IN THE FLORIDA SUPREME COURT

Transcription

1 IN THE FLORIDA SUPREME COURT SONIC AUTOMOTIVE, INC., ) a North Carolina corporation, ) ) Fla.S.Ct. Case No. SC Petitioner, ) ) Fla. 2d DCA Case No. 2D vs. ) ) L.T. Case No ENRIQUE GALURA, and ) MARISA HAZELTON, on behalf ) of themselves and all others similarly ) situated, ) ) Respondents. ) ) ON DISCRETIONARY REVIEW FROM THE FLORIDA SECOND DISTRICT COURT OF APPEAL RESPONDENTS' ANSWER BRIEF ON JURISDICTION David M. Caldevilla Florida Bar Number de la Parte & Gilbert, P.A. Post Office Box 2350 Tampa, Florida Telephone: (813) COUNSEL FOR RESPONDENTS

2 TABLE OF CONTENTS Page TABLE OF AUTHORITIES...ii STATEMENT OF CASE AND FACTS...1 SUMMARY OF THE ARGUMENTS...3 ARGUMENTS..3 I. THE SECOND DCA'S DECISION IS NOT IN CONFLICT WITH ANY FLORIDA DISTRICT COURT OR SUPREME COURT DECISIONS.3 CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE i

3 TABLE OF AUTHORITIES Citations to case law: Page Allstate Ins. Co. v. Langston, 655 So.2d 91 (Fla.1995).9 Black Diamond Properties, Inc. v. Haines, 940 So.2d 1176 (Fla. 5th DCA 2006).4 Cole v. Echevarria, McCalla, Raymer, Barrett & Frapper, 2007 WL , - So.2d - (Fla. 1st DCA Sept. 28, 2007)..7 Collins v. DaimlerChrysler Corp., 894 So.2d 988 (Fla.5th DCA 2004) 6 Cummings v. Warren Henry Motors, Inc., 648 So.2d 1230 (Fla. 4th DCA 1995).5 Davis v. Powertel, Inc., 776 So.2d 971 (Fla. 1st DCA 2000), rev. den., 794 So.2d 605 (Fla.2001) 5, 6 Dept. of Health & Rehab. Services v. National Adoption Counseling, 498 So.2d 888 (Fla. 1986)...4 Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006) 8, 9 Equity Residential Prop. Trust v. Yates, 910 So.2d 401 (Fla. 4th DCA 2005)...7 Hutson v. Rexall Sundown, Inc., 837 So.2d 1090 (Fla. 4th DCA 2003).4 Latman v. Costa Cruise Lines, N.V., 758 So.2d 699 (Fla. 3d DCA 2000) 6 Mancini v. State, 312 So.2d 732 (Fla.1975)..4 ii

4 Orkin Exterminating Co. v. Petsch, 872 So.2d 259 (Fla.2d DCA 2004).7 Philip Morris USA, Inc. v. Hines, 883 So.2d 292 (Fla. 4th DCA 2003)..4 Reaves v. State, 485 So.2d 829 (Fla. 1986).4 Sonic Automotive, Inc. v. Galura, 961 So.2d 961 (Fla.2d DCA 2007) (the "Opinion")..1, 2, 3, 9 Turner Greenberg Assoc., Inc. v. Pathman, 885 So.2d 1004 (Fla. 4th DCA 2004) 6, 8 Veal v. Crown Auto Dealerships, Inc., 236 F.R.D. 572 (M.D.Fla.2006).2 Citations to Florida Constitution: Art. V, 3(b)(3), Fla. Const..3 Art. V, 3(b)(4), Fla.Const...4 Citations to Florida Statutes: , Fla. Stat. ( ) , Fla. Stat. ( )..1 Citations to rules of procedure: Fla.R.App.P Fla.R.Civ.P (a).1, 3 Fla.R.Civ.P (b)(2) 1, 2, 3 Fla.R.Civ.P (b)(3) 1, 3, 9 iii

