What is the preferable procedure for addressing a dangerous
product – a recall or a class action?
In Coles v FCA Canada1, the Court
denied certification of a proposed class action against an auto
manufacturer that had already initiated recalls to replace
defective air bag components at no cost to consumers. The air bags
were designed, manufactured and tested by Takata, and installed by
most auto manufacturers. Takata went bankrupt following the
discovery of the defects and pleaded guilty to having devised a
scheme to defraud the auto manufacturing industry through
materially false, fraudulent and misleading reports and other
information that concealed the truth about the air bags. Recall
campaigns were initiated in the U.S. and Canada, and proposed class
actions focusing on the same defective components were
commenced.
