Recent district court decisions are erroneously allowing CAFA to supersede the MMWA’s Class Action’s requirements, and this could potentially be a red flag for those who think CAFA could be used to evade the MMWA’s jurisdictional requirements.  Courts are disregarding the jurisdictional limitations of the MMWA, and are allowing CAFA to trump its requirements.  These courts are stating that, where CAFA’s conditions are met, CAFA provides an alternative basis for jurisdiction without regard for the MMWA.  Consider this hypothetical that explains this scenario:  Plaintiffs file a complaint under the MMWA, and Defendants move to dismiss Plaintiffs’ claims under the MMWA for lack of subject-matter jurisdiction.  Defendants argue that the MMWA provides:

[n]o claim shall be cognizable in a ‘suit’ brought by a consumer for a violation of the Act if ‘the amount in controversy of any individual claim is less than the sum or value of $25,’ the total ‘amount in controversy is less than the sum or value of $50,000’ or ‘the action is brought as a class action, and the number of named plaintiffs is less than one hundred.’^[1]

The Complaint neither names one hundred plaintiffs nor states that any individual plaintiff is seeking more than $25.  Defendants further argue that Plaintiffs’ MMWA claims must be dismissed because the Complaint neither names one hundred plaintiffs nor states that any individual plaintiff is seeking more than $25.  However, Plaintiffs’ counsel will argue cleverly, with a smirk on his face, and say, “Honorable Judge, my client is not invoking the MMWA as a basis for the Court’s jurisdiction, but instead my client relies on the CAFA.” The judge, then, will consider this argument and ask himself whether this newly enacted CAFA presents an alternative basis for jurisdiction over Plaintiffs’ MMWA claims.  The truth of the matter is that the judge will most likely answer this question in the affirmative.  Why?  Is it because recent decisions who have engaged in the same inquiry are saying yes?  Likely, the judge will say to himself, “I would hate to be an odd ball if all these judges are allowing jurisdiction pursuant to CAFA, so I shall do the same.”  More likely than not, the judge will agree with the weight of authority, and find Plaintiffs’ MMWA claims may go forward.

However, this is not what Congress intended.  If Congress really wanted to create a more relaxed class action requirement for MMWA claims, then perhaps it would have done so prior to the enactment of the CAFA, or at the very least Congress would have added a provision in the CAFA allowing it to trump the MMWA.  Therefore, allowing district courts to render jurisdiction based on CAFA is a mistake on its face and will lead to the over flooding of the district courts.  On the whole, this comment explains why this is a misconception and courts should adhere to what Congress expressly set out in the MMWA, and not allow CAFA to trump the MMWA.

I.  BACKGROUND

A.  Magnuson-Moss Warranty Act (“MMWA”)

Congress enacted the MMWA with the purpose of protecting consumers from deceptive warranty practices,^[1] specifically, consumer product warranties that are often too convoluted for a layperson to understand.^[2]  In doing so, Congress wanted to safeguard consumers by requiring warrantors to make detailed disclosures of information necessary to allow consumers to understand written warranties.^[3]  The MMWA provides consumers with a guideline that allows consumers to compare warranty coverage before a purchase and to know what to expect if a product goes wrong.^[4]  The MMWA, therefore, allows a consumer to assert a civil cause of action to enforce the terms of an implied or express warranty. ^[5]  Notably, however, this consumer friendly statute requires consumers to follow a stringent jurisdictional requirement.^[6]

Sections 2310(d)(1) and (3) of the MMWA provides^[7]

[s]ubject to subsections (a)(3) and (e), a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title [15 USCS §§ 2301 et seq.], or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief-- (A) in any court of competent jurisdiction in any State or the District of Columbia; or (B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection. . . .

