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In its recent decision in Maginnis and Magnaye v. FCA Canada et al. (“Maginnis”), the Ontario Superior Court of Justice declined to certify a class action against FCA Canada and the other defendants (the “Defendants”)relating to an emission defeat device.
The decision in Maginnis represents a departure from the court’s recent trend of certifying emission defeat device class actions against automobile manufacturers.[1] In denying certification, the court reinforced the importance of establishing compensable harm as an initial threshold to certification.
Background
Fiat Chrysler Automobile (“FCA”) manufactures vehicles in Canada and the United States, including vehicles with “EcoDiesel” engines. The plaintiffs separately purchased vehicles with “EcoDiesel” engines at car dealerships in Ontario.
The plaintiffs commenced a class action against the Defendants after FCA US was charged in the United States with installing emission defeat devices in diesel-fuel vehicles. The proposed class action named multiple defendants, including FCA Canada, the car dealerships that sold the vehicles to the plaintiffs and the manufacturer of the emission defeat device.
The American charges against FCA US were settled in early 2019. FCA US did not admit liability. In May 2019, both FCA US and FCA Canada recalled and began repairing all vehicles containing the alleged emission defeat device. Experts agreed that the repairs would render the vehicles compliant with emission standards.
Decision
The certification decision turned on whether the plaintiffs provided evidence of compensable harm in the form of economic loss. The court indicated that it would not consider the plaintiffs’ arguments on the other requirements to certify the class if the plaintiffs did not meet this initial threshold.
The court listed several ways the plaintiffs could have suffered compensable harm despite FCA Canada repairing the vehicles. For example, the plaintiffs may have lost money on rental vehicles or trading in their vehicle at reduced value, or even personal injury from fuel emissions. The plaintiffs, however, did not advance any of these claims.
The plaintiffs claimed that they suffered compensable harm in two ways: (1) paying a premium price for a “clean diesel” vehicle, and (2) the vehicles’ fuel economy and performance deteriorating because of the repairs.
The court rejected both claims.
- Premium price
With respect to the premium price claim, the court held that while the defendants may have engaged in unfair practice under s. 18(2) of the Consumer Protection Act, the evidence presented did not demonstrate any compensable harm. The invoices that the plaintiffs relied on did not prove that anyone actually paid a premium price for “clean diesel”.
Even if the invoices had demonstrated payment of a premium price, the difference in value calculation under s. 18(2) would be negligible. FCA Canada repaired the plaintiffs’ vehicles to be emission-compliant, giving the vehicles the same value they would have had if they had never contained the emission defeat device.
The court also dismissed any environmental concerns that the plaintiffs may have had from using “dirty diesel” vehicles. The plaintiffs did not present evidence supporting a private cause of action on those environmental grounds.
2. Fuel economy and performance
The court further rejected the plaintiffs’ fuel economy and vehicle performance claim. There was no evidence that the repairs that FCA Canada undertook reduced the vehicles’ fuel economy and performance. Officials in the United States approved FCA’s claims that the repairs would not reduce average fuel economy and would not change vehicle performance on several metrics.
The plaintiffs provided no admissible evidence to contradict these statements. The plaintiffs never had the vehicles tested and relied solely on inadmissible hearsay.
3. Disposing of the certification
The court disposed of the certification motion pursuant to s. 5(1)(d) of the Class Proceedings Act, because a class proceeding was not the preferable procedure to resolve the common issues. Certification on these facts would not advance the purpose of class proceedings. There was no access to justice issue because there was no compensable harm. FCA Canada already modified their behaviour by repairing the vehicles. Advancing unviable claims through class proceedings would also dissipate judicial resources.
Significance
The court’s decision in Maginnis provides important lessons about the compensable harm required to certify a class proceeding.
This decision reinforces that evidence of compensable harm is a “fundamental prerequisite” for class certification in Ontario. The court emphasized that every proposed class proceeding must be decided on its own merits according to the laws of the jurisdiction in which it is commenced. That related class proceedings may have been certified in other jurisdictions is no guarantee that other proposed classes will see the same result. An Ontario court will not certify a class action if the plaintiffs do not satisfy the requirements for certification, including demonstrating compensable harm. A plaintiff’s failure to file evidence of compensable harm will therefore be fatal to a certification motion.
This decision also provides some guidance on what to consider when pleading compensable harm. Courts will be reluctant to consider sources of compensable harm, even if they are plausible, that the plaintiffs do not reference in their affidavits or pleadings. Accordingly, relying on the ‘wrong’ compensable harm may defeat class certification.
[1] See for example, Quenneville v Volkswagen, 2016 ONSC 7979.
