Pa. Supreme Court upholds certification, but rules against fees in Kia Motors case

The Pennsylvania Supreme Court ruled Dec. 2 in the case of Samuel-Bassett v. Kia Motors America, Inc. that the class action certification would remain but that $4.1 million in attorneys’ fees were inappropriate.

Chief Justice Ronald D. Castille wrote the majority opinion.

The justices’ reversal was only to the extent of the “lower courts’ approval of an enhancement” of the legal fee by application of “a risk multiplier to the amount of the lodestar.” The Supreme Court remanded the case back to the trial court for adjustment of fees.

Shamell Samuel-Bassett sued KMA on behalf of herself and others in a class action lawsuit filed in January 2001 in Philadelphia Common Pleas Court. Bassett alleged that, in October 1999, she purchased a 2000 Sephia from KMA with an extended warranty of 60 months or 60,000 miles. The purchase contract included the manufacturer’s standard warranty clause, which stated that the new vehicle would be free from defects in material and workmanship.

According to the complaint, the plaintiff experienced malfunctioning of her Sephia’s brakes within 17,000 miles of use, claiming she was unable to stop the vehicle or control it properly. She attributed this to a design defect in the Sephia’s brake system. The complaint cited inadequate heat dissipation, premature wear of the brake pads and warping of the rotors.

KMA’s authorized dealerships attempted five repairs on Bassett’s vehicle between January and October 2000, replacing brake pads and rotors on four of five occasions. Bassett claimed that, although KMA was aware of the defect in the brake system, it failed to correct the defect and failed to honor the warranty by charging her for the required repairs. All the repair attempts were ineffective, Bassett claimed.

According to Bassett, she wanted to rescind her purchase contract but KMA refused. She alleged that the defect was common to all Sephia model years from 1995 to 2001.  She filed the class action claiming that all members of the class experienced premature wear and malfunction of the brakes and that they all needed repairs within the first 20,000 miles of purchase.

Bassett claimed that each member of the class was entitled to compensatory damages for out-of-pocket repair costs,loss of use costs, loss of resale value, funds for permanent repair of the vehicle, treble damages, and costs of litigation, including legal fees. Finally, Bassett requested an injunction compelling KMA to notify all class members of the potential danger for personal injury from the defect.

After a May 27, 2005 jury trial in Philadelphia Common Pleas Court, a verdict was rendered in favor of the class on the claim for breach of express warranty. Damages in the amount of $600 per class member were awarded.

Bassett filed a motion for attorneys’ fees on June 6, 2005. After several postponements, the trial court held a hearing on the motion on September 13, 2005. The court granted the motion and awarded class counsel $4,125,000 in fees in January 2006, and $267,513 in costs and expenses of litigation.

The Supreme Court ruled that “Pennsylvania law is well established that a petition for attorneys’ fees is an ancillary matter, which the trial court retains authority to decide after entry of judgment on the verdict…. Pennsylvania generally adheres to the 'American Rule,' under which 'a litigant cannot recover counsel fees from an adverse party unless there is express statutory authorization, a clear agreement of the parties, or some other established exception.'"