. . . . [] No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection--(A) if the amount in controversy of any individual claim is less than the sum or value of $ 25; (B) if the amount in controversy is less than the sum or value of $ 50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.^[8]

As noted above, “no claim shall be cognizable” in district courts unless the number of members in the plaintiff’s class is greater than one hundred.^[9]  Congress set forth this provision in order “to prevent such actions from occupying a federal forum at all unless these prerequisites are met,” and to “avoid trivial or insignificant actions being brought as class actions in the federal courts.”^[10]  However, soon after the passage of the CAFA, district courts are allowing CAFA to serve as a loophole around the MMWA, and are failing to prevent these trivial and insignificant actions from occupying a federal forum.^[11]

B.  Class Action Fairness Act

Congress intended to address a different need when it passed the CAFA than when it passed the MMWA.^[12]  CAFA was enacted with the purpose of enhancing and expanding class actions in federal jurisdiction.^[13]  In doing so, Congress broadened federal jurisdiction by establishing lenient requirements in order to protect defendants from “inequitable state treatment” and “to put an end to certain abusive state practices by plaintiffs’ counsel.”^[14] However, subject to its relaxed requirements, CAFA provides federal courts with jurisdiction over class actions provided that:  The amount of controversy must be more than $5 million and satisfy any of the following:

(1) “Any member of the plaintiff class is from a state other than the state of any defendant;”

(2) “Any member of [the plaintiff class] is a foreign state or … subject of a foreign state and any defendant is a citizen of a State;” or

(3) “Any member of [the plaintiff class] is a citizen of a State and any defendant is a foreign state or … subject of a foreign state.”^[15]

As mentioned above, CAFA’s grant of jurisdiction over qualifying class actions is quite broad.^[16]  It provides district courts with original jurisdiction over “any civil action” that satisfies both the amount in controversy requirement and “is a class action,” as long as certain specified other criteria are met.[17]  Although it may be arguable that because CAFA contains several enumerated exceptions:^[18] the “Securities Act” ^[19] exception and the “Securities Exchange Act of 1934,” ^[20] CAFA is harmonious with the MMWA.  Courts are arguing that because Congress failed to include the MMWA as an enumerated exception, “they may not assume that those omissions were accidental, and must “assume that Congress is aware of existing law when it passes legislation.”^[21]  However, this is a fallacy, as one is to say that because Congress failed to list MMWA under the enumerated exceptions, then courts should assume that the CAFA trumps the MMWA?  Therefore, Part II and III analyzes this misconception, and demonstrates that courts should not allow CAFA to supersede the MMWA’s Class Action requirements.

II. WHICH REQUIREMENT TO APPLY?

A.  Barr v. General Motors^[22]

In Barr, the Plaintiff purchased an automobile from General Motors and discovered that discoloration of the car’s paint. The Plaintiff claimed the automobile had been painted with defective paint and brought suit as the representative of a class action involving herself and all the persons in the country that had purchased the car from the defendant’s car with defective paint.  In the Complaint, the Plaintiff set forth that the MMWA was the basis of federal jurisdiction; however, Defendants moved to dismiss because the complaint was conclusory as to the size of the class.

The Plaintiff argued that discovery would “certainly” demonstrate the 100 named plaintiffs existed.  The Court rejected Plaintiff’s argument and ruled the buyer could not claim that discovery would certainly demonstrate the class existed.^[23]  The Court held that the buyer’s allegations as to the size of the class were insufficient to satisfy the numerosity requirement under the MMWA statutory requirement, which requires that a class action brought under MMWA must have at least 100 named plaintiffs;^[24] and that the jurisdictional prerequisite to a class action under the MMWA had to be met at the time the Court certified class action.^[25]  The Court held that holding otherwise would frustrate the purpose of jurisdictional provisions, which is, “to avoid trivial or insignificant actions being brought as class actions in the federal courts.”^[26]

B.  Kuns v. Ford Motor Co.^[27]

As mentioned in Part I, to bring a class action pursuant to the MMWA, a complaint must list at least one hundred named plaintiffs.^[28]  In Kuns, a purchaser of a sport utility vehicle brought a class action against dealership alleging that it violated, among other things, the MMWA.  Kuns filed her complaint against the dealership as the only named plaintiff, and the Court correctly determined that it did not have jurisdiction under the MMWA.  However, Kuns’ counsel found a loophole around MMWA class action requirement, and filed an amended complaint asserting federal jurisdiction pursuant to CAFA.  The Court held that even though courts have not addressed this “jurisdictional interplay,” it nevertheless had jurisdiction pursuant to the CAFA. ^[29]

