Paley v. Coca Cola Company

209 N.W.2d 232, 389 Mich. 583, 1973 Mich. LEXIS 119
CourtMichigan Supreme Court
DecidedJuly 24, 1973
Docket5 March Term 1973, Docket No. 54,058
StatusPublished
Cited by38 cases

This text of 209 N.W.2d 232 (Paley v. Coca Cola Company) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paley v. Coca Cola Company, 209 N.W.2d 232, 389 Mich. 583, 1973 Mich. LEXIS 119 (Mich. 1973).

Opinion

Williams, J.

(to affirm). Despite the millions of dollars involved in this case, and the general struggle to guarantee to the people the right to bring *587 the potentially powerful consumer class action suit in the state’s court best equipped with discovery, injunction and other powers, the legal issue in this case is narrow and relatively simple. The legal issue boils down to whether or not the Legislature in its wisdom divested the circuit courts of original jurisdiction in class action suits in setting up district court jurisdiction. With the aid of excellent briefs and arguments pro and con, this opinion concludes that the Legislature did not intend to divest the circuit courts of jurisdiction over class action suits whatever the amount in controversy.

I — THE FACTS

Defendants Coca Cola and Glendinning created and conducted a nationwide contest called "Big Name Bingo”. Cards were distributed with ten questions on each, relating to the achievements of some famous person. The answers were pictures of such famous persons and were to be found on Coca Cola and Tab bottle tops and can cartons. The game was to paste the proper picture over the answers. Plaintiffs allege the original rules indicated that there was only one right answer to each question. However, at the last minute and after most contestants had filed their answers, new rules were announced indicating that some questions required two answers. This prevented most of the 1,500,000 contestants from winning the $100 prize for correctly answering ten questions.

Plaintiff Paley filed a representative class action on behalf of himself and 1,500,000 other persons similarly situated, seeking damages totaling $900,-000,000 for unfair trade practices, breach of contract and fraudulent misrepresentation on November 19, 1970.

Similar class actions had been filed in Los An *588 geles and the Federal district courts in northern California and Detroit. The California case is still pending, the California Federal case was dismissed and is on appeal, and the Detroit Federal case was dismissed and has not been appealed. There is a still pending Federal Trade Commission case against the same defendants on the same facts.

Defendant Coca Cola filed a motion to dismiss for lack of jurisdiction and defendant Glendinning filed a motion for summary and accelerated judgments. These motions were granted February 22, 1971. Plaintiffs appealed. The Court of Appeals vacated the circuit court judgment and remanded for further proceedings on March 23, 1972. 39 Mich App 379.

We granted leave to appeal June 22, 1972. 387 Mich 797 (1972).

II — SOURCE OF JURISDICTION

The basic issue in this case is whether the circuit court or the district court has jurisdiction to try it. The answer to thát question must be found in the subscribed constitutional and statutory provisions:

A. "The circuit court shall have original jurisdiction in all matters not prohibited by law * * * ,” 1 Const 1963, art 6, § 13.

B. "Sec. 601. Circuit courts have the power and jurisdiction

(1) possessed by courts of record at the common law, as altered by the constitution and laws of this state * * * , 1 and

*589 (2) possessed by courts and judges in chancery in England on March 1, 1897, as altered by the constitution and laws of this state * * * ” MCLA 600.601; MSA 27A.601.

C. "Sec. 605. Circuit courts have original jurisdiction to hear and determine all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute to some other court or where the circuit courts are denied jurisdiction by the constitution or statutes of this state.” MCLA 600.605; MSA 27A.605.

D. "Sec. 8301. The district court shall have exclusive jurisdiction in civil actions when the amount in controversy does not exceed $3,000.00. 2 MCLA 600.8301; MSA 27A.8301.

E. "Sec. 8315. The district court shall not have jurisdiction in actions for injunction, divorce or actions which are historically equitable in nature, except as otherwise provided by law.” MCLA 600.8315; MSA 27A.8315.

