Case: Coleman v. General Motors Acceptance Corp.

3:98-cv-00211 | U.S. District Court for the Middle District of Tennessee

Filed Date: March 9, 1998

Closed Date: 2007

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Case Summary

In 1998, a car buyer complaining about the terms of her car loan brought this case as a proposed class-action lawsuit against General Motors Acceptance Corporation (GMAC) in the U.S. District Court for the Middle District of Tennessee. The plaintiff alleged that GMAC violated the Equal Credit Opportunity Act (ECOA) by charging African-American consumers higher finance charge markups in its retail credit pricing system than it charged white consumers. The plaintiff sought injunctive relief and compensatory damages. Since this case predates PACER, the Judge’s orders unrelated to the appeal of the class action certification are unavailable. Any information about Judge Trauger’s reasoning as to those orders was provided by the docket.

The plaintiff originally entered into a retail contract to purchase a vehicle in 1995, with Beaman Automotive Group and GMAC subsequently purchased her contract. Under GMAC’s pricing system, the plaintiff qualified for a buy rate of 18.25%, but Beaman had discretion under the Finance Charge Markup Policy to increase her interest rate. Therefore, the plaintiff ended up paying GMAC a 20.75% interest rate on her contract. Because of Beaman’s involvement in the policy and her individual contract, on June 19, 1998 the plaintiff amended her complaint to add Beaman Automotive as a defendant in the case. After this amendment, defendant, GMAC, filed a motion to dismiss the claim on August 25, 1998. This motion to dismiss, as well as Beaman’s motion for judgment on the pleadings were denied in part and granted in part by Judge Todd Campbell.

Shortly before the plaintiff announced her intention to file a motion for class certification, on March 30, 1999, the case was transferred to Judge Aleta Trauger.

On November 19, 1999 the plaintiff filed a motion for class certification, with the proposed class defined as “[a]ll African American consumers who obtained financing through GMAC in Tennessee pursuant to GMAC’s ‘Retail Plan—Without Recourse’ between May 10, 1989 and the date of judgment and who were charged a finance charge markup greater than the average finance charge markup charged white consumers.” Judge Aleta Trauger granted class certification on August 28, 2000.

The defendant challenged the certification of the proposed class, arguing the proposed class was over inclusive—it covered too long of a time period and too many tier ratings—and therefore, the plaintiff’s claim of her markup would not be typical of the other proposed plaintiffs. Judge Trauger denied the defendant’s challenge. She concluded that it was not a requirement for class action status that every proposed class action member’s claim occur in the same way, but rather that the claim arise from the same practice or course of conduct. The lead plaintiff and the class members all claimed their injury arose from GMAC’s policy to make racially discriminatory finance charge mark-ups, which was sufficient for class certification, Judge Trauger found. There were over 10,000 people with the same claims; Trauger certified the proposed class as a 23(b)(2) class. 196 F.R.D. 315.

In the same opinion, Judge Truager ruled on defendant GMAC’s May 4th motion for summary judgment. Judge Trauger granted the motion as to the plaintiffs’ claim to hold GMAC vicariously liable for defendant Beaman’s Equal Credit Opportunity Act (ECOA) violations through the use of the Federal Trade Commission’s Holder in Due Course Rule. Judge Trauger held that this Rule required the plaintiff to establish that GMAC “knew or had reasonable notice” of Beaman’s credit practices that violated the ECOA in order to hold GMAC liable. Judge Trauger denied summary judgment as to all other claims. 196 F.R.D. 315.

The defendant GMAC filed an interlocutory appeal of Judge Trauger’s grant of class certification; the Sixth Circuit Court of Appeals granted immediate review on November 6, 2000. The defendant GMAC also filed a motion to stay District Court proceedings until the resolution of the 6th Circuit Court of Appeals interlocutory appeal, but Judge Trauger denied the motion to stay on September 15, 2000.

The Court of Appeals reversed Judge Trauger’s District Court decision on class certification on July 24, 2002 for abuse of discretion. The Sixth Circuit held that Judge Trauger erred in certifying the proposed class under 23(b)(2) because “compensatory damages under the ECOA are not recoverable by a 23(b)(2) class.” 296 F.3d 443.

