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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Eight Circuit Upholds Class Certification, Grant of Summary Judgment, And Holds Fee-Shifting Provision Applies to Class Action

Posted in Case Summaries

McKeage v. TMBC, LLC, 2017 WL 562456 (8th Cir. 2017).

In an action removed under CAFA, the Eighth Circuit affirmed the District Court’s grant of summary judgment to the plaintiffs, but reversed the District Court’s determination of attorneys’ fee and remanded the action to consider whether the fee should be awarded on the trebled damages.

The plaintiffs in the action, Robert and Janet McKeage, brought a class action to challenge the defendant TMBC, LLC’s nationwide practice of charging a doc fee when selling boats and trailers under form contracts governed by Missouri law.  The plaintiffs filed the suit in the Circuit Court for St. Charles County, Missouri, but asked the state court to certify a nationwide class action.  The state court certified a class, but limited it to customers whose purchases occurred in Missouri.

The plaintiffs sought review from the Missouri Supreme Court, contending that the state court should have certified a nationwide class.  The Missouri Supreme Court agreed, noting that TMBC chose Missouri law for the standardized form contracts it used nationwide.  Subsequently, the state court certified a nationwide class.

TMBC then removed the action to the federal court pursuant to CAFA.  After removal, TMBC brought a motion to decertify the class, which the District Court denied.  After TMBC unsuccessfully petitioned the Eighth Circuit challenging the denial of the motion to decertify, TMBC asked the District Court to reconsider.  Ultimately, the District Court required the plaintiffs’ counsel to hire reviewers to manually inspect each of TMBC’s customer files in order to determine which contracts contained a Missouri choice-of-law provision, the inclusion of which formed the basis for the nationwide class.  After the document review, the class was determined to consist of approximately 100,000 members.

The District Court next determined that TMBC prepared legal documents attendant to its sales and that charging a fee for those documents constituted unauthorized law business in violation of Mo. Rev. Stat. §§ 484.010 and 484.020.  The District Court granted summary judgment in favor of the class and awarded treble damages in the amount of $21,735,754, and also awarded attorneys’ fee in the amount of $2,425,359.

TMBC filed an appeal challenging the class certification, the grant of summary judgment, and the Court’s application of Missouri law to sales that occurred outside Missouri.  The plaintiffs filed a cross appeal to enforce the fee-shifting provision in TMBC’s contract and to challenge the District Court’s calculation of fees based on the amount of untrebled damages rather than the entire common fund.

On appeal, the Eighth Circuit first concluded that the District Court did not err in granting the class members’ motion for summary judgment or in calculating damages based upon the entire document fee.  The Eighth Circuit reversed, however, the finding on calculation of fees and remanded the action for the District Court to determine if the class counsel is entitled to additional fees from the common fund apart from those reasonable expenses covered by the fee-shifting provision.  The Eighth Circuit also directed the District Court to determine if class counsel was to be awarded additional fees from the common fund with the inclusion of the trebled damages.