5 Fla.R.Civ.P (d)(1) 3, 9 iv

6 STATEMENT OF CASE AND FACTS Respondents/Plaintiffs Enrique Galura and Marisa Hazelton submit this brief in response to the jurisdiction brief submitted by Petitioner/Defendant Sonic Automotive, Inc. ("Sonic"), seeking discretionary review of Sonic Automotive, Inc. v. Galura, 961 So.2d 961 (Fla.2d DCA 2007) (the "Opinion"). Sonic owns various car dealerships. The Respondents filed a class action against Sonic, pursuant to the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), , Fla. Stat. ( ). Opinion at 963. The Respondents alleged that Sonic orchestrated a scheme to secretly include a product known as "Etch" into vehicle transactions without proper disclosure to customers. Opinion at The Respondents also alleged that Etch is essentially worthless and unconscionably overpriced. Opinion at 964. Pursuant to FDUTPA, the Respondents sought damages, interest, declaratory and injunctive relief, attorney's fees, and costs. Id. After conducting a hearing, the trial court granted the Respondents' motion for class certification pursuant to Florida Rule of Civil Procedure 1.220(a), (b)(2), and (b)(3). 1 Opinion at 964. The trial court's order "certifies and defines as the Sonic Class, all customers who on or after December 30, 1998, purchased or leased from a Sonic dealership in the State of Florida a vehicle that included an etch 1 Rule 1.220(b)(2) pertains to class certification of declaratory and injunctive relief claims. Rule 1.220(b)(3) pertains to claims seeking monetary relief. 1

7 product as part of the transaction." Id. (footnote omitted). Sonic appealed the class certification order, and the Second DCA affirmed in part and reversed in part. First, the Second DCA held that "the class representatives sufficiently established the prerequisites for certification under subsections (a) and (b)(3) of rule 1.220" and "affirm[ed] certification under those subsections without discussion except to note that the facts and legal theories argued in support of certification are very similar to those asserted in Veal v. Crown Auto Dealerships, Inc., 236 F.R.D. 572 (M.D.Fla.2006)." Opinion at 965 (emph. added). Second, the Second DCA reversed, without prejudice, the trial court's class certification under rule 1.220(b)(2), on the grounds that "the record does not establish that injunctive or declaratory relief is appropriate to the class as a whole" and that "the trial court did not make factual findings that support its conclusion." Opinion at 965. Third, the Second DCA found that the class definition was overbroad, and must be modified on remand to exclude: (1) all individuals who have already received a refund for their Etch purchase pursuant to the Department of Insurance's investigation, and (2) all individuals who purchased Etch on or after the April 23, 2003 effective date of legislation which excluded these types of disputes from FDUTPA. Opinion at 966. In its conclusion, the Second DCA recapped by stating that it "considered Sonic's other arguments but conclude[d] that, except as discussed above, the 2

8 certification order is proper." As such, the Second DCA "affirmed the order as to subsections (a) and (b)(3) of rule 1.220, but reverse[d] as to rule 1.220(b)(2) and the class definition", and remanded with instructions that the trial court enter an amended certification order consistent with [the] opinion" but noted that "as the case progresses, the trial court may alter or amend the order as may be appropriate. See, Fla. R. Civ. P (d)(1)." Opinion at Sonic subsequently filed a notice seeking to invoke this Court's discretionary jurisdiction. SUMMARY OF THE ARGUMENTS Sonic's brief improperly goes beyond the four corners of the Second DCA's decision, and relies upon case law which is easily distinguished from the case at bar. The Second DCA's decision does not conflict with any other Florida district court or Supreme Court decisions. Accordingly, this Court lacks jurisdiction. ARGUMENTS I. THE SECOND DCA'S DECISION IS NOT IN CONFLICT WITH ANY FLORIDA DISTRICT COURT OR SUPREME COURT DECISIONS Discretionary jurisdiction under Art. V, 3(b)(3) of the Florida Constitution may be invoked only if the district court's decision "expressly and directly conflicts with a decision of another district court of appeal or of the supreme court on the same question of law." Moreover, Sonic has the burden of demonstrating the alleged conflict appears "within the four corners" of the Second DCA's decision, 3

9 and the record on appeal cannot be relied upon to establish the alleged conflict, or to determine whether a district court's recitation of the facts is correct. See, e.g., Reaves v. State, 485 So.2d 829 (Fla. 1986); Dept. of Health & Rehab. Services v. National Adoption Counseling, 498 So.2d 888 (Fla. 1986). Further, the purported conflict cannot be merely "inferential" or "implied." National Adoption, 498 So.2d at 889. Rather, to trigger conflict jurisdiction, the decision below must (1) announce a rule of law that conflicts with a rule previously announced by another district court or this Court, or (2) apply a rule of law to produce a different result in a case involving similar facts to a case decided by another district court or this Court. Mancini v. State, 312 So.2d 732 (Fla.1975). Neither situation is presented here. Sonic begins by suggesting that "here, proof of causation as required by FDUTPA can only be made on an individualized basis." However, there is nothing within the four corners of the Second DCA's decision to confirm there are any individualized issues in this case, much less that any individualized issues will "predominate." Sonic erroneously contends that the Second DCA's decision conflicts with Black Diamond Properties, Inc. v. Haines, 940 So.2d 1176 (Fla. 5th DCA 2006); Philip Morris USA, Inc. v. Hines, 883 So.2d 292 (Fla. 4th DCA 2003); and Hutson v. Rexall Sundown, Inc., 837 So.2d 1090 (Fla. 4th DCA 2003). As conceded at p. 4 4

