August 18, 2020 Practice Points

Ninth Circuit: CAFA Does Not Override the Magnuson-Moss Warranty Act’s Requirement to Name 100 Plaintiffs

The decision is an excellent reminder for litigants that CAFA does not operate to displace the MMWA’s jurisdictional requirements.

By D. Scott Carlton and Emily Monroe

Under the Magnuson-Moss Warranty Act (MMWA), claims brought under the federal statute are not “cognizable” if “the number of named plaintiffs is less than one hundred.” 15 U.S.C. § 2310(d)(3)(C). An emerging split among federal courts has developed over whether class action plaintiffs may rely on the Class Action Fairness Act of 2005 (CAFA) to obtain federal subject matter jurisdiction for MMWA claims despite failing to meet the named plaintiff requirement of the MMWA. (Compare Kuns v. Ford Motor Co., 543 F. App’x 572, 574 (6th Cir. 2013) (unpublished decision recognizing federal jurisdiction over MMWA based on CAFA’s jurisdictional requirements despite plaintiff failing to meet the named plaintiff requirement of the MMWA”) and Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929, 954 (C.D. Cal. 2012) (same), with Ebin v. Kangadis Food Inc., 2013 WL 3936193 (S.D.N.Y. July 26, 2013) (holding CAFA does not override requirements of MMWA).) The Ninth Circuit recently weighed in on the issue, offering the first published opinion by a federal circuit court. See Floyd v. Am. Honda Motor Co., No. 18-55957, 2020 WL 4331769 (9th Cir. July 28, 2020). In doing so, the court affirmed a district court decision holding that CAFA does not allow class plaintiffs to bypass the named plaintiff requirement of the MMWA.

The putative class action was brought by three named plaintiffs that purchased or leased certain models of the Honda Civic sedans with allegedly malfunctioning transmissions. The plaintiffs, from Tennessee, Wisconsin, and California, alleged claims under the MMWA, along with additional state law claims. To establish federal jurisdiction of the MMWA, the plaintiffs relied on CAFA. However, the district court dismissed the MMWA claim for failing to satisfy the named plaintiff requirement and also the state-law claims for lack of supplemental jurisdiction.

On appeal, plaintiffs argued that CAFA supersedes the named-plaintiff requirement of the MMWA. CAFA, which has expanded federal jurisdiction over class actions when, among other conditions, the class includes over 100 members, does not require the plaintiffs to be named. In contrast, the MMWA requires that the complaint actually name at least 100 plaintiffs. The Ninth Circuit rejected plaintiffs’ argument, relying on traditional rules of statutory interpretation to determine the import of CAFA. The court explained that there is no need to resort to outside sources for interpretation when the plain meaning of the MMWA is clear. MMWA’s requirement to actually name at least 100 plaintiffs is clearly and plainly set forth.

The court noted that “repeals by implication are disfavored” and that the court could give effect to both the MMWA and CAFA. The court stated that “the statutory language of the MMWA and of CAFA is not irreconcilable—the MMWA simply prevents claims under that Act from proceeding in federal court absent the satisfaction of certain jurisdictional prerequisites.” The court concluded that it could “easily give effect to that command and apply CAFA in all other cases.” Therefore, the Ninth Circuit affirmed the district court’s decision to dismiss the MMWA claim. Nevertheless, the court reversed the district court’s dismissal of the state law claims because the district court failed to consider whether federal jurisdiction was proper for those claims under CAFA.

The Ninth Circuit’s decision is an excellent reminder for litigants that CAFA does not operate to displace the MMWA’s jurisdictional requirements.

D. Scott Carlton is of counsel and Emily Monroe is a summer associate at Paul Hastings LLP in Los Angeles, California.


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