Court
File No:
ONTARIO
BETWEEN:
Michelle Rambharos
and
FORD
MOTOR COMPANY OF CANADA LIMITED, FORD MOTOR COMPANY,
BRIDGESTONE
CORPORATION, BRIDGESTONE/ FIRESTONE inc.,
BRIDGESTONE/
FIRESTONE CANADA INC.
Defendants
STATEMENT
OF CLAIM
Proceedings under
the Class Proceedings Act, 1992
TO THE
DEFENDANT(S)
A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the
plaintiff(s). The claim made against
you is set out in the following pages.
IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting
for you must prepare a statement of defence in Form 18A prescribed by the Rules
of Civil Procedure, serve it on the plaintiff(s)’ lawyer or, where the
plaintiff(s) do(es) not have a lawyer, serve it on the plaintiff(s), and file
it, with proof of service, in this court office, WITHIN TWENTY DAYS after this
statement of claim is served on you, if you are served in Ontario.
If you are served in another province or territory of Canada or in the
United States of America, the period for serving and filing your statement of
defence is forty days. If you are
served outside Canada and the United States of America, the period is sixty
days.
Instead of serving and filing a statement of defence, you may serve and
file a notice of intent to defend in Form 18B prescribed by the Rules of Civil
Procedure. This will entitle you to ten more days within which to serve and
file your statement of defence.
IF YOU FAIL TO
DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND
WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE
UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A
LOCAL LEGAL AID OFFICE.
Date: Issued
by:............................................
Local Registrar
Address of court office:
393 University Avenue
10th Floor
Toronto, Ontario
M5G 1E6
TO: Ford Motor Company of Canada Limited
1
The Canadian Road
Oakville,
ON
L6J
5E4
AND TO: Ford Motor Company
1 American Road
Dearborn, Michigan
48126
U.S.A.
AND TO: Bridgestone
Corporation
10-1,
Kyobashi 1-Chome, Chuo-ku
Tokyo
104-8350
Japan
Attn:
Hiroyuki Kita
Manager- Corporate Legal Department
AND TO: Bridgestone/Firestone
Inc.
50 Century Blvd.
Nashville, Tennessee
37214
U.S.A.
AND TO: Bridgestone/
Firestone Canada Inc.
Suite #400
5770 Hurontario Street
Mississauga, Ontario
Canada
L5R 3G5
CLAIM
1. The
Plaintiff claims as against the Defendants:
(a)
general damages;
(b)
special damages;
(c)
punitive damages;
(d)
pre-judgment
interest pursuant to the Courts of Justice Act, R.S.O. 1990, c.C-43;
(e)
costs of this
action together with applicable Goods and Services Tax; and
(f)
such further and
other relief as to this Honourable Court seems just.
3. The Defendant Bridgestone/ Firestone Inc. (hereinafter, “Firestone”) is a corporation organized under the laws of the state of Ohio, with its principal place of business in Nashville, Tennessee.
4. The Defendant Ford Motor Company
(“Ford”) is a corporation organized under the laws of the state of Delaware,
with its principal place of business in Dearborn, Michigan.
5. The Defendant Ford Motor Company of
Canada Limited (“Ford Canada”) is a corporation organized under the laws of
Ontario, with its registered office in Oakville, Ontario. Ford Canada and Ford are referred to herein collectively
as the “Ford Defendants”.
6. The Defendant Bridgestone/ Firestone
Canada Inc. (“Firestone Canada”) is a corporation organized under the laws of
Ontario with its registered office in Mississauga, Ontario.
7. The Defendant Bridgestone Corporation
(“Bridgestone”) is a corporation organized under the laws of Japan, with its
principal place of business in Tokyo, Japan.
Bridgestone, Firestone and Firestone Canada are collectively referred to
herein as the “Firestone Defendants.”
CAUSE OF ACTION
8.
The Plaintiff alleges that tires
designed and manufactured by the Firestone Defendants are unsafe, and have an
unreasonably dangerous propensity to fail.
Such tires may unexpectedly rupture or suffer complete or substantial
tread separation (the “Tire Defect”).
These tires are defined as Firestone-brand ATX, ATX II, Firehawk ATX,
ATX 23 Degree, Widetrack Radical Baja, Wilderness, or other comparably designed
or manufactured Firestone-brand, steel-belted radial tires (the “Tires”).
