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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND TIMOTHY LLOYD, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, et al., Defendants. * * * * * * * * * *

CIVIL NO. L-07-2487

MEMORANDUM I. INTRODUCTION Now pending is the plaintiffs' Motion to Certify Class. Paper No. 243. The plaintiffs seek to certify a class that includes all Maryland residents who currently own Ford Explorers, Mercury Mountaineers or Ford Windstars for certain model years. They allege that the front seats in the class vehicles are defective because they are prone to collapse rearward in moderate speed rear-impact collisions. The suit does not seek to recover for personal injuries caused by the alleged defect. The proposed class specifically excludes persons who have suffered personal injury while driving in class vehicles. The suit demands damages from Ford Motor Company ("Ford") for the cost of repairing or replacing the front seats in each class vehicle. The Court will, in a separate order of even date, DENY the motion. The plaintiffs will be given leave to attempt to reformulate a narrower class that avoids the problems discussed herein. Failing that, the Court will dismiss the case so that the plaintiffs may pursue their individual claims, which arise under Maryland law, in state court. Plaintiffs filed their certification motion under Fed. R. Civ. Pro. 23(b)(3). In order for a 23(b)(3) class action to proceed, the plaintiffs must establish that (i) common issues predominate

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over individual issues, (ii) a class action is superior to other available methods of adjudication, and (iii) a class action would be manageable. As discussed herein, none of these conditions is satisfied. The plaintiffs contend that the seats in the class vehicles are unsafe because they tend to deform or collapse rearward in moderate speed rear-impact collisions. This poses a risk that the seat's occupant may hyperextend backwards over the top of the seat, or be hurled into the rear compartment. Both occurrences also pose risks to individuals, especially children in car seats, sitting behind the deforming seat. Plaintiffs posit that for an automobile to be reasonably safe (non-defective), its seats must be able to withstand 20,000 inch-pounds of torque without deforming backwards. Because every class vehicle fails to meet this standard, the plaintiffs maintain that all are defective. Plaintiffs envision a relatively simple trial that would focus on whether 20,000 inchpounds is an irreducible safety benchmark for car seats.1 Ford disagrees, contending that the trial would be unmanageable. Determining the safety of a single car's seating system is a complex undertaking. Because the class vehicles were manufactured with twenty-three different seating system configurations, the jury would be faced with a task of hopeless complexity, Ford maintains. Ford has the better part of the argument. Crashworthiness involves a vehicle's ability to withstand a myriad of accidents, including front, side, and rear impacts at low, moderate, and high speeds. Design changes that make a car better able to withstand one type of crash may make the car less safe in others. The jury would be required to decide whether strengthening the
At the December 4, 2009 hearing, plaintiffs suggested that the jury might find the various seating systems defective without stating a rigidity benchmark. Paper No. 275, p. 4. This suggestion must be rejected. The verdict sheet must specify why the product is defective so that Ford would know how to correct the problem. As discussed infra, the result of a plaintiffs' victory would be to set a new design standard for seating systems, and one must know, in sufficient detail, what that standard is.
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seats to better protect occupants in moderate speed rear-impact collisions would create unacceptable vulnerabilities in other contexts. Moreover, the National Highway Transportation Safety Administration has stated that determining a seating system's safety requires understanding the "compatible interaction" of the system's components, including the seats, seatbelts, headrests, reclining mechanisms, air bags, and floor pan attachments. 69 Fed. Reg. 67068, 67069 (Nov. 16, 2004). In other words, seatback strength is but one element in the seating system safety equation. The class vehicles feature twenty-three different seating system configurations, utilizing, inter alia, a variety of seat strengths, headrest types, and reclining mechanisms as installed in vehicles that differ in terms of size and weight. At trial, the jury would be required to return a verdict on each of the twenty-three configurations. Moreover, if the jury found a seating system defective, the Court would be faced with the daunting task of determining whether the vehicle could be safely retrofitted to meet the 20,000 inch-pound standard. A trial involving such complexities would not only be unwieldy, but unmanageable. Hence, the plaintiffs cannot satisfy the predominance and manageability requirements. Next, plaintiffs' complaint includes counts alleging negligent failure to disclose, fraudulent concealment, and deceptive trade practices. The purchaser's reasonable reliance is an element of each of these torts. Determining reliance requires an individualized inquiry, consumer by consumer, that is not susceptible to class treatment. Hence, these counts would necessarily be dismissed were the class action to proceed. Additionally, around the country, consumers have brought personal injury suits involving the seatback rigidity issue, winning some and losing others. If the instant case were to proceed as a class action and the jury returned a verdict for Ford, a class member who was subsequently

