2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 1 of 67 Pg ID 21748 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In Re: OnStar Contract Litigation Case No. 2:07-MDL-01867 Honorable Sean F. Cox ________________________________/ OPINION & ORDER DENYING PLAINTIFFS’ MOTIONS FOR CLASS CERTIFICATION Buyers and lessees of automobiles equipped with OnStar telematics equipment filed prospective class action complaints against four automobile manufacturers (General Motors Corporation (“GM”), American Honda Motor Company (“Honda”), Subaru of America (“Subaru”), and Volkswagen of America (“VW”)), and OnStar Corporation (“OnStar”), asserting consumer protection act and warranty claims. Those actions were consolidated for pretrial proceedings by the Judicial Panel on Multidistrict Litigation. The complaints have since been combined in a Second Master Amended Complaint that seeks certification of nationwide classes. This matter is currently before the Court on Plaintiffs’ Motions for Class Certification as to Defendant OnStar and three manufacturer Defendants: Honda, Subaru, and VW. Plaintiffs ask the Court to certify a nationwide class as to their Michigan Consumer Protection Act claims against OnStar. Plaintiffs also seek class certification of their consumer fraud and express warranty claims against: 1) Honda under the laws of Washington, California, New York, and Florida; 2) Subaru under the laws of Washington, Pennsylvania, New York, and Oregon; and 3) VW under the laws of California, Colorado, New York, and West Virginia. 1 2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 2 of 67 Pg ID 21749 The parties have conducted extensive class-certification discovery and have fully briefed the issues. A hearing on the motions was held on November 10, 2011. As explained below, because the consumer protection and warranty laws of several states govern Plaintiffs’ claims, and because factual variations among the claims abound, Plaintiffs have not met FED. R. CIV. P. 23(b)(3)’s predominance requirement. Accordingly, the Court shall DENY Plaintiffs’ Motion for Class Certification. BACKGROUND A. Procedural Background Case Management Order No. 1, which was submitted and agreed to by the parties, was entered in this action on January 25, 2008. (D.E. No. 44). That order provided that Plaintiffs would file a Master Amended Complaint (“MAC”) and that Defendants may file motions to dismiss the MAC. It also required Plaintiffs to file their Initial Class Statement within 10 days of the Court’s ruling on Motions to Dismiss and provided that the statement to be filed by Plaintiffs “shall define the putative class(es) (including any subclasses for which Plaintiffs will seek class treatment.)” (D.E. No. 44 at 7). It further provides that class certification discovery would commence upon the filing of that Initial Class Statement. (Id.). Plaintiffs filed their MAC on February 25, 2008. (D.E. No. 46). Thereafter, Defendants filed Motions to Dismiss. This Court issued its Opinion & Order on the Motions to Dismiss on February 19, 2009. (D.E. No. 100). Notably, at the time that the Court ruled on the Motions to Dismiss, the Court had not made any rulings regarding choice of law. The Court made rulings concerning several of the grounds presented in the motions to dismiss based on generally applicable law and declined to make rulings on other grounds that required a choice-of-law 2 2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 3 of 67 Pg ID 21750 determination before they could be addressed. Among other things, this Court ruled that the MAC, as it existed at that time, failed to state an express warranty claim as to any Plaintiff whose express written warranty had expired prior to the cut-off of analog service. The Court did not rule whether or not a Plaintiff whose express written warranty had expired, but who alleged unconscionability, stated a breach of warranty claim. Plaintiffs’ Initial Class Statement On March 2, 2009, Plaintiffs filed their Initial Class Statement, wherein Plaintiffs stated that they intended to seek certification of the following nationwide classes as to the Manufacturer Defendants: Honda Class All individuals and entities in the United States who, as of December 31, 2007, either owned or leased a Honda vehicle originally sold or leased on or after August 8, 2002 and equipped with analog-only or analog/digital-ready OnStar equipment which had not been upgraded or who paid for an upgrade on or before December 31, 2007. Subaru Class All individuals and entities in the United States who, as of December 31, 2007, either owned or leased a Subaru vehicle originally sold or leased on or after August 8, 2002 and equipped with analog-only or analog/digital-ready OnStar equipment which had not been upgraded or who paid for an upgrade on or before December 31, 2007. VW Class All individuals and entities in the United States who, as of December 31, 3 