Court of Appeal of Lousiana Ruling II

Sixth Assignment of Error

      The sixth assignment raised by appellant is whether consumer certificates could be transferred to dealers.

      Section III.E.8 of the settlement agreement provides that: Certificates may not be transferred to authorized General Motors dealers or their affiliated entities during the first 15 months, except that Certificates may be redeemed at authorized General Motors dealers as provided in this Agreement.

      GM cites a Class Counsel press release introduced at the April 27, 2001 hearing to the effect that, by mid-May, “dealers, leasing companies, and fleets will be able to access a special Web site … where [consumer] certificates may be purchased in large quantities.” GM contends that Class Counsel intends to have CRG sell consumer certificates to dealers, who will then, presumably, sell or exchange these consumer certificates for third party certificates in the names of actual vehicle purchasers.

      First, GM appears to be correct that this scheme would involve two sales of the original consumer certificate; whether or not more than one sale is contemplated in the settlement agreement is debatable. Further, the settlement agreement expressly prohibits the transfer of consumer certificates to GM dealers. GM contends that the trial court erred to the extent it did not prevent this violation from occurring; indeed the judgment does not expressly preclude transference of consumer certificates to dealers. Moreover, paragraph E of the trial court’s judgment/order states that “[a] request for Third Party Certificate may be sent to Experian by any person or entity holding a [consumer] Certificate.” Class Counsel does not directly address this issue. It is our finding and our opinion that to the extent the judgment allows GM dealers to purchase or obtain consumer certificates, it is in violation of the settlement agreement and must be reversed.

Eighth Assignment of Error

      The issue posed by GM’s eighth assignment of error is whether GM is entitled to specific performance of the settlement agreement, including the right to injunctive relief prohibiting Class Counsel’s breaches and requiring the undoing of the improper actions. The only apparent difference between GM’s present request for specific performance of the settlement agreement and its earlier Motion to Compel Compliance, the denial of which gave rise to this appeal, is that GM now seeks to have “Class Counsel pay for undoing what they have already done.” As GM did not raise the issue of damages below, the trial court did not have the opportunity to rule on this issue. Accordingly, this assignment is not appropriate for review atthis time, and will be remanded to the trial court for resolution after implementation of the judgment of this court.

Ninth Assignment of Error

      The ninth error assigned by GM is whether Class Counsel failed to comply with Rule of Professional Conduct 1.8.

      GM raised its ethics arguments at the trial court; however, the trial court opined it does not hear questions regarding professional conduct. Indeed, it appears that the appropriate forum in which to raise an alleged violation of professional conduct is through the Attorney Disciplinary Board and Office of Disciplinary Counsel as more specifically set forth under the Louisiana Supreme Court Rules For Lawyer Disciplinary Enforcement. See Supreme Court Rules, Rule 19. Following investigation and review by a hearing committee, a complainant not satisfied with disposition of a disciplinary matter may appeal to a panel of the disciplinary board and ultimately request review by the Louisiana Supreme Court. Supreme Court Rules, Rule 19, Section 30. Accordingly, this assignment is without merit.

Tenth Assignment of Error

      The tenth and final error assigned by GM questions whether Class Counsel, acting alone or in concert with Experian and/or CRG, may retain, use, or disseminate any list of settlement class members who responded affirmatively to the “cash alternative”. This court has already stated that it could not find any language in the settlement agreement that expressly or impliedly prohibits a member of the settlement class from authorizing Class Counsel to exchange, on the settlement class member’s behalf, a consumer certificate for a third party certificate in the name of a designated purchaser provided a consumer certificate has previously been delivered to a settlement class member. Similarly, we find nothing in the settlement agreement that would prohibit Class Counsel, either alone or in concert with Experian or CRG from obtaining lists of settlement class members.

      Paragraph III.D of the settlement agreement envisions the creation of a secondary market whereby settlement class members not interested in purchasing a new vehicle may sell or transfer their consumer certificate for a third party certificate to be used for the unexpired portion of the initial 15-month period. If Class Counsel, either alone or in concert with Experian or CRG, were precluded from acquiring a list of settlement class members for the purpose of locating a market maker for a secondary market, such action would, in the opinion of this court, undermine the alternative set forth in paragraph III.D of the settlement agreement. This assignment is without merit.