10 of Sonic's jurisdictional brief, each of those cases "turns on individual consumers' experiences, knowledge, or motivations." However, this case involves Sonic's scheme to secretly include a worthless product into vehicle transactions without disclosing it to customers. This can be easily demonstrated on a class-wide basis. This case is similar to Davis v. Powertel, Inc., 776 So.2d 971, 975 (Fla. 1st DCA 2000), rev. den., 794 So.2d 605 (Fla.2001), where "[i]ssues pertaining to the proof of the alleged deceptive practice and issues relating to causation and damages will be common to all members of the class." A deceptive trade practice is simply one that is likely to mislead customers. Id. The question is not whether the plaintiff actually relied on the alleged deceptive trade practice, but whether the practice was likely to deceive a reasonable consumer. 2 Id. See also, Cummings v. Warren Henry Motors, Inc., 648 So.2d 1230 (Fla. 4th DCA 1995) (under 2 In Powertel, a cell phone company sold name-brand cell phones to subscribers without informing them the phones were modified to work only with its wireless service and were inoperable with any other wireless service provider. 776 So.2d at In holding that the customers could maintain a class action under FDUTPA, the First DCA rejected arguments that FDUTPA did not apply to customers who would have purchased the modified phones at the same price even if they had known that they would not work with another service provider, or to customers who still wished to continue subscribing to the defendant's service. Id. at 973. "Because proof of reliance is unnecessary, the plaintiffs' inability to show reliance in every case cannot be used to justify a finding that individual issues will predominate over the class claims. Issues pertaining to the proof of the alleged deceptive practice and issues relating to causation and damages will be common to all members of the class." Id. at 975. Thus, issues concerning a class member's understanding or knowledge of the etch product do not defeat class certification. 5

11 FDUTPA, unfair practice is one that offends established public policy and is immoral, unethical, oppressive, unscrupulous, or injurious to consumers). This case is also similar to Latman v. Costa Cruise Lines, N.V., 758 So.2d 699 (Fla. 3d DCA 2000), where the defendant did not accurately and honestly disclose part of the purchase price of the item being sold. 3 Like Sonic, the cruise line in Latman argued that determinations of whether there was individual reliance by and resulting damage to any individual customer required a case-by-case inquiry. Id. The appellate court rejected this argument. Id. It is well settled that the sale of a worthless or unconscionably overpriced product is actionable under FDUTPA. Powertel, 776 So.2d at 975 (damages claims could be asserted on behalf of class under rule 1.220(b)(3) because they all shared "one essential common feature; that is, the alleged defective practice reduced the value of the telephones"); Turner Greenberg Assoc., Inc. v. Pathman, 885 So.2d 1004 (Fla. 4th DCA 2004) (class certification affirmed where FDUTPA claim was based on seller's failure to disclose price mark-ups); Collins v. DaimlerChrysler Corp., 894 So.2d 988 (Fla.5th DCA 2004) (FDUTPA has "no 3 In Latman, a cruise line made an additional profit off of a port fee that should have been no more than a "pass-through" cost to the customer. Id. at 702. The named plaintiffs did not have identical experiences in purchasing their cruises. Some of them purchased the cruise through a travel agent; some directly from the cruise line; some were given a breakdown of the cruise price and port charges; and some were only given the total cruise price. Id. Nevertheless, these variations in the customer's sales experiences did not affect their ability to bring a class action based on the cruise line's deceptive sales practice. Id. at

