Shamell SAMUEL-BASSETT on Behalf of Herself and All Others Similarly Situated, Appellees v. KIA MOTORS AMERICA, INC., Appellant. Shamell Samuel-Bassett on Behalf of Herself and All Others Similarly Situated, Appellees v. Kia Motors America, Inc., Appellant. Shamell Samuel-Bassett on Behalf of Herself and All Others Similarly Situated, Appellees v. Kia Motors America, Inc., Appellant.
Supreme Court of Pennsylvania.
Decided Dec. 2, 2011. Argued April 15, 2009.
34 A.3d 1
Petitioner‘s Application for Leave to File a Supplemental Brief in Support of Petition for Allowance of Appeal is DENIED.
Maureen Murphy McBride, William H. Lamb, Scot Russel Withers, James C. Sargent, Jr., John J. Cunningham, IV, Lamb McErlane, PC, West Chester, for Kia Motors America, Inc.
James Michael Beck, Dechert LLP, Philadelphia, for Appellant Amicus Curiae, Product Liability Advisory Counsel.
Emily Jane Lawrence, Morgan Lewis & Bockius, L.L.P., Amy Keating, Alicia Downey, Bingham McCutchen, L.L.P., for Appellant Amicus Curiae, Association of International Automobile Manufacturers, Inc. and Alliance of Auto. Man.
Crystal Lynne Brown, Bryan Cave, LLP, for Appellant Amicus Curiae, the Chamber of Commerce of the United States of America.
Michael D. Donovan, Donovan Searles, L.L.C., James A. Francis, Francis & Mailman, P.C., Alan M. Feldman, Feldman, Shepherd, Wohlgelernter, Tanner, Weinstock & Dodig,
Michael J. Boni, Philadelphia, Joshua D. Snyder, Bala Cynwyd, Boni & Zack, LLC, for Appellee Amicus Curiae, Community Legal Services of Philadelphia and PA Association of Justice.
BEFORE: CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, MCCAFFERY, GREENSPAN, JJ.
OPINION
Chief Justice CASTILLE.1
Appellant, an automobile manufacturer who unsuccessfully defended a class action lawsuit for breach of express warranty, appeals the Superior Court‘s decision to affirm the certification of the class by the trial court, and the amount of damages and litigation costs awarded to the class. Costs included a significant legal fee, entered pursuant to the Magnuson-Moss Warranty Improvement Act (the “MMWA“),
Case History
Appellee Shamell Samuel-Bassett, on behalf of herself and others similarly situated (the “class“), filed this class action lawsuit in January 2001, in the Philadelphia Court of Common Pleas. Bassett alleged that, in October 1999, she purchased a model year 2000 Sephia from appellant Kia Motors America,
According to the complaint, Bassett experienced malfunctioning of her Sephia‘s brakes within 17,000 miles of use, which manifested as an inability to stop the vehicle, increased stopping distances, unpredictable and violent brake pedal pressures, brake lockup and vibration, and general interference with control of the vehicle. She attributed these manifestations to a defect in the design of the Sephia‘s brake system causing inadequate heat dissipation, premature wear of the brake pads, and warping of the rotors.4 KMA‘s authorized dealerships attempted five repairs on Bassett‘s vehicle between January and October 2000, replacing brake pads and rotors on four of five occasions. According to Bassett, she sought to rescind her purchase contract but KMA refused her demand. Bassett claimed that, although KMA was aware of the defect in the brake system, KMA failed to correct the defect and failed to honor the warranty by charging her for the required repairs and replacements. Further, Bassett alleged that the defect in the brake system‘s design was common to all model year 1995 to 2001 Sephias. She claimed that all members of the class experienced premature wear and malfunction of the brakes, needing repairs within the first 20,000 miles of purchase. According to the complaint, all repair attempts were ineffective, most were not covered by
The complaint stated four causes of action: breach of express warranty, breach of implied warranty of merchantability, violation of the
In February 2001, counsel for KMA filed a notice to remove the action to the U.S. District Court for the Eastern District of Pennsylvania, invoking that court‘s diversity jurisdiction. The parties then filed an amended complaint and answer with the federal court. Bassett‘s amended federal court complaint re-stated the allegations in her original state court complaint, and KMA answered denying all allegations and asserting forty-seven boilerplate affirmative defenses. The manufacturer sought dismissal of the amended complaint. In due course, the district court certified the class on all of Bassett‘s claims except her UTPCPL claim. See Samuel-Bassett v. Kia Motors Am., Inc., 212 F.R.D. 271 (E.D.Pa.2002). KMA appealed and the U.S. Court of Appeals for the Third Circuit, which raised the issue of jurisdiction sua sponte, vacated the lower court‘s certification decision, and remanded for a determination of whether the parties met the amount in controversy required to establish diversity jurisdiction. See Samuel-Bassett v. Kia Motors Am., Inc., 357 F.3d 392 (3d Cir.2004). In light of the Third Circuit‘s decision, the parties agreed that the jurisdictional requirement had not been satisfied and, on April 8, 2004, the district court remanded the case to the Philadelphia County Court of Common Pleas.
Following remand, in May 2004, Bassett filed her motion for class certification with the Philadelphia Court of Common Pleas. Bassett‘s motion for class certification filed in state court simply incorporated by reference the motion she originally filed in federal court. Compare
All residents of the Commonwealth of Pennsylvania who purchased or leased model year 1995-2001 Kia Sephia automobiles for personal, family or household purposes for a period of six years preceding the filing of the complaint in this action.
Certification Order, 9/17/04, at 1. Following discovery, the parties stipulated that KMA did not begin selling the Sephia in the United States until 1997. Bassett also conceded that the 2001 model Sephia had undergone substantial redesign that corrected the alleged brake defect. Consequently, the class was limited to purchasers of 1997 to 2000 Sephias. Class certification was denied as to the UTPCPL claim, and Bassett was permitted to proceed alone on that count. Bassett was designated class representative and her attorneys were appointed counsel for the class. Subsequently, KMA asked the trial court to certify the September 17, 2004, order granting class certification for interlocutory appeal, but its request was denied in November 2004.
Bassett notified the class of the action against KMA. The parties then filed various motions in limine and proposed findings of fact in anticipation of trial. In addition, KMA filed a motion to bifurcate, which the trial court denied. Tr. Ct. Order, 5/16/05. Subsequently, the parties proceeded to trial. The trial took place between May 16 and May 27, 2005. At the conclusion of Bassett‘s case, KMA moved for compulsory nonsuit, but the court denied the motion. Notes of Testimony (“N.T.“), 5/23/05, Vol. 5, at 55-60. KMA renewed its request for summary relief at the end of its case, moving for a directed
On June 10, 2005, KMA—represented by new counsel—filed a post-trial motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. See
In October 2007, the Superior Court addressed the parties’ initial cross-appeals, affirming the lower court‘s decision with respect to the class action verdict on the basis of the trial court‘s Rule 1925(a) opinion. See Samuel-Bassett v. Kia Motors Am., Inc., No. 3048 EDA 2005, at *2-5, 944 A.2d 811 (Pa.Super. Oct. 24, 2007). However, the Superior Court remanded for a supplemental Rule 1925(a) opinion on KMA‘s challenge to the award of legal fees. The trial court filed its supplemental Rule 1925(a) opinion in November 2007 and, in February 2008, the Superior Court affirmed in a brief unpublished decision, extensively quoting from the trial court‘s opinion. See Samuel-Bassett v. Kia Motors Am., Inc., No. 537 EDA 2006, at *3-7, 951 A.2d 1225 (Pa.Super. Feb. 8, 2008). KMA filed petitions for allowance of appeal from the Superior Court‘s October 2007 and February 2008 decisions.
We granted allocatur and consolidated the appeals to address the following issues, as stated by KMA:
- Whether, in an issue of first impression, the lower courts disregarded class action procedures and fundamental principles of Pennsylvania contract law by presuming that a class action could be pursued based solely on proof of breach of the named plaintiff‘s individual express limited warranty contract, as evidence of proof of breach as to all other limited warranty contracts for all the other members of the class?
- Whether long-standing Supreme Court precedent requires reversal of the judgment improperly entered and affirmed in favor of all class members, in circumstances where the trial court accepted proof of breach of the named plaintiff‘s express limited warranty contract as proof of breach as to all limited warranty contacts as to all other
members of the class, even where the only class-wide evidence was that the defendant had honored its express warranty? - Whether, in an issue of first impression, the trial court violated the defendant‘s due process rights by entering judgment for the entire range of class members without requiring proof of breach of all of their express limited warranty contracts?
- Whether as a matter of first impression, an attorneys’ fee award made pursuant to the [
MMWA ] cannot be entered after entry of judgment where: (i) theMMWA requires that fee awards be entered as “part of the judgment,” and where (ii) Plaintiff voluntarily took judgment on the underlying verdict, and thus disposed of all claims (including the Plaintiff‘s unresolved claim for attorneys’ fees) before the trial court entered the fee award? - Whether under
Pa.R.A.P. 1701 , a trial court lacks jurisdiction to enter a fee award after judgment has been entered and a notice of appeal has been filed? - Whether, as a matter of first impression, the courts of Pennsylvania are required to follow United States Supreme Court precedent regarding the interpretation of federal fee shifting statutes when interpreting the fee shifting provision of the
MMWA , and, if so, whether the trial court‘s decision to add a $1 million “risk multiplier” bonus to the fee award violates controlling United States Supreme Court precedent?
Samuel-Bassett v. Kia Motors Am., Inc., 598 Pa. 104, 954 A.2d 565 (2008); Samuel-Bassett v. Kia Motors Am., Inc., 598 Pa. 105, 954 A.2d 566 (Pa.2008).7 Shorn of the argumentative framing by KMA, we view these issues as raising five narrow and distinct questions that we will address individually: 1) whether the class was properly certified; 2) whether evidence
I. Class Certification
KMA‘s first claim is that the trial court certified the class in error because Bassett failed to prove: that questions of law and fact were common to the class, that the common questions predominated over individual issues, that Bassett‘s claims were typical of the class claims, and that Bassett was an adequate class representative.
Class certification presents a mixed question of law and fact. Liss & Marion, P.C. v. Recordex Acquisition Corp., 603 Pa. 198, 983 A.2d 652, 663 (2009) (”Liss“). The trial court is vested with broad discretion in deciding whether an action may be pursued on a class-wide basis and, where the court has considered the procedural requirements for class certification, an order granting class certification will not be disturbed on appeal unless the court abused its discretion in applying them. Id.; Kelly v. County of Allegheny, 519 Pa. 213, 546 A.2d 608, 610 (1988). See also In re Community Bank of Northern Virginia, 622 F.3d 275, 290 (3d Cir.2010). An abuse of discretion will be found if the certifying court‘s “decision rests upon a clearly erroneous finding of fact, an errant conclusion of law, or an improper application of law to fact;” the trial court must have “exercised unreasonable judgment, or based its decision on ill will, bias, or prejudice.” 622 F.3d at 290; In re E.F., 606 Pa. 73, 995 A.2d 326, 329 (2010). See also Twp. of Exeter v. Zoning Hearing Bd. of Exeter Twp., 599 Pa. 568, 962 A.2d 653, 659 (2009). The existence of evidence in the record that would support a result contrary to that reached by the
For the trial court, the question of whether a class should be certified entails a preliminary inquiry into the allegations of the putative class and its representative, whose purpose is to establish the identities of the parties to the class action.
