Lockwood Motors, Inc. v. General Motors Corp.

162 F.R.D. 569, 1995 U.S. Dist. LEXIS 17794, 1995 WL 435971
CourtDistrict Court, D. Minnesota
DecidedJune 23, 1995
DocketCiv. No. 3-94-1141
StatusPublished
Cited by94 cases

This text of 162 F.R.D. 569 (Lockwood Motors, Inc. v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lockwood Motors, Inc. v. General Motors Corp., 162 F.R.D. 569, 1995 U.S. Dist. LEXIS 17794, 1995 WL 435971 (mnd 1995).

Opinion

MEMORANDUM OPINION AND ORDER

KYLE, District Judge.

Introduction

Plaintiff Lockwood Motors, Inc. (“Lockwood”) commenced this unfair business action against General Motors Corporation (“GM”) on behalf of all GM new automobile dealers in the State of Minnesota. Lockwood claims that it and similarly situated GM dealers have been and continue to be required to contribute to a GM advertising fund in violation of the Federal Automobile Dealers’ Day in Court Act (“ADDCA”), 15 U.S.C. §§ 1221-1225, and the Minnesota Motor Vehicle Sale and Distribution Act (“MMVSDA”), Minnesota Statutes section 80E.12. This matter is currently before the Court on Lockwood’s Motion for Class Certification pursuant to Rule 23 of the Federal Rules of Civil Procedure. Lockwood seeks to represent all Buiek, Cadillac, Chevrolet, GMC Truck, Oldsmobile, and Pontiac dealers in Minnesota who were required to contribute to a GM advertising fund from 1988 to the present. For the reasons set forth below, the Court will grant Lockwood’s Motion and certify the proffered class.

Background

Plaintiff Lockwood is a Minnesota corporation with its principal place of business in Marshall, Minnesota. Lockwood is a licensed and franchised GM Cadillac and Oldsmobile new vehicle dealer. Defendant GM is a Delaware corporation with its principal place of business in Detroit, Michigan. GM manufactures, assembles and distributes new vehicles through its Buick, Cadillac, Chevrolet, GMC Truck, Oldsmobile and Pontiac divisions, which are unincorporated operating divisions of GM.

Lockwood commenced this action on October 10, 1994. In its Complaint, Lockwood alleges GM imposes a mandatory advertising charge on each new vehicle purchased by putative class members as part of a “marketing initiative.” (Compl. ¶ 11.) This advertising charge is equal to 1% of the manufacturers suggested retail price (“MSRP”) and is [573]*573allegedly uniformly imposed on all licensed and franchised Buick, Cadillac, Chevrolet, GMC Truck, Oldsmobile and Pontiac dealers. (Id. ¶¶ 5-9, 11.) Lockwood claims dealers are “required” to pay the 1% mandatory marketing charge, dealers who do not pay this charge are not permitted to purchase new GM vehicles, and monies collected from the advertising charge were “intended ... itemized, targeted, obligated, and exclusively used in payment of advertising campaigns.” (Id. ¶¶ 12-14.)

Based upon these claims, Lockwood seeks to certify the following class:

All persons who were licensed and franchised Buick, Cadillac, Chevrolet, GMC Truck, Oldsmobile and Pontiac new vehicle dealers in Minnesota from the effective date of each marketing initiative1 through the present time, excluding defendant, its affiliates, divisions and subsidiaries.

(Id. ¶ 15.) Lockwood claims that GM’s 1% advertising charge violates the ADDCA2 and the MMVSDA3 and that as a result, it and the putative class members it seeks to represent are entitled to compensatory damages, injunctive relief, costs and attorneys’ fees. Lockwood maintains that certification of this class is warranted because: (1) class members are so numerous that joinder is impracticable; (2) its claims are typical of the class it seeks to represent; (3) it will fairly and adequately protect the interests of the class; (4) its claims involve issues of law and fact common to the class, and these common issues predominate over individual issues unique to any particular class member or members; and (5) a class action is the most efficient method for resolving its claims. (Compl. ¶ 16.) GM opposes Lockwood’s Motion and maintains that Lockwood has not satisfied the applicable requirements for class certification.

This Court has jurisdiction over this matter pursuant to 15 U.S.C. § 1222 and 28 U.S.C. §§ 1331 and 1332.

Discussion

A Class Certification

The requirements for class certification are set forth in Rule 23 of the Federal Rules of Civil Procedure. Plaintiffs have the burden of establishing they have satisfied each of Rule 23’s class certification requirements. General Telephone Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982); Jenson ¶. Eveleth Taconite Co., 139 F.R.D. 657, 659 (D.Minn.1991). The Court may certify the class only when it is satisfied “after rigorous analysis” that all of Rule 23’s prerequisites are met. Jenson, 139 F.R.D. at 659. In making the Rule 23 analysis, the substantive allegations in the plaintiffs complaint are accepted as true. Jackson v. Rapps, 132 F.R.D. 226, 230 (W.D.Mo.1990); see also Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178, 94 S.Ct. 2140, 2152, 40 L.Ed.2d 732 (1974) (explaining that courts do not have authority to “conduct a preliminary inquiry into the merits of a suit in determining whether it may be maintained as a class action”). District courts ultimately retain broad discretion in determining whether or not to certify a class under Rule 23. General Telephone Co. v. Falcon, 457 U.S. at 161, 102 S.Ct. at 2372; In re Workers’ Compensation, 130 F.R.D. 99, 103 (D.Minn. 1990).

[574]*574As a threshold matter, GM argues the Rule 23 analysis does not apply because Lockwood lacks standing to pursue claims on behalf of the class. GM claims Lockwood is not a “member” of the purported class because it is not a Buick, Chevrolet, GMC Truck or Pontiac dealer. GM contends that only dealers from these particular divisions have standing to contest the 1% advertising charge collected from their respective divisions, and that Lockwood therefore lacks standing to represent these dealers.

GM’s challenge to Lockwood’s standing in this case is not persuasive. Notwithstanding GM’s claims, by its express terms, Lockwood is clearly a “member” of the proffered class. Based on the allegations in the Complaint, Lockwood, like the dealers he seeks to represent, has been illegally required to pay the 1% advertising charge and seeks to vindicate the rights of all dealers who similarly have been illegally required to make this payment. The fact that other dealers were required to pay the charge at a different time or based on a different brand of GM vehicle does not affect the existence of this injury. Insofar as Lockwood has a personal stake in this litigation, based on an actual “case or controversy” with GM which is redressable by a favorable decision, he unquestionably has “standing.” See Valley Forge Christian College v.

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162 F.R.D. 569, 1995 U.S. Dist. LEXIS 17794, 1995 WL 435971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lockwood-motors-inc-v-general-motors-corp-mnd-1995.