January 29, 2018 / 7:18 PM / 4 months ago

In Remington trigger appeal, state AGs cite controversial 9th Circ. ruling

(Reuters) - The day after the 9th U.S. Circuit Court of Appeals issued its instantly controversial decision in In re Hyundai and Kia Fuel Efficiency Litigation, striking down a $200 million nationwide class action settlement because the trial judge failed to analyze differences in state consumer laws when he approved the deal, the Massachusetts attorney general sent a letter about the Hyundai ruling to the 8th Circuit, where a group of state AGs is protesting approval of a nationwide settlement over allegedly defective Remington rifle triggers.

The Massachusetts AG’s letter pointed out that in the Remington case, as in the Hyundai class action, the trial judge approved a nationwide class settlement despite differences in underlying state consumer laws. The 9th Circuit’s Hyundai decision, which held that trial courts must consider those differences in evaluating whether classwide issues predominate over individual concerns, is directly at odds with Remington trial judge’s assertion that a settlement obviates state choice-of-law analysis. The 9th Circuit in Hyundai, the letter said, called such reasoning “wrong as a matter of law.”

The letter is early proof of the significance of the 9th Circuit’s Hyundai decision, which has suddenly elevated choice of law analysis as an obstacle to nationwide class action settlements. No doubt, the ruling is contentious. Critics – including panel member Jacqueline Nguyen, who wrote a scathing dissent from the Hyundai majority’s holding – say the opinion conflicts with precedent from other circuits, in particular with the 3rd Circuit’s en banc 2011 decision in Sullivan v. DB Investments. Settlement proponents in the Hyundai case have said they intend to ask the 9th Circuit for en banc review. Regardless, new prominence in the already high-profile Remington case will contribute to a choice-of-law reckoning for nationwide class action proponents.

Approval of the nationwide Remington rifle settlement was hard-won. As you may recall, U.S. District Judge Ortrie Smith of Kansas City at first refused to approve the deal – which offered replacement trigger mechanisms to the owners of more than 7.5 million supposedly defective bolt-action rifles – because only a tiny percentage of prospective class members filed claims. In January 2017, while the judge was considering a renewed motion for final approval after a second campaign to notify rifle owners about the settlement, Massachusetts and other AGs filed a brief urging the judge to reject the proposed deal because it leaves millions of dangerous weapons unfixed. Judge Smith nevertheless approved the settlement in March 2017.

Objectors appealed approval of the settlement to the 8th Circuit. In an amicus brief, Massachusetts and 12 other states, as well as the District of Columbia, argued that Judge Smith ignored the U.S. Supreme Court’s directive in Amchem v. Windsor to evaluate variations in the value of class members’ claims. Specifically, the amicus brief argued, Judge Smith approved a nationwide settlement based on Missouri’s weak consumer protection laws even though class members from states with more robust protections had stronger claims for economic damages.

Objectors didn’t raise choice-of-law arguments, so both Remington and class counsel said in their 8th Circuit briefs that the issue had been waived. But even if it hadn’t, they said, the AGs were wrong. Judge Smith followed the 8th Circuit’s holding in Keil v. Lopez when he evaluated the proposed settlement in its entirety rather than on a claim by claim basis, the briefs said. Plaintiffs said Judge Smith did, in fact, engage in a state-by-state analysis and concluded the settlement was fair. The deal, they said, accounted for Amchem by creating subclasses to assure all class members’ interests were protected.

“As this court noted in Keil, a settlement is a compromise of what the varying claims are worth and if a class member thinks he or she has a more valuable claim, that class member can opt out,” the plaintiffs’ brief said. “Every citizen represented by the Attorneys General had the right to opt out if they thought their state’s remedies offered additional avenues of recovery not offered in this settlement.”

Mark Lanier of the Lanier Law Firm will be arguing on behalf of class counsel when the 8th Circuit hears the Remington case on Feb. 14. In an email, he said the 9th Circuit’s Hyundai decision is “not normative,” and that the AGs are asking the 8th Circuit “to go into weirdness land on the law.” Lanier said the class plans to file a response to the Massachusetts AG’s Hyundai notice on Monday but it was not immediately available. Neblett Beard & Arsenault, Levin Sedran & Berman and the Holland Law Firm are also on the class brief at the 8th Circuit.

I emailed Remington counsel John Sherk of Shook Hardy & Bacon for comment on the Massachusetts AG’s letter but didn’t hear back. Remington is also represented by Swanson Martin & Bell.

The 8th Circuit will at least hear, if not decide, the Remington case before any reconsideration of Hyundai. It’s going to be interesting to see if other courts regard the 9th Circuit’s holding as an anomaly or as a logical extension of Amchem. The future of nationwide class actions may depend on the answer.

The views expressed in this article are not those of Reuters News.

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