Class Certification and Diminution of Value in Auto Recall Litigation

In late 2009 and early 2010 Toyota Canada Inc. and Toyota Motor Corporation initiated recalls related to an alleged brake defect and an alleged ETCS-i defect that could result in unintended acceleration. Cassels Brock & Blackwell LLP retained Dr. Faten Sabry, Senior Vice President at NERA Economic Consulting on behalf of Toyota Canada to assess whether the impact, if any, of the alleged defects could be quantified on a class wide basis without reference to each class member’s individual information and to examine allegations of diminution of value. Dr. Sabry filed several expert reports on the economic analysis of class certification issues and diminution of value.

Plaintiffs alleged that each member of the proposed class, having purchased, leased or owned a Toyota vehicle with the alleged defect, was entitled to damages as a result of the reduced resale value of their vehicles. Dr. Sabry provided various statistical analyses based on resale prices that document that the impact of the alleged defects could not be determined on a class-wide basis in these cases and evaluated the allegations of diminution of value.

Toyota has settled the consumer class actions in Canada and in the United States.