The Court of Queen’s Bench for Saskatchewan recently denied certification of a proposed class action alleging negligent design and manufacture of numerous vehicle models spanning several decades.
In Kane v FCA US LLC and FCA Canada Inc., 2022 SKQB 69 the proposed representative plaintiff grounded her allegations in a large number of Canadian vehicle recall notices and a Consent Order entered into with a United States regulatory agency involving similar U.S. vehicle models. The plaintiff did not submit any independent evidence about the nature or quality of the alleged defects but rather sought to piggyback off the mere existence of the recall notices and the U.S. regulatory proceedings.
In dismissing the application, Elson J. held that the recalls were not meaningfully connected to each other and the U.S. regulatory settlement was irrelevant to a Canadian action. The plaintiff failed to provide any proof of harm independent of the notices themselves. Further, the claim did not allege that any damages flowed from the alleged defects but rather claimed pure economic loss.
Causes of Action
Section 6(1)(a) of The Class Actions Act, SS 2001, c C-12.01 (the “Act”) requires that a certification application disclose a cause of action. The plaintiff need only establish that it is not plain and obvious that the claim fails to disclose a cause of action.
With respect to her allegations of negligence, the plaintiff was required to plead: (a) a duty of care was owed by the defendants to the plaintiff; (2) the defendants failed to meet the standard of care required; (c) the plaintiff sustained compensable damages; and (d) that the damages were not too remote in law.
Elson J. accepted that the plaintiff pleaded a duty of care was owed by the defendants to the plaintiff and that the standard was breached. However, the pleadings with respect to compensable damages were deficient.
The plaintiff pleaded that the alleged safety defects endangered the class members, causing economic loss. However, this pleading for pure economic loss (as opposed to damages directly arising from personal injury or property damage) did not plead any facts to support a real and substantial danger. Elson J. held that while the existence of the recalls (barely) supported a viable claim that the standard of care was breached, it did not disclose a claim for property damage arising from a defect.
Other causes of actions raised in the pleadings did not disclose a viable cause of action and were dismissed for similar deficiencies.
Subsection 6(1)(c) of the Act requires that there is some basis in fact to support that the issues raised are actually common to the class members. To establish this element, the plaintiff must show some basis in fact that the proposed common issues exist and that they can be answered across the class.
The plaintiff relied on recalls involving approximately 130 different models of vehicles manufactured across decades. The plaintiff heavily relied on the U.S. Consent Order but Elson J. found it did not establish some basis in fact that the defects were related to one another and could be commonly pursued in a meaningful way. The Consent Order did not specifically address fault or responsibility for any defect and solely dealt with an assertion the U.S. defendant had not complied with administrative processes and timelines established by a U.S. regulatory agency.
As a result, the Court also held that this element was not satisfied in the certification application.
Summary Judgments in Class Action Lawsuits
A final point of interest in this decision is the Court’s assessment of the defendants’ summary judgment application. The defendants applied for summary judgment under Rule 7-5 of The Queen’s Bench Rules, requesting that the plaintiff’s application be dismissed outright on the basis that there was no genuine issue requiring trial.
Elson J. noted there was strong evidence for dismissing the action due to insufficient evidence of compensable damages. However, he instead adjourned the application sine die given the conflicting jurisprudence on whether a summary judgment application should be determined before or at the same time as a certification application. In particular, he noted the plaintiffs’ concern about the extent of disclosure and questioning for the specific purpose of addressing summary judgment.
- Allegations of defects via recall notices without more evidence are unlikely to be sufficient to establish some basis in fact for a common issue.
- Summary judgment may be an available process for parties to a class action but the proper sequencing can be unclear depending on the circumstances of the case.
MLT Aikins was pleased to act for the defendants in this case. Our legal team has significant experience in helping organization prepare for and respond to class actions. Contact a member of our class action team to learn more.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice of opinion. Readers should consult a legal professional for specific advice in any particular situation.