The Court reasoned that “the CAFA—the more recent of the two statutes—“can render a district court a ‘court of competent jurisdiction’ and permit it to retain jurisdiction where the CAFA requisites are met but the MMWA requisites are not.”^[30]  The Court based its reasoning on Keegan v. Am. Honda Motor Co., which held that as a “general rule” the CAFA effectively supersedes the MMWA’s more stringent jurisdictional requirements.^[31] 

In Keegan, Plaintiffs brought an action on behalf of all individuals who purchased or leased a defective model year 2006 and 2007 Honda Civic and 2006 through 2008 Honda Civic Hybrid vehicles.  Plaintiffs alleged the vehicles were defective, and that the rear control arm originally installed in the vehicles were too short.  However, Defendants moved to dismiss the complaint because the complaint failed to meet the requirements of § 2310(d)(3)(C), and consequently lacked jurisdiction to hear the MMWA claim.

Defendants argued that the MMWA only permits the exercise of federal jurisdiction over class actions where the number of named plaintiffs equals or exceeds one hundred.[32]  Plaintiffs argued that the Court had jurisdiction pursuant to an alternative basis for jurisdiction under CAFA.  Plaintiffs argued that, even if the number of proposed plaintiffs is less than 100, the Court allegedly has jurisdiction under CAFA.^[33]  The Court nevertheless followed its reasoning on the weight of authority and adopted the reasoning of those cases,^[34] and held that the absence of at least one hundred named plaintiffs it does not prevent the Plaintiff from asserting claims under the MMWA, and the requirement was satisfied because Plaintiffs properly invoked jurisdiction under CAFA.^[35]

C.  The Text and Legislative History

1.  The Text

In Barr, as noted above, the Plaintiff filed her Complaint against General Motors because the automobile had defective paint.  Subsequently, the Court dismissed the Complaint because the Plaintiffs did not meet the class action requirements of § 2310(d)(3)(C).  The Court recognized that “the language of § 2310(d)(3)(C) means what it says; there must be at least one hundred individuals named in the complaint, or at the very least identified in the motion to certify the class.”^[36] 

However, in recent court opinions, district courts are reconciling CAFA with the MMWA.^[37]  These courts are arguing that “as a firmly embedded principle of statutory construction requires courts to presume that Congress enacts legislation with knowledge of existing law and, consequently, the newly-enacted statute is “harmonious with the existing law.”^[38]  But perhaps this is a clear mistake, as statutes conferring jurisdiction on federal courts are to be strictly construed, and doubts are resolved against federal jurisdiction.^[39]  Therefore, courts should not forget “as a basic principle of statutory construction that a statute dealing with a narrow, precise, and specific subject is not to be submerged by a later enacted statute covering a more generalized spectrum.”^[40]

2.  Statutory Interpretation and Canons of Interpretation

In Radzanower v. Touche Ross & Co., the United States Supreme Court held that as a basic principle of statutory construction a statute dealing with a narrow, precise, and specific subject should not submerged by a later enacted statute covering a more generalized spectrum.^[41]  In Radzanower, the Complaint was dismissed on the ground that venue was improper under the National Bank Act, which provided that an action could not be brought in the district where the bank was “established.”^[42]  On certiorari, the Supreme Court rejected the representative’s contention that the venue provision of the later-enacted Securities Exchange Act of 1934, partially repealed the National Bank Act’s venue provision.^[43]  

The Court held that the Securities Exchange Act of 1934, the later enacted statute covers a more generalized spectrum and that the National Bank Act dealt with a narrow, precise, and specific subject, should not submerged by the later statute.  Similarly, the MMWA is a statute dealing with a narrow, precise, and specific subject that requires at least one hundred individuals named in a complaint.^[44]  The CAFA’s grant of jurisdiction over qualifying class actions is quite broad and more generalized, which provides district courts with original jurisdiction over “any civil action” that both satisfies the amount in controversy requirement and “is a class action,” as long as certain specified other criteria are met.^[45]     Therefore, as a basic principle of statutory construction, the MMWA should not be submerged by CAFA, the more generalized statute.

