Duane Morris Consumer Fraud Class Action Review – 2024

3. Motions On Class Decertification In 2023, defendants had mixed results in seeking to decertify classes that courts previously had certified. The plaintiffs in Sonneveldt, et al. v. Mazda Motor Of America, Inc., 2023 U.S. Dist. LEXIS 23481 (C.D. Cal. Jan. 25, 2023), a group of consumers, filed a class action alleging Mazda ’ s 2008-2015 CX-9s and 2009-2013 Mazda6s vehicles equipped with MZI Cyclone engines had a design defect that led to premature engine failure in violation of the Texas Deceptive Trade Practices Act (TDTPA). The court previously granted the plaintiffs’ motion for class certification. Subsequently, the court, sua sponte, decertified the class. The court found that the plaintiffs contended that the design defect manifestation rate was not relevant and failed to offer any evidence that would allow a jury to determine the likelihood that the defect would manifest in each class vehicle. The court reasoned that without any evidence as to the failure rate, the trier of fact would be left to speculate as to the likelihood of the defect ’ s manifestation and each class member ’ s potential injury. The court ruled that the only evidence regarding warranty claims rates and water pump led to a conclusion that water pump failures were rare among the class vehicles and unlikely to occur in the vast majority of cases. The court found that because the facts could not support a finding that manifestation of the design defect was more than a “remote chance” for most members of the Texas- based class, most members of the Texas class could not claim an injury that was actionable under the TDTPA. Id. at *19-20. The court therefore concluded that the class could not meet the predominance requirement, and decertified the class. Conversely, in Weiner, et al. v. Ocwen Financial Corp., 343 F.R.D. 628 (E.D. Cal. 2023), the plaintiffs alleged that Ocwen Financial Corp. charged improper fees and misapplied payments in violation of California ’ s Unfair Competition Law, the Racketeer Influenced and Corrupt Organizations Act (RICO), and the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act). After the close of discovery, the defendant secured an order from the court that decertified the class. Subsequently, the plaintiff filed a motion for reconsideration of the court ’ s ruling granting the defendant ’ s motion for decertification. The plaintiff argued that the court misinterpreted and thus misapplied the U.S. Supreme Court ’ s decision in TransUnion LLC v. Ramirez, et al., 141 S.Ct. 2190 (2022), by concluding that TransUnion modified the predominance inquiry under Rule 23(b)(3). The plaintiff contended that the court ’ s misinterpretation led it to erroneously find that because the plaintiff ’ s class-wide evidence on damages was disputed, the court would be required to engage in individualized inquiries as to the standing of each class member that would predominate over common questions of law or fact. The court determined reconsideration was appropriate, and it clarified that TransUnion did not require proof of harm for every class member at the certification stage. In granting the plaintiff ’ s motion for reconsideration, the court vacated its previous order, and denied the defendant ’ s motion for class decertification. The court ruled that individualized inquiries into standing did not predominate over common questions, and thus the previous ruling granting class certification was appropriate. 4. Rulings On Other Issues In Consumer Fraud Class Actions Courts undertook adjudication of a wide range of motions in 2023 in consumer fraud class actions, some of which were subsidiary to class certification motions. The plaintiffs in a consolidated class action, Chapman, et al. v. GM LLC, 2023 U.S. Dist. LEXIS 98317 (E.D. Mich. June 6, 2023), alleged there were defects in GMC and Chevrolet trucks with 6.6L Duramax engines from model years 2011-2016, caused by GM ’ s use of Bosch CP4 pumps. After the court certified several classes, GM moved for reconsideration. The court denied most aspects of GM ’ s motion. First, GM asserted that the court erred when it found GM ’ s failure to assert arbitration as an affirmative defense earlier in the litigation constituted a waiver of GM ’ s right to compel arbitration. The court disagreed. It found that GM did not invoke the defense for over four years of litigation and thus it was waived. GM also argued

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