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injured in a class vehicle would be collaterally estopped from claiming that the vehicle's seats were defective because they lacked sufficient rigidity. Such a class member, who has relatively little to gain from the instant class action, might be precluded thereafter from prosecuting a substantial personal injury claim. II. PROCEDURAL HISTORY This case began on June 15, 1999, when plaintiffs Timothy and Bernadette Lloyd filed a class action complaint in the Circuit Court for Montgomery County, Maryland against General Motors Corp. ("GM"), Ford, and Chrysler LLC ("Chrysler"). In an amended complaint, the plaintiffs added Saturn Corp. ("Saturn") as a defendant. Paper No. 5. The suit alleged that the seats in certain of the automobiles manufactured by the defendants were unreasonably dangerous because they were unable to withstand the force of a moderate impact rear-impact collision without deforming or collapsing. The plaintiffs sought damages for the cost of replacing or repairing the allegedly defective seating systems. In their Third Amended Complaint, the plaintiffs asserted seven counts, as follows: Count 1: Negligence in the design and manufacture of the seats. Count 2: Strict liability because the seats were defective, rendering them inherently dangerous, and creating an unreasonable risk of serious injury or death. Count 3: Breach of the implied warranty of merchantability. Count 4: Negligent failure to disclose, failure to warn, concealment, and misrepresentation. Count 5: Fraudulent concealment and intentional failure to warn. Count 6: Unfair or deceptive trade practices under the Maryland Consumer Protection Act.

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Count 7: Civil conspiracy. In response to the Third Amended Complaint, the defendants moved jointly to dismiss. Among other arguments, the manufacturers contended that plaintiffs' claims were barred by the economic loss doctrine because the plaintiffs had suffered no actual injury. In March 2000, the Circuit Court for Montgomery County granted the motion to dismiss, agreeing that plaintiffs' claims were, in fact, barred by the economic loss doctrine.2 The plaintiffs appealed to the Court of Special Appeals of Maryland, which affirmed the dismissal in an unreported opinion dated July 11, 2001. Lloyd, et al. v. General Motors Corp., et al., No. 298 (Md. Ct. Spec. App. July 11, 2001). The plaintiffs then petitioned the Maryland Court of Appeals for a writ of certiorari. The Court of Appeals agreed to hear the case during its September 2002 term. The Court of Appeals heard oral arguments in 2002 but did not issue its opinion until February 8, 2007, when it reversed and reinstated the plaintiffs' Third Amended Complaint. Lloyd, et al. v. General Motors Corp., et al., 916 A.2d 257 (Md. 2007). In a significant pronouncement of Maryland law, it delineated an exception to the economic loss doctrine. According to the Court of Appeals, the doctrine does not bar a claim if a plaintiff sufficiently pleads that the product at issue, while having caused no actual harm, creates a dangerous condition, one that gives rise to a clear danger of death or personal injury. Id. at 266. The Court of Appeals noted that historically damages in product liability cases are categorized as either (1) personal injuries, (2) physical harm to tangible property, or (3) intangible economic loss stemming from the inferior quality of a product or the product's unfitness for the purpose for which it was purchased. Id. at 265. In its discussion, the court

The Circuit Court for Montgomery County made no determination on defendants' arguments that plaintiffs' claims were time-barred or that the plaintiffs lacked standing to sue.

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observed that the first two categories were inapplicable because the proposed class expressly excluded those who had suffered a personal injury or property damage. Thus, the class plaintiffs were asserting damages exclusively in the third category, namely economic loss. Whether the plaintiffs could fit themselves into the economic loss category was the main topic of discussion in the Court of Appeals's opinion. As the Court of Appeals observed, ordinarily "damages for economic loss are not available in a tort action and are recoverable, if at all, in contract causes of action and, in the case of fraud, in actions for deceit." Id. Applying this traditional rule, the lower state courts had held that the economic loss doctrine barred the plaintiffs' claims because (i) the seats were functioning as intended, namely as automobile seats, (ii) the class plaintiffs, by definition, had not suffered any actual injury to person or property, and (iii) the plaintiffs had failed to plead fraud with the particularity required by the Maryland Rules. The Court of Appeals reversed and remanded. Reviewing Maryland cases, the court expressly recognized a limited exception to the economic loss doctrine that arises when the defective product poses a substantial and unreasonable risk of death or personal injury. Thus, in order to assert a cognizable product liability theory of recovery, an action sounding in tort, but one premised on economic loss alone, the plaintiff must allege facts that demonstrate that the product at issue creates a dangerous condition, one that gives rise to a clear danger of death or personal injury. Id. at 266. Applying this exception to the allegations of the Third Amended Complaint, the Court of Appeals concluded that the alleged risk of death or personal injury was sufficient to bring the case, at least at the motion to dismiss stage, within the sweep of the exception. Id. at 270. Based upon this foundation, the Court of Appeals addressed the Third Amended Complaint's seven counts, holding that each was sufficiently plead under Maryland law. With respect to Counts 3

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