The opinion of the court was delivered by: Simandle, District Judge:
Honorable Jerome B. Simandle
This matter is before the court on the motion of defendant, Cherry Hill Toyota, Inc. ("Cherry Hill Toyota") for reconsideration, under Local Civil Rule 7.1(g), of the court's March 26, 1999 Opinion and Order granting plaintiff Loetta Cannon's motion for class certification, Cannon v. Cherry Hill Toyota, Inc., 184 F.R.D. 540 (D.N.J. 1999), and on Cherry Hill Toyota's motion for a declaratory judgment that the federal Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq. (the statutory basis for Count One of Cannon's Complaint), pre-empts New Jersey's Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-2 et seq. (the statutory basis for Counts Two and Three of Cannon's Complaint). During oral argument on these motions on July 16, 1999, the court also discussed with counsel a slight modification of the class definition as a result of Cherry Hill Toyota's discontinuance in March 1997 of the conduct that gave rise to the claims asserted in this litigation. For the reasons set forth below, the court denies Cherry Hill Toyota's motion for reconsideration and its motion for declaratory judgment, and announces a slight modification of the class definition.
On July 30, 1996, Cannon purchased a used automobile from Cherry Hill Toyota. In addition to the vehicle, Cannon purchased, through Cherry Hill Toyota, an optional mechanical breakdown protection ("MBP") package from Interstate, Inc. Cannon financed the entire transaction through Cherry Hill Toyota. The transaction was memorialized in a retail sales installment contract, which reflects a charge of $1,167.21 for the MBP in a section entitled "Amounts Paid to Others On Your Behalf."
On July 29, 1997, Cannon commenced this case by filing a putative Class Action Complaint against Cherry Hill Toyota under TILA and the CFA. Cannon alleges that Cherry Hill Toyota's representation in the "Amounts Paid to Others On Your Behalf" section of the retail sales installment contract that it paid $1,167.21 to Interstate, Inc. for MBP on her behalf was false and misleading because Cherry Hill Toyota retained a substantial portion of that amount for itself without disclosing to Cannon that it was doing so. (Complaint at ¶¶ 17-18.) Cannon further alleges that Cherry Hill Toyota routinely makes false and misleading representations to consumers about the amount of money it pays to third parties for MBP on their behalf because Cherry Hill Toyota routinely retains a portion of the price it charges consumers for MBP while affirmatively misrepresenting and failing to disclose the true distribution of those funds on its retail sales installment contracts. (Complaint at ¶¶ 19-21.)
Cannon claims that Cherry Hill Toyota violated TILA (Count One) and the CFA (Count Two) by failing to disclose that it was adding a mark-up or surcharge to the actual cost of the service warranty Cherry Hill Toyota purchased for her from Interstate and its affirmative misrepresentation of the amount actually paid to Interstate on the retail sales installment contract. Cannon also claims that Cherry Hill Toyota violated the CFA by affirmatively misrepresenting to her that the vehicle she purchased had front wheel drive when, in fact, it did not (Count Three).
Cherry Hill Toyota moved to dismiss Counts One and Two of Cannon's Complaint for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). On May 11, 1998, the court denied Cherry Hill Toyota's motion to dismiss.
Cannon then moved for class certification under Federal Rule of Civil Procedure 23. On March 26, 1999, the court granted Cannon's motion for class certification and certified the following class:
All consumers who purchased since July 1991 a service contract or extended warranty from Cherry Hill Toyota in connection with the purchase of a vehicle which was documented in a form retail installment agreement. Cannon v. Cherry Hill Toyota, Inc., 184 F.R.D. at 547. *fn1
On April 6, 1999, Cherry Hill Toyota filed the instant motion for reconsideration of the court's March 26, 1999 Opinion and Order granting Cannon's motion for class certification. In its moving papers, Cherry Hill Toyota informed the court that Cannon had filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania under Chapter 7 of the Bankruptcy Code on June 4, 1998, more than three weeks before she filed her motion for class certification on June 28, 1998. Neither party had disclosed this fact to the court in the course of their briefing on the class certification motion.
On May 7, 1999, the court heard oral argument on Cherry Hill Toyota's motion for reconsideration of the court's March 26, 1999 Opinion and Order granting Cannon's motion for class certification. At the oral argument, Cannon's counsel confirmed the following facts relating to Cannon's bankruptcy. Cannon filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania under Chapter 7 of the Bankruptcy Code on June 4, 1998. Cannon listed the vehicle she purchased from Cherry Hill Toyota as an asset and identified Toyota Motor Credit Corporation ("TMCC")(the assignee of the loan she obtained through Cherry Hill Toyota) as a creditor on her bankruptcy petition, but because she intended to retain possession of the vehicle despite her bankruptcy, Cannon continued to make payments to TMCC on her automobile loan in June and July 1998. Cannon identified her pending lawsuit against Cherry Hill Toyota as an exempt asset. The meeting of bankruptcy creditors was held on July 9, 1998. On that date, the bankruptcy trustee filed a report of no assets. Neither the bankruptcy trustee nor TMCC filed a timely objection to the exemption of Cannon's lawsuit against Cherry Hill Toyota within thirty days of the meeting of creditors. On September 17, 1998, the bankruptcy court approved Cannon's petition and discharged her debts, including her debt to TMCC. In January 1999, Cannon voluntarily relinquished possession of the vehicle she purchased from Cherry Hill Toyota. Cherry Hill Toyota, and Cherry Hill Toyota canceled the MBP warranty she had purchased.
