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Philadelphia Common Pleas Judge Mark I. Bernstein has rejected a proposed settlement of a tentative class action stemming from the recall of roughly 162,000 Isuzu SUVs due to defective brake systems. In his recent nine-page order in Parker v. American Isuzu Motors Inc., Bernstein argued that certain requirements of the proposed settlement — such as that class members would need to produce a police report that supported their claim in order to receive compensation — might cause plaintiffs undue difficulty. He also called attention to the fact that the proposal only guaranteed a total payment by Isuzu of $300,000, with class counsel set to be reimbursed up to $150,000 for fees and expenses. “Since the proposed settlement abandons most claims and clearly minimizes recovery to class members and maximizes the difficulty of even submitting a claim, the proposed settlement fails to be within the parameters of a reasonable settlement,” Bernstein wrote. Serving as class counsel in the matter are Sherrie Savett and Michael Fantini of Berger & Montague. Isuzu is being represented by Joseph Kernen of DLA Piper Rudnick Gray Cary. None immediately responded to calls seeking comment. According to Bernstein’s order, the Parker class action was filed in September 2003 and sought to include all people in the United States who leased or purchased a 1998 or 1999 Isuzu Rodeo or Amigo and wound up paying money due to a car accident caused by the defective brake system. “Five years after the vehicles were first marketed the defendant issued a recall notice stating that as a result of the brake system, drivers ‘may encounter extended stopping distances,’” Bernstein wrote. “The notice further advised: ‘This could lead to a crash.’” Over 161,927 Amigos and Rodeos were recalled. Before the issue of certification could be reached, according to the order, both parties submitted in February a joint motion for Bernstein’s approval of a proposed settlement agreement. The settlement proposal requires class members to submit multiple sworn statements and documents before receiving a payment, according to the order. Compensation would range from $75 to $1,750, and the named plaintiffs — of which there are two listed on the common pleas docket — would receive payments of $3,000 apiece. Bernstein wrote in his order that this was the second time he has declined to approve a settlement proposal put forward by the parties in Parker. The first, he wrote, involved no guaranteed minimum payout by Isuzu, and recommended notification by post card. “The current proposed settlement, otherwise substantially the same, is deficient in that it abandons most of the claims presented and imposes onerous proof requirements for recovery by class members,” he wrote. Under the current settlement proposal, according to the order, multiple claims arising from a defect within a single vehicle would be abandoned. “A defective braking system could easily cause the owner of a vehicle to be involved in more than one accident,” Bernstein wrote. “Likewise, if the vehicle had been sold one or more times prior to the recall, damages could have been sustained by multiple owners of the same vehicle. Nonetheless, the proposed settlement provides for a single payment per vehicle and a single payment per owner. No system is provided for resolving conflicts among multiple claimants for the same vehicle.” But the “arduous claims procedure,” Bernstein found, was “even more egregious” than the proposal’s abandonment of certain types of claims. In order to be eligible for minimal compensation under the proposal, he continued, class members would have to provide a sworn statement that discloses details of the accident and weather conditions on the day it occurred, as well as an explanation of out-of-pocket losses incurred. In addition, claimants also need to present a sworn statement of a passenger present during the accident in which it is asserted that the accident was caused by brake failure, according to the order. And finally, the claimant would need to produce documentation of out-of-pocket expenses stemming from an accident, such as a canceled check for payment of an insurance deductible or a bill for auto body repair work. “If the accident occurred at the beginning of the class period, 1998, the documentation required is from seven years ago,” Bernstein wrote. “Upon receipt of all these proofs and sworn statements, the claimant will receive a grand total of $75. While it is extremely unlikely that any significant number of class members will undergo the difficulties and aggravation to obtain the documentation needed to receive $75, it is a virtual certainty that only a tiny fraction, if any, of the 161,000 potential class members will comply with the additional burdensome requirement to obtain any greater recovery.” In order to obtain compensation of more than $75 under the proposal, Bernstein explained, a class member would have to go through the added step of obtaining a police report that indicates that the accident was caused by a brake failure. “Investigating police officers are neither auto mechanics nor accident reconstruction experts,” he wrote, adding later, “This court is also very concerned about the difficulty, aggravation and expense in obtaining a police report for an accident which [may have] occurred five years earlier in a jurisdiction far from home. This difficulty is itself significant further discouragement to presenting a claim.” In closing, Bernstein also noted that under proposal, Isuzu would have reserved the right to withdraw from the settlement if 75 class members — .04 percent of the class — chose to opt out.

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