Pursuant to Pennsylvania‘s civil procedure rules, the trial court may allow a representative to sue on behalf of a class if, the class is numerous (“numerosity“); there are questions of law or fact common to the class (“commonality“); the claims of the representative are typical of the class (“typicality“); the representative will fairly and adequately protect the interests of the class (“adequate representation“); and a class action is a fair and efficient method for adjudicating the parties’ controversy, under criteria set forth in Rule 1708.
During certification proceedings, the proponent of the class bears the burden to establish that the Rule 1702 prerequisites were met. Kelly, 546 A.2d at 612. The burden is not heavy at the preliminary stage of the case. Clark v. Pfizer Inc., 990 A.2d 17, 24 (Pa.Super.2010). Indeed, evidence supporting a prima facie case “will suffice unless the class opponent comes forward with contrary evidence; if there is an actual conflict on an essential fact, the proponent bears the risk of non-persuasion.” Id.; Debbs, 810 A.2d at 153–54; Baldassari v. Suburban Cable TV Co., 808 A.2d 184, 191 (Pa.Super.2002), appeal denied, 573 Pa. 694, 825 A.2d 1259 (2003); Cambanis v. Nationwide Ins. Co., 348 Pa.Super. 41, 501 A.2d 635, 637 (1985). It is essential that the proponent of the class establish requisite underlying facts sufficient to persuade the court that the Rule 1702 prerequisites were met. Kelly, 546 A.2d at 612.
The trial court prepared a certification memorandum dated September 17, 2004, explaining its class certification decision (“Certification Memo.“), and addressing each disputed issue, of commonality, predominance, typicality, and adequacy of representation, as follows. First, respecting commonality, the trial court noted that the theory of liability of the putative class centered on KMA selling one vehicle “with a uniformly defective braking system that affected all drivers” and on KMA‘s unsuccessful attempts to remedy the defective vehicles in a similar manner, i.e., by replacing brake pads and rotors every few thousand miles. The court listed the common questions of law identified in the complaint, which included whether the Sephias possessed the brake system defect alleged; whether KMA lacked the means to repair the defect; whether the defect constituted breach of express and implied warranties and violation of the
Finally, with regard to the adequacy of representation prong, the trial court concluded that, contrary to KMA‘S arguments, Bassett did not have a conflict of interest in the maintenance of the class, and that her financial resources and legal representation were adequate. Specifically, the court rejected KMA‘s claim that Bassett was an inadequate representative because she had a conflict of interest arising from potential, not-yet-asserted Lemon Law and personal injury claims (resulting from a brake-related accident) that other class members did not share. The court concluded that, instead, Bassett‘s personal injury made her “a more zealous advocate on behalf of the class.” Certification Memo., 9/17/04, at 14-16 (citing Janicik, supra).
The trial court further addressed class certification issues in its
On appeal to this Court, KMA argues that Bassett failed to establish that common questions of law and fact existed, that these common issues predominated over individual issues, that her experience was typical of the class, and that she was an adequate representative of the class.
A. Commonality and Predominance
KMA claims that Bassett did not meet either the commonality or the predominance prerequisites for certifying the class, raising the same arguments in support of both claims. According to KMA, the trial court certified the class on a record that contained proof of Bassett‘s “anecdotal” experience but no evidence that KMA had breached its express warranty with respect to all class members or that the class members sustained out-of-pocket costs as a result.10
KMA states that to prove liability for breach of express warranty, Bassett had to submit evidence for each absent class member. KMA states that Bassett‘s evidence of her personal experience, expert testimony and internal documents regarding a defect present in all 1997-2000 Sephias, and warranty brake repair data were not probative to satisfy Bassett‘s burden of proof with regard to all the elements of a breach of warranty cause of action for the class. Without specifying whether it is addressing the certification hearing or the trial testimony, KMA attacks Bassett‘s evidence as not credible and not probative. Thus, KMA challenges the conclusion of Bassett‘s expert witness that the Sephias suffered from a common defect, on the basis that he personally inspected only two vehicles rather than all the vehicles in the class. According to KMA, warranty repair statistics did not cure any deficiencies in the expert‘s testimony regarding the existence of a defect and, instead, showed only that “KMA honored its express warranty” by routinely covering brake repairs to Sephia vehicles.
Moreover, KMA argues that reliance, manifestation, notice, and opportunity to cure are elements of proof in a breach of
Bassett responds first with a waiver argument. Bassett claims that KMA waived all certification issues by failing to object on the trial court record and distinguish express warranty issues from implied warranty issues for certification purposes. According to Bassett, KMA contested certification as to all claims, “hoping as a matter of strategy to obtain the same res judicata benefit it now claims for the implied warranty claim.” Our review, however, reveals that KMA raised and preserved issues related to certification of the class with respect to all of Bassett‘s claims on behalf of the class. Therefore, KMA‘s claims related to the express warranty were not waived, even if they were not addressed separately from implied warranty claims, and regardless of KMA‘s strategy.11
On the merits, Bassett argues that consumer product warranty claims are recognized as “particularly suitable” for class litigation. Bassett‘s Brief at 14 (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (predominance is “readily met” in certain cases alleging consumer fraud) and
Bassett argues that she proved that each class vehicle manifested the defect by showing that the abnormal degradation of the brake pads and rotors was measurable. KMA‘s business records, i.e., warranty data and internal memoranda, showed that the defect was measured, tested, and ultimately recognized internally by KMA. Thus, Bassett asserts, warranty data supported the commonality and predominance allegations, regardless of whether the same data also showed that KMA complied with its warranty promises, a fact relevant to KMA‘s liability but not a factor for the court to consider for certification purposes.
According to Bassett, KMA did not object to or introduce evidence to rebut Bassett‘s commonality evidence. Bassett notes that KMA‘s appeal strategy is different from its trial argument: at trial, KMA sought to prove that a common defect did not exist but, on appeal, KMA is claiming that existence of a defect is irrelevant. Bassett emphasizes that, at trial, KMA “recognized” that it was replacing one set of defective brakes with another and, therefore, that warranty repairs did not restore the Sephias to a defect-free condition. But, Bassett adds, on appeal, implicit in the jury‘s verdict is a finding that commonality existed so there is no basis to overturn the certification decision.
Bassett also argues that common issues predominated over any individual issues. Common issues included whether KMA met its express promise to deliver vehicles free from defect; whether the Sephias had a braking system design defect; and whether the design defect manifested as abnormal or premature wear of the brakes. According to Bassett, these issues were essential to proving the warranty claims and were properly supported with generalized proof.
Next, Bassett responds to KMA‘s assertion that evidence of individual reliance is necessary to prove breach of warranty and is not amenable to generalized proof. According to Bassett, reliance is not an element of proof in a warranty action because the written warranty is an affirmation of fact and part of the basis of the bargain. Bassett‘s Brief at 29 (citing Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 171 F.3d 818, 825 & n. 7 (3d Cir.1999) (not all promises are warranties; to be a warranty, promise must be part of basis of bargain and reliance may become factor in determining whether promise is part of basis of bargain)). Bassett states that the burden was, therefore, on KMA to prove that the written warranty was not part of the bargain and did not cover the defective condition of which class members complained. Id. (citing
Bassett also rejects KMA‘s arguments that each class member was required to provide individual notice of the common defect, opportunity to cure, and to establish failure to repair in order for the class to maintain suit. According to Bassett,
Finally, Bassett responds to KMA‘s argument that her evidence of damages at trial was inadequate because individual out-of-pocket costs of repair were not demonstrated. Bassett states that KMA‘s current argument on this issue highlights the difference in posture at the time of class certification, when Bassett was asserting that the class action mechanism was appropriate, versus on appeal, when KMA is attacking a completed trial as improper. Bassett emphasizes that her expert‘s testimony at trial, and KMA‘s records, substantiated the request for per person damages, to which KMA had a full opportunity to object but did not. Furthermore, according to Bassett, the jury‘s award was supported by the evidence at trial.
In its reply brief, KMA reemphasizes that the existence of a common defect “is not the answer to the question of whether the class was properly certified” but merely a threshold fact. KMA also states that Bassett‘s arguments ignore evidence
Preliminarily, to better focus the dispute, we address the proper scope of our review of the trial court‘s decision to certify the class. “Scope of review refers to the confines within which an appellate court must conduct its examination ... [or] to the matters (or ‘what‘) the appellate court is permitted to examine.” Morrison v. Commonwealth, 538 Pa. 122, 646 A.2d 565, 570 (1994); see generally Jeffrey P. Bauman, Standards of Review and Scopes of Review in Pennsylvania—Primer and Proposal, 39 Duq. L.Rev. 513 (2001). Both parties here offer extensive argument about whether the trial court‘s decision to certify was proper in view of evidence offered during the liability phase of trial. But, as stated, a certification proceeding is a preliminary inquiry whose purpose is to establish who the parties to the class action are “and nothing more.”
An appellate court does not second-guess a trial court‘s discretionary “preliminary” decision to certify the class by considering subsequent case developments of which the trial court could not have been aware at the time of its decision. Thus, arguments regarding subsequent case developments, such as evidence revealed at the liability phase of trial or the jury‘s verdict, cannot prove an abuse of discretion at the certification stage.12 By the same token, pre-trial class
For ease of discussion, we will address commonality and predominance together as the parties do, but we emphasize that the
To establish the commonality requirement, Bassett had to identify common questions of law and fact—“a common source of liability.” Weismer, 615 A.2d at 431. Simply contending that all putative members of a class have a complaint is not sufficient if the complaints are disparate personal allegations arising from different circumstances and requiring different evidence, i.e., “one requiring less, the other requiring more, the one not indicative of the merits, the other appearing to approach the merits of individual cases.” Allegheny County Hous. Auth. v. Berry, 338 Pa.Super. 338, 487 A.2d 995, 996-98 (1985) (commonality requirement not met with bare allegation that a number of plaintiffs had different verifiable complaints against same defendant); see Eisen v. Indep. Blue Cross, 839 A.2d 369, 372 (Pa.Super.2003) (same). Commonality may not be established if “various intervening and possibly superseding causes of damage” exist. Weismer, 615 A.2d at 431. The critical inquiry for the certifying court is whether the material facts and issues of law are substantially the same for all class members. Liss, 983 A.2d at 663. The court should be able to envision that the common issues could
But, here, KMA‘s issues on appeal do not concern decertification and consideration of post-certification evidence is inappropriate.
Bassett was not required to prove that the claims of all class members were identical; the existence of distinguishing individual facts is not “fatal” to certification. Buynak v. Dep‘t of Transp., 833 A.2d 1159, 1163 (Pa.Cmwlth.2003). The common questions of fact and law merely must predominate over individual questions.
