Class Certification of Florida Deceptive and Unfair Trade Practices Act Claim Affirmed

On May 17, the Eleventh Circuit decided Carriuolo v. General Motors Co., 2016 WL 2870025 (11th Cir. May 17, 2016), affirming the district court’s partial grant of a motion for class certification. The plaintiffs’ motion in the district court involved four classes relating to four claims, but the district court denied certification of three and only granted class certification of the Florida class relating to a claim under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). General Motors petitioned the Eleventh Circuit for review of the district court’s partial grant of class certification under Rule 23(f) of the Federal Rules of Civil Procedure. The district court’s denials were not considered in this appeal.

Carriuolo purchased a new 2014 Cadillac CTS sedan. When Carriuolo bought the vehicle, it had a General Motors-provided window sticker that allegedly contained inaccurate safety information. The sticker was a standardized “Monroney” window sticker containing safety ratings assigned by the National Highway Traffic Safety Administration (NHTSA) on a five-star scale in six categories. When Carriuolo purchased his vehicle, the sticker indicated that the CTS had received perfect five-star ratings in three categories and had not been rated in the other categories. In fact, the NHTSA had not yet rated the CTS at all at the time Carriuolo made his purchase. General Motors then sent a letter to Carriuolo acknowledging the inaccurate safety data and enclosing a corrected label, one that indicated the vehicle had not been rated.

A FDUTPA claim requires proof of (1) a deceptive act or unfair practice that (2) caused the plaintiff (3) actual damages. According to the court, the first element relies on an objective test of whether the practice would likely deceive a consumer acting reasonably in the same circumstances. See id. at *3 (citing Davis v. Powertel, Inc., 776 So. 2d 971, 973 (Fla. Dist. Ct. App. 2000)). The damages in a FDUTPA case are measured by the difference between the market value of the product or service as received compared to the condition required by the parties’ contract. Carriuolo’s claim, therefore, required a showing that a consumer acting reasonably would have been deceived by the inaccurate window sticker and that the CTS with the alleged safety ratings would have a higher market value than the CTS before it was rated.

General Motors argued on appeal that the common issues of law or fact did not predominate (a requirement of Rule 23(b)(3) of the Federal Rules of Civil Procedure, under which the district court had certified the class) because liability determinations and damage calculations would necessarily be highly individualized based on the individual experiences of each purchaser, including price negotiations, knowledge of the inaccuracy of the sticker prior to purchase, and differences between institutional and individual purchasers.

In his opinion for the court, Judge Stanley Marcus, explained, however, that the district court had not abused its discretion in certifying the class because the claimant’s subjective knowledge of the unfair or deceptive trade practice is not relevant to a FDUTPA claim. According to the court, the basis of the injury in a FDUTPA claim is simply diminution of market value. The court, therefore, held that plaintiffs would only need to prove that a vehicle with three perfect safety ratings was more valuable than a vehicle that had not yet been rated, regardless of what the ratings were later. Essentially, the court held that because the vehicle’s market value can be measured objectively, the damage done to individual purchasers is not likely affected even if they negotiated different prices. The court went on to explain that, even if damage determinations ultimately were to require individualized calculations, the district court could revisit the certification question when necessary, because certification is always provisional, and that other issues could be dealt with as they arise through refinement of the class or the creation of subclasses. The Eleventh Circuit found that, given the flexible nature of the district court’s certification decision, certifying the class at this stage did not constitute an abuse of discretion.

Posted by Danny Wells.

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