Compaq Computer Corp. v. Albanese

The court reverses the certification order and remands to the trial court for further analysis, considering LaPray, of the appropriateness of the joinder of the two claims asserted here, the cohesiveness of the (b)(2) class, the choice of law, and the due process requirements of notice and opt-out opportunities for the proposed (b)(2) class.

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Click here for the full text of this decision FACTS:Michael Albanese bought a Compaq laptop computer in April 1999. He experienced several problems with it, but when he took it to be repaired, he was told the problems were not covered by the warranty. Albanese filed a class action suit against Compaq. He alleged that the target products were sold with written limited warranties against defects in materials or workmanship during normal use. Albanese asked for a declaratory judgment that the warranty violates the Magnuson Moss Warranty Act’s prohibition against disclaiming or modifying implied warranties.; he also asked for equitable or legal relief, other than damages, for violation of the Magnuson Moss Warranty Act. In his fourth amended petition, Albanese reiterated that his first cause of action requested declaratory relief only, based on Civil Practice & Rem.edies Code 37.004, which says a person interested under a written contract, or whose rights are affected by a statute, may have a court determine a question of construction or validity arising under the contract or statute and obtain a declaration of rights. He also reiterated the remedy he wanted under the MMWA: a declaration substantially similar to that pleaded in his first cause of action. The trial court certified the class under both Texas Rule of Civil Procedure 42(b)(1)(A) and 42(b)(2). The class is generally comprised of all U.S. residents and citizens who bought certain Compaq products after April 1, 1997, and received a written limited warranty. After the trial court’s order, the Texas Supreme Court issued its opinion in Compaq Computer Corp. v. LaPray, 135 S.W.3d 657 (Tex. 2004), which imposed rigorous analysis by the trial court of the cohesiveness of a class certified under Rule 42(b)(2), and said that an appellate court cannot effectively review a certification order of a mandatory class (classes with no possibility of exit) that does not say how, if any, notice and opt-out rights will be provided to the class members. HOLDING:Reversed and remanded. The court notes that the cohesiveness of a mandatory class raises due process concerns. The degree of the mandatory class’ unity is the rationale for the lack of opt-out rights. The requirements for certification of a mandatory class must be strictly followed to assure the necessary class cohesiveness. The trial judge did not have the benefit of the Supreme Court’s opinion in LaPray, the court notes. But where the class is mandatory, as here, the trial court must apply a more rigorous standard of class cohesion that the trial court gave it in this case, because members will be bound by the judgment without the opportunity to opt out. “Rather than determine the issues in this appeal on this record, we reverse the certification order and remand to the trial court for further analysis, considering LaPray, of the appropriateness of the joinder of the two claims asserted here, the cohesiveness of the (b)(2) class, the choice of law, and the due process requirements of notice and opt-out opportunities for the proposed (b)(2) class.” The court also notes that the criteria for certification under Rule 42(b)(1)(A) is not met merely by showing that different courts might reach different results on similar claims. There is not enough of a showing of a palpable risk in this case that Compaq’s conduct, absent certification of this class, would be bound by irreconcilably conflicting judgments. Regardless, the court adds, certification under Rule 42(b)(1)(A) should be analyzed the same as under Rule 42(b)(2) for purpose of notice and opt-out rights and the effect of the judgment on absent class members. The class must be cohesive. OPINION:Gaultney, J.; McKeithen, C.J., Burgess and Gaultney, JJ.

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