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Neale v. Volvo Cars of N. Am., LLC

United States Court of Appeals, Third Circuit

July 22, 2015

JOANNE NEALE, Individually and on behalf of all others similarly situated; KERI HAY, Individually and on behalf of all others similarly situated; DAVID TAFT; JEFFREY KRUGER; KAREN COLLOPY; KELLY MCGARY; SVEIN A. BERG; GREGORY P. BURNS
v.
VOLVO CARS OF NORTH AMERICA, LLC; VOLVO CAR CORPORATION, Appellants

Argued June 2, 2015

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[Copyrighted Material Omitted]

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On Appeal from the United States District Court for the District of New Jersey. District Court No. 2-10-cv-04407. District Judge: The Honorable Dennis M. Cavanaugh.

Paul Daly, Esq., Hardin, Kundla, McKeon & Poletto, Springfield, NJ; Peter W. Herzog, III, Esq., ARGUED, Wheeler Trigg O'Donnell, St. Louis, MO, Counsel for Appellants.

David M. Freeman, Esq., Eric D. Katz, Esq., ARGUED, David A. Mazie, Esq., Matthew R. Mendelsohn, Mazie Slater, Katz & Freeman, Roseland, NJ; Benjamin F. Johns, Esq., Joseph G. Sauder, Esq., Matthew D. Schelkopf, Esq., Chimicles & Tikellis, Haverford, PA, Counsel for Appellees.

Daniel I. Rubin, Esq., Andrew R. Wolf, Esq., Henry P. Wolf, Esq., The Wolf Law Firm, North Brunswick, NJ, Counsel for Amicus Appellee.

Before: SMITH, CHAGARES, and HARDIMAN, Circuit Judges.

OPINION

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SMITH, Circuit Judge.

This appeal involves a putative class action brought by consumers from six states alleging that Appellants-Defendants Volvo Cars of North America, LLC and Volvo Car Corporation (collectively " Volvo" ) sold certain vehicles with defective sunroof drainage systems. Volvo challenges the grant of class certification by the U.S. District Court for the District of New Jersey. For the reasons that follow, we will vacate the District Court's order and remand for further proceedings.

I.

Plaintiffs-Appellees Joanne Neale, Keri Hay, Kelly McGary, Svein Berg, Gregory Burns, David Taft, Jeffrey Kruger, and Karen Collopy (collectively " Plaintiffs" ) filed suit on behalf of themselves and a nationwide class of current and former Volvo vehicle owners and lessees. Plaintiffs allege that a uniform design defect exists in the sunroof drainage systems in the following vehicles sold and leased to consumers by Volvo: S40, S60, S80, and V70 (model years 2004 to present); XC90 (model years 2003 to present); and V50

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(model years 2005 to present) (the " Class Vehicles" ).

On August 7, 2012, Plaintiffs proposed a nationwide class consisting of " [a]ll persons or entities in the United States who are current or former owners and/or lessees of a Class Vehicle (the 'Nationwide Class')." Supplemental Appendix (" SA" ) 19; Joint Appendix (" JA" ) 140. In the alternative, Plaintiffs also proposed the following statewide classes:

All persons or entities in Massachusetts who are current or former owners and/or lessees of a Class Vehicle (the " Massachusetts Class" ).
All persons or entities in Florida who are current or former owners and/or lessees of a Class Vehicle (the " Florida Class" ).
All persons or entities in Hawaii who are current or former owners and/or lessees of a Class Vehicle (the " Hawaii Class" ).
All persons or entities in New Jersey who are current or former owners and/or lessees of a Class Vehicle (the " New Jersey Class" ).
All persons or entities in California who are current or former owners and/or lessees of a Class Vehicle (the " California Class" ).
All persons or entities in Maryland who are current or former owners and/or lessees of a Class Vehicle (the " Maryland Class" ).

SA 20; see also JA 140-41 (Pls.' Second Am. Compl. listing all classes except for the Maryland Class). Volvo filed a brief in opposition to the proposed classes and separate motions for summary judgment against the individual class representatives.

On March 26, 2013, the District Court denied Plaintiffs' motion to certify a nationwide class, granted Plaintiffs' motion to certify six statewide classes, and denied Volvo's motions for summary judgment. After the Supreme Court's decision in Comcast Corp. v. Behrend, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013), Volvo moved for reconsideration of the District Court's order granting class certification, which the District Court also denied. Volvo filed this timely appeal.

II.

The District Court had jurisdiction over this case pursuant to 28 U.S.C. § § 1332(d)(2) and (d)(6) and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.[1] We have jurisdiction

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pursuant to U.S.C. § 1292(e) and Rule 23(f) of the Federal Rules of Civil Procedure.

" We review a class certification order for abuse of discretion, which occurs if the district court's decision rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." Grandalski v. Quest Diagnostics Inc., 767 F.3d 175, 179 (3d Cir. 2014) (quoting Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 354 (3d Cir. 2013)) (internal quotation marks omitted). We review de novo a legal standard applied by a district court. Carrera v. Bayer Corp., 727 F.3d 300, 305 (3d Cir. 2013).

III.

Volvo argues on appeal that: (1) putative members of the class have not suffered an injury and therefore lack Article III standing; (2) the District Court failed to identify the class claims and defenses in its certification order; (3) the District Court erred in its analysis of the Rule 23(b)(3) predominance requirement; and (4) the Supreme Court's decision in Comcast Corp. v. Behrend means that Plaintiffs must have class-wide proof of damages in order for the class to be certified. We address each issue in turn.

A.

Volvo argues that all putative class members must have Article III standing. We begin with this argument because " [w]e have 'an obligation to assure ourselves' of litigants' standing under Article III." DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)); see also In re Deepwater Horizon, 739 F.3d 790, 798 (5th Cir. 2014). We exercise plenary review over a threshold question of law, such as that presented by an Article III standing challenge. McNair v. Synapse Grp. Inc., 672 F.3d 213, 222 n.9 (3d Cir. 2012).

1.

Article III governs constitutional standing and limits our jurisdiction to actual " cases or controversies." U.S. Const. art. III, § 2. Article III requires a plaintiff

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to demonstrate " (1) an 'injury in fact,' (2) a sufficient 'causal connection between the injury and the conduct complained of,' and (3) a 'likel[ihood]' that the injury 'will be redressed by a favorable decision.'" Susan B. Anthony List v. Driehaus, 134 S.Ct. 2334, 2341, 189 L.Ed.2d 246 (2014) (alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1991)). Constitutional standing ensures that litigants are truly adverse to one another and are not merely " suitors in the courts of the United States." Valley Forge Christian Coll. v. Ams. United for Separation of Church and State, Inc., 454 U.S. 464, 476, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982); Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (" In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." ). " The law of Article III standing, which is built on separation-of-powers principles, serves to prevent the judicial process from being used to usurp the powers of the political branches." Clapper v. Amnesty Int'l USA, 133 S.Ct. 1138, 1146, 185 L.Ed.2d 264 (2013); see also William A. Fletcher, The Structure of Standing, ...


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