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Third Circuit Vacates Certification in Class Action Involving Defective Tires

August 14, 2012


Last week, the United States Court of Appeals for the Third Circuit issued an important decision clarifying the proof needed to satisfy the ascertainability and numerosity requirements of a class under Rule 23.  Marcus v. BMW of N. Am., LLC, Nos. 11-1193, 11-1192, __ F.3d __ (3d Cir. Aug. 7, 2012).

In its first comprehensive ruling on the subject, the Third Circuit made clear that ascertainability is an essential class certification requirement under Rule 23(b)(3).  The Court held that if class members are impossible to identify without extensive and individualized fact-finding or “mini-trials,” a class is not ascertainable and may not be certified.

Marcus involved certain model-year BMWs equipped with Bridgestone “run-flat” tires (“RFTs”).  RFTs permit drivers to continue driving for a period of time after a tire suffers a total and abrupt loss of air pressure.  Plaintiff leased a BMW equipped with Bridgestone RFTs and experienced four flat tires during his three-year lease.  In each case, the RFTs performed as intended.  Nonetheless, he sued BMW and Bridgestone for consumer fraud, breach of warranty, and breach of contract.  According to Plaintiff, Bridgestone’s RFTs are defective because they are highly susceptible to flats, fail at a significantly higher rate than radial tires or other run-flat tires, and are exorbitantly priced.  The district court certified Plaintiff’s suit as an opt-out class of all purchasers and lessees of certain model-year BMWs equipped with Bridgestone RFTs sold or leased in New Jersey with tires that had gone flat and been replaced.

In reversing the district court’s order, the Third Circuit found Plaintiff’s proposed class raised serious ascertainability issues in light of BMW’s evidence that it had no way to identify original owners and lessees of BMW vehicles, factory-equipped with Bridgestone RFTs, that were initially purchased or leased at New Jersey dealerships-and Plaintiff offered no evidence to suggest otherwise.  The Third Circuit also found that even if BMW could identify the proper cars with the proper tires, its records suggested it could not establish whether all potential class members’ Bridgestone RFTs had gone flat and been replaced-as the class definition required-because the class was not limited to those persons who took their vehicles to BMW dealers to have their tires replaced.  The record thus suggested that extensive individualized fact-finding would be required to ascertain who was a member of Plaintiff’s proposed class.

Although the Third Circuit remanded the case to the district court to determine whether there was a reliable, administratively feasible way to determine class membership, it cautioned against approving a method that requires no more than an affidavit from class members stating their Bridgestone RFTs had gone flat and been replaced.  “Forcing BMW and Bridgestone to accept as true absent persons’ declarations that they are members of the class, without further indicia of reliability, would have serious due process implications.”

The Third Circuit also reversed the district court’s finding that Plaintiff satisfied Rule 23(a)(1)’s numerosity requirement.  Plaintiff failed to offer evidence of the number of BMWs purchased or leased in New Jersey with Bridgestone RFTs that had gone flat or been replaced.  Of particular note was the Third Circuit’s refusal to “speculate” or “guess” how many consumers purchased or leased BMWs with Bridgestone RFTs in New Jersey based on the nationwide numbers Plaintiff offered.  “Given the complete lack of evidence specific to BMWs purchased or leased in New Jersey with Bridgestone RFTs that have gone flat and been replaced, the District Court’s numerosity ruling crossed the line separating inference and speculation.”