Hanlon v. Chrysler Corporation

While the National Highway Traffic Safety Administration (NHTSA) investigated problems with rear latches in Chrysler minivans, several class actions were filed against Chrysler Corporation (defendant), seeking latch replacement and damages. Chrysler began negotiating settlements for the various actions, resulting in consolidation of the cases in federal court. Hanlon and the other named plaintiffs of the consolidated action (plaintiffs) represented all 50 states and all affected Chrysler models. Three days after consolidation, the parties proposed a settlement restricted to claims for latch replacement, which the court preliminarily approved. The same day, the court certified a nationwide class of Chrysler minivan owners and barred class members from commencing proceedings in other tribunals. Notice was sent to 4.3 million class members, informing them of the settlement’s binding nature and their ability to opt out, which 971 chose to do. In contravention to the court’s order, class member Robert Kempton filed a class action in a Georgia state court, asserting that he was opting out all Georgia class members from the Hanlon settlement. The Hanlon court enjoined Kempton from proceeding and held that he could only opt out himself. The NHTSA closed its investigation, concluding that Chrysler’s proposed action—free replacement with improved latches on all affected vehicles—was satisfactory. The Hanlon court held three fairness hearings regarding the settlement. Objectors complained about the settlement’s adequacy in light of Chrysler’s agreement with the NHTSA. The court approved the settlement, as well as $5 million in attorneys’ fees to class counsel. Objectors to the settlement appealed.