The judge denied class certification in this Canadian automotive litigation.
Counsel for Volkswagen retained Cornerstone Research to support economics expert Professor Lorin Hitt in a proposed Canadian class action. Justice Edward Belobaba of the Ontario Superior Court denied class certification on the basis that the plaintiffs failed to establish an economic loss or a methodology for determining economic losses on a classwide basis.
In his order denying class certification, Justice Belobaba agreed with Professor Hitt’s conclusion that the plaintiffs’ proposed methodology could not accurately measure the alleged premium paid for clean diesel vehicles.
The matter relates to “clean diesel” Volkswagen and Audi vehicles in Canada that contained “defeat devices” causing them to excessively emit nitrogen oxide (NOx) under certain conditions. Plaintiffs were buyers and lessees of clean diesel vehicles who disposed of their vehicles before the existence of the defeat devices was disclosed to the market. Plaintiffs alleged that they paid an initial premium for the clean diesel feature that they could not fully recoup at the time when they resold or returned their vehicles because the vehicle’s (and the feature’s) value had depreciated.
Professor Hitt rebutted the damages report of the plaintiffs’ expert at the class certification stage, showing that the expert did not provide a plausible methodology to measure or isolate the premium customers place on clean diesel vehicles. In addition, Professor Hitt demonstrated that the plaintiffs’ expert did not provide a plausible methodology to show the rate at which such premium (if any) would have depreciated.
In his order denying class certification, Justice Belobaba agreed with Professor Hitt’s conclusion that the plaintiffs’ proposed methodology could not accurately measure the alleged premium paid for clean diesel vehicles. In addition, Justice Belobaba acknowledged that “[t]he defendants and their expert, Professor Hitt, provided the court with a number of additional reasons why the plaintiff’s approach and analyses were unworkable and unreliable and should not be accepted.”