To dissolve the class, Ally is asking the U.S. Supreme Court to rule that failure to comply with the Uniform Commercial Code on a national level is not a valid claim because the laws pertaining to the code don’t align perfectly across the states. The argument is a strong one, according to attorney Aaron Jacoby, chair of the auto industry practice group at Arent Fox law firm. Jacoby said it would destabilize similarity in the applicable law, one of the three components necessary to certify a class. Jacoby and the law firm are not involved in the case.
A failure to comply with the code in one state, or even one instance, “doesn’t mean every one of your repossessions was wrong,” Jacoby said.
If the Supreme Court were to side with the class, the case would proceed with merits, a period of discovery and then trial. From there, it could mean nationwide class-action lawsuits could occur “anywhere they could find one plaintiff with the requisite connection to the forum,” Ally’s petition reads.
The National Automobile Dealers Association, the American Financial Services Association and the American Bankers Association are advocating on behalf of Ally, with representatives included as supporting counsel in Ally’s petition.
Consolidating multidistrict litigation into class actions is a common legal practice, Jacoby said. The scale of this claim, especially as the certified class seeks statutory damages, is somewhat unusual. And the impact if the court sides against Ally could be substantial.
“There are statutory damages for failure to comply,” Jacoby said. Such damages may seem like a small amount in a given state, “but if you multiply it across thousands of people across 50 states, it could be a boatload of damages.”