Meanwhile, a similar case in the Middle District of Tennessee, Cason v. Nissan Motor Acceptance Corp, that involved discriminatory lending practices, was set to go to trial on February 3, 2003. On November 4, 2002 the plaintiff filed a motion to stay court proceedings pending a final resolution of this case. Judge Trauger granted the plaintiff’s motion on November 27, 2002. The case settled prior to trial, and Judge Traueger vacated the stay on April 9, 2003.

Prior to the stay of proceedings, the plaintiffs filed a seventh amended class action complaint on September 17, 2007. Shortly after the District Court proceedings resumed, defendant GMAC filed a motion to be dismissed from this complaint on May 19, 2003. This motion to dismiss was granted in part by Judge Trauger on August 21, 2003. At this time the plaintiffs’ claims seeking to hold GMAC vicariously liable under the non-delegable duty doctrine were dismissed.

The case was beginning to come to a resolution on June 2, 2003 when American Financial, A B C, Bill Heard Chevrolet, and New York Times Co. were all terminated as defendants in the case. At this time, the plaintiffs and the defendant Beaman Automotive filed a stipulation of dismissal and all of the plaintiffs’ claims against Beaman were dismissed. GMAC was the only remaining defendant in the case.

Since the plaintiffs’ original motion for class certification was denied on appeal and remanded to the District Court, the plaintiffs filed another motion for national class certification on October 15, 2003. Judge Trauger granted this motion on January 14, 2004 as a 23(b)(2) class because plaintiffs were only seeking injunctive and declaratory relief, not damages. However, Judge Trauger altered the proposed class definition to “all black consumers who obtained non-recourse financing from GMAC in the US pursuant to GMAN’s ‘Retail Plan-Without Recourse’ between 5/10/89 and the date of judgment; excluding black consumers who obtained such financing under special rate contracts for which markup is prohibited, pursuant one of General Motors Corporation’s or GMAC’s Special Rate Programs.” 220 F.R.D. 64.

On February 18, 2004 Judge Trauger granted preliminary approval of the parties proposed settlement, and the plaintiffs filed an 8th amended complaint.

On March 29, 2004, after a fairness hearing on March 8, the settlement was approved by Judge Trauger, and the plaintiffs withdrew and dismissed the claims concerning the special rate programs.

In this final order on March 29, Judge Trauger granted the settlement. Within the terms of the settlement, the plaintiffs agreed to dismiss the suit with prejudice. GMAC agreed to include an APR disclosure in each contract form, to limit the difference between the APR and buy rate, to contribute $1.6 million to a consumer education program on credit financing, and to launch a diversity marketing initiative.

The court approved the class representatives and counsel’s requests for attorney fees in the amount of $9 million and reimbursement of litigation expenses in the amount of $508,989.78. The case was dismissed with prejudice.

	Document
3:98-cv-00211	Docket [PACER] Coleman v. General Motors Acceptance Corporation	Nov. 14, 2007	Nov. 14, 2007 Docket
276 3:98-cv-00211	Memorandum Opinion Coleman v. General Motors Acceptance Corporation	Aug. 29, 2000	Aug. 29, 2000 Order/Opinion 196 F.R.D. 315
00-06484	Brief for United States as Amicus Curiae Supporting Appellees Urging Affirmance Coleman v. General Motors Acceptance Corporation	March 14, 2001	March 14, 2001 Pleading / Motion / Brief
00-06484	Opinion Coleman v. General Motors Acceptance Corporation U.S. Court of Appeals for the Sixth Circuit	July 22, 2002	July 22, 2002 Order/Opinion 296 F.3d 443
604 3:98-cv-00211	Memorandum Order and Opinion Coleman v. General Motors Acceptance Corporation	Jan. 14, 2004	Jan. 14, 2004 Order/Opinion 220 F.R.D. 64
3:98-cv-00211	Settlement Agreement Coleman v. General Motors Acceptance Corporation	Feb. 10, 2004	Feb. 10, 2004 Settlement Agreement

