A Missouri Supreme Court verdict in a case that started with a dispute over a vehicle repossession could have far-reaching implications beyond the auto lending industry. Legal experts say the ruling could open the door for consumers from multiple states to form class-action lawsuits against any business, even if the laws from the various states differ from those in the state where the plaintiff resides. The Missouri high court affirmed a lower court’s certification of a class in the dispute.

Ally Financial Inc., one of the largest U.S. auto lenders, filed a petition Aug. 14 to the U.S. Supreme Court to review Ally Financial vs. Alberta Haskins, et al., a conflict that began when Missouri residents Alberta Haskins and David Duncan defaulted on an auto loan with Ally for a used 2006 Chevrolet Colorado.

Ally repossessed the truck and sold it at auction in 2012. The lender sued for the couple’s $4,000 deficiency on their finance contract in March 2016, according to a July 31 government filing. Haskins and Duncan countersued in 2017, claiming, among other things, that Ally’s pre- and post-disposition notices to consumers violated provisions of the Uniform Commercial Code. The allegations specify issues with how the lender clarified how redemption payments must be made and that in the pre-sale notice for the repossessed vehicles, the lender failed to identify co-buyers who lived at separate addresses who were also sent copies of the notice.

Alongside their counterclaims, the plaintiffs brought a class-action lawsuit that includes people who live outside Missouri and whose repossessions occurred “over time periods ranging from four to twenty-five years, depending on the state,” the petition said. Ally said it repossessed approximately 510,000 vehicles in that period and estimated approximately 390,000 of them had account holders who met the definition of the nationwide class.

A circuit court judge certified the class, and as the case progressed, judges, including those of the Missouri Supreme Court, continually sided with the class. In June, Haskins and Duncan, on behalf of the nationwide and Missouri subclass, filed a motion for partial summary judgment on liability and damages.

Ally said in the July government filing that the damages, if awarded by the court, “could be significant, ” though the lender declined to provide an estimate.

“We intend to vigorously defend against the claims made by the buyers, including their measure of alleged damages, and the circuit court’s certification of nationwide and Missouri classes,” the lender said in the filing.

An Ally spokesperson said the lender would not comment on an active case.

To dissolve the class, Ally is asking the U.S. Supreme Court to rule that failure to comply with the Uniform Commercial Code on a national level is not a valid claim because the laws pertaining to the code don’t align perfectly across the states. The argument is a strong one, according to attorney Aaron Jacoby, chair of the auto industry practice group at Arent Fox law firm. Jacoby said it would destabilize similarity in the applicable law, one of the three components necessary to certify a class. Jacoby and the law firm are not involved in the case.

A failure to comply with the code in one state, or even one instance, “doesn’t mean every one of your repossessions was wrong,” Jacoby said.

If the Supreme Court were to side with the class, the case would proceed with merits, a period of discovery and then trial. From there, it could mean nationwide class-action lawsuits could occur “anywhere they could find one plaintiff with the requisite connection to the forum,” Ally’s petition reads.

The National Automobile Dealers Association, the American Financial Services Association and the American Bankers Association are advocating on behalf of Ally, with representatives included as supporting counsel in Ally’s petition.

Consolidating multidistrict litigation into class actions is a common legal practice, Jacoby said. The scale of this claim, especially as the certified class seeks statutory damages, is somewhat unusual. And the impact if the court sides against Ally could be substantial.

“There are statutory damages for failure to comply,” Jacoby said. Such damages may seem like a small amount in a given state, “but if you multiply it across thousands of people across 50 states, it could be a boatload of damages.”