9.
Furthermore, the Plaintiff
alleges that the Ford Explorer, as designed and manufactured by the Ford
Defendants, is unsafe. It has an
unreasonably dangerous propensity to roll over (the “Roll-Over Defect”).
10. The Tire Defect and the Roll-Over Defect
work in combination with each other, and are synergistic. Together, they
greatly increase the risk of injury to consumers. To conceal the existence of the Roll-Over Defect, the Defendants
recommended that the Tires mounted on Explorers be under-inflated. This under-inflation served only to
exacerbate the Tire Defect. The Tire
Defect and the Roll-Over Defect are collectively referred to herein as the
“Defects”.
11. For some years, the Defendants received
reports from around the world of injuries and deaths caused by the
Defects. The Defendants acted
together to conceal these Defects, and to prevent knowledge of such Defects
from reaching public authorities in Canada and the United States.
12. The Defendants further profited from the concealment of the Defects. They were able to sell Ford Explorers and Tires at prices far in excess of the values which would have been assigned to these products if the Defects had been disclosed.
13. The Plaintiff alleges that she and members of the Class have suffered damages as a result of the Defects. Accordingly, the Plaintiff asserts the following causes of action against the Defendants, on behalf of herself, and on behalf the Class:
(a) Negligence;
(b) Unjust Enrichment; and
(c) Breach of s.52 of the Competition Act.
THE CLASS
14. The Classes herein are defined as follows:
(a) “Personal Injury Class”: All persons in Canada who suffered personal injury as a result of a motor vehicle accident caused by the Defects;
(b) “Derivative Claimant Class”: All persons in Canada who have a derivative claim on account of a family relationship with a person in the Personal Injury Class;
(c) “Property Loss Class”: All persons in Canada who lost property as a result of a motor vehicle accident caused by the Defects;
(d) “Tire Class”: All persons in Canada who now own or lease, or owned or leased, vehicles that are or were equipped with the Tires;
(e) “Explorer Diminution Class”: All persons in Canada who purchased, owned or leased new or used Ford Explorers at any time during the period from 1990 to present and who either (1) currently own, lease, or operate the vehicle (the “Current Explorer Subclass”); or (2) sold, traded or otherwise disposed of such vehicles or whose lease for such vehicle expired or otherwise terminated between August 9, 2000 and the later of the date of class certification or the dissemination of class notice (the “Former Explorer Subclass”).
15. Excluded from the class are the Defendants, any entity in which any Defendant has
a controlling interest, or is a parent or subsidiary of, or is controlled by a
Defendant, and the officers, directors, affiliates, legal representatives,
heirs, predecessors, successors or assigns of any of the Defendants.
MATERIAL FACTS
The Development of
the Explorer
16. During the Explorer’s development, the Ford Defendants tested its stability to establish, among other things, the likelihood of rollovers such as those that had plagued the company’s Bronco II SUV. The Bronco II had been popular but was losing sales due to its dated styling and highly publicized safety problems.
17. The Ford Defendants’ internal testing revealed that the Explorer, like the Bronco II, had significant handling and stability defects. The testing showed the Explorer was prone to rollovers when equipped with tires inflated to the manufacturer’s recommended inflation pressure.
18. In a June 15, 1989 internal memo to Ford management, Ford engineers recommended eight design changes to address the rollover problem and improve the safety of the Explorer. Among other things, Ford engineers recommended fundamental design changes to the Explorer’s suspension and track width to increase the vehicle’s stability and thus prevent rollovers. That memo concluded that such design changes would resolve the rollover problems and render the Explorer as safe and as unlikely to roll over as the Chevrolet Blazer. Making these changes would have avoided the Roll-Over Defect. Making these changes however, would have taken ten months or more, which would have delayed the planned launch of the Explorer.
19. Ford management directed the engineers to make only those minor changes that would not affect production deadlines. The Ford Defendants understood that such minor changes would not correct the Roll-Over Defect.
20. The Ford Defendants introduced their Explorer sport-utility vehicle (“SUV”) onto the North American market in 1990. The Explorer quickly became the best selling SUV in North America.
