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The New York Supreme Court’s Appellate Division, 1st Department, has dismissed a proposed class action suit against major car manufacturers for alleged seat defects, in what appears to be the court’s first ruling on class actions in which plaintiffs had yet to sustain physical injuries. The unanimous opinion, written by Justice Eugene Nardelli, cited public policy concerns, saying it “would be manifestly unfair to require a manufacturer to become, in essence, an indemnifier for a loss that may never occur.” Nardelli wrote that upholding such claims could lead to suits that asked companies to upgrade products immediately after a better design had been invented. “Such ‘no injury’ or ‘peace of mind’ actions would undoubtedly have a profound effect on the marketplace,” the judge wrote. The plaintiffs, estimated at 1 million people, had sued DaimlerChrysler, Ford Motor Co., General Motors Corp. and Saturn Corp., alleging that the seats in certain cars were defective and likely to collapse during rear-end crashes, resulting in serious injuries. Attorney John M. Mason of Philadelphia’s Greitzer and Locks, which filed the suit, declined to comment. The firm has brought similar suits in Maryland, New Jersey, New Hampshire and Pennsylvania. Courts have dismissed the suits, which specifically exclude people who allegedly have sustained injuries from the defect, on similar grounds in every state except Pennsylvania. In briefs to the 1st Department, the firm likened the car owners to owners of buildings containing asbestos, saying courts have recognized asbestos removal as an injury, whether or not someone has suffered actual harm from asbestos. The New York suit claimed that the car companies knowingly concealed the risk posed by the seats from the public, and asked for damages not in excess of $5,000 per consumer to correct the defect. In May 2000, Manhattan Supreme Court Justice Jane S. Solomon dismissed the suit because no actual injury had been shown, and the 1st Department affirmed that ruling in Frank v. DaimlerChrysler Corp., 5411. All claims against DaimlerChrysler were dismissed with prejudice before the lower court ruling. The 1st Department pointed to numerous cases in support of its ruling, and swept aside examples offered by the plaintiffs. Citing Feinstein v. Firestone Tire and Rubber Company, 535 F. Supp. 595 (S.D.N.Y. 1982), Nardelli said that the plaintiffs could not maintain a cause of action for breach of implied warranty if the defect did not manifest itself and cause economic loss. In Feinstein, the federal district court ruled that plaintiffs whose tires had not malfunctioned could not maintain a cause of action, even though other complaints had commenced for actual injury and death and Firestone had begun to recall the tires. In the suit filed by Greitzer and Locks in Pennsylvania, Lipscomb v. General Motors, a state court has declined to dismiss claims for breach of implied warranty, though it has dismissed claims for negligent and intentional failure to disclose. But Nardelli said the Pennsylvania case was “of little persuasive value” because the court “provided absolutely no reasoning for its conclusions.” The judge noted that another Pennsylvania court has dismissed a similar suit involving faulty tires because the plaintiffs had not suffered injuries. NOT WITHOUT RECOURSE Nardelli wrote that though filing a lawsuit was not an option for the plaintiffs, they were not without recourse. The judge said the consumers could petition the National Highway Traffic Safety Administration (NHTSA) to investigate the seats. “The remedy which will not only best promote consumer safety, but will also address the parties’ concerns regarding the possible consequences of a rear-end collision if the purported defect is not remedied, is to petition the NHTSA,” Nardelli wrote. J. Andrew Langan of Kirkland & Ellis in Chicago, who represented General Motors and was lead counsel for the car companies, said GM was pleased with the “comprehensive” opinion. “The court reaffirmed the longstanding principle in New York and other states that cases must be premised on actual injury and damage, which was simply lacking in this case,” he said. Langan said he knew of no other case on point in the 1st Department. Janet Walsh of the Law Offices of Gene Locks, the New York division of Greitzer and Locks, worked with Mason on the case.

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