Litigation involving the automotive industry is on the rise, and automakers in the U.S. are facing various lawsuits. Increasingly, a product recall by an automotive manufacturer leads to a class action lawsuit. Expert witnesses seem to be the key to class action lawsuits involving the auto industry, and both sides are mapping out plans of campaign to deal with the large number of class actions in light of recent court decisions.
Class action litigation against car manufacturers is no small matter: literally thousands of claims must be threshed out. The class actions stem from actions in tort or contract concerning product liability claims, similar to other actions but unique in many respects to the auto industry alone. For one thing, the size of damages awards in auto cases can be staggering compared to other product liability suits. More importantly, courts are more likely to permit class certification when the expert witnesses are consulted, against auto manufacturers, paving the way for appropriate recoveries.
At this point, automobile manufacturers have to be aware of the pitfalls and develop appropriate defense strategies. The substantive law at issue is currently considered friendlier to plaintiffs than to automobile manufacturers. There are new liability theories that have emerged, specifically dealing with express and implied warranties, that automakers must now cope with, and the procedural laws have opened the doors to more product liability litigation against automakers than ever before. Every automotive company, U.S. based or foreign, has faced recalls and ensuing class action litigation regarding a product liability issue.
Automotive expert witnesses play a critical role in the litigation, and their skills are needed on both sides. No plaintiffs can go forward without the help of a solid expert in ensuring that their class is certified. These experts are needed to evaluate and establish key components of the litigation, such as reliance (in contract cases or breach of warranty), materiality, causation, and of course, damages. In a class, proving damages may be more difficult, or at least more complex than proving damages for an individual, so good experts are needed to come up with an aggregate damages amount, or the amount that each member of the class, on average, deserves, in order to make the individuals in the class whole.
For their part, automakers have been trying to invoke several strategies to deny class certification, and of course, much of this involves challenging the plaintiffs’ experts. In some cases, auto manufacturers have tried to rely on Federal Rule of Civil Procedure (FRCP) 68, which suggests that if a company makes an offer to the plaintiffs and the offer is then rejected, such rejection should moot the plaintiffs’ claims, or at least moot the class or class representative. However, companies face an uphill battle with this strategy, as plaintiffs’ experts on damages offer compelling reasons why accepting a particular offer would not make the plaintiffs whole and, therefore, FRCP 68 should be out of play. The Ninth Circuit recently heard litigation on this very issue and determined that Rule 68 does not, in fact, moot the individual class representative or the class’s claims.
However, plaintiffs are by no means immune from scrutiny, as courts are increasingly bearing down and conducting more exacting reviews of experts in automotive defect cases. Because such litigation involves highly complex technical and financial matters, it is always difficult to make calculations, and experts are expected to explain these complexities to a court’s satisfaction in order for a class to get certified. Because class actions have a much higher discovery burden, involving literally hundreds or thousands of individuals, experts are sorely needed to outline the various theories of recovery and assist in discovery. Engineering experts are often used in class actions to establish a “common defect” that negatively impacted all class vehicles and members. Economic experts are needed to provide uniform causation and damages theories for a class. Clearly, experts are also needed to refute these findings, so automakers should retain experts early and often in class action suits.
Federal Rule of Procedure (FRCP) 23 requires courts to use their gatekeeping authority to ensure that relevant expert testimony supports class certification, as well as to conduct a Daubert review, making sure that the science each expert uses is based on sound, peer-reviewed and accepted principles. In at least one case involving a class action against an automaker, one court held that a trial court’s failure to conduct the appropriate Daubert test at the class certification stage was a reversible error.
Regardless of what side is represented, the experts play a critical role in class actions involving automotive manufacturers. Both their involvement in the certification process and the challenges to their expertise are trends that are likely to continue, as the number of class actions involving automakers steadily increases.
By: Kat S. Hatziavramidis, Attorney-at-Law