The “predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., 521 U.S. at 623; see In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 310-11. Thus, a class consisting of members for whom most essential elements of its cause or causes of action may be proven through simultaneous class-wide evidence is better suited for class treatment than one consisting of individuals for whom resolution of such elements does not advance the interests of the entire class. See Liss, 983 A.2d at 666 (“[c]lass members may assert a single common complaint even if they have not all suffered actual injury; demonstrating that all class members are subject to the same harm will suffice“); Delaware County v. Mellon Fin. Corp., 914 A.2d 469, 475 (Pa.Cmwlth.2007) (existence of separate questions “essential” to individual claims does not foreclose class certification) (quoting Weismer, 615 A.2d at 431); Cook v. Highland Water & Sewer Auth., 108 Pa.Cmwlth. 222, 530 A.2d 499, 505 (1987) (internal citations omitted) (“Where a common source of liability can be clearly identified, varying amounts of damage among the plaintiffs will not preclude class certification. However, where there exist[] various intervening and possibly superseding causes of the damage, liability cannot be determined on a class-wide basis.“)
The findings of fact by the certifying court formed a sufficient basis to conclude that commonality was met, as the class‘s claims were based on “a common source of liability” and were susceptible to common proof. Liss, 983 A.2d at 663; Weismer, 615 A.2d at 431. KMA warranted Sephias to be “free from defects in material and workmanship.” Bassett and the class asserted several causes of action on the basis of the common source of liability (i.e., the defective design of the brake system), including breach of express and implied warranties, and violation of the MMWA. The trial court did not abuse its discretion in concluding that common questions of law and fact existed, such as whether the 1997-2000 Sephias had the common defect alleged, whether KMA had the ability to repair the defect, whether KMA breached the express and implied warranties, and whether KMA violated the MMWA. Based on the same evidence, the certifying court also did not abuse its discretion in concluding that common issues predominated over individual issues of liability.
KMA‘s arguments on appeal do not prove an abuse of discretion by the trial court. First, the class here was not required to prove “reliance” in order to recover for
Second, the trial court did not abuse its discretion in concluding that the issue of proximate cause could be proven by common evidence. The court considered KMA‘s internal memoranda and expert testimony regarding the brake design defect, in conjunction with warranty claims data, which tended to prove that the brake design defect was the proximate cause of premature wear of brake pads and rotors with respect to the class claims. N.T., 7/15/04, at 88-91, 99-102. On appeal, KMA argues that commonality was not established because evidence of record proved that premature wear could also have other causes, such as environmental conditions, driver habits, or separate defects. Id. at 120-23, 148. We reject KMA‘s implicit invitation to reweigh the evidence on appeal. Commonwealth v. Treiber, 582 Pa. 646, 874 A.2d 26, 30 (2005). Whether causation could be established on a class-wise basis was an issue for the finder of fact—the certifying court, in this case—and contrary testimony in the record is insufficient for reversal on appeal. See Summers v. Certainteed Corp., 606 Pa. 294, 997 A.2d 1152, 1163-64 (2010) (causation is question for finder of fact; plaintiff need not exclude every possible
Third, we also reject KMA‘s claims that certification was an abuse of discretion because the record was devoid of evidence that class members provided notice of the defect and an opportunity to cure.17 Indeed, the record shows that KMA was on notice since late 1998 (more than two years before this action was filed) that Sephias, beginning with the 1997 model, had defective front brakes. See, e.g., KMA‘s Opposition to Class Certification, Exh. D2-32 (Tim McCurdy Inter-Office Memorandum to James Lee, 2/03/99; KMC Brake Quality Team Meeting Summary, 2/15/99). KMA had the opportunity
As a final matter, KMA argues that common proof for individual class members of the related issues of defect manifestation and amount of damages, see Briehl v. Gen. Motors Corp., 172 F.3d 623, 627-28 (8th Cir.1999), was not available and that the trial court‘s decision to certify the class was erroneous on this ground. According to KMA, testimony related to Bassett‘s repair history was insufficient to prove the damages of the other class members and the trial court should have found commonality lacking on this ground. KMA argues that Bassett “made no attempt to extrapolate her experience to those absent class members and offered no documentary or testimonial evidence to establish that any plaintiff class member other than she [sic] sustained any economic harm.” KMA‘s Brief at 23.
At issue are two different considerations: whether the class could demonstrate the impact of the defective brakes on each member and whether the amount of damages for each class member was provable with common evidence. See Behrend v. Comcast Corp., 655 F.3d 182, 204-06 (3d Cir.2011) (“At the class certification stage we do not require that Plaintiffs tie each theory of antitrust impact to an exact calculation of damages, but instead that they assure us that if they can prove antitrust impact, the resulting damages are capable of measurement and will not require labyrinthine individual calculations.“); Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 188 (3d Cir.2001) (ability to calculate amount of damages “does not absolve plaintiffs from the duty to prove each investor was harmed by the defendants’ practice“); accord Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 565, 51 S.Ct. 248, 75 L.Ed. 544 (1931) (“rule which precludes the recovery of uncertain damages applies to such as are not the certain result of the wrong, not to those damages which are definitely attributable to the
The design defect of which the class complained was susceptible to proof on a class-wide basis, and testimony showed that the inability of the Sephia brake system to exhaust heat manifested as premature wear of brake pads and rotors, accompanied by noise and inability to brake, symptoms of which Sephia owners complained. High warranty claims confirmed the impact of the defect on individual members of the class. The fact that the claims rates were not one hundred percent across all models was not dispositive of the issue of manifestation because, as KMA‘s representative testified, only covered claims were included in the calculations of the warranty rate. Uncompensated claims were not. See N.T., 7/15/04, at 91-92, 97-98. KMA offered testimony that the decision whether to replace brake pads and rotors, wear-and-tear items generally not covered under the warranty, was at the discretion of KMA. Moreover, Bassett‘s evidence supported the conclusion that, even where KMA replaced brake system components free of charge, the replacement parts were equally defective and required additional repairs, whose replacement at no cost to the Sephia owners would again be subject to KMA‘s discretion. Notably, at the preliminary stage of trial, the class was pursuing several types of compensation, including out-of-pocket costs, diminished re-sale value of the vehicle, and retrofit costs. The record following the certification hearing contained sufficient evidence to support
Regarding damage amounts or scope of individual relief, it has been well established that if a “common source of liability has been clearly identified, varying amounts of damages among the plaintiffs will not preclude class certification.” Weismer, 615 A.2d at 431; accord 6 Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS § 18:27 (4th ed.2002) (part of federal approach to class actions is “recognition that individual damages questions do not preclude [certification] when the issue of liability is common to the class.“). Indeed, as we have recently held, “demonstrating that all class members are subject to the same harm will suffice” for certification purposes. Liss, 983 A.2d at 666 (quoting Baldassari, 808 A.2d at 191 n. 6); accord Int‘l Bhd. of Teamsters v. U.S., 431 U.S. 324, 361, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977) (“Teamsters“) (authorizing “additional proceedings after the liability phase of the trial to determine the scope of individual relief“); Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 40 (1st Cir.2003) (if “common questions predominate regarding liability, then courts generally find the predominance requirement to be satisfied even if individual damages issues remain“). The class here did not offer testimony of identical damages among members during certification proceedings and, in fact, acknowledged that individual class members paid varying out-of-pocket costs for brake repairs. N.T., 7/15/04, at 22-23.
KMA argued in opposition to certification—and renews the argument now, on appeal—that the individual nature of damages proves that the trial court abused its discretion in its finding of commonality and predominance. We disagree. As our previous analysis shows, Bassett and the class adduced sufficient evidence during certification proceedings to show a common source of liability. Any question regarding individual expenditures resulting from varying attempts to repair the defect was not a ground to reject the commonality found on other issues, to defeat the predominance of common issues and, ultimately, to deny certification of the class at the prelim
In his dissent, Mr. Justice Saylor addresses damages and observes that class members had “plainly individualized experience[s] with out-of-pocket expenditures,” which the trial court “glossed over” both at certification proceedings and at trial. Dissenting Op., at 476, 34 A.3d at 63-64. Justice Saylor criticizes the trial court for failing to manage the class action proceedings fairly and efficiently to account for differences in out-of-pocket damages incurred by the individual class members. Id. at 472, 34 A.3d at 62. “The looseness of the certification decision yielded ongoing controversy about how the certification was to operate and its impact on required substantive proofs” at trial. Id. at 469, 34 A.3d at 60.
We do not discount the concern of our esteemed colleague. Respectfully, however, in our view, the concern has less power in the context of assessing the trial court‘s ruling on the commonality and predominance prerequisites for class certification (especially since claims proceedings that account for different damages among class members are not uncommon in class actions), and more power in the overall context of ensuring that the “class action provides a fair and efficient method for adjudication of the controversy under the criteria set forth in Rule 1708.”
But, we do not view the trial court‘s failure to devise a proper damages management plan during class certification proceedings—a failure that itself invited a distinct objection—as sufficient to render an abuse of discretion its determination that “potential differences in individual damage claims based upon individual experiences and costs associated with attempts to repair the vehicle” do not “pose any serious management difficulty.” Tr. Ct. Op., 9/21/04, at 18. The question is rather whether the individual damages issues were especially difficult and burdensome on the trial court so as to factor against class certification. See
Setting aside KMA‘s failure to develop the claim in any meaningful fashion in its brief so as to allow for appellate review—a sufficient basis in itself to reject the argument, Commonwealth v. Walter, 600 Pa. 392, 966 A.2d 560, 566 (2009)—KMA‘s claim also fails on the merits. First, contrary to KMA‘s arguments, only the issue of individual damages would have been subject to individualized proceedings. See also Teamsters, 431 U.S. at 361-62 (question of individual relief does not arise until defendant‘s liability has been proved and “force of that proof does not dissipate at the remedial stage of the trial“). Second, “[w]here damages is
B. Typicality
Concerning typicality,
KMA argues that, as with the commonality and predominance prongs, the trial court considered evidence irrelevant to an express warranty claim like Bassett‘s, which evidence
Bassett responds that typicality was established. According to Bassett, her position on common issues of law and fact is sufficiently aligned with that of absent class members so that pursuit of her own interests would also advance those of the class. Bassett reiterates that she purchased a model year 2000 Sephia with the same warranty and same front brake defect as the absent class members. She states that the brake components were interchangeable between 1997-2000 Sephias and that she was “ideally suited” to present the class claims regarding the ineffectiveness of the design changes, because her vehicle was the latest model in the class. Bassett emphasizes that proof of her claims necessarily proved each class member‘s claims as well.19
Here, the trial court did not abuse its discretion in deciding that Bassett was a typical class member. Bassett and the class asserted the same claims for breach of express warranty, premised on similar facts and KMA conduct. During class certification proceedings, Bassett adduced evidence to support her averments that, like the other class members, she purchased a Sephia vehicle model year 1997-2000 and received the standard purchase contract and written warranty. Because of a design defect that affected the ability of the Sephias’ front braking system to dissipate heat, Bassett‘s vehicle, like the other vehicles in the class, experienced premature wear of the brake pads and warping of the rotors. As with the other members of the class, KMA failed to effectively repair Bassett‘s vehicle free of charge in accordance with the written express warranty. Bassett‘s Complaint, at ¶¶ 15-21; N.T., 7/15/04, at 84-89, 99-106.
During certification proceedings, KMA emphasized testimony that not all 1997-2000 Sephias utilized the same brake pads
KMA‘s central position that the trial court‘s decision on this point “was contrary to the evidence,” see KMA‘s Brief at 25, n. 13, is not borne out by the record. Rather, as we have detailed, the evidence was disputed, creating an issue for the trial court to resolve. Where, as here, the evidentiary record supports the trial court‘s credibility determinations, we are bound to accept them. See In re R.J.T., 608 Pa. 9, 9 A.3d 1179, 1190 (2010). The existence of facts in the record that would support a result contrary to that reached by the certifying court does not demonstrate an abuse of discretion by that court. See In re E.F., 995 A.2d at 329.
