As the types of automotive class actions continue to evolve, so too do class action trends and developments. Morgan Lewis lawyers detail below some of the hot topics in automobile class action litigation, such as personal jurisdiction challenges; whether, when, and how the actual manifestation of an alleged defect matters; the importance of affirmative defenses at all stages of the case; plaintiffs’ popular damages theories and challenges to these; and why class certification does not and should not automatically trigger settlement.
Types of Claims. Automotive class actions often assert claims for purely economic damages due to overpayment at the point of sale. This theory avoids individual issues associated with having to prove physical injury or property damage, as is often required with traditional product liability claims. In class actions, plaintiffs will often assert that automobile manufacturers wrongfully induced the vehicle purchases by misrepresenting or concealing the alleged defects and that plaintiffs would have paid less for their vehicles had they known of the alleged defect.
Key Issues in Automobile Defect Class Actions. There are a number of key defenses that can be raised in automobile defect class actions—at the motion to dismiss or summary judgment stage, at class certification, and even at trial. These defenses include (1) requiring plaintiffs to prove an actual design defect under applicable state law, (2) challenging personal jurisdiction with respect to the claims of named plaintiffs and absent class members, (3) requiring plaintiffs to show that all class members have been harmed by the alleged defect, (4) challenging claims where the alleged problem is not going to be experienced by the vast majority of class members, and (5) using affirmative defenses, such as the statute of limitations, to show why any class claim cannot proceed and any class trial would be overrun with individual issues. Case law is continuously evolving on all of these issues. The success of these arguments often will hinge on the nature of the alleged problem at issue, applicable law, and the particular forum for the case.
Classwide Damages. Plaintiffs turn to a variety of theoretical models to attempt to show damages and injury for all class members. These models can lead to large certified classes and high exposure, but they can also lead to absurd results when models are actually run. Some of the key models include conjoint analysis, average cost of repair or replacement, and depreciation of vehicle value. Whether plaintiffs’ proposed model will be accepted depends on the type of claim, applicable state law, and where the case is brought. There are many ways of attacking these damages models, and such challenges should not lose sight of common sense principles.
Beyond Class Certification. Just because a class has been certified does not mean that a case must settle. Certified classes can be decertified or narrowed in advance of trial. Class claims also can be tried. Even if a class is certified, it is important to address with the court whether and how the class claims, along with any individual issues and defenses, can be tried in a manageable way. It is also critical to hold plaintiffs to their classwide burden at trial.
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