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Victorino v. FCA U.S. LLC

United States District Court, S.D. California

July 25, 2017

CARLOS VICTORINO and ADAM TAVITIAN, individually and on behalf of a class of similarly situated individuals, Plaintiff,
v.
FCA U.S. LLC, a Delaware limited liability company, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DENY CLASS CERTIFICATION [DKT. NO. 58.]

          HON. GONZALO P. CURIEL UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendant's motion to deny class certification filed on May 19, 2017. (Dkt. No. 58.) Plaintiffs filed an opposition on June 16, 2017. (Dkt. No. 103.) On June 30, 2017, Defendant filed a reply. (Dkt. No. 105.) After a review of the briefs, the applicable law and supporting documentation, the Court DENIES Defendant's motion to deny class certification.[1]

         Background

         Plaintiffs Carlos Victorino (“Victorino”) and Adam Tavitian (“Tavitian”) (collectively “Defendants”) bring this purported first amended class action complaint based on defects in the 2013-2016 Dodge Dart vehicles equipped with a Fiat C635 manual transmission that cause the vehicles' clutches to fail and stick to the floor. (Dkt. No. 104, FAC ¶¶ 1, 2.) As a result, the vehicles equipped with the defective manual transmission “exhibit stalling, failure to accelerate, and premature failure of the Clutch System's components, including the clutch master cylinder and reservoir hose, clutch slave cylinder and release bearing, clutch disc, pressure plate, and flywheel . . . .” (Id. ¶ 2.) Defendant FCA U.S. LLC (“Defendant”) designs, manufactures, markets, distributes, services, repairs, sells and leases passenger vehicles, including Plaintiffs' vehicles. (Id. ¶ 52.)

         On February 13, 2017, defense counsel emailed Plaintiffs' attorneys, Jordan Lurie and Tarek Zohdy, with the subject line “Settlement” where Defendant offered to pay the two plaintiffs in the DeCoteau[2] case and the two plaintiffs in the Victorino case $10, 000 each for a total of $40, 000 total. The offer was contingent on acceptance by all four plaintiffs in both cases. (Dkt. No. 105-1, Wisniewski Decl., Ex. D.) The settlement offer was made in response to a $10, 000 demand for an individual settlement made by Plaintiffs' counsel in the DeCoteau . (Id., Exs. A-C.) Defendant agreed to accept the demand made in DeCoteau contingent upon acceptance of the settlement by all four plaintiffs in DeCoteau and this case.

         When Plaintiffs' counsel never responded to the offer, it was withdrawn over a month later on March 10, 2017 due the start of discovery. (Dkt. No. 58-2, Wisniewski Decl. ¶ 7.) When Tavitian and Victorino were deposed in April 2017, they indicated they were not aware of a settlement offer made by Defendant to resolve their claims (Dkt. No. 58-2, Wisniewski Decl., Ex A, Tavitian Depo. at 289:23-290:5; 290:11-16; Ex. B., Victorino Depo. at 165:14-24; 166:11-24.)

         Discussion

         In the instant motion, Defendant moves to deny class certification arguing that the adequacy requirement for class certification pursuant to Federal Rule of Civil Procedure (“Rule”) 23(a)(4) cannot be satisfied because Plaintiffs' counsel violated their ethical obligation under California Rules of Professional Conduct 3-510 by failing to communicate to Plaintiffs the settlement offer made by Defendant. It contends that Plaintiffs' counsel's failure to communicate the settlement offer demonstrates they will act in the same unethical manner throughout the litigation. In response, Plaintiffs argue that their counsel had no obligation to communicate Defendant's settlement offer to them because it was not a valid settlement offer as it was made contingent upon acceptance of the settlement by plaintiffs in a separate, distinct case in DeCoteau.

         Rule 23 “does not preclude a defendant from bringing a ‘preemptive' motion to deny certification.” Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 939 (9th Cir. 2009); Fed.R.Civ.P. 23(c)(1)(A) (a court must determine whether to certify a class action “[a]t an early practicable time.”). Rule 23(a) establishes four requirements for class certification: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Fed.R.Civ.P. 23(a). Rule 23(a)(4) requires “that the representative parties will fairly and adequately protect the interests of the class.” Id. Although Defendant filed the motion to deny certification, Plaintiffs have the burden to establish that the class certification requirements under Rule 23 have been met. Spagnola v. Chubb Corp., 264 F.R.D. 76, 92 (S.D.N.Y. 2010) (“Even though the issue of class certification [ ] comes before the Court on Defendants' motion, the burden remains on Plaintiffs to prove that each of the required elements for class certification under Rule 23 has been satisfied.”); Zulewski v. Hershey Co., No. CV 11-5117-KAW, 2013 WL 1748054, at *1 (N.D. Cal. Apr. 23, 2013) (same).

         In analyzing whether Rule 23(a)(4) has been met, the Court must ask two questions: “(1) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1031 (2012) (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998)). The adequacy of counsel is also considered under Rule 23(g). See Fed. R. Civ. P. 23(g); Baumann v. Chase Inv. Servs. Corp., 747 F.3d 1117, 1122-23 (9th Cir. 2014) (noting that “named plaintiff's and class counsel's ability to fairly and adequately represent unnamed [plaintiffs]” are “critical requirements in federal class actions under Rules 23(a)(4) and (g)”).

         In 2003, Congress added Rule 23(g) to guide the court's inquiry in the adequacy of proposed class counsel and does not introduce a new element into the class certification process. Fed.R.Civ.P. 23(g) advisory committee's note (2003) (“Rule 23(a)(4) will continue to call for scrutiny of the proposed class representative, while [subdivision (g) ] will guide the court in assessing proposed class counsel as part of the certification decision.”) “Plaintiffs' failure to show adequacy of counsel under Rule 23(g) is effectively a failure to meet the adequate representation requirement of Rule 23(a)(4) for class certification.” Varela v. Indus. Prof'l and Techical Workers, 2009 WL 10670788, at *3 (C.D. Cal. Oct. 29, 2009).

Under Rule 23(g)(1), the court
(A) must consider:
(i) the work counsel has done in identifying or investigating potential claims in the action;
(ii) counsel's experience in handling class actions, other complex litigation, and the types of claims ...

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