Little v. Kia Motors America, Inc., 455 N.J. Super. 411 (App. Div. 2018). Class actions notoriously take a long time. But the case in which Judge Koblitz issued a decision for her Appellate Division panel today is nearly old enough to vote. As her opinion recited, plaintiffs, who are owners or lessees of Kia Sephia model year 1997-2000 vehicles with allegedly defective brakes, began in 2001.
In August 2003, plaintiffs obtained class certification. Contrary to the notion that defendants simply settle once a class is certified, the case continued, and a classwide jury trial occurred in 2008. Plaintiffs won a verdict on express and implied warranty theories. The jury made an aggregate award of damages to the class based on the cost to repair. That award was later overturned in a judgment notwithstanding the verdict (“judgment NOV”). Other proceedings followed, resulting in a minuscule award to plaintiffs based on individual claim forms instead of the larger, aggregate damage award. Plaintiffs appealed, and today the Appellate Division restored the aggregate damage award, giving plaintiffs a tremendous victory.
The standard of review of the judgment NOV was that “if, accepting as true all the evidence which supports the position of the party defending against the motion and according [it] the benefit of all inferences which can reasonably and legitimately be deduced therefrom, reasonable minds could differ, the motion must be denied.” The jury found breach of warranty, but the Law Division interpreted the Uniform Commercial Code, the basis for the warranty claims, as not permitting an aggregate amount of repair damages. That ruling was not entitled to deference on appeal.
Judge Koblitz cited Supreme Court of New Jersey, Appellate Division, and Circuit Court of Appeals cases, as well as the Restatement (Second) of Contracts, for the ideas that cost of repair may be awarded as damages, that damages need not be proven with precision (indeed, “a small windfall to the injured party based on an inability to prove exact damages should not defeat recovery”), that aggregate damage awards are permissible if based on sufficient expert methodology, and that “the injured party need not prove that he or she actually spent the money to repair the defect in order to recover for the breach.” Discussing at length the ruling in Muise v. GPU, Inc., 371 N.J. Super. 13 (App. Div. 2004) [Disclosure: I argued that case for the plaintiff class], Judge Koblitz held that “so long as a plaintiff-class establishes proof of damage, or at least a pre-trial presumption of damage, the class need not prove individual damage, but may instead present class-wide average damages based on a reliable mathematical formula.” Plaintiffs’ experts here had offered two different viable damage formulas.
Judge Koblitz found persuasive the decision of the Supreme Court of Pennsylvania in a parallel case, Samuel-Bassett v. Kia Motors Am., Inc., 34 A.3d 1 (Pa. 2011). Also influential in favor of plaintiffs was Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036 (2016). That “employee donning and doffing” case allowed plaintiffs to “fill an evidentiary gap created by the employer’s failure to keep adequate records.” Like the defendant there, Kia “failed to present evidence to rebut the class’s formula for computing aggregate damages.” Judge Koblitz recognized, however, that those opinions came down well after the Law Division made the ruling that the Appellate Division today reversed.
This case is worth carefully reading by anyone involved with class actions, as it contains important (largely pro-plaintiff) statements about class certification, the fact (not always recognized by some courts) that “failing to return a claim form does not prove that the class member incurred no damage,” and a number of other matters. This was not a sympathetic case for the defense, and should not warrant review by the Supreme Court if Kia seeks it. As Judge Koblitz observed, “[t]he defense did not deny the Sephia had brake problems.” After 17 years, today’s decision should at last bring to an end (other than a follow-on proceeding regarding attorneys’ fees for class counsel) a case in which justice was done for owners and lessees of these Kia vehicles, applying precedent from New Jersey’s appellate courts and elsewhere.