Arguing Class Actions is a monthly column by Adam J. Levitt for the National Law Journal.
Reprinted with permission from the January 6, 2025 edition of the National Law Journal. © 2024 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
The advent of the new year seems an appropriate time to revisit the hot-button issue of “manifestation” in product defect cases. In some cases, a defective product fails to perform as intended from day one. In others, the defect remains latent, unknown to the consumer, until it “manifests,” sometimes resulting in severe physical injury. No matter whether the defect is latent or not, one expects that reasonable consumers would not be willing to pay the same price for a defective product compared to a non-defective product. As I have argued previously in this space, this economic injury should, at the very least, establish Article III standing in federal court. Significantly, the weight of recent authority on this point is in accord. See, e.g., Riddell v. General Motors LLC, 2024 WL 2077559 (E.D. Mo. May 9, 2024) (holding that Article III standing was satisfied for each class member given evidence of a class-wide vehicle defect).
Even after clearing Article III’s constitutional hurdle, however, class plaintiffs alleging a product defect frequently face the same kinds of manifestation arguments under state law. Thus, federal courts are placed in the unenviable position of determining, under Erie, whether the product defect claims of each state at issue—up to all 50 in the most sprawling multidistrict litigations—include a requirement that the defect manifest in some fashion. The differences among the states’ laws in this area should be minimal: breach of warranty claims generally arise under the same Uniform Commercial Code provisions, fraud claims all stem from the same source in common law, and the states’ respective consumer protection statutes are mainly based on a relatively small number of pattern statutes addressing unfair and deceptive trade practices. Nevertheless, courts typically tackle the manifestation question on a state-by-state basis.
For example, In re General Motors LLC Ignition Switch Litigation featured a defect in the vehicles’ ignition switch that, after years of normal operation, could suddenly switch off, causing moving stalls or, worse, disabling the airbag at the most inopportune moments. 339 F. Supp. 3d 262, 274 (S.D.N.Y. 2018). The court attempted to streamline consideration of GM’s manifestation arguments by addressing the validity of the plaintiffs’ claims in eight states, followed by another set of eight states. Even with the benefit of these bellwether legal rulings, the parties could not agree on how manifestation affected the claims in 27 remaining jurisdictions. After considering the parties’ “lengthy” briefing with respect to the remaining states, the court concluded that manifestation was not required in any of them, holding that:
“There is no legal or logical ground to bar Plaintiffs’ recovery if they can prove that they suffered economic loss. If Plaintiffs paid x for their cars and can prove that their cars are now worth x minus y as the result of the alleged defects, it is arbitrary to prevent them from recovering the difference between x and y simply because the defect did not manifest itself in property damage or personal injury. In the Court’s view, the courts that have adopted a manifestation requirement often do so as a proxy for proof of actual defect.”
Id. at 276 (citation omitted and emphasis added). In another airbag defect multidistrict litigation, In re Takata Airbag Products Liability Litigation, the court similarly criticized the illogic behind imposing a manifestation requirement for a well-pleaded defect: “If Takata had installed grenades in its airbags that may or may not explode on impact, a court would not require an explosion to demonstrate manifestation of a defect.” 193 F. Supp. 3d 1324, 1335 (S.D. Fla. 2016).
The GM Ignition court’s observation that the manifestation rule may simply be operating as a proxy for whether there is a defect at all goes a long way toward harmonizing state-law manifestation requirements that may otherwise seem at odds. The Eighth Circuit’s decision in Briehl v. General Motors, 172 F.3d 623 (8th Cir. 1999), often cited in support of a manifestation rule, is one such case where the court may have been skeptical that the subject brakes were actually defective. Id. at 626 (“The Plaintiffs do not allege that the [brake system] is incapable of stopping the vehicles or that [the brake system] has violated any national safety standards.”), quoted in GM Ignition, 339 F. Supp. 3d at 276. In another seemingly pro-manifestation Eighth Circuit case, O’Neil v. Simplicity, 574 F.3d 501 (8th Cir. 2009), the U.S. Consumer Product Safety Commission’s recall of the affected cribs suggested that the problems resulted from improperly installing the drop-side of the crib upside down, rather than a defect present in every crib. In at least one recent decision, a district court in the Eighth Circuit adopted this understanding of Briehl and O’Neil in certifying a class of owners of vehicles with the same piston ring defect. Even though GM argued that not all of these owners had suffered from the excessive oil consumption resulting from that defect, the court held that the defect had been substantiated to a class-wide extent, noting that “plaintiff has evidence from defendant’s own records that the class vehicles all suffer from the same piston ring defect.” Riddell, 2024 WL 2077559.
Another category of cases that are frequently cited in support of applying a manifestation rule, but are really better understood as cases in which the defect was not actually present class-wide, are food contamination cases. In Wallace v. ConAgra Foods, 747 F.3d 1025 (8th Cir. 2014), the plaintiffs’ allegations that the “kosher” hot dogs they purchased may not have been kosher at all were
insufficient to sustain their economic injury claims. While this decision is often included in the Eighth Circuit’s line of manifestation cases, it is better understood not as a manifestation case at all, but, rather, as a failure by the plaintiffs “to show that any of the particular packages of Hebrew National beef they personally purchased contained non-kosher beef.” The Seventh Circuit’s recent decision not to allow claims for economic injury in In re Recalled Abbott Infant Formula Products Liability Litigation similarly does not reflect a manifestation requirement, but, rather, a case in which the plaintiffs could not establish that the formula they purchased was actually contaminated. 97 F.4th 525, 529 (7th Cir. 2024) (noting that the plaintiffs “do not allege that any of the products they purchased were contaminated”). The court was careful to distinguish that holding from the one reached in In re Aqua Dots Products Liability Litigation, 654 F.3d 748 (7th Cir. 2011), which allowed claims for economic injury without manifestation of physical injury because “every unit of toy contained the toxic adhesive.” Infant Formula, 97 F.4th at 529–30 (citing Aqua Dots, 654 F.3d at 749).
In each of these cases, one finds that the same principle generally holds: “A universal defect inherent in a product—such as a design defect or a fundamental flaw—renders each product valueless to each plaintiff,” Abbott Infant Formula, 97 F.4th at 530. To the extent that courts require a manifestation of that defect to sustain a claim, that outcome is often best explained through an underlying skepticism about the defect itself rather than state-specific differences in the law on manifestation. Keeping this in mind may aid courts and practitioners in simplifying the legal terrain in multi-state product defect class actions involving latent, yet serious, defects.
Adam J. Levitt is a founding partner of DiCello Levitt, where he heads the firm’s class action and public client practice groups. He can be reached at [email protected]. Thank you to DiCello Levitt partner John Tangren for contributing to this column.