The Missouri Court of Appeals has affirmed a lower court’s denial of class certification in a consumer’s Uniform Commercial Code counterclaim accusing an auto lender and a debt buyer of sending deficient repossession notices, ruling the plaintiff never showed that common questions would predominate across a proposed nationwide class.
The background: The plaintiff financed a vehicle through a lender, fell behind on payments, and had the vehicle repossessed.
- The lender mailed a pre-sale notice titled “Notice of Our Plan to Sell Property” explaining her redemption rights, how sale proceeds would be applied, and how any deficiency would be calculated. After she did not redeem the vehicle, it was sold and she received a post-sale notice showing a deficiency balance of $8,992.03.
- The lender later assigned the account, along with other consumer accounts, to a debt buyer, which sued the plaintiff to collect the deficiency.
- The plaintiff responded with a counterclaim and third-party petition against both defendants, alleging the template notices were “erroneous, confusing, and misleading” under several UCC provisions. She proposed a nationwide class and a Missouri subclass.
- The defendants’ motion to compel arbitration was denied, and they did not appeal that order. They opposed certification, arguing among other things that many putative class members had signed arbitration agreements or class action waivers.
- When the plaintiff moved for certification, she sought a nationwide class for each defendant but dropped the request for a Missouri subclass. The trial court denied the motion without explanation, and the plaintiff obtained permission to file an interlocutory appeal.
The ruling: The Appeals Court affirmed, taking up only one of the plaintiff’s nine points because it was dispositive: whether she had carried her burden of proving that common questions of law or fact predominated over individual ones.
- Judge Virginia W. Lay of the Missouri Court of Appeals, who wrote that a court must first know which law applies before it can assess predominance, and that in a multi-state class “variations in state law may swamp any common issues and defeat predominance.”
- The plaintiff submitted a chart of three UCC provisions from all 50 states and argued it showed uniform adoption everywhere except North Dakota. She also argued the defendants bore the burden of identifying an actual conflict. Judge Lay called that a misunderstanding of who carries the burden: the party seeking certification must supply the choice-of-law analysis and affirmatively establish there are no conflicts, “through an extensive analysis of state law variances.”
- The judge pointed to cases where courts rejected far heavier submissions, including catalogs of statutory text, expert reports, and more than 100 pages of exhibits, as insufficient. The plaintiff’s effort to distinguish those cases on their underlying claims was “a distinction without a difference.” A court “cannot accept ‘on faith'” that state law variations are insignificant, and, quoting a leading treatise, “The Uniform Commercial Code is not uniform.”
- The plaintiff’s argument that Missouri law should simply apply to the entire nationwide class was “fraught with constitutional implications,” and the record showed no attempt to justify that under due process limits.
- The judge rejected reliance on Missouri precedent involving form contracts, noting those cases either involved a uniform Missouri choice-of-law clause or only Missouri consumers under Missouri’s UCC.
- The Appeals Court declined to redefine the class on appeal to exclude North Dakota or to limit it to Missouri residents, because the plaintiff never sought that relief below beyond a general request to modify the class as the trial court saw fit.
