district court preliminarily approved the settlement, certified a single class, and set a fairness hearing.
- Objectors argued that the reimbursement/residual split created intra-class conflicts that prevented adequate representation of the entire class; the district court ruled in favor of certification and fee awards.
- On appeal, the Third Circuit reversed, holding the class failed Rule 23(a)(4) adequacy due to fundamental intra-class conflicts between the reimbursement and residual groups.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether magistrate jurisdiction required unnamed class member consent | Unnamed class members can be affected; consent needed | unnamed class members are not parties under §636(c)(1) | Magistrate jurisdiction proper; unnamed members not required to consent. |
| Whether intra-class conflicts between reimbursement and residual groups defeat adequacy | Representatives align with reimbursement group; conflicts foreclose adequacy | Structural provisions align incentives; no fundamental conflict | Fundamental intra-class conflict exists; certification reversed; remand possible subclasses or unified fund. |
| Whether intra-class conflicts between past leakage claimants and future claims prevent adequacy | Amchem-type conflict; present vs future claimants misaligned | Not as stark here; alignment through settlement structure | Conflict not resolved; still found inadequacy; contributes to reversal of certification. |
Key Cases Cited
- Amchem Prods., Inc. v. Windsor, 521 F.3d 681 (3d Cir. 1997) (intra-class conflicts and need for subclasses to ensure adequacy)
- Ortiz v. Fibreboard Corp., 527 F.3d 775 (5th Cir. 1999) (future claimants vs present claimants; subclassing often required)
- Valley Drug Co. v. Geneva Pharmaceuticals, 343 F.3d 1291 (11th Cir. 2003) (fundamental conflicts must touch the issues in controversy)
- In re Cmty. Bank of N. Va., 418 F.3d 277 (3d Cir. 2005) (adequacy assessment and alignment of interests)
- Amchem Prods., Inc. v. Windsor (Georgine v. Amchem Prods.), 117 S. Ct. 2231 (Supreme Court 1997) (class certification and separation to address intra-class conflicts)