C. Adequacy of Representation
Finally, KMA states that it is also challenging the adequacy of Bassett‘s representation of the class.
Here, KMA develops its adequacy of representation argument only as a subset of and in reference to whether Bassett‘s interests are typical or aligned with those of the class, and fails to develop any arguments that address the
D. Conclusion
For the foregoing reasons, we conclude that the trial court did not abuse its discretion in certifying the class. Kelly, 546 A.2d at 610. The case properly proceeded to trial as a class action.
II. Sufficiency and Weight of Evidence
Intermingled with its issues of class certification, KMA raises questions of whether the evidence was sufficient to support the jury‘s finding of liability for breach of express warranty, and of whether the jury‘s verdict was against the weight of the evidence. KMA asks that we reverse the
KMA maintains that Bassett‘s proof in support of her own claim against KMA was not probative of the other class members’ claims and the trial court erroneously allowed the jury to extrapolate from evidence of Bassett‘s claim proof respecting the entire class. KMA again rests its argument on the premise that Bassett did not establish the commonality, typicality, adequacy of representation, and predominance prerequisites for class certification. According to KMA, the class also failed to prove all the elements of a breach of the express warranty claim and the Superior Court “improperly used [evidence of] the [jury-]rejected implied warranty claims to justify a class-wide breach of express warranty cause of action.” KMA‘s Brief at 28.
Bassett responds that, at trial, she introduced class-wide common evidence which established that KMA breached its express warranty. According to Bassett, KMA did not object to the admission of the “common” evidence at trial and failed to argue against her offer of generalized proof. Bassett argues that, irrespective of KMA‘s argument on appeal, the jury credited her evidence and found KMA liable to the entire class. Bassett also recounts the evidence introduced at trial, specifically addressing the following elements of a breach of warranty: KMA‘s warranty or promise, KMA‘s failure to meet its promise, causation, notice to KMA and opportunity to cure, and the class members’ damages. Although Bassett articulates her arguments with parallel references to the record from the trial and to the record created during class certification proceedings, she observes that there is “a material difference between pre-trial certification and post-trial reexamination” of a trial and argues that “the question after trial is whether generalized proof was fairly presented and confronted by the parties at trial.” Bassett‘s Brief at 33.
In its
Finally, the court described KMA‘s sale of 1997-2000 Sephias to consumers with identical written warranties, which provided that KMA promised the “new Kia Vehicle [to be] free from defects in material and workmanship.” KMA‘s warranty manual also included a maintenance schedule which recommended a first inspection of the brake system at 30,000 miles or 30 months for ordinary driving use, or 15,000 miles or 15 months for instances of severe driving conditions. Witnesses testified that, under ordinary use conditions, the Sephias did
Initially, we agree with Bassett that our examination of the trial court‘s pre-trial certification decision is materially different from our examination of issues raised post-trial following the judgment in favor of the class, including issues of evidentiary sufficiency and weight. Accord Behrend, 655 F.3d at 194-95 (court determined relevant geographic market solely for purposes of class certification and not binding on merits). The action proceeded at trial on behalf of the entire class. The class action mechanism is designed to permit a named individual to proceed to trial on behalf of the class, including herself, and to try all of the class members’ claims together to judgment. See Bell, supra;
A. Sufficiency of the Evidence
When reviewing a sufficiency of the evidence claim in a civil case (here, a breach of express warranty action), an appellate court, viewing all the evidence and reasonable inferences therefrom in the light most favorable to the verdict winner, must determine whether the evidence was sufficient to enable the factfinder to find that all the elements of the causes of action were established by a preponderance of the evidence. Elliott-Lewis Corp. v. York-Shipley, Inc., 372 Pa. 346, 94 A.2d 47, 50 (1953); Mescanti v. Mescanti, 956 A.2d 1017, 1020 (Pa.Super.2008). See McElwee v. Southeastern Pa. Transp. Auth., 596 Pa. 654, 948 A.2d 762, 774 (2008); Commonwealth v. Hawkins, 549 Pa. 352, 701 A.2d 492, 499 (1997). Whether a claim was established under a preponderance of the evidence standard is “tantamount to a ‘more likely than not’ inquiry.” Popowsky, 937 A.2d at 1055 n. 18; Commonwealth v. D‘Amato, 579 Pa. 490, 856 A.2d 806, 818-19 (2004).
To prevail on her breach of express warranty claim in this class action, Bassett had to establish that KMA breached or failed to meet its warranty promise with respect to the members of the class, that the breach was the proximate cause of the harm to the class members, and the amount of the ensuing damages. Price v. Chevrolet Motor Div., 765 A.2d 800, 809 (Pa.Super.2000).21 Additionally, because the class members had already accepted tender, Bassett had to show that the class notified KMA of the breach within a reasonable time.
KMA‘s warranty, provided to all the members of the class, states that:
[KMA] warrants that [the] new Kia Vehicle is free from defects in material or workmanship, subject to the following terms and conditions. An Authorized Kia Dealer will make the necessary repairs, using new or remanufactured parts, to correct any problem covered by this limited warranty without charge to you.
*
*
*
The liability of [KMA] under this warranty is limited solely to the repair or replacement of parts defective in Kia-supplied material or workmanship by an Authorized Kia Dealer at its place of business....
E.g., KMA‘s 1999 Warranty and Consumer Information Manual at 4, 6; N.T., 5/24/05, Vol. 1, at 67 (warranty manual same for 1997-2000 Sephias).22
At trial, the record shows that Bassett offered evidence (in the form of expert testimony from R. Scott King, testimony from KMA executives and other corporate designees, Tim McCurdy, Lee Sawyer, Donald Pearce, and Y.S. Sohn,23 and internal KMA memoranda) that the 1997-2000 Sephias were manufactured and sold with defective front brake systems. The brake systems were defective because the rotors’ placement on the vehicles—or the design of the brake system—did not permit sufficient dispersal of heat generated during normal operation of the brakes, which caused premature wear of the brake pads and warping of the rotors. Once the lining on the brake pads wore down to the indicators and the rotors warped, the members of the class experienced noise and vibration when applying the brakes. KMA‘s corporate designee Tim McCurdy and Bassett‘s expert agreed that brake system components had to be replaced significantly in advance of when anticipated by KMA and by consumers. It was only in 2001, when a significant modification for that year‘s model involving a re-design of the front brake rotor, a larger brake pad, and a repositioning of the axle, that the performance of the brake system improved to KMA and American market expectations. According to Bassett‘s expert, high warranty claim rates for the 1997-2000 Sephias confirmed the existence of a common defect. See N.T., 5/19/05, Vol. 1, at 55, 60, 68-70,
95-116 (King testimony); N.T., 5/18/05, Vol. 1, at 80-81; 5/18/05, Vol. 2, at 15-16; 34-35, 41-42, 72-78 (McCurdy deposition); N.T., 5/23/05, Vol. 1, at 17, 20 (Sawyer deposition); N.T., 5/23/05, Vol. 1, at 42-43 (Pearce deposition); N.T., 5/23/05, Vol. 5, at 19-23 (Sohn deposition); Tim McCurdy Inter-Office Memorandum to James Lee, 2/03/99.Further, KMA did not make effective necessary repairs free of charge. KMA‘s warranty data, internal KMA documents, and King‘s testimony regarding the nature of the brake system defect allowed the jury to conclude that simply replacing the pads and rotors on the 1997-2000 model year Sephias was an ineffective repair, which did not resolve the defective design problem that affected the vehicles. Indeed, only a “field fix” for vehicles already on the market, announced via a January 2002 Technical Service Bulletin, and a redesign of the brake system for new models (re-named the Spectra), successfully offered the necessary repair in late 2001. See KMA Technical Service Bulletin (chassis division), 1/02, Vol. 3 # 8. Testimony from KMA‘s corporate designees Donald Pearce and Michelle Cameron24 also established that Sephia owners were responsible to pay for repairs out of pocket following the premature wear of brake system components, because brake pads and rotors were generally not covered under the warranty. N.T., 5/23/05, Vol. 1, at 30-33, 42-43, 54-55, 58-62 (Pearce deposition); N.T., 5/24/05, Vol. 1, at 39 (Cameron cross-examination), 64-77 (Pearce cross-examination).
Both Bassett‘s expert and KMA executives attributed consumer complaints of noise, vibration, and early brake component wear to the brake system design. Bassett‘s expert testified that none of the materials that he reviewed from KMA suggested that the widespread problem with the brakes on the Sephias was caused by individual driver habits such as “a heavy foot on the brake,” or road conditions, dirt, and dust. See N.T., 5/18/05, Vol. 2, at 41-43 (McCurdy deposition); N.T.,
The record also contained evidence that, at least since late 1998 (more than two years before the class action was filed), KMA had notice that the brake system on the Sephias, beginning with the 1997 model, was performing under market expectations in terms of wear and required frequent repair and replacement. According to KMA executives, they became aware of the problem because of an increase in the sale of brake parts and warranty claim activity. KMA sought repeatedly to increase the performance of the brake system but failed until 2001, when a field fix was developed for in-use models concurrently with the re-design of front brake system on the new model in the Sephia line. In the meantime, class members experienced varying treatment in seeking replacement of brake pads and rotors under the warranty. See Tim McCurdy Inter-Office Memorandum to James Lee, 2/03/99; KMC Brake Quality Team Meeting Summary, 2/15/99; N.T., 5/23/05, Vol. 1, at 16-18, 23-24 (Sawyer deposition); N.T., 5/18/05, Vol. 2, at 35 (McCurdy deposition). Finally, Bassett adduced sufficient evidence to prove that the members of the class suffered damages. Donald Pearce and Michelle Cameron testified that KMA dealerships offered some free repairs to promote good will for Sephia owners, as well as the brake coupon program in late 2001. But, according to the KMA witnesses, in general, the replacement of brake pads and rotors was not covered by the written warranty. As a result, KMA owners sustained out-of-pocket repair costs estimated by Bassett‘s expert at approximately $1,005 over the life of their Kia Sephia. On cross-examination, the expert stated that he derived the number not from Bassett‘s repair history data but by relying on data from KMA, and in particular on the Field Assurance and the Technical Assistance Center Incident reports, regarding the frequency of repairs over the life time of a Sephia. N.T., 5/19/05, Vol. 3, at 19-26 (King testimony); N.T., 5/20/05, Vol. 1, at 23 (King cross-examination); N.T., 5/23/05, Vol. 1, at 23-24 (Sawyer deposition); N.T.,
KMA‘s primary defense strategy at trial was to undermine the class assertions that the Sephia brake system was defective and that any defect affected all the members of the class, by referencing the design changes and the fact that it is common to hear complaints regarding noise, vibration, and brake component wear. KMA executive Y.S. Sohn explained that the primary goal of designing brakes was safety and that brake component longevity was simply an issue of merchantability or competitiveness in the automobile market. According to Sohn, there was no stated or established target for brake pad longevity by which to measure a premature wear defect. N.T., 5/24/05, Vol. 6, at 17-34, 45-48 (Bowman testimony); N.T., 5/25/05, Vol. 2, at 10-29 (Sohn deposition).
