Anderberg v. Masonite Corp.Anderberg v. Masonite Corp.
ORDER
This matter is before the court on Defendants’ motion to compel [13-1], Plaintiffs’ motion to dismiss their nationwide class allegations [15-1], and Defendants’ motion for a determination that a nationwide class cannot be maintained [22-1].
I. Statement of the Case
On June 28, 1996 Plaintiffs Kenneth A. Anderberg and Beverly Anderberg filed the present action against Defendants Masonite Corporation and International Paper Co. The seven count complaint, filed on behalf of Plaintiffs and all other similarly-situated individuals nationwide alleges that Defendants have manufactured, distributed, and falsely advertised defectively designed roof shingles. Plaintiffs claim that Defendants’ shingles are defective in that, when exposed to normal conditions, they absorb moisture and prematurely rot, buckle, crack, or deteriorate.
On February 15, 1997 Plaintiff filed a motion to dismiss the class allegations, amend the complaint, and vacate the August 27, 1996 scheduling order. Defendant filed a response opposing this motion, and on March 20, 1997 filed a motion for a determination that a nationwide class action could not be maintained in this ease.
On April 17, 1997 this court held a conference concerning Defendants’ motion to compel discovery regarding potential class members. At the conference, the court discussed all the pending motions. Regarding the primary dispute as to whether Plaintiffs would be able to amend away their class allegations, the court provided Plaintiffs with three options: (1) continue with and attempt to certify a nationwide class; (2) pay Defendants’ class-related discovery costs and the court would allow them to amend their complaint to drop their class allegations; or (3) streamline the proposed class and seek certification. (April 17, 1997 Hearing Tr. at 13, 19, 24-26). By letter dated May 21, 1997, Plaintiffs have expressed their interest in proceeding with a streamlined, redefined class consisting of all persons or entities presently owning structures in Georgia who have had Defendants’ product, manufactured since January 1,1980, installed.
II. Discussion
A. Plaintiffs’Proffer
After reading Plaintiffs’ proffered class definition, the court does not believe that this streamlined class is any more likely to be certified than the one defined in the original complaint. The court’s primary concern with Plaintiffs’ proposed nationwide class arose from the numerous and varying causes of actions contained in Plaintiffs’ original complaint, including fraud, negligent misrepresentation, conspiracy to commit fraud, violation of state consumer protection statutes, and breach of express and implied warranties. Causes of action based on fraud are highly individualistic and are therefore often particularly ill-suited to class resolution. The facts of each individual class member will generally vary, for example, as to the types of representations received, the manner in which the representations were made, the degree of class member reliance, and the additional information that the class member may have acquired with due diligence. Due to these numerous individualized issues, management of a fraud class action is generally a difficult proposition. See Andrews v. American Tel. & Tel. Co.,
Plaintiffs’ proffered class definition does reduce the difficulties that arose from the application of the laws of many different states to different groups of plaintiffs. However, Plaintiffs’ reduction of the geographic scope does not rectify the court’s concerns with managing a class action containing numerous fraud-based claims. Although the court does not believe this proffered class definition is satisfactory, Plaintiffs remain free to modify further their proposed class definition and submit a formal motion for class certification. The court will make a final Rule 23(c)(1) class determination, if one becomes necessary, when the parties have fully briefed and submitted the matter to the court for consideration.
