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9th Circuit Vacates Class in Acura Deception Case

(CN) - California law does not cover a nationwide class of consumers who claim that the optional collision-mitigation braking system for the Acura RL did not work as advertised, the 9th Circuit ruled.

Vacating a judge's certification of the class on Thursday, the federal appeals court in Pasadena found that the law of multiple jurisdictions, not just the laws of one state, applies to the case because "variances in state law overwhelm common issues and preclude predominance for a single nationwide class."

American Honda Motor Co. offered the Collision Mitigation Braking System (CMBS) with the Acura RL as part of an optional, $4,000 technology package. In a varied marketing campaign, Honda claimed that the brakes could detect the presence of other cars and would "make rear-end collisions less common and ... minimize the consequences of collision," according to the ruling.

But Michael and Janet Mazza, who purchased an Acura with the brake package from a Florida dealer in 2007, and Deep Kalsi, who bought one in Maryland the same year, sued the company in California, where American Honda Motor is based, for unfair competition and false advertising.

They claimed that Honda had neglected to tell them that the braking system's three separate stages overlap, that the system may not warn drivers in time to avoid an accident and that it shuts off in bad weather.

U.S. District Judge Valerie Baker Fairbank in Los Angeles certified a nationwide class that included all consumers who purchased the Acura RL equipped with the braking system between 2005 and 2008. The class included consumers in 44 states, according to the complaint.

On appeal, Honda argued, among other things, that California's consumer-protection laws do not apply in other states. A three-judge panel of the 9th Circuit agreed and vacated the certification.

"Under the facts and circumstances of this case, we hold that each class member's consumer protection claim should be governed by the consumer protection laws of the jurisdiction in which the transaction took place," Judge Ronald Gould wrote for the court.

"Here, the last events necessary for liability as to the foreign class members - communication of the advertisements to the claimants and their reliance thereon in purchasing vehicles - took place in the various foreign states, not in California," he added. "These foreign states have a strong interest in the application of their laws to transactions between their citizens and corporations doing business within their state."

The panel also found that the class was "overbroad," as it should have included only those consumers who learned about the brake system from Honda's allegedly misleading marketing campaign.

"The relevant class must be defined in such a way as to include only members who were exposed to advertising that is alleged to be materially misleading," Gould wrote. "The relevant class must also exclude those members who learned of the CMBS's allegedly omitted limitations before they purchased or leased the CMBS system."

Writing in dissent, Judge D.W. Nelson argued that the majority's stance could let Honda off the hook for bad behavior.

"Without certification of a nationwide class to which California law applies, Honda becomes free to avail itself of the benefits offered by California without having to answer to allegations by consumers nationwide that it has violated the consumer protection laws of its forum state," he wrote. "This situation will allow corporations to take advantage of a forum state's hospitable business climate on the one hand, while simultaneously discounting the potential for litigation by nationwide consumers in response to a particular profit-motivated but harmful action on the other. If the harm to individual consumers is small enough to create a disincentive to individual litigation, and if a nationwide class action is not a potential consequence, corporations can choose increased revenues over the consumer with impunity. Thus, corporations like Honda will be able to act without accountability for past behavior and without a check on future profit-motivated actions that may risk consumer harm."

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