Bantolina v. Aloha Motors, Inc.

75 F.R.D. 26, 25 Fed. R. Serv. 2d 160, 1977 U.S. Dist. LEXIS 15549
CourtDistrict Court, D. Hawaii
DecidedJune 6, 1977
DocketCiv. No. 75-295
StatusPublished
Cited by18 cases

This text of 75 F.R.D. 26 (Bantolina v. Aloha Motors, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bantolina v. Aloha Motors, Inc., 75 F.R.D. 26, 25 Fed. R. Serv. 2d 160, 1977 U.S. Dist. LEXIS 15549 (D. Haw. 1977).

Opinion

MEMORANDUM AND ORDER

WONG, District Judge.

I. BACKGROUND

The Bantalinas initiated this Truth-in-Lending class action1 on August 27, 1975 against Aloha Motors, Inc. and First Hawaiian Bank (Bank). The plaintiffs subsequently moved for a determination of the class. On August 26,1976, this court issued a decision which granted the plaintiffs’ motions for determination and certification of class.2 The class is defined as all natural persons in the State of Hawaii who, within the calendar year prior to the filing of the complaint in the instant case, purchased an automobile in a consumer credit transaction from Aloha Motors, Inc. wherein the disclosure statement provided to such persons used the standard form “Retail Installment Contract and Open End Credit Plan” and further where each contract was then assigned to the Bank.

In its August 26 decision, this court ruled that all members of the class, including the Bantolinas, must share pro-rata in any class recovery. Since this meant that an individual class member might recover less than the minimum statutory recovery,3 the court instructed the plaintiffs to give notice of the pro-rata sharing and that “each class .member may request to be excluded from the class by a specified date and bring an individual suit should that class member so desire.” The plaintiffs have not yet given the class such notice or notice of the court’s decision certifying the class.

[30]*30The court also said in its August 26 decision that filing of the class action tolled the one year statute of limitation 4 and that “all members of the class who opt out will be allowed to file their own actions.”

Since even, the named plaintiffs must share pro-rata in the class recovery, the court gave the Bantolinas the option of proceeding with the class action or withdrawing their motion for certification of the class action. The Bantolinas, the only representatives of the class, have decided to withdraw their motion for certification of the class and to pursue their individual remedy under the Truth-in-Lending Act (TILA).5 In effect, the Bantolinas have withdrawn as representatives of the class.

Plaintiffs’ counsel has now moved for an order pursuant to Federal Rule of Civil Procedure 23(e) for an order requiring notification of the unnamed members of the class (1) stating that the Bantolinas have chosen to proceed individually and no longer represent the class and (2) outlining the options available to the unnamed class members. The Bank opposes the motion and seeks to delete all allegations in the complaint about a class action pursuant to Federal Rule of Civil Procedure 23(d)(4).

II. DISCUSSION

A. Federal Rule of Civil Procedure 23(e)

Federal Rule of Civil Procedure 23(e) provides that a

class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

The plaintiffs argue that Rule 23(e) requires notice to the unnamed class members. They say that the Santolinas’ decision to proceed individually is analogous to a settlement or tantamount to a dismissal.

The Bantolinas’ withdrawal from the class action is not a settlement. There is no compromise of their claim; there is no out-of-court settlement. On the contrary, the Bantolinas will continue to pursue their individual claim against the defendants.

The plaintiffs say that the Bantolinas’ decision is a dismissal because, if no notice is given, no one will intervene or assert the class’ claim and the case eventually will be dismissed for want of prosecution.

The class action fails, but not for want of prosecution. In any class action, the class must be represented. Fed.R.Civ.P. 23(a), 23(a)(4). See Sosna v. Iowa, 419 U.S. 393, 403, 95 S.Ct. 553, 559, 42 L.Ed.2d 532 (1975). If there is no representative of the class, the class action cannot be maintained. Therefore, if no new representative is found, the class action must be dismissed.

This case presents a novel situation. The court granted a motion for certification of the class. But the Bantolinas have withdrawn the motion.6 They have also withdrawn from the class, thereby leaving the class without a representative as required by Rule 23(a).

Where the question "of notice under Rule 23(e) has been presented prior to a determination on the validity of the class action, courts have presumed the viability of the class action. For example, Pearson v. Ecological Science Corp., 522 F.2d 171, 177 (5th Cir. 1975); Burgener v. California Adult Authority, 407 F.Supp. 555, 560 (N.D.Cal.1976) (three-judge court). Here, this court had previously determined that there is a viable class, but subsequent to that determination, the motion for certification of the class was withdrawn. It would seem equitable in this case that we assume that there was a viable class, as previously determined. But the Bantolinas’ withdrawal of their motion negates the court’s prior determination that the class action is viable.

[31]*311. Class action

Federal Rule of Civil Procedure 23(c)(1) requires that “[a]s soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained.” The court had made that determination in this case in its August 26 decision. There has been, however, a significant change in the representation of the class. Since the Bantolinas no longer represent the class, the court must again determine whether the action is maintainable as a class action.

The Bantolinas’ withdrawal of their motion to certify the class places the court in a pre-certification posture. Other courts have applied Rule 23(e) prior to certification of the class. For example, Magana v. Platzer Shipyard, Inc., 74 F.R.D. 61 (S.D.Tex.1977); Rotzenburg v. Neenah Joint School District of Winnebago County, 64 F.R.D. 181 (E.D.Wis.1974); Rothman v. Gould, 52 F.R.D. 494 (S.D.N.Y.1971). See Philadelphia Electric Co. v. Anaconda Brass Co., 42 F.R.D. 324 (E.D.Pa.1967). These courts may have presumed that a class action was proper. Here there is a major defect in the class action; there is no representative of the class. This action is therefore not maintainable as a class action. A class must exist, whether by presumption or fact, before Rule 23(e) is applicable. Pearson, 522 F.2d at 177;

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Bluebook (online)
75 F.R.D. 26, 25 Fed. R. Serv. 2d 160, 1977 U.S. Dist. LEXIS 15549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bantolina-v-aloha-motors-inc-hid-1977.