## Facts

- Firestone tires installed on Ford Explorer SUVs experienced an unusually high rate of failures in the late 1990s, prompting investigations and recalls beginning in 2000.
- Numerous lawsuits followed, including claims for personal injury and death and claims by owners whose tires had not failed seeking economic-loss and risk-of-failure damages (e.g., diminished resale value and emotional distress).
- Federal cases were centralized for coordinated pretrial proceedings in an MDL in the Southern District of Indiana under 28 U.S.C. § 1407, with the expectation of remand to transferor courts for merits proceedings.
- Plaintiffs’ counsel filed a new consolidated action in the MDL forum and sought certification of nationwide classes that would subsume other cases.
- The district court certified two nationwide Rule 23(b)(3) classes: (1) an “Explorer class” covering owners/lessees of model-year 1991–2001 Ford Explorers before the first recall, and (2) a “tire class” covering owners/lessees (from 1990 to the present) of specified Firestone tire models and “substantially similar” tires—together involving millions of vehicles and tens of millions of tires.
- To manage certification, the district court applied Indiana choice-of-law rules and selected a single governing law for each class: Michigan law for the Explorer class (Ford’s headquarters) and Tennessee law for the tire class (Firestone’s headquarters).
- Ford and Firestone sought interlocutory appellate review of the certification order.

## Issues

1. Whether Indiana choice-of-law rules permitted applying a single “headquarters state” law to nationwide classes involving consumers, purchases, use, and alleged injuries across many states.
2. Whether variations in applicable state substantive law and individualized factual and damages questions defeated Rule 23(b)(3) predominance and superiority for nationwide product-defect and economic-loss classes.

## Decision

- The Seventh Circuit reversed the district court’s certification of both nationwide classes.
- The court held the district court misapplied Indiana choice-of-law principles by selecting Michigan and Tennessee law to govern nationwide classes.
- The court concluded that, because different states’ laws would apply to different class members and because individualized issues were substantial, certifying nationwide Rule 23(b)(3) classes was an abuse of discretion.
- The case was remanded for further proceedings consistent with the appellate opinion.

## Legal Principles

- A federal court must apply the forum state’s choice-of-law rules; those rules may require applying different states’ substantive laws to different class members based on where purchase, use, and injury occurred.
- Nationwide class certification under Rule 23(b)(3) is generally improper when material variations in state law are outcome-determinative and prevent common legal issues from predominating.
- Predominance is undermined when claims combine divergent factual circumstances, including multiple product versions over time and differing experiences among class members (catastrophic failures and physical injuries versus no malfunction and purely economic-loss theories).
- Manageability and superiority concerns intensify when adjudication would require applying many states’ rules on economic loss, warranty, privity, punitive damages, and consumer-protection remedies, along with individualized proof of defect, causation, and damages.

## Conclusion

The Seventh Circuit set aside nationwide class certification for Explorer and Firestone-tire owners because Indiana choice-of-law rules did not support a single governing law for nationwide claims and because the resulting multi-state legal variation and individualized issues defeated Rule 23(b)(3) predominance and superiority.


In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 288 F.3d 1012 (7th Cir. 2002)