Mitsubishi Class aAction Lawsuit
Mitsubishi Diesel Class Action Lawsuit
Mitsubishi Motors Corporation is in the business of manufacturing car parts and accessories. As a company it has come to be known for developing high quality electric cars, trucks, and buses. Its success in the car part business has led to it being the largest car producer in the world. One would expect its success in the lawsuit sales market to translate into success in the courtroom.
Mitsubishi Class aAction Lawsuit
On December 14th, Mitsubishi Motors USA, Inc., submitted an answer to a complaint that their Mitsubishi class action lawsuit had filed against them. In this answer they claim that they are not guilty of any wrongdoing in the way they conduct business, or the way in which they sell parts or service their vehicles. Their answer also acknowledges that they have signed contracts with consumers that allow them to resolve any complaints that may arise. At first glance, this looks like a pretty decent argument. But then, one must ask if the company’s definition of conduct on the part of a manufacturer is broad enough to allow them to escape liability in a lawsuit.
From the plaintiffs’ perspective, this kind of answer does little to alleviate their worries.
There is nothing in the answer that tells the court and the plaintiffs that they will not be able to pursue damages in favor of their complaint. For instance, they do not say that they will not be able to sue Mitsubishi for introducing new diesel engines into the marketplace that would turn off the emissions regulations. They do not say that they will not be able to sue Mitsubishi for introducing Mitsubishi galactic engines into the marketplace that, while compliant with regulations, causes emissions that exceed the allowable levels. These companies argue that they are not liable because, as distributors of parts and services, they exercise their right to make good faith estimates of future sales of parts and services to other purchasers.
This argument has some merit.
It is not that Mitsubishi is trying to avoid responsibility, but rather that the company’s counsel is arguing that they are innocent of all charges in this case. By offering a defense that they believe is factually true, the class action lawsuit administrator will force Mitsubishi to acknowledge their role in introducing diesel engines into the marketplace and the ensuing emissions control problem. The settlement administrator will recoup their costs from the manufacturers, who were the targets of the class action lawsuit and suffered harm as a result. If the company counsel is correct that class members will not succeed in their attempt to force Mitsubishi into admitting liability, then the settlement administrator will be forced to award large settlements to the plaintiffs.
This outcome is highly unlikely. First, it is important to understand why the settlement administrator cannot simply recoup its costs by collecting money from the manufacturers. When a manufacturer makes its monthly policy payments based on an estimate of future sales, it increases the company’s cash on hand. This cash is then used to cover costs such as interest and salaries. Mitsubishi’s class action lawsuits were brought about by fraudulently inflating its diesel engine sales figures in order to receive an inflated payment from the factory.
Even if the settlement administrator did recover its costs from the manufacturers, the loss would be excessive.
If Mitsubishi had approximately one million vehicles refits each year, that would equate to over one billion dollars. The settlement administrator has a financial interest in maintaining low class action settlement premiums. That is perfectly compatible with the goal of achieving a reduction in claims brought forth by the class action lawsuit process. In other words, the settlement administrator’s job is to submit a claim form that will achieve this goal, not to increase the level of premiums paid by the class.
Second, to the extent that the costs associated with a Mitsubishi diesel engine class action lawsuit could force the total amount paid out by the company beyond its current ability to pay, that cost should not be passed on to class members.
As noted above, the claims process is extremely complicated and time consuming for both the defense and the defendant. Further, the costs relate to a relatively small number of claims. The goal of any law firm is to reduce the number of cases it takes to resolve. A reduction in the number of class members claiming compensatory damages will have a positive overall impact on the firm’s overall profitability. As such, a reduction of one class member’s claim would not have a negative financial impact on the company.
Third, Mitsubishi’s diesel engine class action lawsuit should not force the company into a corner. Given the extensive analysis conducted by the EPA, Mitsubishi’s emissions control efforts fall far short of what is required under existing statutes and case law. As such, Mitsubishi should not be required to admit or deny the extent of its responsibility in connection with the emissions of its diesel engine. The EPA’s Proposed Rule would require Mitsubishi to clean up its mess, but not be required to admit or deny liability.