3.  Legislative History and Federal Judiciary

The MMWA’s legislative history demonstrates that it would be inconsistent to construe the MMWA as not requiring 100 members in a Class Action.^[46]  The House Report 93-1107 is part of the legislative history of the Magnuson-Moss Warranty Act and a glance at the portion dealing with section 2310(d) reveals the following:^[47]

[1055] The purpose of these jurisdictional provisions is to avoid trivial or insignificant actions being brought as class actions in the federal courts. However, if the conditions of [Section 2310(d)(3)] are met by a class of consumers damaged by a failure to comply with a warranty as defined in this statute, Section [2310](d) should be construed reasonably to authorize the maintenance of a class action. In this context, we would emphasize that this section is remedial in nature and is designed to facilitate relief that would otherwise not be available as a practical matter for individual consumers.

However, scholars who support CAFA will argue that CAFA’s legislative history prevails, as it is the last one to be enacted.^[48]  District courts are arguing that Congress is presumed to enact legislation with knowledge of the law,^[49] but these courts fail to acknowledge a couple of important points in the legislative history that support the proposition that Congress intended a strict interpretation of the MMWA’s class action requirement.^[50]  Thus, the reading of the House Report turns the statute’s language on its head, as the drafters recognized that federal courts should not be burdened by “trivial or insignificant actions.”^[51]

III.  Whether CAFA presents an alternative basis for jurisdiction over MMWA claims?

The truth of the matter is that courts have disagreed about the answer to that question — namely, about whether the MMWA’s specific jurisdictional limitations trump CAFA’s authorization of federal jurisdiction over MMWA class actions.  As mentioned above, courts have held that, where its conditions are met, CAFA provides an alternative basis for jurisdiction without regard for the MMWA.^[52]  However, courts should not disregard the text of the MMWA, and instead should consider the argument that MMWA claims that do not satisfy that statute’s requirements may be brought pursuant to CAFA to be “flatly contradicted by the plain text of the MMWA.” ^[53]

In Ebin v. Kangadis Food Inc., the Court dismissed the Plaintiffs’ MMWA claims for lack of subject-matter jurisdiction.^[54]  The Court rejected Plaintiffs’ contention at oral argument that “CAFA creates an alternative basis for federal jurisdiction over the MMWA claim.”  In order to bolster their argument, Plaintiffs’ filed a supplemental letter brief which cited to recent MMWA cases, suggesting their MMWA claims were viable under the CAFA.  However, the Court held that Plaintiffs’ position was incorrect, as “it was flatly contradicted by the plain text of the MMWA.”^[55]  The Court reasoned that, the MMWA provides no claim shall be cognizable in a suit brought under paragraph (1) (B) of the MMWA, unless the MMWA’s independent jurisdictional requirements were met. 

A.  Countervailing issues with the Application of Kuns to the MMWA

Applying the Kuns test to the MMWA presents several problems.  First, it is important to acknowledge why Congress drafted its own set of class action jurisdictional requirements for the MMWA, which is, with the purpose of not flooding district courts with claims that belong in state courts.^[56]  In 1996, Congress “recognized the importance of balancing the need to assist the Federal judiciary in reducing its increasing caseload with the needs of those making use of our Federal courts.”^[57]  If courts allow CAFA to serve as an admission ticket into district courts and supersede MMWA, this will do exactly the opposite of what Congress has strived to prevent.^[58]

Statistics indicate that since 2006, soon after the enactment of CAFA, approximately fifteen courts allowed CAFA to supersede the class action requirements of the MMWA.^[59]  In 2007, approximately four courts allowed CAFA to trump the class action requirements of the MMWA.^[60]  And, more recently, in 2013 approximately five courts allowed CAFA to supersede the class action requirements of the MMWA.^[61]  Therefore, if this trend continues, our district courts will be burdened by “trivial or insignificant actions” that belong in state courts.^[62] 

