In American Honda Motor Company, Inc. v. Superior Court of Los Angeles County, 199 Cal. App. 4th 1367 (2011), the California Court of Appeal for the Second Appellate District clarified that, under California law, a party moving for class certification in a breach of warranty action must provide "substantial evidence of a defect that is substantially certain to result in malfunction during the useful life of the product." American Honda Motor Co., Inc., 199 Cal. App. 4th at 1375.
Plaintiff Jin Hyeong Lee purchased a new Acura RSX with a
six-speed manual transmission from Defendant American Honda Motor
Company, Inc. ("Honda"). Id. at 1369. The
standard manufacturer's four-year warranty certified that Honda
would replace any parts defective in material or workmanship under
normal use. Id. The plaintiff experienced problems with
the transmission within the warranty period when the car would pop
out of third gear while it was running, but Honda technicians told
him that the car was operating as designed. Id. Honda
issued a service update to its dealers and a technical service
bulletin ("TSB") about this issue, advising Honda
technicians on how to address the problem, such as replacing the
third gear set. Id. at 1369-70.
The plaintiff brought a class action suit against Honda, alleging
breach of warranty and unfair business practices under the UCL.
Id. at 1370. The trial court granted the plaintiff's
motion to certify a class of all individuals in California who
purchased or leased the Acura models described in Honda's TSB,
but whose third gear set was not replaced by Honda. Id.
Honda filed a petition for writ of mandate. Id.
The Court of Appeal granted Honda's petition, holding that the
trial court abused its discretion when it certified the
plaintiff's proposed class because it relied almost exclusively
on a Ninth Circuit opinion, Wolin v. Jaguar Land Rover North
America, LLC, 617 F.3d 1168 (9th Cir. 2010), without properly
applying California law. Id. at 1375. Although
Wolin correctly stands for the proposition that proof of
manifestation of a defect is not a prerequisite to class
certification in a breach of warranty case, the analysis under
California law does not end there. Id. at 1375. Rather,
under Hicks v. Kaufman & Broad Home Corporation, 89
Cal. App. 4th 908 (2001), the plaintiff must still provide proof
that "an inherent defect exists which is substantially certain
to result in malfunction during the useful life of the
product." Id. at 1373. Because the trial court did
not follow Hicks and based its ruling on the erroneous legal
assumption that Wolin alone was the law, the Court of
Appeal reversed the class certification order. Id. at
1376.
In addition, the Court of Appeal held that the plaintiff's
breach of warranty claims were not amenable to class treatment as
the class was currently defined because the plaintiff's own
evidence showed that, of the vehicles in question, less than four
percent reported warranty claims for third gear problems, and, of
that number, many had received a new third gear. Id. at
1377. Several other individualized issues persisted, including
whether the warranty had expired or whether the alleged defect
caused the problems. Id. at 1378. Notably, the Court of
Appeal held that a TSB is not and cannot be fairly construed by a
trial court as an admission of a design or other defect.
Id.
Lastly, as to the plaintiff's UCL cause of action, the Court of
Appeal held it was not subject to common proof because the
plaintiff did not allege that Honda or its dealers made standard or
scripted representations to class members. Id. at 1379.
Rather, the plaintiff's own evidence showed how variable the
representations could be and that, since many of the class members
never even reported third gear problems, many class members were
undisputedly never exposed to the alleged misrepresentations about
a third gear problem. Id.
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