Class Actions -- 2006



Coker v. DaimlerChrysler Corp.   (North Carolina Supreme Court)

No injury class action

The NAM joined with the American Tort Reform Association in an amicus brief urging the North Carolina Supreme Court to reject a “no-injury” class action brought by purchasers of mini-vans in the mid 1990’s. The plaintiffs claimed that the mini-vans were touted as the “safest mini-van in the world”, but the vans did not have a new brake-shift interlock to prevent a vehicle from accidentally being shifted into gear without depressing the brake. The company argued that the vans performed as promised, and that the plaintiffs cannot sue when there has been no malfunction or injury. The lower courts agreed, ruling that the vans were not warranted to have the interlock, there was no allegation the vehicles were defective without it, the plaintiffs did not contract for, or even know about, the interlock, and no plaintiff sold a van at a diminished value.

Our amicus brief argued that there is no right to sue claiming that a product has a chance to cause future injury. Instead, there must be an actual injury. Adopting the plaintiffs’ theory would allow any product owner to allege harm that may never arise, merely because they are dissatisfied with the product. It would also make North Carolina a magnet jurisdiction for these kinds of claims, raising the cost of doing business and usurping the role of the legislature.

In addition, the plaintiffs are essentially advancing a fraud-on-the-market theory that has never been accepted in North Carolina. That theory applies in some federal securities cases, and has been the subject of significant criticism. There must be proof of causation, i.e., that the statement actually caused the plaintiffs to rely on it and to pay a higher price than they would have otherwise.

On April 7, 2006, the North Carolina Supreme Court affirmed the order dismissing plaintiffs' amended complaint.