Consider this premise: some claims belong in state courts, while other claims belong in federal courts.  This is why Congress purposely distinguished between federal and state courts, “attempting to strike a balance between the needs of federal courts and the needs of legitimate potential plaintiffs.”^[63]  Consequently, if plaintiffs cannot meet the class action requirements under the MMWA, they have no “hook to maintain jurisdiction in district courts, and courts should acknowledge that the “congressionally approved balance of federal and state judicial responsibilities” tips in favor of remanding.”^[64]

B.  The Kuns Precedents Do Not Support CAFA to Supersede the MMWA’s Class Action Requirements.

None of the precedents under Kuns support CAFA to supersede the MMWA’s Class Action requirements.  Since the enactment of the MMWA, it has been well established that plaintiffs must meet all three requirements set out in 15 U.S.C. § 2310(d)(3).  For example, in Lieb v. American Motors Corp., the Court dismissed the Plaintiff’s class claims under the Magnuson-Moss Act because only one plaintiff was named in the complaint.^[65]  The Court found that “the Complaint is deficient measured against the explicit and unambiguous statutory mandate and must be dismissed as a class action.”^[66]  Similarly, in Watts v. Volkswagen Artiengesellschaft, the Court dismissed class claims under the Magnuson-Moss Act because there were only two named plaintiffs in the complaint.^[67]  Finally, in Barr, the Court found that “the language of § 2310 (d) (3) (C) means what it says; there must be at least one hundred individuals named in the complaint.”  Therefore, case law is well settled and plaintiffs must meet the stringent Class Action requirements set forth in the MMWA.

C.  Has Congress Directly Spoken to the Issue? ^[68]

Congress has not spoken on the issue, but referencing back to the H.R.Rep.No.93-1107, 93d Cong., 2d Sess. (1974), Reprinted in (1974) U.S.Code Cong. & Admin.News p. 7724.^[69]  It should be noted that the language of  § 2310(d)(3) is essentially a limitation, and Congress makes it unmistakably clear that, as the House Report reflects, the purpose is to avoid such “trivial or insignificant actions” being brought in the federal courts.”^[70]

Even if Congress has not addressed this jurisdictional interplay, case law has construed that MMWA overrides statutes that supersedes it.”^[71]  For example, Watts v Volkswagen, the Court held that it did not have subject matter jurisdiction because there were only two named Plaintiffs.^[72]  The Court relied its reasoning on the MMWA legislative history, which “does not shed light on when the requirement of 100 named plaintiffs must be met.”^[73]  The Court also noted that, “[i]n the absence of any express language to indicate a Congressional intent to change the general rule concerning when the jurisdictional facts must exist, it is declined to find that it has been changed.”^[74]  Therefore, in the absence of any express language to indicate a Congressional intent to change the general rule concerning the jurisdictional requirements of the MMWA, courts must decline to find that the MMWA has been changed.^[75]

CONCLUSION

The crossroads of the MMWA and the CAFA is a field where two conflicting class action requirements meet: the CAFA’s requirements regarding judicial deference to the broadening of federal jurisdiction and the MMWA’s stringent requirement to prevent actions from occupying a federal forum unless these prerequisites are met favoring a strict interpretation of the MMWA.  Applying the Barr framework first, the statute clearly provides that CAFA in this context should not supersede the MMWA class action requirements.  Even after applying the Kuns framework, any further discussion of the statute in the Barr framework clearly establishes that Congress did not intend for CAFA to supersede the MMWA’s Class Action requirements and that the MMWA interpretation deserves deference.  Therefore, under the Barr framework, the MMWA’s Class Action requirements are stringent, and courts should not allow CAFA to create a loophole on what Congress expressly set out in 1975.

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_{* The author would like to thank Tom, her mentor, for all his advice, encouragement, and support. The author also would like to thank Professor Jennifer S. Martin, St. Thomas University School of Law, for her support and topic suggestion.  In addition, she would like to thank Alexa Bontkowski, for her skillful editing and insightful comments on an early draft of this comment.}

_{[1] See Skelton v. Gen. Motors Corp., 660 F.2d 311, 313 (7th Cir. 1981) (noting the MMWA is “a remedial statute designed to protect consumers from deceptive warranty practices.”).}