KMA elicited testimony from Bassett‘s expert which confirmed that the rotors on Bassett‘s vehicle did not present a safety concern. The expert also agreed that other vehicle or driver-specific causes were possible for the symptoms exhibited by vehicles in the class; but, on re-direct, he concluded that KMA internal memoranda and warranty data persuaded him that they were not the proximate cause of the premature wear of brake system components experienced by the class members. Finally, although KMA asked the expert about whether he based his calculation of out-of-pocket repair costs for the class on Bassett‘s experience and challenged the expert‘s qualifications in providing an opinion on damages, KMA did not object to the introduction of aggregate damages evidence on due process or other grounds, and did not introduce any evidence to rebut the class expert‘s damages testimony. N.T., 5/16/05, Vol. 1, at 44-50 (motions); N.T., 5/19/05, Vol. 3, at 49,
On appeal, KMA no longer presses the “no defect” theory it pursued at trial, and challenges instead whether sufficient evidence was introduced at trial to prove all the elements of a breach of warranty claim with respect to all the class members on the basis that the evidence described only Bassett‘s individual experience. Essentially, KMA questions whether Bassett established a breach of express warranty with respect to the entire class. See McElwee, 948 A.2d at 773.
Contrary to KMA‘s claims, the evidence of record was sufficient to establish all the elements of a breach of warranty claim by a preponderance of the evidence. See Mescanti, 956 A.2d at 1020. The evidence established that KMA made the same promise to all class members, 1997-2000 Sephia owners, to deliver a vehicle free of manufacturing defects and to correct free of cost any problem covered by the warranty. All vehicles in the class were sold with a defectively designed brake system causing premature wear of brake components that necessitated frequent replacement. KMA knew that the 1997-2000 Sephias were not performing up to the expectations of KMA and the American market, and that the transactions were troublesome well before this lawsuit was filed. Although KMA sometimes covered the repairs under the warranty or offered free repairs under other consumer satisfaction programs, members of the class also paid for repairs out-of-pocket. Testimony supported a verdict of up to $1,005 per class member for out-of-pocket costs over the life of a Kia Sephia. This evidence was sufficient to establish the breach of warranty claim with respect to the entire class. Price, 765 A.2d at 809. The trial court did not commit an error of law in sustaining the verdict and rejecting KMA‘s application for a judgment notwithstanding the verdict or for a new trial.
B. Weight of the Evidence
Next, KMA essentially contends that the jury‘s verdict in favor of the class was against the weight of the
Allegations that a motion for judgment notwithstanding the verdict or a new trial should have been granted because the verdict was against the weight of the evidence are addressed to the discretion of the trial court. Commonwealth v. Cousar, 593 Pa. 204, 928 A.2d 1025, 1035-36 (2007). “An appellate court, therefore, reviews the exercise of discretion, not the underlying question whether the verdict is against the weight of the evidence. The factfinder is free to believe all, part, or none of the evidence and to determine the credibility of the witnesses.” Id. The trial court awards a judgment notwithstanding the verdict or a new trial “only when the jury‘s verdict is so contrary to the evidence as to shock one‘s sense of justice. In determining whether this standard has been met, appellate review is limited to whether the trial judge‘s discretion was properly exercised, and relief will only be granted where the facts and inferences of record disclose a palpable abuse of discretion.” Id. at 1036. Thus, the trial court‘s decision based on a weight of the evidence claim is among “the least assailable of its rulings.” Id.
Witness credibility is an issue “solely for the jury to determine.” Commonwealth v. Hawkins, 549 Pa. 352, 701 A.2d 492, 501 (1997). The jury in this case had an opportunity to hear conflicting evidence regarding the existence of a common brake system design defect affecting the 1997-2000 model Sephias, of KMA‘s knowledge of the defect, of KMA‘s unsuccessful efforts to repair the defect, and of its policy to consider brake component repairs non-warranty items, only sometimes covering replacements and, consequently, causing Sephia owners out-of-pocket costs. Bassett presented evidence in support of claims for the entire class. Cf. Behrend, 655 F.3d at 203-04 (court‘s inquiry is whether class claims may be proven on class-wide basis using common proof). Based on this evidence, the jury found in favor of Bassett and the class on the breach of express warranty claim and awarded damages. We see no abuse of discretion in the trial court concluding that the verdict is not so contrary to the evidence as to shock one‘s sense of justice.
Whether the amount of damages awarded to each class member is against the weight of the evidence is a narrower and potentially more difficult question. Bassett‘s expert testified that each class member incurred identical costs of approximately $1,005. He calculated these costs based on: (1) a life expectancy for each Kia of 100,000 miles, (2) during which time, brake system components would be replaced approximately every 10,000 miles, half the distance that would have met KMA and industry standards; (3) at the average cost of replacing brake components in Pennsylvania ($175 for replacing brake pads and resurfacing rotors, and
As Mr. Justice Saylor explains in his dissent, the class never attempted to account for variables in damages resulting from “markedly different experiences of personal expenditure to address Sephia brake problems.” Dissenting Op., at 468, 469-72 & n. 7, 34 A.3d at 59, 60-61 & n. 7. The class expert testified to aggregate damages representing out-of-pocket costs that likely did not reflect the actual expenses of each or even most members of the class. As Justice Saylor points out, this evidentiary approach “blur[s] the substantive requirements of the law of damages.” Id. at 476, 34 A.3d at 64. The dissent emphasizes that court sanctioning of agreements to calculate damages in the aggregate as part of class action settlements involves different considerations from court approval of aggregate damages evidence proffered in the adversarial trial setting. See id. at 475 n. 14, 34 A.3d at 63-64 n. 14 (citing City of Detroit v. Grinnell Corp., 356 F.Supp. 1380, 1385 (S.D.N.Y.1972)). As Justice Saylor notes, the parties’ consensual acceptance of rough justice does not distort the expectations, predictability, and fundamental fairness of our judicial system. See id. at 475, 34 A.3d at 64.
On the other hand, we note that some jurisdictions have permitted the use of aggregate damages calculations in class actions. See, e.g., Scottsdale Mem‘l Health Sys., Inc. v. Maricopa County, 224 Ariz. 125, 228 P.3d 117, 133 (App.2010) (rejecting claim that calculating damages based on statistical sampling is per se violation of due process); In re Pharm.
The question of whether testimony regarding aggregate damages is probative to calculate the amount of damages in a class action would be an issue of first impression for this Court. In this instance, Bassett‘s expert offered such testimony. Once the evidence was offered, KMA had the opportunity to object that it was incompetent to the task or violated KMA‘s right to due process (or other rights), to cross-examine the witness on the weakness of his methodology, or rebut the argument with evidence of its own; yet, the testimony of Bassett‘s expert went unchallenged in these respects.
Instead, as we read the record and KMA‘s brief, KMA proceeded both at trial and on appeal on the theory that Bassett introduced only evidence of her own damages and no evidence of damages to any other member of the class. But, this position misapprehends the record. As described, Bassett‘s expert specifically testified to his calculation of estimated damages for each member of the class, which in the aggregate produced the molded verdict.
Justice Saylor has well demonstrated that this testimony was subject to a colorable objection on the ground that it inaccurately or imprecisely captured the amount of damages for individual members of the class. But, at the appropriate time at trial, when any error in this regard could have been addressed or avoided, KMA did not challenge the expert‘s method of calculating damages in the aggregate on due process or any other grounds, and thus waived the argument. The dissent articulates a problematic issue regarding the proof and determination of individual damages differently, and certainly more cogently, than KMA did either at trial or on appeal. In light of existing jurisprudence that articulates a reasonable ground upon which to permit certain forms of aggregate damages evidence in class action litigation, and in light of the narrower nature of KMA‘s preserved challenge to
III. Molding of the Verdict
Next, KMA claims that the Superior Court erred in affirming the trial court‘s judgment of a molded verdict of $5,641,200. KMA makes two related but nonetheless distinct arguments. First, KMA contends that molding of the verdict was improper or in violation of its due process rights because it allowed each member of the class to recover $600, although no evidence of liability and amount of out-of-pocket costs was of record for any member of the class except Bassett. Essentially, the manufacturer re-asserts its prior arguments regarding the certification of the class and the sufficiency of evidence to prove a breach of the express warranty. See Jackson v. Virginia, 443 U.S. 307, 313-14, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) (constitutional predicate of sufficiency claim is due process clause). Second, KMA states that molding of the verdict was improper because the trial court did not conduct claims proceedings per its pre-trial order of May 16, 2005 (“May 16th Order“), which disposed of KMA‘s motion to bifurcate the trial into proceedings on what KMA perceived as “common” versus “individual” issues. The May 16th Order stated:
AND NOW, this 16th day of May, 2005, upon consideration of the Motion to bifurcate of Defendant, Kia Motor [sic] America, Inc., it is hereby ORDERED that Defendant‘s Motion is DENIED. Each class member‘s entitlement to recover if plaintiff class prevails, shall be determined at claims proceedings.
Tr. Ct. Order, 5/16/05. According to KMA, in light of the May 16th Order, the trial court molded the verdict “without forewarning” and in violation of KMA‘s constitutional due process
Bassett and the class respond that KMA distorts the record. According to Bassett, the evidence was “crystal clear that this case was tried on a class basis and defended on a class basis.” Bassett‘s Brief at 39. She states that the jury entered a verdict for the class and not for Bassett alone, as the jury questionnaire reflected. Question 5 on the jury questionnaire stated:
State the amount of damages if any, sustained by each [c]lass member:
*
*
*
b) For repair expenses, reasonably incurred, as a result of defendant‘s breach of warranty.
Jury Verdict Special Interrogatories, 5/27/05. After the jury awarded $600 per class member, the trial court merely realized the plain intent of the jury by multiplying the per person award by the stipulated number of class members, and arrived at the molded verdict. The trial court then entered judgment pursuant to Rule 1715(d), which required the court to specify who was bound by the judgment.
Bassett emphasizes that KMA waived any claim of error regarding the molding of the verdict by failing to raise a timely objection at trial. According to Bassett, the trial court‘s May 16th Order did not relieve KMA of the obligation to object when the trial court molded the verdict.28 Bassett
In its reply brief, KMA asserts that its objection to the molded verdict was timely, because the first appropriate opportunity to object was in its motion for post-trial relief; the
In its Rule 1925(b) statement, KMA raised the molding of the verdict issue in terms similar to those in its appellate brief to this Court. Unfortunately, the trial court addressed the narrower (and somewhat different) issue of whether there was error in its denial of the motion to bifurcate the damages and liability phases of trial. The court concluded that bifurcation was not necessary because the risk of prejudice against the defendant, common, for example, in catastrophic personal injury cases, was not present here. Tr. Ct. Op., 12/29/06, at 39. The Superior Court agreed and affirmed the judgment on the molded verdict. The panel also added that the record contained sufficient evidence to support a verdict of $600 per class member (and indeed of up to $1,005). According to the court, “all class members were entitled to have good brakes on their cars that did not require repeated trips to the dealership for replacement to avoid brake failure.” Super. Ct. Op., 10/24/07, at 3-4. We address each of KMA‘s related claims separately.
