Last year, you may have heard about the allegations that Toyota cars were experiencing “sudden, unintended acceleration”—that is, that the cars would suddenly just start going when the driver didn’t want them to. There turns out to be no reliable evidence to support these allegations, but that hasn’t stopped opportunistic class action lawyers from filing million dollar lawsuits against Toyota. More remarkably, some of the plaintiffs in the case admit not only that they have not experienced any such “acceleration” incidents, but that they have not even tried to sell their cars at a reduced price in consequence of such a defect. Instead, they argue that the value of their cars has gone down because the general public thinks there might be something wrong with them. Not the actual sale price of their cars—no, the potential resale value of their cars if they ever do decide to sell them.
The problem with this, legally speaking, is that Article III of the Constitution only allows federal courts to hear “cases and controversies”—that is, plaintiffs in lawsuits must show that they’ve actually been harmed, or will soon be harmed, by the defendant. They can’t just claim that they might someday suffer some kind of injury as an indirect result of the defendant’s actions. Not to mention the fact that a car doesn’t have a price in the first place until the moment of sale. Nothing does. There’s no such thing as an abstract “price” of something.
PLF filed a friend of the court brief this week in the Ninth Circuit Court of Appeals, arguing that to allow a lawsuit like this to go forward would give people a sort of permanent veto power over a manufacturer, by which the consumer could sue the manufacturer any time it acts in a way that reduces the potential resale value of a product. People who bought the Microsoft Zune could sue due to the fact that, well, nobody liked the Zune. People who bought Betamax video recorders could have sued Sony for allowing VHS to dominate the market. Purchasers of Procter & Gamble products could sue because Procter & Gamble is rumored to be doing business with Satan. (Um…falsely.)
PLF has argued against these non-injury class action cases before. In Texas and in Florida, for example, trial lawyers sued car makers for a non-existent seat-belt defect. Unfortunately, some state courts have allowed cases like these to proceed—thus giving a judicial blessing to lawsuits in which plaintiffs do not even claim that they’ve been harmed. Class action lawsuit abuse is a multibillion dollar industry in the United States. Sadly, it flourishes only by diverting money from the productive sector of the economy into the pockets of a clever and manipulative plaintiffs’ bar that sees the courts not as a forum for remedying actual harms, but as a device for enriching themselves and squeezing wealth-creating businesses.