Hanlon v. Chrysler Corp- Chrysler Mini-Van Latch Litigation

Class Actions — Objections to Proposed Settlements
Case Description: 

Plaintiffs filed class action suits all over the country against Chrysler because the rear latch on its minivan was defective and had a tendency to pop open in collisions, leading to many serious personal injuries and deaths, particularly of children. The class actions asked for damages and that the company be ordered to fix the latch. A case was ultimately filed in federal court in San Francisco and settled on a nationwide basis shortly thereafter. The settlement provided that Chrysler would offer class members a new improved latch if the owner presented the van to a dealer. In addition, Chrysler agreed to spend $14 million to advertise the service campaign (monies which may have already been spent). The problem is that Chrysler had already agreed to replace the latch in an informal agreement with the National Highway Traffic Safety Administration ("NHTSA"), which had launched an investigation into the latch problem. Moreover, at the time the settlement was reached, the retrofit was not yet ready. So, class counsel apparently agreed to something it could not have properly assessed and which the government had already obtained. The agreement provided for up to $5 million in attorney's fees for class counsel.

The district court approved the settlement on the ground, among others, that the settlement is enforceable in court, although Chrysler's promises to NHTSA are not. The judge also approved the full $5 million fee, despite the lack of any evidentiary support for it, on the ground that the fee had been negotiated with the help of a mediator (a retired judge). We appealed the district court's decision. Thereafter, the settling parties discovered that they had failed to notify a sizeable segment of the class (e.g., Californians). Therefore, additional notification was provided and a supplemental fairness hearing was held at which we presented further objections (e.g., evidence concerning Chrysler's slow progress in repairing the faulty latches). The district court again approved the settlement, and we again appealed.

The Ninth Circuit affirmed on all issues in a very disappointing opinion that did not address the objectors' arguments in any detail.

We represented various class members and the Center for Auto Safety in opposing the settlement. We took discover from class counsel and Chrysler to determine what, if anything, in addition to the NHTSA action has been achieved and how much Chrysler had spent toward the $14 million prior to entering the settlement. We argued that the settlement was unfair because it conferred no real value on the class beyond what NHTSA has already negotiated. We also challenged the nationwide class certification, arguing that it overrode the rights of class members under their state consumer protection and "lemon" laws. Finally, we opposed the fee request on the ground that it was excessive and that it was unsupported by any fee and expense records.

In light of the adverse Ninth Circuit ruling, the case is now closed and our involvement ended.