A. Class Certification Decision and Sufficiency of the Evidence
KMA argues that the molding of the verdict was improper because evidence as to Bassett‘s claim was not probative of the claims of other class members and, as a result, the class failed to carry its burden of proof at trial. The car manufacturer essentially incorporates and re-asserts its prior claims of trial court error regarding the sufficiency and weight of the evidence to justify the jury‘s verdict as the basis for its due process argument. We have already discussed at length and
B. Effect of May 16th Order
KMA argues that the molding of the verdict was erroneous in light of the May 16th Order. In April 2005, KMA filed a motion to bifurcate, seeking separate trials on common issues from issues that it identified as individual, i.e., defect manifestation, notice and opportunity to cure, causation, and damages. According to KMA, its request was for a court order “confirming that issues of fact and law identified by KMA [t]herein [would] be adjudicated in future, class-member-specific proceedings, in the event that [Bassett] prevail[ed] in the ... common issue trial.” See KMA‘s Motion to Bifurcate, 4/25/05, at 14, 19. The trial court denied the motion and stated that “class members’ entitlement to recover[,] if plaintiff class prevails, shall be determined at class proceedings.” Tr. Ct. Order, 5/16/05. Thereafter, the parties proceeded to trial and Bassett introduced evidence to prove the claims of all the members of the class.
On May 25 and 26, 2005, the trial court conferred in chambers with both parties regarding their requested jury instructions and the jury verdict sheet, and sought to provide prompt resolution to the parties’ objections. The court described its jury instructions and jury questions in terms of amount “sustained by each class member,” inter alia, “for repair expenses as a result of defendant‘s breach of warranty.” The trial court asked if there were any objections to the questions on the jury verdict form as explained and KMA‘s counsel responded “No, Your Honor.” N.T., 5/25/05, Vol. 7, at 70-73. Both the jury instructions and the verdict form reflected the discussion in chambers. Indeed, after providing a description of the damages requested by the class in its charge to the jury, the court explained: “[b]ecause you‘re rendering a verdict for each class member, I will take care of making sure that the Class members recover.” At sidebar, immediately after the damages instruction, the court again asked attorneys for both parties if there were any objections to the charge and
Question No. 1:
Did [KMA] breach its express warranty on the cars purchased by the class?
X Yes ___ No
*
*
*
Question No. 5:
State the amount of damages if any, sustained by each Class member:
b) For repair expenses, reasonably incurred, as a result of [KMA]‘s breach of warranty.
$ 600.00
Jury Verdict Special Interrogatories, 5/27/05; accord N.T., 5/27/05, Verdict, at 3-8.
After the trial court recorded the jury‘s answers to the questions on the verdict slip, the court multiplied the $600 damages award by the agreed-upon number of class members—9,402—and recorded a verdict of $5,641,200 on behalf of the class. After dismissing the jury, the court asked the parties if there was anything further they wished to address at that time. Counsel for KMA answered “No, Your Honor. Thanks to the Court.” The court concluded proceedings. N.T., 5/27/05, Verdict, at 4-8.
On appeal, KMA concedes that it raised an objection to the molding of the verdict premised on the May 16th Order for the first time in its post-trial motion, re-asserted it in its Rule 1925(b) statement, and argues that such an objection afforded the trial court sufficient opportunity to correct its error. In the Rule 1925(b) statement, KMA asserted that Bassett had consented to undertake post-verdict claims proceedings to determine each class member‘s entitlement to recover, yet the trial court “sua sponte and in derogation of its own order on bifurcation, transformed this bifurcated class action trial into a
We disagree with KMA that its objection, which it concedes was offered for the first time in a post-trial motion, was timely under the circumstances. Under prevailing Pennsylvania law, a timely objection is required to preserve an issue for appeal.
The substance of the trial court‘s May 16th Order does not affect this conclusion. This Court‘s Straub decision is particularly instructive. In Straub, after the parties rested, the trial court discussed the verdict sheets with the parties and stated that it aimed to explain to the jury that the plaintiffs were forwarding two independent claims, and that the plaintiffs
Here, we have a similar scenario. KMA argues that the molded verdict was incompatible with the May 16th Order, which it poses as the law of the case, and upon which it claims it relied to allegedly forego pursuit of undisclosed defenses to the class claims.31 Pursuant to Straub, however, this so-called reliance was not sufficient to excuse KMA‘s obligation to raise a timely objection when, in its view (as alleged now), the court acted contrary to the prior order. KMA should have objected
IV. Authority of Trial Court to Enter Counsel Fee Order
Next, KMA argues that the counsel fee award should be vacated because, when the award was issued, the trial court had been deprived of jurisdiction by KMA‘s appeal from the judgment on the verdict. According to KMA, Bassett entered judgment pursuant to
Bassett answers that the award of costs was proper. She recognizes that the MMWA is the statute authorizing legal fees here, but argues that matters of trial court jurisdiction and procedure related to the award of attorneys’ fees are governed by Pennsylvania law and rules. According to Bassett, petitions for attorneys’ fees are ancillary to the judgment on the merits and the trial court does not lose jurisdiction to decide them separately after an appeal on the merits is filed. Bassett‘s Brief at 49-50 (citing Old Forge Sch. Dist. v. Highmark Inc., 592 Pa. 307, 924 A.2d 1205 (2007); Miller Elec. Co. v. DeWeese, 589 Pa. 167, 907 A.2d 1051 (2006) (”Miller“)). Bassett notes that the MMWA does not control trial and appellate jurisdiction in Pennsylvania. Indeed, Bassett claims that the U.S. Supreme Court has recognized that counsel fees may be awarded separately from the judgment on the verdict and later incorporated into the judgment. Id. at 51 (citing Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988)).
The trial court agreed with Bassett that the fee petition and award were timely. According to the court, issues regarding attorneys’ fees and costs are collateral or ancillary to the merits and may be addressed by the trial court after an appeal has been filed. Entry of judgment and the appeal therefore did not divest the court of jurisdiction to decide Bassett‘s pending fee petition. Tr. Ct. Supp. Op.—Findings of Facts &
Pursuant to the MMWA, a consumer who prevails on a claim under that statute or on a claim for breach of warranty may recover “as part of the judgment” the reasonably incurred “amount of cost and expenses (including attorneys’ fees based on actual time expended).”
As here, the statute at issue in Budinich provided that the “judgment” would “include a reasonable attorney fee in favor of the winning party, to be taxed as part of the costs of the action.” Id. at 197, 108 S.Ct. 1717 (citing
Like the Colorado statute at issue in Budinich, the MMWA describes the same paradoxical characterization of attorneys’ fees as both a “cost” of litigation and “as part of the judgment.”
Similar to the U.S. Supreme Court, we have a strong interest in the preservation of consistency and predictability in the operation of our appellate process. Pennsylvania law is well established that a petition for attorneys’ fees is an ancillary matter, which the trial court retains authority to decide after entry of judgment on the verdict. Here, there is no dispute that the application for attorneys’ fees was timely when filed on June 6, 2005. Accordingly, the trial court was authorized to decide Bassett‘s application for attorneys’ fees in January 2006, irrespective of KMA‘s appeal on October 28, 2005, from the judgment on the verdict dated October 25, 2005. We must reject KMA‘s request for relief from the fee award on this ground.34
V. Counsel Fee Enhancement
Finally, KMA argues that the Superior Court erred in affirming the trial court‘s application of a “risk multiplier” to the attorneys’ fees award under the MMWA. According to KMA, the U.S. Supreme Court “prohibited” risk multipliers in federal fee shifting cases and, because fees were awarded here pursuant to a federal statute—the MMWA—state courts are bound by that interpretation. KMA‘s Brief at 35-36 (citing City of Burlington v. Dague, 505 U.S. 557, 559, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992);
Bassett responds that Pennsylvania law, not federal law, controls the award of the fee enhancement in this case for several reasons. First, she claims that the Dague decision was limited to the environmental statutes addressed by the High Court. Second, according to Bassett, calculation of attorneys’ fees is a matter of exclusive state procedure, not of substantive law. Bassett‘s Brief at 52 (citing Middlesex County Ethics Comm. v. Garden State Bar Ass‘n, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982); Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975); Arons v. New Jersey State Bd. of Educ., 842 F.2d 58 (3d Cir.1988)). Consequently, in Bassett‘s view, federal fee-shifting provisions cannot override or displace state rules governing the award of attorneys’ fees. Id. at 54 (citing Chin v. Chrysler LLC, 538 F.3d 272, 279-80 & n. 5 (3d Cir.2008)). She also insists that the MMWA does not preempt Pennsylvania law with regard to attorneys’ fees and the application of the risk multiplier. Id. at 55 (citing
Finally, Bassett emphasizes that Pennsylvania has a strong public policy to fully compensate parties that incur attorneys’ fees where a statute permits fee-shifting. Id. (quoting Solebury Twp. v. Dep‘t of Envtl. Prot., 593 Pa. 146, 928 A.2d 990, 1004 (2007) (“federal standards that have not been incorporated into state statutes can only be supported to the extent that those standards are consistent with Pennsylvania public policy“)). According to Bassett, the discretion of state courts to award attorneys’ fees is broader than that of federal courts in purely federal cases and, as a result, state courts may adjust the lodestar. Id. at 55-56 (citing Signora, 886 A.2d at 293 & n. 14; Skelton v. Gen. Motors Corp., 860 F.2d 250 (7th Cir.1988); Krebs v. United Ref. Co. of Pennsylvania, 893 A.2d 776 (Pa.Super.2006); Croft v. P & W Foreign Car Serv., Inc., 383 Pa.Super. 435, 557 A.2d 18 (1989)). Bassett claims that to fulfill the consumer-friendly purposes of the MMWA‘s fee-shifting provision, accounting for the nature of the services, amount of time expended, results obtained, amounts recovered, and for the contingent nature of the fee arrangement, via the application of a risk multiplier, is integral. Id. at 58-61. Bassett asserts that Pennsylvania Rule of Civil Procedure 1716 reflects these considerations and controls the “discretionary determination of a ‘reasonable’ class fee by the Commonwealth‘s courts.”35 Id. at 57 (citing
In its reply brief, KMA briefly reiterates the arguments in its main appellate brief and adds that application of a risk multiplier is in plain conflict with the language of Section 2310 of the MMWA. According to KMA, the Dague decision applies to all federal fee-shifting statutes, including the MMWA.
The trial court agreed with Bassett that class counsel was entitled to an attorneys’ fee award equal to a risk multiplier of 1.375 times the $3 million lodestar, for a total of $4.125 million.36 The court stated that it had discretion to adjust the lodestar upwards by applying a risk multiplier where class counsel had taken the case for a contingent fee. Tr. Ct. Op., 11/14/07, at 11 (citing Signora, supra). According to the court, whether a fee enhancement is appropriate requires consideration of several factors: that a contingent fee case is significantly riskier than an hourly fee case, what fee would attract competent counsel, and whether the prevailing class
Generally, where the award of attorneys’ fees is authorized by statute, an appellate court reviews the propriety of the amount awarded by the trial court under an abuse of discretion standard. Solebury Twp., 928 A.2d at 997 n. 8. We will not find an abuse of discretion in the award of counsel fees “merely because [we] might have reached a different conclusion.” Hoy v. Angelone, 554 Pa. 134, 720 A.2d 745, 752 (1998). Rather, we require a showing of manifest unreasonableness, partiality, prejudice, bias, ill-will, or such lack of support in the law or record for the award to be clearly erroneous. Id. To the extent that the issue before us is a question of statutory interpretation, however, our scope of review is plenary and the standard of review is de novo. Solebury Twp., 928 A.2d at 997 n. 8.