2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 4 of 67 Pg ID 21751 2007, either owned or leased a VW vehicle originally sold or leased on or after August 8, 2002 and equipped with analog-only or analog/digital-ready OnStar equipment which had not been upgraded or who paid for an upgrade on or before December 31, 2007. GM All individuals and entities in the United States who, as of December 31, 2007, either owned or leased a GM vehicle originally sold or leased on or after August 8, 2002 and equipped with analog-only or analog/digital-ready OnStar equipment which had not been upgraded or who paid for an upgrade on or before December 31, 2007. (D.E. No. 101 at 1-2). Plaintiffs’ SMAC On April 30, 2009, Plaintiffs filed their Second Master Amended Complaint (“SMAC”). (D.E. No. 113). The following five counts of the SMAC are asserted against Honda, Subaru, VW, and GM: Count I, asserting claims under the Michigan Consumer Protection Act; Count II, alleging “Unfair and Deceptive Trade Practices In Violation Of All States’ Consumer Protection Acts”; Count III, alleging “Breach of Express Warranty” claims; Count IV, alleging breach of implied warranty claims; and Count V, alleging violations of the Magnuson-Moss Warranty Act. The SMAC states that Plaintiffs seek to bring this action on behalf of the same nationwide classes that were identified in Plaintiffs’ Initial Class Statement. (See SMAC at ¶ 193). The Breach of Express Warranty Count in the SMAC differs from the MAC in that it alleges that the durational limitations in the Manufacturer Defendants’ warranties with respect to analog OnStar equipment were “unreasonable,” “unconscionable, invalid and unenforceable.” (SMAC at ¶¶ 220-21). 4 2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 5 of 67 Pg ID 21752 Only Counts I and II of the SMAC, the consumer protection act claims, are asserted against OnStar. Claims Against GM Are Stayed On June 1, 2009, GM filed a voluntary petition seeking bankruptcy protection under 11 U.S.C. § 101 et. seq. in the United States Bankruptcy Court for the Southern District of New York. (D.E. No. 126). As of December 16, 2009, Counsel for GM advised the Court that the bankruptcy case was still pending and all claims against GM remain stayed. (See D.E. No. 199). Plaintiffs are not seeking class certification as to any claims asserted against GM. To date, the Court has not received any notice from Plaintiffs indicating that the stay has been lifted, that the claims against GM have been discharged, or that Plaintiffs wish to dismiss the claims against GM. Choice-Of-Law Rulings On August 25, 2010, after conducting a choice-of-law analysis as to the consumer protection act and warranty claims asserted against Honda, Subaru and VW, this Court ruled that the law of each Plaintiff’s home state (i.e., the law of the state where each Plaintiff resides) shall govern his or her claims. (D.E. No. 250).1 The Court ruled that Michigan law applies to Plaintiffs’ consumer protection act claims against OnStar. Pending Motions For Class Certification From the outset, Plaintiffs have sought to certify nationwide classes in this action, taking 1No choice-of-law ruling was made as to the claims asserted against GM due to the bankruptcy stay. 5 2:07-md-01867-SFC-PJK Doc # 336 Filed 12/19/11 Pg 6 of 67 Pg ID 21753 the position that Michigan law should be applied to all claims against all Defendants. Thus, the SMAC includes Count I: “Plaintiffs and The Classes v. All Defendants Violations Of The Michigan Consumer Protection Act.” It also contains, as an alternative count, Count II: “Plaintiffs and the Classes v. All Defendants Unfair and Deceptive Trade Practices In Violation Of All States’ Consumer Protection Acts,” which then asserts claims under the consumer protection acts of the remaining 49 states and the District of Columbia. The SMAC, however, only includes named plaintiffs from Michigan and eight other states. Plaintiffs have filed separate motions asking this Court to certify class actions as to OnStar, Honda, Subaru, and VW. Both the SMAC – the operative complaint in this action – and Plaintiffs’ Initial Class Statement ask the Court to certify OnStar, Honda, Subaru, and VW classes that are different than the classes that Plaintiffs now ask this Court to certify in their motions. OnStar Plaintiffs are still asking the Court to certify a nationwide class as to Defendant OnStar, but they have changed the proposed OnStar Class. The OnStar Class that Plaintiffs now ask the Court to certify is as follows: All persons or entities residing in the United States who between August 8, 2002 and December 2006, purchased or leased a vehicle equipped with an analog OnStar system and were subscribers as of December 31, 2006 and who owned the vehicle as of December 31, 2007, (1) for whom no upgrade to digital service was offered, or (2) who paid for or were required to pay to upgrade to digital OnStar service.