NEW YORK, Jan 12 (Reuters) - American Honda Motor Co
won a legal victory as a divided U.S. appeals court on Thursday
said a nationwide lawsuit over a brake system used in some Acura
RL vehicles should not have been certified as a class-action.
The 2-1 decision by the 9th U.S. Circuit Court of Appeals in
Pasadena, California, is a fresh setback for consumers, who have
seen their ability to sue collectively curtailed after a U.S.
Supreme Court ruling last June in favor of Wal-Mart Stores Inc
that narrowed class-action litigation.
The 9th Circuit said a Los Angeles district court judge
erred in finding that California's tough consumer protection
laws should apply to a nationwide class of consumers who bought
or leased Acura RLs equipped with the optional Collision
Mitigation Braking System from Aug. 17, 2005 to Dec. 16, 2008.
It also said the lower court wrongly found that consumers
could have relied on advertising by American Honda about the
system, part of a $4,000 technology package.
Lawyers for the roughly 2,000 plaintiffs did not immediately
respond to requests for comment. American Honda, which is part
of Japan's Honda Motor Co Ltd, had no immediate comment.
The brake system was designed to warn Acura RL drivers with
an alarm and flashing indicator that a crash may be imminent,
and tighten seat belts and apply brakes automatically if a
frontal crash appeared unavoidable.
But drivers claimed that the system might deploy or fail to
warn too slowly, and would shut off in bad weather.
NO COMMON ISSUES OF FACT
The lower court found enough in common among the claims to
certify a class. It also said American Honda failed to show why
other states' laws should prevail, even though the purchases and
leases took place in 44 U.S. states.
But writing for the 9th Circuit majority, Judge Ronald Gould
said it was unfair to apply California law everywhere.
Gould said other states had strong interests in regulating
similar transactions, often under materially different consumer
protection laws.
He also said there were no "common issues of fact" because
drivers nationwide could not have relied on Honda's "small
scale" advertising for the brake system.
Circuit Judge Dorothy Nelson dissented, citing California's
"compelling interest" in regulating the conduct of American
Honda, which has headquarters in Torrance, California.
The 9th Circuit returned the case to the Los Angeles
district court for further proceedings.
Gould and U.S. District Judge James Gwin, who normally works
in Cleveland, comprised the majority. Both were appointed to the
bench by President Bill Clinton. Nelson was appointed by
President Jimmy Carter.
The case is Mazza et al v. American Honda Motor Co, 9th
U.S. Circuit Court of Appeals, No. 09-55376.
For Mazza: Robert Byrnes of Initiative Legal
Group.
For American Honda: Roy Brisbois of Lewis Brisbois
Bisgaard & Smith.
(Reporting by Jonathan Stempel)
Follow us on Twitter: @ReutersLegal