Class Certification Denied Under Rules 23(a)(2) and 23(b)(3) Where Individualized Inquiries Were Required for Car Dealers’ Claims

In Auto. Leasing Corp. v. Mahindra & Mahindra, Ltd., 2014 U.S. Dist. LEXIS 33224 (N.D. Ga. Mar. 14, 2014), 340 car dealers collectively paid the defendant car manufacturer $32 million in “appointment fees” for the right to sell the defendant’s cars. The defendant ultimately decided not to enter the U.S. market and did not refund all the fees. The class plaintiffs brought a variety of federal and state law claims. For the state claims, plaintiffs relied on choice of law provisions in certain “dealership agreements” to establish that Georgia law applies, but did not include any breach of contract claims.
The court found that the choice of law provision, which merely indicates that “[t]his Agreement is to be governed and construed according to the laws of the State of Georgia,” did not reach disputes arising from the agreements. And, given that at least seven of the eight named class members had no ties to the state of Georgia, the court would have to conduct differing due process analyses for many of the 340 class members. Further supporting the determination that plaintiffs failed to establish commonality under Rule 23(a)(2), the court noted that multiple versions of documents were signed by the dealers in the class and on differing dates.
Applying much of the same reasoning, the court separately held that plaintiffs failed to establish predominance under Rule 23(b)(3). Additionally, the class members sought to recover varying amounts that were paid at differing times, and in some cases, were paid to the defendant’s predecessor. Thus, applying Conagra and Comcast, the court determined that the need for individualized assessments of damages counsels against class certification.

Civil Rule 23 Requirements, Class Action Fairness Act, Class Definitions