The authorizing statute here—the MMWA—is a federal statute. “The construction of a federal statute is a matter of federal law.” Council 13, 986 A.2d at 80. Pursuant to federal rules of statutory construction, the courts consider the particular statutory language, as well as the design of the statute and its purposes in determining the meaning of a federal statute. Id. (citing Crandon v. United States, 494 U.S. 152, 158, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990)). But, if the MMWA‘s language is clear, we should refrain from searching other sources in support of a contrary result. See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 228, 128 S.Ct. 831, 169 L.Ed.2d 680 (2008) (“We are not at liberty to rewrite the statute to reflect a meaning we deem more desirable.“); Carter v. United States, 530 U.S. 255, 271, 120 S.Ct. 2159, 147 L.Ed.2d 203 (2000) (statutory interpretation “begins by examining the text ... not by psychoanalyzing those who enacted it“); United States v. Gonzales, 520 U.S. 1, 6, 117 S.Ct. 1032, 137 L.Ed.2d 132 (1997) (where “[g]iven [a] straightforward statutory command, there is no reason to resort to legislative history“); Connecticut Nat‘l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992) (“[I]n interpreting a statute a court should always turn first to one, cardinal canon before all others. We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.’ “). Accord Dooner v. DiDonato, 601 Pa. 209, 971 A.2d 1187, 1195 (2009) (“The language used by [Congress] is the best indication of its intent.“).
In relevant part, Section 2310 of the MMWA provides that:
If a consumer finally prevails ... he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys’ fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys’ fees would be inappropriate.
On its face, Section 2310(d)(2) contains no language authorizing a mandatory contingency multiplier nor does it
Moreover, even assuming arguendo that Section 2310(d)(2) is subject to a construction contrary to its plain terms, U.S. Supreme Court precedent provides additional strong legal support for KMA‘s position that the statute does not allow for a contingency multiplier in the present circum
[The Clean Water Act and the Solid Waste Disposal Act] authorize a court to “award costs of litigation (including reasonable attorney ... fees)” to a “prevailing or substantially prevailing party.” This language is similar to that of
many other federal fee-shifting statutes, see, e.g., 42 U.S.C. §§ 1988 ,2000e-5(k) ,7604(d) ; our case law construing what is a reasonable fee applies uniformly to all of them.
505 U.S. at 561-62, 112 S.Ct. 2638 (emphasis in original; internal citations omitted). The Supreme Court, of course, is the final word on federal statutory interpretation and our decisional mandate is to follow its teachings. See Council 13, 986 A.2d at 77 (“It is fundamental that by virtue of the Supremacy Clause, the State courts are bound by the decisions of the Supreme Court with respect to federal law, and must adhere to extant Supreme Court jurisprudence.“).39 Here, the lower courts failed to consider or apply the strong presumption in favor of equating the counsel fee with the lodestar; rather, the courts considered impermissible factors in enhancing the attorneys’ fee award.
Bassett insists that the MMWA allows for enhancement of the attorneys’ fee award beyond the lodestar by application of a risk multiplier. She claims essentially: (1) that Dague‘s holding was limited to the environmental statutes at issue in that case; (2) that the MMWA gives state courts discretion to award contingency multipliers available through state procedural rules; and (3) that Pennsylvania public policy supports the exercise of discretion in the application of a contingency multiplier to promote the pro-consumer purposes of the MMWA.40 We must reject Bassett‘s arguments.
Bassett‘s argument that Dague‘s holding must be deemed limited to the environmental statutes “at issue” there, the
Writing for the Dague Court, Justice Antonin Scalia focused on whether a “reasonable” attorneys’ fee award may include a contingency enhancement of the lodestar. The High Court concluded that the lodestar benefits from a “strong presumption” of reasonableness because it generally reflects the merits and difficulties of a case, i.e., the risk of loss. For an attorney who expected a premium over his hourly rates when he or she accepted a contingency fee case, the “lodestar enhancement [would] amount[] to double counting” the risk of loss and is unreasonable. 505 U.S. at 562-63, 112 S.Ct. 2638. The Court also discussed various approaches to lodestar enhancement and decided that all the approaches suffered from similar infirmities: undesirable social costs (such as creating incentives to bring nonmeritorious claims and overcompensating cases with above-average chances of success), added incentives for burdensome satellite litigation over attorneys’ fees, and inconsistency with the Court‘s general rejection of contingent fees. Id. at 563-66, 112 S.Ct. 2638 (rejecting, inter alia, the Delaware Valley approach, see supra at n. 2). Importantly, “reasonableness” of the attorneys’ fees is the linchpin under the MMWA just as it was under the statutes analyzed in
Bassett also insists that we limit the application of Dague to “federal-question [sic] cases pending only before the federal courts under exclusively federal statutes.” Bassett‘s Brief at 54. According to Bassett, because the MMWA incorporates state law, it is “subject to state procedural rules and interpretations” and its variations regarding contract laws and counsel fee decisions. But, Bassett‘s description of the MMWA is inapt and her attempt to divorce the trial court‘s award of attorneys’ fees here from the plain language of Section 2310 and controlling precedent is unavailing.
The MMWA is an act that provides, inter alia, federal standards governing contents of warranties and minimum standards for warranties. See, e.g.,
In the same vein, Bassett argues that the award of attorneys’ fees is traditionally a matter of procedure “exclusively” governed by state law and procedure, specifically Pennsylvania Rule of Civil Procedure 1716.41 We recognize that the question of what in particular is substantive and what is procedural is not always clear. See Laudenberger, 436 A.2d at 155 (noting substantive effect of new procedural rule permitting pre-judgment interest). But that is not so in this instance where, given the interplay between the MMWA and Rule
Bassett also looks to the MMWA‘s savings clause and concludes that Congress intended to preserve a consumer/plaintiff‘s right under state law, which in Pennsylvania—as Bassett would have it—permits a contingency multiplier. Bassett‘s Brief at 55, 60-61 (citing
Rule 1716 is a rule of procedure prescribed by this Court that does not purport to create any substantive right to a contingency multiplier in all cases. See
Finally, we must reject Bassett‘s claim that Pennsylvania‘s “strong public policy to justly compensate parties who incur attorney fees” and are entitled to attorneys’ fees under fee-shifting provisions justifies an application of the contingency multiplier here. Bassett‘s Brief at 55 (citing Solebury Twp., 928 A.2d at 1004) (awarding attorney fee under Pennsyl
Rule 1716‘s actual procedural purpose is as follows. With respect to authorized counsel fee awards under legislation, courts must weigh the considerations of Rule 1716 as a matter of procedure. See, e.g., Signora, supra. But, the procedural vehicle does not create the underlying entitlement. Here, the class requested attorneys’ fees under a federal statute—the MMWA. The plain language of the MMWA and the High Court‘s clear precedent provide no basis to trigger our procedural rule. Applying Dague to the federal statute at issue here by no means interferes with Congressional intent to preserve distinct state rights or remedies. Accordingly, we reverse the order below to the extent it provides for enhancement of the attorneys’ fee award beyond the amount of the lodestar.
VI. Conclusion
For the foregoing reasons, we affirm in part and reverse in part the decisions of the Superior Court dated October 24, 2007, and February 8, 2008. Our reversal is limited to the lower courts’ decision to permit application of a risk of loss multiplier to enhance the attorneys’ fee award beyond the amount of the lodestar. We remand to the trial court for adjustment of the attorneys’ fees in accordance with this Opinion. Jurisdiction is relinquished.
Justice GREENSPAN did not participate in the decision of this case.
Justice SAYLOR files a dissenting opinion.
Justice SAYLOR, dissenting.
I agree with the majority‘s rationale as it concerns the attorney-fee matters but dissent relative to the class treatment as it was administered by the trial court.
I. Preface
Initially, the majority‘s overarching approach to this appeal appears to suggest liberality in favor of class certification. I have no objection, to the degree that this does—as the majority indicates and our rules prescribe—nothing more than indicate who the parties to the action will be. See Majority Opinion, at 396-97, 34 A.3d at 15-16 (quoting
The difficulty we are seeing in the cases, however, is that many proponents of class treatment believe the judiciary concomitantly should bring about substantive changes in the law favorable to consumer classes. It seems, more often than not, that such innovations are not being presented to our courts as the matters of substantive law they truly represent. Rather, they are being passed off as if they were merely part and parcel of the procedural aspects of class treatment.
My intention is not to advance or criticize any particular position advanced in the legitimate, ongoing policy debate concerning what the substantive law should be in the class setting. It may be that changes are desirable. My point is that substantive modifications require choices among competing social policies, can have deep and wide-reaching social impact, and may implicate defendants’ constitutional rights and entitlements.1 Furthermore, substantive changes in the
Accordingly, and in the first instance, it is essential to recognize substantive accretions for what they are. Moreover, even assuming judicial lawmaking is appropriate to facilitate collectivized litigation, there can be no legitimate dispute that substantive changes are well beyond the contemplation of the class action provisions presently reposited in our Civil Procedural Rules. See
In the present case, the phenomenon of substantive inroads riding the coattails of class action procedure is most vividly illustrated with regard to the damages question. To develop this, in light of the breadth and complexity of the underlying litigation, it is necessary first to lay some supporting groundwork. Upon review of this background, I will discuss how class members were relieved of the obligation to present necessary, fair, and sufficient proofs concerning an unarguably individualized form of damages they sought—and the only form of damages they were awarded—namely, “out of pocket paid repair costs.” N.T., May 26, 2005, Vol. 4, at 51 (jury charge).
II. Background
In assessing the damages question, it is important to understand that there simply was no evidence of class-wide com
Rather than addressing individualized damages on conventional terms, as required under ordinary substantive law, class
The looseness of the certification decision yielded ongoing controversy about how the certification was to operate and its impact on required substantive proofs.5 At the pretrial stage, the uncertainties culminated in a surprising turn taken shortly before trial, during a discussion of KMA‘s motion to bifurcate. At this juncture, after consistently rejecting the notion that individualized treatment of any issues was necessary, both class counsel and the trial court cryptically agreed that some sort of undefined claims process would be necessary. This dialogue proceeded as follows:
THE COURT: And [the] verdict will then set the upper limit of what [KMA] has to pay and then people will have to prove that they fit within whatever requirements qualify
them to receive that upper limit, and if they had to pay twice or three times as much, it‘s because of the defect, they‘re out of luck, right?
[CLASS COUNSEL]: That‘s correct.
THE COURT: Okay.