B. Motion to Dismiss Class Allegations
Plaintiffs move to amend their complaint to dismiss the nationwide class allegations. Although they owned a home with defective
1. Procedural posture of Plaintiffs’ motion
As a preliminary matter, Defendants treat Plaintiffs’ motion as if it were brought pursuant to
Having reached this conclusion, however, the court is aware that similar standards govern the exercise of the court’s discretion under both
2. Prejudice to Defendants and conditions on amending
In the instant case, Defendants’ primary argument is that it would be prejudiced if Plaintiffs were allowed simply to dismiss the nationwide class action after allowing Defendants to incur great discovery expenses. As an analogy, Defendants compare the present case with instances where a plaintiff seeks voluntarily to dismiss an action after a dispositive motion for summary judgment has been filed. In such cases, courts often find plain prejudice and deny motions to voluntarily dismiss claims. See, e.g., Andes v. Versant Corp.,
After consideration, the court believes that Plaintiffs’ motion to amend should be granted. Since they have no desire to pursue the nationwide class claims, the court does not believe that it would be proper or prudent to force them to continue with them. Furthermore, the court may under Rule 15(a), impose costs as a condition of granting leave to amend in order to compensate Defendant and avoid any prejudice caused by the amendment. General Signal v. MCI Telecommunications Corp.,
3. Rule 23(e)’s approval and notice requirements
Finally, the court must consider whether it must first approve the dismissal and provide notice to the absent members of the purported nationwide class. The Federal Rules of Civil Procedure provide: “A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.”
In the case at bar, the court has not certified a class and Plaintiffs have not filed a motion to certify a class action. If any class exists, therefore, it must exist simply because of the allegations in the original, filed complaint. The primary inquiry before the court, therefore, is whether
Most other courts that have addressed the issue have concluded that
In contrast to these other courts, the Fourth Circuit has held that
This court has grave doubts about adopting any reading of
Perhaps recognizing these and similar problems with absolute notice requirements, even those courts that have found that
Regardless of whether or not
Accordingly, finding no evidence of collusion or danger of prejudice to absent class members, the court approves of, and GRANTS, Plaintiffs’ motion to amend their complaint to delete the nationwide class allegations.
B. Motion that a nationwide class cannot be maintained
Defendants move to have this court determine, pursuant to
Under these circumstances, the court believes that it would be fundamentally unfair for it to rule on Defendants’ motions on the merits and possibly injure the unrepresented rights of absent members of the purported class. As a result, the court declines to rule that a nationwide class can never be maintained as defined in Plaintiffs’ original complaint. Defendants’ motion is DENIED as MOOT.
C. Motion to compel
Given the court’s disposition of the other pending motions, Defendants’ motion to compel is DENIED as MOOT.
Plaintiffs’ motion to amend the complaint to delete their nationwide class allegations and to vacate the scheduling order [15-2] is GRANTED on the condition that they compensate Defendants for those discovery expenses incurred (1) that were related solely to the class issues; (2) that were incurred up to the point when Plaintiffs indicated that they did not wish to pursue a nationwide class; and (3) that Defendants acted reasonably in incurring given the nature of the allegations in the complaint and the likelihood that any court in this country would certify such a class. In accordance with this decision, Defendants are DIRECTED to file within twenty (20) days of receipt of this Order, a detailed claim for the discovery related attorneys’ fees and expenses covered by this Order, with supporting affidavits. Plaintiffs should then file with the court, within ten (10) days of service of Defendants’ claim, a pleading indicating whether it will comply with this court’s condition and, if applicable, any objections to the reasonableness of the expenses sought by Defendants.
Defendants’ motion for a determination that a nationwide class cannot be maintained [22-1] and Defendants’ motion to compel [13-1] are both DENIED as MOOT.
Notes
.
(a) Voluntary Dismissal: Effect Thereof.
(1) By Plaintiff, by stipulation. Subject to the provisions of
(2) By Order of Court. Except as provided in paragraph (1) of this subdivision of this rule, an action shall not be dismissed at the plaintiffs’ instance save upon order of the court and upon such terms and conditions as the court deems proper____
. The language of
. In Bonner v. City of Prichard,
.
. The court is aware that the former Fifth Circuit in Roper v. Consurve, Inc.,
[w]e have held that prior to certification a class action cannot be dismissed merely because the representatives are satisfied, unless there is notice to the putative class of the proposed dismissal and a determination by the court that the dismissal is proper, as required byRule 23(e) ....
The court is also aware that other courts have cited to Roper for the proposition that approval and notice are required in all precertification dismissals of class actions. See, e.g., Caston v. Mr. T's Apparel, Inc.,
This court, however, does not find the statement in Roper to be binding. The court in Roper cited Pearson,
. The court has also conducted its own independent search of news databases and has found no references to this litigation.