In American Honda Motor Co. v. Superior Court (Lee), ___ Cal.App.4th ___ (Sept. 29, 2011; pub. ord. Oct. 18, 2011), the Court of Appeal (Second Appellate District, Division Eight) reversed an order granting class certification of breach of warranty and UCL claims. The action was filed on behalf of a putative class of owners of Honda Acuras with a defective mechanism for shifting the transmission into third gear. Slip op. at 2-3.
The existence of a product warranty was critical for the panel:
Hicks and Wolin are in agreement that proof of current manifestation of the defect is not necessary in a breach of warranty class action. However, like the court in Hicks, we do not find that to be the end of the inquiry. Just because the law does not require a current malfunction to prove breach of warranty does not mean it should not require proof of any malfunction, present or future. A breach of warranty cannot result if the product operates as it was intended to and does not malfunction during its useful life. (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 831-832.) Accordingly, Hicks extends its holding to include the requirement that the party moving for class certification must provide substantial evidence of a defect that is substantially certain to result in malfunction during the useful life of the product. This is an issue that must be considered not only to determine the merits of a plaintiff’s claim, but also in a class certification motion.
Because the trial court relied on Wolin, which does not require proof of a common defect that is substantially certain to manifest in a future malfunction, we conclude the trial court based its ruling on an erroneous legal assumption and that alone is sufficient grounds for reversal of the class certification order as to the breach of warranty claims. [CIitations.]
Slip op. at 9-10 (hyperlinks added). That's a common misreading of Daugherty in particular, but also Hicks, and it's one that unfortunately seems to be creeping into UCL jurisprudence. The court reversed the order granting certification of the UCL claim with little further analysis. The discussion of that claim ends with this:
We also note that the class certified by the trial court—all individuals who leased or purchased the affected Acura models in California without the redesigned third gear—may be overbroad since it appears undisputed that many class members were never exposed to the alleged misrepresentations because they never contacted Honda or its dealers about a third gear problem. (Pfizer Inc. v. Superior Court (2010) 182 Cal.App.4th 622, 631-632.)
Slip op. at 15. This conclusion misses the point in a couple of ways. First, under Tobacco II, the only thing that must be proven at trial in a UCL case is that the defendant engaged in conduct likely to deceive a reasonable consumer. Whether the consumers suffered harm is wholly irrelevant. Put another way, they don't need to have contacted the manufacturer! Second, in this case, the gravamen of the claim was Honda's uniform failure to disclose the defect. Id. at 14. Even assuming that uniform exposure and injury are required, both can be established here with common proof. All putative class members were uniformly exposed to this omission. Whether the omission is "material" is judged by a reasonable consumer standard. If it is material, and the class member paid money to purchase the product, classwide reliance and causation are both presumed. What is more, given the fact that this is an omissions case, it's no wonder most of the class members never contacted the manufacturer or the dealer. They were deceived and didn't know about the problem.
Judge Wiley got this one right.