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Valparaiso Univ. Law School

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Tuesday, April 28, 2009

Another Benefit of Contract-Based Warranties: Class Certification?

This blog's illustrious editor, Prof. Snyder, recently pointed out that tort law provides much better remedies than contracts-based breach of warranty claims, but students nevertheless need to know about contracts-based remedies because of the longer statute of limitations.


It seems that there is another reason that students should learn about UCC and common law warranty claims: class certification.  At least, for those warranty claims that don't have a reliance element.  

This is evidenced by a recent Oklahoma Supreme Court ruling in a case against Ford, as summarized at law.com

Among Detroit's Big Three, Ford Motor Company looks to be in the best shape. But sometimes, even when you think you're in the clear, you're not. (At least in litigation.) That's what happened to Ford last week in Oklahoma, where the state's supreme court reinstated a nationwide class action against Ford and auto parts maker Williams Controls that had been tossed by an intermediate appellate court. The class, which includes an estimated 300,000-500,000 members, contends that certain models of Ford Super Duty pickup trucks and Expedition sport utility vehicles contain faulty accelerator pedals, causing the trucks to idle rather than accelerate when drivers step on the gas.

The case, which was first filed in 2004, alleges breach of warranty, negligence, and product liability. The trial court certified a nationwide class in 2007, but last year the Oklahoma Court of Civil Appeals reversed the lower court. In reinstating the case, the Oklahoma Supreme Court found that the trial court did not abuse its discretion in certifying a class on the breach of warranty claims. It declined to affirm class certification on negligence or product liability claims.


(emphasis added).  And, a class action, by the way, seems the only feasible way such small individual warranty claims would ever be litigated.  Attorneys for plaintiffs will seek between $60-100 million, depending on the size of the class.  This amount is based on a price tag of $185 per faulty accelerator pedal.


[Meredith R. Miller]

http://lawprofessors.typepad.com/contractsprof_blog/2009/04/another-benefit-of-contractbased-warranties-class-certification.html

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