Automotive Product Liability Litigation - Recalls

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Automotive Product Liability Litigation

Recalls: How They are Impacting Class Actions; Litigation

Strategy to Defeat Class Claims; Recall-Based Rule 23 Arguments; Mootness; and More

June 4 - 5, 2014

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S. Vance Wittie

Special Counsel Sedgwick LLP Dallas, Texas

Michelle I. Schaffer

Shareholder Campbell, Campbell Edwards & Conroy PC Boston, Massachusetts

Barry I. Buchman

Partner

Gilbert LLP

Paul E. Wojcicki

Shareholder

Segal McCambridge Singer & Mahoney, Ltd.

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Automotive Product Liability Litigation

Vehicle Recalls Common Law and Regulatory Environment

S. Vance Wittie Special Counsel Sedgwick LLP Dallas, Texas

June 4 - 5, 2014

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Administrative Recalls

•Determination of Defect or Noncompliance

•Notification of Recall

•Recall Implementation

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Common Law Issues

•Post Sale Duty to Warn

•Duty to Recall/Retrofit

•Court-ordered Recalls

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Post-Sale Duty to Warn (Per Third Restatement)

•Negligence-based theory (reasonable person)

• Seller knows or should know of substantial risk

•Recipients of warning can be identified and can be assumed to be unaware of the risk

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Post-Sale Duty to Warn (Per Third Restatement)

•Warning can be effectively communicated and acted upon

•Risk of harm sufficiently great to justify burden

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Duty to Recall or Retrofit

• Third Restatement limits application to where governmental directive specifically requires recall or seller undertakes to recall product and fails to act as reasonable person

•Negligent recall claims may be based on design or implementation of campaign

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Duty to Recall or Retrofit

•No general retrofit duty based on safety improvements

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Court-Ordered Recalls

•Question of Primary Jurisdiction— Should Court Defer to Administrative Agency?

•Question of Preemption— Does court action unduly interfere with administrative policies?

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Court-Ordered Recalls

•Question of Judicial Authority— Does court have competence to order relief, especially in other states?

•Question of Superiority— Is a court-ordered injunction a superior remedy?

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Automotive Product Liability Litigation

Admissibility of Recall Evidence

Michelle I. Schaffer Shareholder

Campbell Campbell Edwards & Conroy, P.C. Boston, Massachusetts

June 4 - 5, 2014

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Perception/Reality

• Recall evidence is inherently inflammatory

• Recall evidence will lead to a mini-trial

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Relevance – Rule 402

•Notice

• Existence of a Defect

•Violation of a Duty to Warn

• Feasibility of an Alternative Design

• Impeachment

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Novel Arguments for Admission

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Unfair Prejudice – Rule 403

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Punitive Damages: Actions Speak

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Automotive Product Liability Litigation

Paul E. Wojcicki Senior Shareholder

Don’t Fear the Recall

June 4 - 5, 2014

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www.smsm.com

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Don’t Fear the Recall

• Finally, after years of foot dragging …

•2014 YTD:

•GM issues nearly 30 recalls

•15.8 million vehicles involved

•More than 2013 total vehicle sales all manufacturers

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Don’t Fear the Recall

•Recalls “captivate the media, but the U.S. public absolutely couldn't care less."

- Bob Lutz, former GM CEO

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U. S. Consumers

•Desensitized to recalls

•No big deal

• Everyday occurrence

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2008-12: 3,384 MV Recalls

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2008-12: 98.2MM Vehicles affected

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U. S. Consumers

• Don’t expect perfection … but we do expect

• Transparency – admit your mistake

• Accountability – apologize

• Service – fix it

• Forgiving

• We want to believe in the companies we buy from

• We give second changes

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GM Sales Up in 2014

•Across all 4 GM brands

•March (4%)

•April (7%)

•May (3.5%)

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Go on the offensive

• “… of course we conducted a recall …”

• Committed to customer safety

• You come first

• Right thing to do … and we did it

•Court of law and court of public opinion

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Thanks

Paul E. Wojcicki Segal McCambridge Singer & Mahoney, Ltd. 233 South Wabash Avenue Suite 5500 Chicago, IL 60606 (312) 645-7810 pwojcicki@smsm.com