ECF Number	Description	Date	Link Date / Link
1	NOTICE OF REMOVAL by deft w/attachments from Chancery Ct/Davidson Cty Case Number: 98−379−III (bbj) (Entered: 03/11/1998)	March 9, 1998	March 9, 1998
2	NOTICE of Initial Case Management Conference ; Case Management Conference set for 11:00 4/13/98 , Case referred to Magistrate Judge Juliet E. Griffin (bbj) (Entered: 03/11/1998)	March 9, 1998	March 9, 1998
	REMARK − Copy of Notice of ICMC sent to attys (bbj) (Entered: 03/11/1998)	March 11, 1998	March 11, 1998
3	REMARK − Letter sent to deft atty re: Local Rule 1 (bbj) Modified on 03/12/1998 (Entered: 03/11/1998)	March 11, 1998	March 11, 1998
4	ANSWER by deft General Motors Accep to complaint [1−1] (tlc) (Entered: 03/16/1998)	March 16, 1998	March 16, 1998
5	ATTORNEY APPEARANCE for pltf Addie T. Coleman by Clinton W. Watkins (dm) (Entered: 03/27/1998)	March 26, 1998	March 26, 1998
6	MOTION by deft to dismiss , or, in the alternative, to stay proceedings (tlc) (Entered: 04/02/1998)	April 2, 1998	April 2, 1998
7	MEMORANDUM by deft in support of motion to dismiss [6−1], or in the alternative to stay proceedings [6−2]; w/attached exhibits A &B (tlc) (Entered: 04/02/1998)	April 2, 1998	April 2, 1998
8	ATTORNEY APPEARANCE for deft General Motors Accep by Stephen G. Anderson (tlc) (Entered: 04/13/1998)	April 10, 1998	April 10, 1998
9	CERTIFICATE of Good Standing filed by deft Stephen G. Anderson (tlc) (Entered: 04/13/1998)	April 10, 1998	April 10, 1998
10	MOTION by pltf to extend time to 4/29/98 to respond to defts' motion to dismiss and/or stay (tlc) (Entered: 04/28/1998)	April 27, 1998	April 27, 1998
11	ORDER by Magistrate Judge Juliet E. Griffin granting pltf's motion [10−1] to extend time to 4/29/98 to respond to defts' to dismiss and/or stay [6−1], [6−2] (cc: all counsel)(EOD 4/29/98) (tlc) (Entered: 04/29/1998)	April 29, 1998	April 29, 1998
12	MOTION by pltf to amend complaint ; w/attached exhibit A − proposed amended complaint − adding Beaman Automotive Group (tlc) (Entered: 04/29/1998)	April 29, 1998	April 29, 1998
13	RESPONSE by pltf to motion to dismiss [6−1], or in the alternative, to stay proceedings [6−2]; w/attached exhibits A − G (tlc) (Entered: 04/29/1998)	April 29, 1998	April 29, 1998
14	RESPONSE IN OPPOSITION by deft General Motors Accep to motion to amend complaint [12−1] (w/attached exhs A−C) (train) (Entered: 05/11/1998)	May 8, 1998	May 8, 1998
17	ANSWER to [16−1] and COUNTERCLAIM by deft General Motors Accep against pltf Addie T. Coleman (tlc) (Entered: 06/30/1998)	June 26, 1998	June 26, 1998
15	ORDER by Magistrate Judge Juliet E. Griffin granting pltfs' motion to amend complaint [12−1]; clerk is directed to extract the first amended class action complaint submitted as an attachment to the motion and file and docket it; Case Management Conference held 6/26/98; next Case Management Conference set for 11:30 on 7/31/98 ; see order for further details (cc: all counsel) (EOD 6/29/98) (tlc) (Entered: 06/29/1998)	June 29, 1998	June 29, 1998
16	AMENDED COMPLAINT by pltf; adding deft Beaman Automotive; jury demand (tlc) (Entered: 06/29/1998)	June 29, 1998	June 29, 1998
18	SUMMONS issued as to deft Beaman Automotive (tlc) (Entered: 07/07/1998)	July 6, 1998	July 6, 1998
20	ORDER by Magistrate Judge Juliet E. Griffin telephone conference set for 4:00 on 9/21/98; Case Management Conference held 7/31/98; deft GMAC withdrawing motion to dismiss [6−1]; denying deft GMAC's motion to stay proceedings [6−2]; defts shall have until 8/31/98 to file motions to dismiss the amended complaint; response to such motions due 9/17/98 or 13 working days from service of such motion; defts shall have to 9/25/98 or five days from service of response to file a reply to such motions; see order for further details (cc: all counsel) (EOD 8/6/98) (tlc) (Entered: 08/06/1998)	Aug. 6, 1998	Aug. 6, 1998