The Involvement of
Firestone
21. Ford asked Firestone in the mid-1980s for a hybrid tire which had a truck tire appearance, but passenger tire performance, and met Ford’s price specifications. Firestone developed the ATX.
22. When the Explorer was launched, it was equipped with Firestone-brand ATX tires that had been developed specifically for the Explorer pursuant to specifications and instructions initially developed by Ford and subsequently refined and agreed upon through negotiations between Ford and Firestone.
23. The Roll-Over Defect was apparent to the Ford Defendants prior to launch of the Explorer onto the North American market. The Ford Defendants however, chose to ignore the recommendations of their engineers to correct the defect. Instead, they opted for a “quick fix”, so as to avoid any delay in bringing the Explorer to market. That quick fix involved an attempt to improve the Explorer’s stability test results by lowering the pressure in the ATX tires which – by agreement among the Defendants – were to be used as original equipment on the Explorer.
24. By lowering the tire pressure on the Explorer, the Defendants created the impression that the Explorer was safe. Consumer organizations such as Consumer Reports routinely test vehicles for stability. Negative reports from Consumer Reports about the stability of the Ford Bronco II lead to a drop in sales in that vehicle. By lowering the tire pressure on the Explorer the Defendants hoped to obtain, and were able to obtain consumer test results which were sufficient to avoid a negative safety rating from consumer groups and regulators.
25. However, the Defendants knew or ought to have known that reducing the pressure in the ATX tires would substantially increase the risk of tread separation and other catastrophic tire failures. These risks were, or should have been particularly apparent to the Defendants due to the Explorer’s low weight-carrying capacity, which enhanced the likelihood that typical passenger loads would add to tire stress. The potentially disastrous consequences of such tire failures were, or should have been obvious to the Defendants because tread separation or other tire failure created a heightened risk of rollovers in the Explorer.
26. Firestone had recommended that ATX tires mounted on the Explorer be inflated to 35 pounds per square inch (“psi”). Ford tests showed that inflating the ATX tires to a substantially lower pressure reduced the Explorer’s rollover tendency. The Defendants knew however that under-inflating the ATX tires increased the risk of tread separation or other tire failure because of increased flexing, wear, and heating of the tires.
27. Nevertheless, the Defendants chose to ignore the increased risk of tread separation or other tire failure from under-inflation of the Tires mounted as original equipment on Explorers. Thereafter, the Ford Defendants, with the agreement of the Firestone Defendants, introduced and thereafter sold the Explorer with the recommendation that the Tires be inflated to only 26 psi.
28. In early 1990, Jim Englehart, Vice President in charge of trucks at Ford, complained about the high rolling resistance and resulting low fuel efficiency caused by the under-inflation of the ATX tires on the Explorer, and Ford asked Firestone to address the problem. The options of decreasing rolling resistance by manufacturing the Tires with different compounds, or by inflating the Tires to higher pressures, were rejected because they exacerbated the Rollover Defect. Instead, the Firestone Defendants redesigned the ATX tire to reduce its weight.
29. After this re-design, Ford asked Firestone to change the appearance of the ATX tire. In response, the Firestone Defendants developed the Wilderness AT tire, which is virtually identical to the ATX except for the tread pattern. The Wilderness tire replaced the ATX and ATX II tires in Firestone’s product line in 1996.
30. The Defendants ignored the Explorer’s comparatively low weight-carrying capability for a vehicle of its size. The recommended Explorer payload for passengers and cargo is only 750 to 1,310 pounds, depending on the model. Four occupants plus luggage can easily exceed the lower end of that range, and indeed, can easily exceed the entire recommended range, as the Defendants had to know. This material fact further increased the stress and the resulting risk of tire failure on Explorers, particularly at the low tire pressures recommended by the Ford Defendants. The Defendants knew or ought to have known that the Explorer’s actual payload would often exceed these unrealistic ratings, and that equipping the Explorer with tires inflated to only 26 psi increased tire stress and the resulting risk of tire failure.
31. Moreover, the Defendants ignored the fact that an SUV, such as the Explorer, is one of the worst kinds of vehicles on which to put under-inflated tires because tread separation or other catastrophic tire failure on such a vehicle is particularly likely to result in a fatal rollover.
