Mazza v. American Honda

Under Federal Rule of Civil Procedure 23(b)(3), no common issue of law exists in a consumer protection class action stemming from automobile sales in 44 different jurisdictions, because the foreign states’ interest in applying its own consumer protection laws to achieve an optimal balance between protecting consumers and fostering commerce, outweighs one state’s interest in regulating those who do business and commit wrongdoing within its borders.

Michael and Janet Mazza and Deep Kalsi (“Plaintiffs”) filed a class action complaint against American Honda Motor Co., Inc. (“Honda”) under the California Unfair Competition Law (“UCL”) on behalf of a nationwide class of all consumers who purchased or leased Acura RLs equipped with a Collision Mitigation Braking System (“CMBS”), an optional technology package, during a three-year period in 44 different jurisdictions. The district court certified the class under Federal Rule of Civil Procedure 23(b)(3). Honda appealed the class certification, arguing, inter alia, that common issues of law and fact do not predominate. After finding no common issue of law, the Ninth Circuit held that “each class member’s consumer protection claim should be governed by the consumer protection laws of the jurisdiction in which each member purchased or leased an Acura RL.” This is so because California’s choice of law rules apply California law in a class action if “the interests of other states are not found to outweigh California’s interest in having its law applied.” The Court reasoned that material differences exist between California law and foreign states’ consumer protection laws, including the requirement of (or lack thereof) scienter and proof of reliance. The Court reasoned: “each foreign state has an interest in applying its [consumer protection laws] to transactions within its borders and that, if California law were applied to the entire class, foreign states would be impaired in their ability to calibrate liability to foster commerce.” The Court further found no common issue of fact, because the small scale of Honda’s advertising campaign did not give rise to a presumption of reliance, as it was unlikely that many class members were exposed to the allegedly misleading advertisements. VACATED and REMANDED.