Billions evaporate as flaky Ford paint case is decertified: Judge Tognarelli relies on Avery and Gridley

By Steve Korris | Jan 3, 2008

Lakin attorneys wanted to depose William Clay Ford, Jr.

Madison County Associate Judge Richard Tognarelli delivered a stunning setback to the Lakin Law Firm on Dec. 20, shutting down a class action over flaky paint on millions of vehicles that Ford Motor Company built from 1989 to 1996.

Tognarelli decertified two nearly-national classes that former Circuit Judge Phillip Kardis certified for the Lakin firm in 2003.

One class would have alleged common law fraud in 49 states, and the other class would have alleged consumer fraud in 46 states.

The Lakins sought damages that would have run into billions of dollars, but now they can seek nothing more than a paint job for plaintiff Daniel Schopp.

"...[T]his case would result in a battle of the experts as to many of the potentially 27 million vehicles involved, overwhelming the court with mini-trials," Tognarelli wrote.

He relied on two Illinois Supreme Court decisions from 2005, Avery and Gridley, prohibiting application of Illinois consumer fraud law to transactions in other states.

The Lakins sued Ford in 1999 on behalf of Joyce Phillips, a secretary at the firm's office in Wood River. They would add other plaintiffs through the years.

Ford moved to disqualify Phillips as lead plaintiff, arguing that her role as a Lakin employee created a conflict of interest with her role as a Lakin client.

Kardis denied the motion and certified the classes.

The Lakins, however, did not follow through with a proposed class notice.

In May 2005, Phillips withdrew as class representative for "personal reasons," and Schopp replaced her.

The Lakins moved to add plaintiffs and submitted a class notice.

Kardis set a hearing the motion on new plaintiffs for October 2005, a hearing on class notice for January 2006, and trial for October 2006.

Then he retired.

The case passed to Circuit Judge Andy Matoesian, and in 2006 he denied a Lakin motion to depose Ford owner William Clay Ford Jr.

Matoesian then shed the Ford case and others to lighten his load.

Chief Justice Ann Callis assigned the Ford case to Tognarelli, an unelected associate judge.

Tognarelli took up a decertification motion that Ford had filed after the Illinois Supreme Court delivered its decisions in Avery and Gridley.

In his decertification order he wrote that plaintiffs tried to get around Gridley by asking him to apply consumer fraud statutes of 46 states.

He wrote that applying laws of other states would run counter to Avery and Gridley.

He could have certified a class action for Illinois only, but he shut that down too.

In the process he demolished every argument from Robert Schmieder of the Lakin firm, filling 16 pages with conclusions in Ford's favor.

Tognarelli agreed with Ford attorney Robert Shultz of Edwardsville that individual issues predominated over class issues.

He disagreed with Schmieder, who argued that the class suffered common damage from paint delamination due to Ford's failure to protect paint from ultraviolet light.

"The evidence submitted demonstrates that there are many different kinds of paint problems – delamination being only one of these," Tognarelli wrote.

"Plaintiffs' contention that the sole cause of post-warranty delamination is UV exposure is contrary to the evidence before the Court," he wrote.

He pointed out that plaintiffs did not advance that argument before Kardis.

Even if there was a single cause of delamination, Tognarelli continued, "…this would not avoid the numerous individual issues that would still have to be decided…"

Under Avery, he wrote, a plaintiff could not show proximate cause of damages from reliance on a misrepresentation without showing deception.

"…{R}eliance and proximate cause cannot be presumed for the class at large, but would have to be determined for each potential class member," Tognarelli wrote.

"The individual issues involved in deciding these questions for nationwide classes, or even an Illinois class, would be overwhelming."

In a footnote he wrote that Ford made public acknowledgement of paint problems and spent millions fixing them.

Vehicle inspections alone would overwhelm the case, he wrote, because experts would have to inspect every car just to see if the owner belonged to the class.

Schmieder had estimated that each inspection would take close to an hour, and Tognarelli pointed out that Ford could contest the results.

On top of that Tognarelli rejected an argument from Schmieder that a determination of liability would not require individual inspections.

"Although plaintiffs seek to avoid individual determinations by arguing that they seek liability only as to those vehicles that actually exhibit UV-caused delamination," he wrote, "it is clear that even this determination cannot be made in a blanket manner.

"Individual warranty issues would also have to be answered for each claimant, to determine whether he or she is a class member and has an actionable claim."

He noted that a separate set of questions about class members who bought used Fords would multiply the individual factual issues.

Tognarelli finished with a footnote finding that his decertification order "is now in accord with decisions from other courts in similar automobile paint related litigation."

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