N.T., May 16, 2005, Vol. 1, at 60. Such consensus was then memorialized in the pretrial order, referenced by the majority, specifying that “[e]ach class member‘s entitlement to recover if plaintiff class prevails, shall be determined at claims proceedings.” Majority Opinion, at 42 (quoting Samuel-Bassett v. KMA Motors of Am., Inc., No. 2199 Jan. Term 2001 (Order of May 16, 2005)).6
Despite this prescription for claims proceedings (which, conceptually, should have worked a major alteration in the path of the litigation), Appellees attempted at trial to quantify the out-of-pocket expenses incurred by absent class members via grossly generalized, hypothetical proof. In this regard, Appellees presented an “automotive expert” who indicated—based on assumptions that each class member paid for all relevant brake repairs and drove his vehicle 100,000 miles—all plaintiffs incurred $1,005 in damages. See N.T., May 19, 2005, Vol. 3, at 23-26. Two obvious deficiencies in the testimony were that: the first of the underlying assumptions was directly contrary to the record (not the least because it was well established that KMA already had paid for many of the repairs as warranty items, see supra note 3); and the second was in strong tension with common experience (since it seems highly unlikely that all of a class of 9,400 automobile owners would retain their vehicles for 100,000 miles).7
In response to defense criticisms of this evidence, class counsel, for his part, maintained before the jury that the class action procedural device alleviated his problems of substantive proof:
[Defense counsel] is a good guy, a good lawyer but this is a Class action and I think you have heard comments that distort Pennsylvania law with respect to how Class actions are handled. This is not a case of 10,000 individual claimants in which case we would have the burden of bringing in everybody including everybody‘s individual damages.
The whole notion of a Class action, why they exit [sic], is because if you can satisfy the court before it gets to the jury trial stage that the issues are common and the complaints of Ms. Samuel-Bassett are shared by all other members of the Class, then the court will certify by a judicial Order the action as a Class action and it may proceed to this trial. Ladies and Gentlemen, this case was certified by the Philadelphia Court of Common Pleas as a Class action. This court was satisfied after a hearing that the complaints that [sic] Ms. Samuel-Bassett were the complaints of the 10,000 members of the Class. But I don‘t ask any of you to accept what I tell you; I ask that you listen to the instruction of the court on this issue. Listen to Judge Bernstein‘s instruction. I believe he will tell you that proof and evidence that we present as to Ms. Samuel-Bassett should be considered by you as evidence for the entire Class. That‘s important. That‘s how Class actions work.
N.T., May 26, 2005, Vol. 4, at 113-14 (emphasis added).8
Finally, contradicting its pretrial order providing for claims proceedings, the trial court instructed the jurors that there would be no subsequent proceedings to decide anything.9
In my view, the irregularities discussed above are manifestations of a core analytical problem, i.e., the failure to distinguish between the procedural class action device and substantive legal innovations being employed to facilitate them, including adjustments to the plaintiffs’ burden of proof. It could not be argued seriously that hypothetical testimony from an automotive expert—based upon underlying assumptions that are unsupported by the record, false, counterintuitive, and/or substantially under-representative of the range of actual variables affecting plaintiff costs—could support an out-of-pocket damages verdict in any individual case. Plainly, therefore, the trial court‘s decision to permit Appellees to use just this sort of testimony to justify such a verdict for 9,400 people was incongruous with Pennsylvania substantive law governing damages.10
In the present case, certification of a 9,400-person class action occurred without the predicate, closely-reasoned justification or any rational plan for the handling of individualized issues.13 Rather than redressing this fundamental misstep at any of several benchmark opportunities, Appellees continued to invite the trial court and the jurors to treat the substantive
At one point, during the transient agreement of class counsel and the trial court to subsequent claims proceedings, they appear to have come to some realization of the scale of the distortion created by conflating the common and individualized issues. In the end, however, the latter were unceremoniously blended back into the collectivized treatment, apparently under the force of the driving class-action rubric. The result
As developed above, however, such blurring of the substantive requirements of the law of damages is plainly outside the contemplation of our civil procedural rules. See supra Part I. Furthermore, I agree with KMA that the perversion of expressly limited procedural rules to accomplish unauthorized substantive objectives impacts upon a defendant‘s due process rights. See Brief for KMA at 28-32. See generally Erbsen, From “Predominance” to “Resolvability”, 58 VAND. L.REV. at 1024 (“Class certification is ... proper only if the court has a plan for eventually reaching an adjudicated or negotiated judgment that reflects the parties’ rights under controlling law.“).
I recognize that the record of this case creates the impression that purchasers of Sephias in the relevant time period sustained injury on account of a poor brake design and that the amount of the damages awarded to each individual class member appears to be modest. Thus, there may be a sense that the jury verdict in this case serves a “rough justice” and, as such, should not be disturbed. Result orientation in the law, however, yields its own set of perverse consequences, not the least of which is the silent dilution of the consistency, predictability, and fundamental fairness which are aspirations of the American judicial system. Cf. Erbsen, From “Predominance” to “Resolvability”, 58 VAND. L.REV. at 1037-39 (discussing the deleterious impact of ad hoc lawmaking in class action proceedings on democratic legitimacy and concluding that “[a]llowing courts to bend substantive rules to the procedural needs of particular cases is ... inconsistent with the normal process of rulemaking and prone to prioritize the welfare of litigants over broader social welfare with undesirable distributive consequences“).
Finally, Appellees forcefully contend that KMA‘s attorneys did not do enough to bring their criticisms to the attention of the trial court, and the majority credits such argument. See Majority Opinion, at 438-40, 34 A.3d at 41-42. My response is twofold. First, I do not believe the majority opinion in this
In summary, left to my own devices, I would vacate the verdict and overturn the class certification order on its terms. I would also highlight the evaluative process which I believe should be required from the outset to shape the course of broad-scale, aggregate litigation likely to span the better part of a decade. I do not believe justice is served by insulating this verdict in reliance on the discretionary aspect of certification decisions, thus extending a liberality which yields trials where substantive requirements are subject to dilution and non-enforcement without substantive justification.
COMMONWEALTH of Pennsylvania, Respondent
v.
Jamaar RICHARDSON, Petitioner.
No. 87 EM 2011.
Supreme Court of Pennsylvania.
Dec. 13, 2011.
ORDER
PER CURIAM.
AND NOW, this 13th day of December, the Petition for Leave to File Petition for Allowance of Appeal Nunc Pro Tunc is GRANTED. See
34 A.3d 65
CITY OF PHILADELPHIA, for the Use of YNLME, INC., Respondent
v.
Teresa KENNEDY, Petitioner.
Supreme Court of Pennsylvania.
Dec. 14, 2011.
No. 359 EAL 2011.
Notes
The academic literature examining this form of litigation has portrayed the class action at times as a savior, bringing about justice in an otherwise flawed system of individual adjudication, and other times as a villain, serving to artificially expand defendant liability and create a specialty practice for entrepreneurial plaintiffs’ lawyers.
Martin H. Redish & Clifford W. Berlow, The Class Action As Political Theory, 85 WASH. U.L. REV. 753, 754 (2007) (footnotes omitted).There is nothing unusual about the phenomenon that class actions encompass both common and individual questions. See generally Allan Erbsen, From “Predominance” to “Resolvability“: A New Approach to Regulating Class Actions, 58 VAND. L.REV. 995, 998-99 (2005) (“Factual distinctions at various levels of subtlety and materiality usually permeate the legal claims of putative class members, such that their collective claims raise both ‘common’ and ‘individual’ questions relevant to proving liability and damages.” (footnote omitted)). As further developed below, the irregularities in this case pertain to the absence of a management approach which would fairly account for such material differences.
The amount that you award today must compensate the Class completely for all damage that you find has been proven, let me put it that way.
Because there‘s no second day in court. Just like I said, we can‘t handle 10,000 individual cases and just like I said maybe the amount in question is too small to warrant a whole blown trial for every individual claim; well, just like we in court want only one case if we can reasonably and justly do it; likewise, the defendant only wants one case against them [sic]. So you damages, your verdict is the only verdict in this claim for both sides. There‘s no second day in court. Nobody can come back and say we forgot to bring this up or we discovered something tomorrow. Can‘t be done. You the jury are the only judges of the facts. After you decide this case, this case is decided.
N.T., May 26, 2005, Vol. 3, at 49-50 (emphasis added).I note that, in some circumstances, some jurisdictions have accepted the use of statistical, surveying, and sampling techniques to fill this sort of evidentiary void. See generally Laurens Walker, A Model Plan to Resolve Federal Class Action Cases By Jury Trial, 88 VA. L. REV. 405, 415-20 (2002). Such techniques are not universally and uncritically accepted, however. See generally 2 MCLAUGHLIN ON CLASS ACTIONS § 8:7 (6th ed.2010) (collecting cases). Moreover, whatever the merits of these sorts statistical and/or scientific techniques for approximating individualized damages in a class action, nothing of the sort was attempted here. Rather, and again, Appellees’ “automotive expert” offered an opinion based on a hypothetical entailing unproven, demonstrably erroneous, and under-inclusive assumptions.
when a plaintiff asks a court to certify her as a representative of absent class members seeking damages, the court may do so only if it has a feasible plan for resolving factual and legal disputes regarding each element and defense applicable to each class member‘s claim and for eventually entering judgment for or against each class member. There must either be an opportunity for the parties to litigate individual claims or defenses, or a reason to believe that such an opportunity is not necessary to reach a judgment that accurately values class members’ claims. The existence of individualized issues of fact and law unique to the circumstances of particular class members thus does not necessarily preclude certification if the court has a plan for coping with individual factual and legal inquiries. In practice, however, certification will not be possible when there is no manageable way of reaching a final judgment that resolves all factual and legal disputes relevant to each class member‘s entitlement to relief under applicable substantive law, and when one or more parties is unwilling to settle voluntarily.
Erbsen, From “Predominance” to “Resolvability”, 58 VAND. L.REV. at 1049.
Parenthetically, the majority cites Professor Erbsen‘s substantial work for the proposition that claims proceedings are not required in class actions. See Majority Opinion, at 45 n. 30. While this may be true, the majority does not capture the author‘s overarching point that some fair mechanism for individualized treatment of individualized issues is required.The practical problems with certifying class actions despite dissimilarity among claims arise from the natural human instinct to simplify the inherently complex and to create order out of what appears chaotic. These instincts manifest in class actions in the form of procedural shortcuts to squeeze heterogeneous claims into a homogenous mold and thereby avoid the procedural difficulties that dissimilarity would create.... Likewise, aggregating distinct individual claims into a class obscures differences among class members in ways that engender substantive consequences.
Erbsen, From “Predominance” to “Resolvability”, 58 VAND. L.REV. at 1009-10.Again, it may well be that, as a matter of social policy, some or all of the techniques and philosophies pertaining to class action settlements should be transported into the trial context. My main point here is that, undisputably, the approval of the class action device as acceptable procedure did not accomplish such a substantive change in Pennsylvania. See supra Part I. Moreover, and again, in any such substantive decision making, separation of powers considerations and the constitutional interests of affected defendants obviously merit careful consideration. See id.
Professor‘s Erbsen‘s overview perspective is again illuminating:Erbsen, From “Predominance” to “Resolvability”, 58 VAND. L.REV. at 1012-13.“Ad hoc lawmaking” occurs in class actions when courts attempt to devise substantive and evidentiary shortcuts around management problems that dissimilarity imposes on the resolution of otherwise similar claims. For example, courts will ... bend the rules of evidence and alter burdens of proof so that contested facts can be resolved on a common rather than individualized basis[.] Nothing inherent in the class action device distorts substantive or evidentiary rules in this manner, but certification has that practical effect when judges try to manage the dissimilar aspects of class members’ claims.