12 requirement that a defect manifest itself by failing to operate or by causing injury" and a plaintiff can claim "an actual injury in the form of insufficient product value"); Orkin Exterminating Co. v. Petsch, 872 So.2d 259, 263 (Fla.2d DCA 2004) (FDUTPA allows consumers to recover damages for diminished value of services received); Equity Residential Prop. Trust v. Yates, 910 So.2d 401 (Fla. 4th DCA 2005) (class action certified in FDUTPA claim based on landlord's overcharges); Cole v. Echevarria, McCalla, Raymer, Barrett & Frapper, 2007 WL , - So.2d - (Fla. 1st DCA Sept. 28, 2007) (class action certified in FDUTPA claim based on inflated charges for title work). In this case, Sonic put in place a scheme to charge money for a worthless or unconscionably overpriced product by secretly bundling its price with that of another product. Because FDUTPA requires no proof of individual reliance, proof of Sonic's directives and proof of the Etch product's actual value will be sufficient to establish an unfair and deceptive trade practice for the entire class, regardless of what any particular customer was told. At p. 5 of the jurisdictional brief, Sonic states that Respondents "do not allege a single practice, uniformly applied to all class members, but rather a 'scheme' involving a variety of alleged 'deceptive and unfair business practices.'" In footnote 1 at p. 5, Sonic states that the scheme "involves a wide range of purported practices, from nondisclosure to oral and written misrepresentations to 7

13 forgery." At p. 6, Sonic states that Respondents "allege they were induced to purchase Etch by misrepresentations regarding the nature of the product." At p. 8, Sonic states that the class action is "founded on claims of misrepresentations..." Again, there is no support for Sonic's statements within the "four corners" of the Second DCA's decision, and therefore, these statements provide no basis to invoke this Court's conflict jurisdiction. Moreover, despite Sonic's arguments to the contrary, the FDUTPA claim in this case is based on Sonic's failure to disclose, not misrepresentations. Sonic's scheme was to secretly charge money for a worthless product that the consumer never knew was included in the transaction. There are no individualized issues preventing class certification in this case, and the Second DCA's decision certainly does not identify or suggest the presence of such issues. See, Pathman, 885 So.2d 1004 (class certification affirmed where FDUTPA claim was based on seller's failure to disclose price mark-ups). Sonic's reliance on this Court's recent decision in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006) is grossly misplaced. In Engle, this Court aligned itself with a long line of federal decisions which approve a "phased approach" to class action certification. In Engle, this Court held that class certification can be designed to allow common issues to be determined on a class-wide basis, and to the extent that any issues requiring highly individualized proof remain thereafter, Engle holds that they can be handled through sub-classes or decertified with notice 8

14 to class members as to how they may proceed on the remaining issues. The Engle decision negates Sonic's arguments that causation and damages issues are too highly individualized in this case. As explained in Engle, a trial court can properly separate liability, causation, and damages issues, certify the class to address the liability issues, and if necessary, leave the causation and damages issues to be determined on an individual basis. The concluding paragraph of the Second DCA's decision sub judice expressly states that "as the case progresses, the trial court may alter or amend the order as may be appropriate. See Fla. R. Civ. P (d)(1)." Opinion at 967. Thus, even if this case did involve individualized issues, the Second DCA's remand instructions would allow them to be addressed in the manner contemplated by Engle. Sonic concludes its jurisdictional brief with an attempt to convince this Court that this case has great public importance. However, a question of great public importance is insufficient to invoke this Court's discretionary jurisdiction, unless it was actually "certified" by the district court. Art. V, 3(b)(4), Fla.Const.; Allstate Ins. Co. v. Langston, 655 So.2d 91 (Fla.1995). In this case, the Second DCA has not certified such a question. In summary, the Second DCA's decision does not conflict with the cases cited by Sonic, and is consistent with the numerous appellate decisions authorizing class certification of similar FDUTPA claims, and this Court's recent decision in 9

15 Engle, as well as the requirements of Rule 1.220(b)(3). Therefore, this Court lacks jurisdiction. CONCLUSION Based upon the foregoing, Respondents respectfully request this Honorable Court to deny Sonic's petition for review. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy hereof has been served by U.S. Mail to Steven G. Burton, Esquire, 100 N. Tampa Street, Suite 3500, Tampa, FL 33602; Beverly A. Pohl, Esquire, 100 S.E. Third Ave., Suite 2700, Ft. Lauderdale, FL 33394; and J. Andrew Keyes, Esquire, th Street NW, Washington, DC 20005; on this day of, 20. CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that the text herein is printed in Times New Roman 14-point font, and that this brief complies with the font requirements of Florida Rule of Appellate Procedure Respectfully submitted, de la PARTE & GILBERT, P.A. David M. Caldevilla Florida Bar Number Post Office Box 2350 Tampa, Florida Telephone: (813) COUNSEL FOR RESPONDENTS 10