21	RENEWED MOTION by deft General Motors Accep to dismiss proceedings (tlc) (Entered: 08/26/1998)	Aug. 25, 1998	Aug. 25, 1998
22	MEMORANDUM by deft General Motors Accep in support of motion to dismiss proceedings [21−1]; w/attached exhibits A − F (tlc) (Entered: 08/26/1998)	Aug. 25, 1998	Aug. 25, 1998
23	MOTION by deft Beaman Automotive for judgment on pleadings , and to dismiss (tlc) (Entered: 09/01/1998)	Aug. 31, 1998	Aug. 31, 1998
24	MEMORANDUM by deft Beaman Automotive in support of motion for judgment on pleadings [23−1], of motion to dismiss [23−2] (tlc) (Entered: 09/01/1998)	Aug. 31, 1998	Aug. 31, 1998
25	MOTION by pltf to extend time to 10/12/98 to respond to deft GMAC's renewed motion to dismiss (tlc) (Entered: 09/15/1998)	Sept. 14, 1998	Sept. 14, 1998
26	ORDER by Judge Todd J. Campbell granting pltf's motion to extend time to respond to defts' pending motions to dismiss [25−1] (DE #'s [23−1], [23−2] &[21−1]); time is so extended to 10/13/98; defts shall file their replies, if necessary, by 10/23/98 (cc: all counsel)(EOD 9/18/98) (tlc) (Entered: 09/18/1998)	Sept. 18, 1998	Sept. 18, 1998
27	MOTION by deft General Motors Accep for protective order (tlc) (Entered: 10/09/1998)	Oct. 8, 1998	Oct. 8, 1998
28	RESPONSE by pltf to deft Beamon Pontiac's motion for judgment on pleadings [23−1], motion to dismiss [23−2]; w/attached exhibits A &B (tlc) (Entered: 10/14/1998)	Oct. 13, 1998	Oct. 13, 1998
29	RESPONSE by pltf to deft GMAC's motion to dismiss proceedings [21−1] (tlc) (Entered: 10/14/1998)	Oct. 13, 1998	Oct. 13, 1998
30	MOTION by pltf to amend the complaint (tlc) (Entered: 10/14/1998)	Oct. 13, 1998	Oct. 13, 1998
31	RESPONSE in opposition by pltf Addie T. Coleman to motion for protective order [27−1]; w/attached exhibits A &B (tlc) (Entered: 10/21/1998)	Oct. 20, 1998	Oct. 20, 1998
32	NOTICE by deft Beaman Automotive of filing deposition of Addie Coleman (tlc) (Entered: 10/26/1998)	Oct. 23, 1998	Oct. 23, 1998
33	DEPOSITION of Addie T. Coleman taken on the following date: 9/17/98; submitted by deft Beaman Pontiac Co (tlc) (Entered: 10/26/1998)	Oct. 23, 1998	Oct. 23, 1998
34	REPLY by deft Beaman Automotive to pltf's response to motion for judgment on pleadings [23−1] &motion to dismiss [23−2] (tlc) (Entered: 10/26/1998)	Oct. 23, 1998	Oct. 23, 1998
35	REPLY by deft General Motors Accep to pltf's response to motion to deft GMAC's dismiss proceedings [21−1] (tlc) (Entered: 10/26/1998)	Oct. 23, 1998	Oct. 23, 1998
36	RESPONSE in opposition by deft General Motors Accep to pltf's motion to amend the complaint [30−1] (tlc) (Entered: 10/26/1998)	Oct. 23, 1998	Oct. 23, 1998
37	REPLY by deft General Motors Accep to response to motion; for protective order [27−1]; w/attached exhibits A &B (tlc) (Entered: 10/30/1998)	Oct. 29, 1998	Oct. 29, 1998
38	RESPONSE by deft Beaman Automotive to pltf's motion to amend the complaint [30−1] (tlc) (Entered: 11/02/1998)	Oct. 30, 1998	Oct. 30, 1998
39	MOTION by pltf for oral argument on deft GMAC's Rule 12 Motion, deft Beaman's Rule 12 motion and pltf's motion to amend (tlc) (Entered: 11/03/1998)	Nov. 2, 1998	Nov. 2, 1998
41	MOTION by pltf to seal proposed second amended complaint (tlc) (Entered: 11/10/1998)	Nov. 9, 1998	Nov. 9, 1998

Case: Coleman v. General Motors Acceptance Corp.

3:98-cv-00211 | U.S. District Court for the Middle District of Tennessee

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