The most critical provisions are C, D and E. C (§605) provides the "[c]ircuit courts have original jurisdiction * * * except where exclusive jurisdiction is given * * * to some other court”. D (§ 8301) appears to provide that "[t]he district court shall have exclusive jurisdiction in civil actions when the amount in controversy does not exceed $3,000.00”. However, E (§ 8315) provides "[t]he district court shall not have jurisdiction in * * * actions which are historically equitable in nature * * * 99

If a class action is "historically equitable in nature” then we must see whether the combination of D (§ 8301) and E (§ 8315) divest the circuit court of jurisdiction.

Ill — IS A CLASS ACTION HISTORICALLY EQUITABLE IN NATURE

In American State Savings Bank, Trustee v *590 American State Savings Bank, 288 Mich 78, 84 (1939) before there was any court rule on class actions, we said:

"In City of Detroit v. Railway, 226 Mich. 354 [1924], the class suit doctrine was adopted by this court. In that case, where it appeared that an exigency existed requiring a change in the terms of a trust in which approximately 1,200 bondholders were involved, the court quoted with approval the following from the decree of the trial court:
" 'It seems to be a well known equitable doctrine that virtual representation [etc.]’ ” (Emphasis added.)

This quotation shows that Michigan in adopting the class action clearly recognized it as a "well known equitable doctrine”.

In Detroit we quoted from the quotation in Supreme Tribe of Ben-Hur v Cauble, 255 US 356; 41 S Ct 338; 65 L Ed 673 (1921) used in Colorado & SR Co v Blair, 214 NY 497; 108 NE 840 (1915) as follows:

" 'Class suits were known before the adoption of our judicial system, and were in use in English chancery.’ ” (p 371.)

In Pressley v Wayne Sheriff, 30 Mich App 300, 318 (1971), my Brother Levin, then Judge Levin, quoted from Montgomery Ward & Co, Inc v Langer, 168 F2d 182, 187 (CA 8, 1948):

" 'The class action was an invention of equity [citation omitted] ***.’”

See also Bond v Ann Arbor School District, 18 Mich App 506, 514 (1969). 3

*591

Free access — add to your briefcase to read the full text and ask questions with AI

Related

People of Michigan v. Todd Douglas Robinson
Michigan Court of Appeals, 2024
the Meisner Law Group v. Weston Downs Condominium Association
909 N.W.2d 890 (Michigan Court of Appeals, 2017)
Fillmore v. Leasecomm Corp.
18 Mass. L. Rptr. 560 (Massachusetts Superior Court, 2004)
Labelle v. McKay Dee Hospital Center
2004 UT 15 (Utah Supreme Court, 2004)
GALEN OF FLORIDA v. Arscott
629 So. 2d 856 (District Court of Appeal of Florida, 1994)
People v. Veling
504 N.W.2d 456 (Michigan Supreme Court, 1993)
Pritchard v. State
788 P.2d 1178 (Arizona Supreme Court, 1990)
Dix v. American Bankers Life Assurance Co.
415 N.W.2d 206 (Michigan Supreme Court, 1987)
Boyd v. Nelson Credit Centers, Inc
348 N.W.2d 25 (Michigan Court of Appeals, 1984)
Daou v. Harris
678 P.2d 934 (Arizona Supreme Court, 1984)
Detroit Automobile Inter-Insurance Exchange v. Maurizio
341 N.W.2d 262 (Michigan Court of Appeals, 1983)
Romulus City Treasurer v. Wayne County Drain Commissioner
322 N.W.2d 152 (Michigan Supreme Court, 1982)
Wikman v. City of Novi
322 N.W.2d 103 (Michigan Supreme Court, 1982)
Pollokoff v. Maryland National Bank
418 A.2d 1201 (Court of Appeals of Maryland, 1980)
Melkus v. Allstate Insurance
503 F. Supp. 842 (E.D. Michigan, 1980)
Grettenberger Pharmacy, Inc. v. BLUE CROSS-BLUE SHIELD
296 N.W.2d 589 (Michigan Court of Appeals, 1980)
Citizens for Pre-Trial Justice v. Goldfarb
278 N.W.2d 653 (Michigan Court of Appeals, 1979)
Thomas v. Liberty Nat. Life Ins. Co.
368 So. 2d 254 (Supreme Court of Alabama, 1979)

Cite This Page — Counsel Stack

Bluebook (online)
209 N.W.2d 232, 389 Mich. 583, 1973 Mich. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paley-v-coca-cola-company-mich-1973.