Because the court believed that Cannon's counsel should have informed the court about Cannon's bankruptcy filing during the briefing of Cannon's motion for class certification and that the court should have been afforded the opportunity to consider whether Cannon's bankruptcy, the discharge of her indebtedness to TMCC, the repossession of the vehicle she purchased from Cherry Hill Toyota and the cancellation of her MBP warranty affected her Article III standing to pursue this litigation, the typicality of her claims against Cherry Hill Toyota under Rule 23(a)(3), and her adequacy as a class representative under Rule 23(a)(4) before deciding Cannon's motion for class certification, the court, in an Order filed on May 10, 1999, stayed its March 26, 1999 Order granting Cannon's motion for class certification and ordered supplemental briefing on the aforementioned issues of concern to the court. The court also stayed the class-wide discovery that Magistrate Judge Robert B. Kugler had authorized in his April 22, 1999 Case Management Order, and dictated a briefing schedule for Cherry Hill Toyota's motion for a declaratory judgment that Cannon's TILA claim pre-empts her CFA claim.
After receiving and reviewing the supplemental briefs on Cherry Hill Toyota's motion for reconsideration and the briefs on Cherry Hill Toyota's motion for declaratory judgment and considering the arguments of counsel, the court now addresses the merits of Cherry Hill Toyota's motions.
A. Cherry Hill Toyota's Motion for Reconsideration
A motion for reargument under Local Civil Rule 7.1(g) will be granted only when "dispositive factual matters or controlling decisions of law" were presented to the court but not considered. McGarry v. Resolution Trust Corp., 909 F. Supp. 241, 244 (D.N.J. 1995) (citing Pelham v. United States, 661 F. Supp. 1063, 1065 (D.N.J. 1987)). "The standard of review involved in a motion for reargument is quite high, and therefore relief under this rule is granted very sparingly." United States v. Jones, 158 F.R.D. 309, 314 (D.N.J. 1994) (citing Maldonado v. Lucca, 636 F. Supp. 621, 630 (D.N.J. 1986)). The rule "does not contemplate a Court looking to matters which were not originally presented but which have since been provided for consideration." Florham Park Chevron, Inc. v. Chevron U.S.A., Inc., 680 F. Supp. 159, 162 (D.N.J. 1988). The rule "explicitly invites counsel to draw the court's attention to decisions which may have been overlooked by the court, not those which were overlooked by counsel." Polizzi Meats, Inc. v. Aetna Life & Cas. Co., 931 F. Supp. 328, 339 (D.N.J. 1996).
The instant motion for reconsideration is a unique exception to the well-established general rule that a court should not re-examine its ruling on a decided motion on the basis of information not originally presented to the court in connection with the underlying motion. Where the underlying motion pertains to class certification, however, the court may consider matters that may be material to class representation, as such orders may be altered or amended in the interests of justice under Rule 23(c)(1). Cherry Hill Toyota's motion for reconsideration is predicated on the court's failure to consider the potential impact of Cannon's bankruptcy filing on her motion for class certification under Rule 23 -- an issue the court did not consider in granting Cannon's motion for class certification because neither party brought it to the court's attention in their briefing of that motion.
Although the court does not understand why Cherry Hill Toyota's counsel did not bring the matter to the court's attention before the court issued its ruling on Cannon's class certification motion, the court is more disturbed by Cannon's own counsels' failure to disclose the fact of their client's bankruptcy filing to the court in connection with her motion for class certification.
During oral argument on this motion and in their supplemental brief, Cannon's counsel explained that they did not consider their client's bankruptcy filing to be material to the class certification motion, but conceded that their decision may have been a misjudgment and apologized for it. The court accepts the explanation and the apology, but does consider the omission a misjudgment. *fn2 Without belaboring the point, the materiality of Cannon's bankruptcy filing on her class certification motion was a matter for the court to decide, not a matter for her counsel to decide. Indeed, some courts have held that a plaintiff whose financial condition renders him or her unable to bear the financial burden of a class action cannot be an adequate class representative. See Herbert Newberg and Alba Conte, Newberg on Class Actions § 3.37 at 3-194, n.509 (3d ed. 1992). The discharge of the indebtedness and the repossession of the vehicle are also potentially pertinent to the typicality of plaintiff's claims under Rule 23(a)(3), as noted above.
Thus, although it is unusual for a court to re-examine a ruling on a decided motion on the basis of information that was not originally presented to the court on the underlying motion, the court's obligation to ascertain the nature of a class representative's relationship to the class has caused this court to re-examine its ruling on Cannon's class certification motion in light of its new knowledge about Cannon's bankruptcy filing and the subsequent discharge of her debt to TMCC, repossession of the car she purchased from Cherry Hill Toyota, and cancellation of her MBP warranty. Upon reexamination, however, the court is convinced that these events do not deprive Cannon of Article III standing to pursue this litigation, render her claims against Cherry Hill Toyota atypical of those of other class members, or render her an inadequate class representative.
In order to have standing, a plaintiff must: (1) have suffered an "injury in fact," i.e., an invasion of a legally protected interest that is both (a) concrete and particularized and (b) actual or imminent, as opposed to conjectural or hypothetical; that was (2) caused by or fairly attributable to the challenged action of the defendant; and that is (3) likely ...