A Discussion of the Impact of Mazza v. American Honda Motor Company, Inc. Dina Micheletti and Keri Campbell Ben Whitwell Moderator

Transcription

1 A Discussion of the Impact of Mazza v. American Honda Motor Company, Inc. Dina Micheletti and Keri Campbell Ben Whitwell Moderator

2 Mazza v. American Honda Importance of the 9 th Circuit Ruling on Consumer Class Actions Holding in applying choice of law analysis directly impacts the ability to maintain nationwide class actions under California s unfair competition statutes

3 California s Choice of Law Analysis Class action proponent bears the burden of showing that California has significant contact or significant aggregation of contacts to the claims of each class member. Wash. Mut. Bank v. Superior Court, 24 Cal. 4 th 906, 921 (2001)

4 California s Choice of Law Analysis Once class action proponent makes a showing of significant contact, the burden shifts to the defendant to demonstrate that foreign law, rather than California law, should apply to class claims. Id.

5 California s Choice of Law Analysis California law may only be used on a class wide basis if the interests of other states are not found to outweigh California s interest in having its law applied. Id. Three part test Governmental Interest Test set forth by California Supreme Court in McCann v. Foster Wheeler, LLC, 48 Cal. 4 th 68, (2010).

6 Governmental Interest Test First, the Court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different.

7 Governmental Interest Test Second, if there is a difference, the court examines each jurisdiction s interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists.

8 Governmental Interest Test Third, if the Court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state s interest would be more impaired if the policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be more impaired if its law were not applied.

9 Mazza v. American Honda Ninth Circuit found that California had sufficient aggregation of contacts because Honda s corporate headquarters, the advertising agency that produced the allegedly fraudulent misrepresentations and one fifth of the class members were all located in California.

10 Mazza v. Honda America Conflict of Laws Ninth Circuit found that there were material differences in California s consumer protection laws and the consumer protection laws of other states Scienter Reliance Remedies

11 Mazza v. American Honda Interests of Foreign Jurisdictions Ninth Circuit found that California law also acknowledges that a jurisdiction ordinarily has the predominant interest in regulating conduct that occurs within its borders. Id. at 592, citing McCann, 48 Cal. 4 th at 97. Stated that transactions at issue were the automobile sales which took place in 44 different jurisdictions

12 Mazza v. American Honda Interests of Foreign Jurisdictions Ninth Circuit highlighted each state s interest in balancing consumer protection with creating a favorable business climate Ninth Circuit stated that the creation of that balance were decisions properly made by each state s legislature and courts

13 Mazza v. American Honda California s Interests As set forth by the Ninth Circuit Intentionally Left Blank

14 California s Interests As stated by California Supreme Court: California has a clear and substantial interest in preventing fraudulent practices in this state which may have an effect both in California and throughout the country... California also has a legitimate and compelling interest in preserving a business climate free of fraud and deceptive practices. Diamond Multimedia Systems, Inc. v. Superior Court, 19 Cal. 4th 1036, (1999)(emphasis supplied)

15 Mazza v. American Honda Which State Interest Is Most Impaired Ninth Circuit found that the interests of foreign states would be more impaired by the application of California law

16 Mazza v. American Honda Which State Interest Is Most Impaired Foreign states have interest in calibrating liability to foster commerce Foreign states have interest in application of their laws to transactions between their citizens and corporations doing business within their state California s interest in regulating companies that operate in California attenuated in comparison

17 Fall-Out of Mazza v. American Honda Motions for certification of nationwide classes under consumer protection laws denied Gianino v. Alcer Corporation, 2012 WL (C.D. Cal.) Ralston v. Mortgage Investors Group, Inc., 2012 WL (N.D. Cal.) Kowalsky v. Hewlett Packard Company, 2012 WL (N.D. Cal.)

18 But See.. District Court denied motion for decertification of nationwide class under UCL. Bruno v. Eckhart Corporation, 2012 WL (C.D. Cal.) District Court found that decision in Mazza did not require reconsideration of its prior order because Mazza did not change California state law or overrule Ninth Circuit precedent

19 Bruno v. Eckhart District Court found that decision in Mazza did not require reconsideration of its prior order because Mazza did not change California state law or overrule Ninth Circuit precedent

20 Bruno v. Eckhart District Court distinguished case from Mazza because asserted that Defendants in this case, unlike Mazza, did not meet burden of establishing that there were material differences in laws of the different states. Defendants only made conclusory allegations that there were differences, citing Mazza.

21 Dina Micheletti is a partner in Fazio l Micheletti LLP, a boutique litigation firm that represents plaintiffs in class actions and other forms of complex litigation at the trial and appellate levels in state and federal courts throughout the United States. She has served as lead and co-lead counsel in a number and variety of cases, with an emphasis on those involving unfair competition, consumer fraud, false advertising and business torts.

22 Keri E. Campbell is a litigation partner in the Los Angeles office of Kelley Drye & Warren LLP. Her practice covers a wide variety of substantive areas of law from entertainment and intellectual property to employment matters and consumer class actions.

23 Ben Whitwell is a litigation partner in the Los Angeles office of Venable LLP. His practice covers a wide variety of business litigation and he has extensive experience in consumer class action defense.