In Larsen v. ZF TRW Automotive Holdings Corp., 2023 BCSC 1471 ("Larsen"), the Supreme Court of British Columbia dismissed the plaintiff's application to certify a proposed product liability class action on the grounds the plaintiff failed to demonstrate that there was "some basis in fact" for the alleged defect at issue and that it was common to the proposed class.
The decision in Larsen is significant because it confirms that product liability claims are not always amenable to class actions where there are differences in the features of the alleged defect at issue amongst multiple manufacturer defendants. Larsen also demonstrates that an effective and timely recall campaign can serve to undermine the certification of potential class actions in the automotive industry.
In Larsen, the plaintiff claimed that airbag control units ("ACUs") designed and manufactured by certain defendants and installed in vehicles manufactured, distributed, and sold by other defendants were defective. At its core, the plaintiff's claim was for pure economic loss for negligent design and manufacturing. There were no allegations that the proposed class members had suffered any physical injuries as a result of the defective ACUs.
Certain defendants issued recalls of some of the vehicle models that included the allegedly defective ACU while other models with the ACU were not recalled by the same manufacturers. Certain defendants did not recall any vehicles that included the ACU that was the subject of the claim. The evidence at the certification application disclosed that there were various design features of the several different vehicle models of the proposed class members that could impact whether the alleged defect would manifest itself.
In considering the certification application, the Court noted that although the existence of a recall is some acknowledgment that a defect may exist, in order to be certified as a class action, the plaintiff was required to provide some basis in fact that the ACUs continued to be defective in the vehicles that were recalled and that were repaired. She failed to do so. The evidence before the court established that all individuals affected by the recalls had been made whole through free repair. The court held that "the existing recall campaign was the more fair, efficient and manageable procedure."
The court also determined that there were significant differences amongst the various vehicle models in respect of sensor placement, wire routing, and other design features. In other words, there were several different factors that could materially impact the existence of the alleged defect at issue. Accordingly, the court was not in a position to generalize or extrapolate from one class member's vehicle to another. There was no basis in fact for the existence of a defect that was common to the class and the plaintiff's application was dismissed as a result.
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