Class Counsel Say 'Rats!' to California Court's Rejection of Design-Based Warranty Claims

July 11, 2018

This article was published in the July 2018 issue of Westlaw Journal Automotive and is reprinted here with permission.

Following the dismissal of Preston v. American Honda Motor Co., No. 18-cv-38 (C.D. Cal. May 24, 2018), a California federal judge on June 11 dismissed yet another putative class action, Heber v. Toyota Motor Sales USA Inc., No. 16-cv-1525 (C.D. Cal. June 11, 2018), against an automaker alleging that class vehicles were sold with soy-coated electrical wires that enticed rats to gnaw through them — rendering the vehicles inoperable.

In rejecting plaintiffs’ unconventional claim, Judge Andrew J. Guilford reinforced two important points that present obstacles to putative automotive class actions. First, express warranties do not apply to design defects. Second, courts are increasingly reluctant to hold automakers accountable under the implied warranty of merchantability for damage caused by external forces.

The plaintiffs in Heber alleged that Toyota failed to disclose to consumers that it made a production line switch to soy-coated wires, increasing the likelihood that the class vehicles would incur rodent-inflicted damage.

Bringing claims for breach of express and implied warranty and omissions-based fraud claims, the plaintiffs contended that Toyota knew that the wiring might draw rodents because it received several complaints of such damage from consumers and insurance companies.


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