Common Defect Found in Multiple-Model Product Liability Class Action

December 20, 2017

Written By Ashley L. Paterson and Nina Butz

In a recent case before the British Columbia Supreme Court, N&C Transportation Ltd. v. Navistar International Corp., 2016 BCSC 2129 [N&C], Justice Skolrood certified a multiple-model product liability class action after finding a single common defect across several truck engine models. The defect concerned technology for reducing nitrous-oxide emissions (EGR). The differences among the products encompassed within the proposed class were not fatal to certification, as using EGR technology was the “common denominator” across all products. The plaintiffs were careful to narrowly frame their central common issue to reflect this.

Establishing commonality in multiple-model product liability class actions has proven to be an uphill battle for plaintiffs. As discussed in our blog post of April 23, 2015, in the certification context plaintiffs must put forward sufficient evidence to show a common defective design feature across all product models, or, at the very least, some methodology that would enable them to prove causation on a class-wide basis. The emergence of the methodology requirement for establishing harm in the product liability context was discussed in our blog post of March 16, 2015.

N&C concerned heavy-duty trucks manufactured by the defendant equipped with EGR technology to meet new regulatory environmental standards. The trucks at issue encompassed 13 model years of EGR engines sold in six different truck models. The plaintiffs were trucking companies who purchased vehicles from the defendant. They alleged that the EGR technology was defective, causing serious danger to their drivers and other motorists.

The plaintiffs’ central proposed common issue was whether the Navistar EGR trucks contained a defect that rendered the trucks dangerous and/or unfit for their intended purpose. Navistar put forward two objections: (1) there was significant variation between the different years and models of the EGR trucks, no common design, and no way of extrapolating between them to determine if there was a class-wide defect; and (2) there was no valid methodology put forward to determine general causation.

Typically, these arguments are persuasive on a certification motion in cases involving such a variety of products. N&C may be an outlier to this trend, but there are several reasons why this case represents an exception to the rule.

First, significant circumstantial evidence supported the finding of a common defect among the truck models. This evidence included:

1. Navistar was the only manufacturer who relied solely on EGR technology to meet the new regulations instead of a combined EGR and Selective Catalytic Reductant (SCR) technology like their competitors;
2. Navistar experienced an increase in warranty costs, which it attributed in part to “the initial build of 2010 emission standard engines”;
3. in 2013, Navistar abandoned its EGR-only technology and switched to combined EGR/SCR technology;
4. in various financial disclosure documents, Navistar promoted the increased quality and reliability of its new engines; and
5. when comparing its new engines with duel EGR/SCR technology to the former EGR-only engines, Navistar referred to the older engines collectively as “2010 EGR emissions engines”, without differentiating between years, models, or configurations.

Second, although Navistar referred to the numerous engine options available and the improvements made over time to certain components of the EGR engines, there was no evidence or explanation presented on how the different options or improvements might have changed the performance of the EGR system or whether there was any change to the basic design of the system.

Third, Justice Skolrood had difficulty with the defendant’s expert evidence, stating “it presents more as an advocacy piece than the objective report of a neutral expert”. The plaintiffs did not object to the admissibility of the report, but the Court was not persuaded by its contents given its lack of impartiality. In contrast, the Court was persuaded by the plaintiffs’ expert-proposed methodology for determining whether a class-wide defect existed. The methodology consisted of operating two fleets of Navistar EGR trucks—one equipped with the EGR engines sold to class members and the other with an altered EGR control calibration—to identify differences in the durability and reliability of the different engines.

This proposed methodology combined with the extensive circumstantial evidence was sufficient to establish “some basis in fact” supporting a finding of a common, class-wide defect among the vehicles.

Ultimately, the weak expert evidence proffered by the defendants and the fact that the plaintiffs were able to identify a common defect across the proposed class of products resulted in the class being certified.

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