In a recent Alberta Court of Appeal decision, the court set aside a class certification order in a case involving the recall of motor vehicle tires.
Company Recalls Tires
The company being sued manufactures many different types of tires.
In 2015, it discontinued two tire product lines. The company had identified issues with potential tread separation from “early warning data” collected from warranty claims and goodwill returns, concerning the tires manufactured at one of its plants. After consulting with the regulators, the company issued a recall notice with respect to six types of tires manufactured at the plant in a 13-week period during the spring of 2009. Subsequent examination of the returned tires uncovered no systemic defect.
Plaintiff Involved in Car Accident Using Recalled Tires
An individual who had received the company’s recall notice for his tires went for tire replacement but was told that his tires were actually manufactured three weeks prior to the commencement of the period covered by the recall notice.
Three days after trying to replace the tires, the individual was involved in a motor vehicle accident.
Plaintiff Commences Class Action Over Tires
The individual commenced an action against the company as the representative plaintiff and applied for its certification as a class action. The claim did not limit itself to the tires included in the recall notice, but instead alleged a potential manufacturing defect in all 51 types of tires and was not limited to those manufactured at the specific plant. The claim also alleged that the manufacturing defect may have existed for a longer period of time than the 13 weeks covered by the recall notice.
Ultimately, the claim covered approximately 11 million tires manufactured at three different plants, over about a 10-year period.
The remedies claimed included damages resulting from motor vehicle accidents caused by tire failure, the cost of replacement of defective tires, restitution based on unjust enrichment, disgorgement of profits as a result of wrongdoing, and aggravated and punitive damages.
Lower Court Certifies Class Action
At the first stage of certification, the case management judge reviewed the test for certification found in s. 5 of the Class Proceedings Act and found that it met all criteria to proceed as a class action. Certification was allowed for a class action against the company for negligence in design and manufacturing of the tires, a breach of the duty to warn of a dangerous product, and unjust enrichment and waiver of tort.
The company appealed the decision, arguing that the judge had erred by concluding that there was a basis for the existence of a common defect and failing to require evidence that the issue respecting the common defect could be answered in common with respect to the entire class.
Criteria for Certification
In Alberta, the law mirrors that of other jurisdictions, including Ontario, and sets out the following criteria for the certification of class actions as follows:
(a) the pleadings disclose a cause of action;
(b) there is an identifiable class of 2 or more persons;
(c) the claims of the prospective class members raise a common issue, whether or not the common issue predominates over issues affecting only individual prospective class members;
(d) a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues;
(e) there is a person eligible to be appointed as a representative plaintiff who, in the opinion of the Court,
(i) will fairly and adequately represent the interests of the class,
(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and
(iii) does not have, in respect of the common issues, an interest that is in conflict with the interests of other prospective class members.
Court of Appeal De-Certifies Class Action
Ultimately, the Court of Appeal found that the case management judge had committed several reviewed errors.
Specifically, the court held that the judge had failed to properly consider that there was “some basis in fact” to show a common issue, or that the issue was one that could be fairly and efficiently answered in these proceedings, stating:
“At the certification hearing, the representative plaintiff produced no evidence showing the cause of the tread separation of his tires or the tires covered by the Recall Notice. … There was also no indication on the record that there was any specific or systemic manufacturing defect leading to the representative plaintiff’s accident, that any negligence was behind the observed tread separation, or whether it was within normal manufacturing tolerances. The problem is not with the potential inadequacy of proof of the merits of the claim. The problem is that unless the representative plaintiff can provide “some basis in fact” for the source or nature of the tread separation in the six types of tires covered by the Recall Notice, he cannot provide any “basis in fact” for showing that this defect might be common to all 51 types of tires covered by the certification. In other words, without knowing the nature of the defect and whether it is systemic, the representative plaintiff cannot prove that answering the common issue about the alleged “admitted” defect in the six types of tires covered by the Recall Notice will answer any common question respecting the other types of tires. Unless there is some indication of a common defect, there is no way to prove a common impact on all class members, demonstrating that the issue is not “common”.”
As such, the court concluded that the representative plaintiff had not proven the preconditions to certification of the class action. It therefore allowed the appeal and set aside the certification order.
In the event of serious injury following a car crash, retaining a lawyer can help you to get the long-term support you need from your insurance company and the compensation that ought to be paid by the parties at fault for your accident.
At Campbell Litigation, we investigate your claims arising from a car accident, and we seek the compensation you need to recover from your injuries. In the event you have sustained a catastrophic physical impairment or any permanent, serious impairment of any important physical, psychological or mental function, we will help obtain your insurance benefits and fair compensation from those at fault for the motor vehicle accident. We are experienced in handling cases for the most severely injured. We understand the challenges and worries faced on a day-to-day basis by those dealing with newfound hardships.
Legal advice can help you make sure you have what you need following a car accident. To speak with the Waterloo car accidents lawyers at our firm, call us at 519-886-1204 or contact us online. We offer prospective accident clients a free initial consultation.