CONCLUSION

      For the foregoing reasons, the trial court’s order dated May2, 2001, is affirmed in part only, insofar as paragraph I of said order. This court has found merit in the first, second, third, fourth, sixth, and seventh errors assigned by GM.   For this reason, the remainder of the order dated May 2, 2001 is reversed and this proceeding is remanded to the trial court for further proceedings consistent with this opinion.

      The trial court is further ordered to hold a hearing for the purpose of determining an appropriate date for issuance of a new final notice and proof of claim. In furtherance of this order, all time delays set forth in the settlement agreement are suspended and do not run against settlement class members until such time as a date for issuance of a new final notice and proof of claim is selected by the trial court. At this point, the delays set forth in the settlement agreement shall begin to run anew.

      Additionally, Class Counsel shall bear all expenses associated with notifying settlement class members of this new final notice and proof of claim. The amount of said expense shall be determined by the trial court.

      It is further ordered that settlement class members who have already responded to Class Counsel’s offer must be notified of the changes consistent with this opinion by Class Counsel, and Class Counsel shall bear all costs for same.

      All costs of this appeal shall be borne by the settlement class.

 AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH ORDER.

2002-0771 (La.App. 1 Cir. December 20, 2002).

      FN1. Judge Philip C. Ciaccio, retired, is serving as judge pro tempore by special appointment of the Louisiana Supreme Court.

      FN2. Michael A. Patterson is serving as judge pro tempore by special appointment of the Louisiana Supreme Court.

      FN3. The history of how the nationwide class action settlement ultimately came to the Louisiana court system is set forth in White v. General Motors Corporation, 97-1028, pp. 3-9 (La.App. 1 Cir. 6/29/98), 718 So.2d 480, 482-486.

      FN4. The settlement class includes a consumer sub-class, a fleet sub- class, and a governmental sub-class.

      FN5. The settlement agreement defines “NEW GM VEHICLE” as “any new and unused General Motors light truck or automobile, which include Chevrolet, Geo, GMC Truck, Buick, Oldsmobile, Pontiac and Cadillac models. NEW GM VEHICLE shall not include Saturn models or electric powered vehicles.”

      FN6. White v. General Motors Corporation, on rehearing, 99-2585 (La.App. 1 Cir. 1/16/01), 782 So.2d 9.

      FN7.       In our previous opinion in White, this court ruled that the trial court impermissibly approved Experian to perform the final notice/claim form mail-out function for the settlement of class action claims. This court further concluded that the trial court erred in ordering that any information be provided to Experian. See White, 99-2585 at 18-19, 775 So.2d at 502-503.

      FN8.       A copy of a press release purportedly distributed by Class Counsel and CRG was filed into the record and states that “Houston-based Certificate Redemption Group, LLP [“CRG”], was formed in 1996 for the sole purpose of creating a secondary market for GM certificates in the GM pickup truck class settlement. CRG is the exclusive secondary market maker endorsed and supported by class counsel for the GM … Full-Size Pickup Settlement.”

      FN9. White v. General Motors Corp., 2001-CW-0855 (La.App. 1 Cir. 4/26/01).

            FN10. Class Counsel filed a motion entitled “Motion Relating to Administration and/or Implementation of Settlement” on April 25, 2001. (Exhibit 26)

            FN11. The responsibilities of Rust are unclear. At the April 27, 2001 hearing, Class Counsel described Rust as “the nation’s premiere class action administrative service firm.” Class Counsel later advised the trial court that Rust would probably staple an original certificate with a request for a third party certificate, send the two together to GM Settlement Headquarters in Young America, Minnesota, where they will be processed and data-inputted and the data would then be transmitted back to Experian where the third party certificate would be created.

            FN12. Settlement Agreement, Section III, p. 7.

      FN13. Settlement Agreement, Section III.D, p. 10.