32. Despite all of these risks, the Defendants failed to run safety tests on an Explorer prototype using Tires inflated to only 26 psi before introducing the Explorer on the market. The only tests that the Defendants conducted with tires inflated to 26 psi involved a Ford pick-up truck, not the Explorer itself.
Defendants’ Knowledge
of Defects
33. The Defendants knew of the Defects, and of the harm they caused to people around the world. In the years following the introduction of the Explorer, the Defendants had mounting notice of this harm. During the 1990s, lawsuits against Ford and Firestone based on the catastrophic failure of the Tires – particularly those on Explorers – began to mount. In 1993, five such lawsuits were filed in the United States. By the end of 1996, there were fifteen. Firestone settled a number of these lawsuits, but insisted on strict confidentiality agreements which prevented knowledge of the Defects from becoming public.
34. In 1996, Ford and Firestone received complaints from state agencies in Arizona which had experienced major problems with tread separation on Tires on state-owned Explorers.
35. From 1992 forwards, Firestone compiled data from warranty claims confirming the existence of the Tire Defect. Bridgestone executives knew of the existence of the Tire Defect, and discussed it regularly at sales CEO meetings from 1997 forwards.
36. By 1998, Ford’s Venezuela operations received reports of accidents caused by tire tread separation problems on Explorers. The Defendants received notice of these accidents. In response to these reports, Ford, Bridgestone and Firestone made efforts to redesign the Tires sold in Venezuela, by adding a nylon cap.
37. A nylon cap is a cost effective and reasonable means of improving the strength and durability of the Tires, and of correcting the Defects. The Defendants however failed to adopt this safer nylon cap design for the Tires sold in North America, despite their adoption of this safer design in Venezuela in 1998.
38. Also in 1998, Ford affiliates in the Middle East received reports of injuries and deaths caused by catastrophic tire failure on Explorers sold there. The Defendants received notice of these accidents. In response to these reports, in May, 1999, Ford ordered a recall of the Tires used on the Explorer in sixteen countries outside of North America.
39. The Defendants failed to initiate an immediate recall of Tires sold in Canada, or to immediately report problems with the Tires to Canadian public authorities. They failed to provide immediate notice of the Defects to Transport Canada, pursuant to their obligations under s.10 of the Motor Vehicle Safety Act, R.S.C. 1985, c.M-10.
40. Similarly, Ford, Firestone and Bridgestone failed to notify public safety regulators in the United States of problems with the Tires in that country, or take any steps to recall the Tires from the American market.
41. In February 2000, investigative journalists in the United States reported of deaths caused by the Defects. Again, the Defendants failed to initiate an immediate recall of Tires sold in Canada. Rather, Firestone threatened these journalists with a defamation suit.
42. It was only when public authorities in the United States began their own investigation into reports of injuries and deaths caused by the Defects that any action was taken to protect Canadian and American consumers.
The North American
Recall
43. On May 2, 2000, the U.S. National Highway Traffic Safety Administration (“NHTSA”) officially opened an investigation into the ATX, ATX II and Wilderness AT Tires.
44. On August 9, 2000, Ford, Ford Canada, Firestone, and Firestone Canada jointly announced a limited recall of the following models of Tires: all ATX and ATX II tires in the size P235/75R15, wherever manufactured; and all Wilderness AT tires in the size P235/75R15 that were manufactured at Firestone’s Decatur, Illinois plant (“August 9 Recall”).
45. On August 30, 2000, NHTSA recommended that the recall be expanded to include the following models of Tires:
|
Tire Line |
Size |
Plant Code * |
|
ATX |
P205/75R15 |
VD |
|
ATX |
P225/7515 |
HY |
|
ATX |
30X9.50R15LT |
VD |
|
ATX |
31X10.50R15LT |
VD |
|
ATX |
32X11.50R15LT |
VD |
|
ATX |
31X10.50R16.5LT |
VD |
|
ATX |
33X12.50R16.5LT |
VD |
|
Firehawk ATX |
27X8.50R14LT |
VD |
|
Firehawk ATX |
235/75R15 |
VD |
|
Firehawk ATX |
30X9.50R15LT |
VD |
|
Firehawk ATX |
31X10.50R15LT |
VD |
|
Firehawk ATX |
32X11.50R15LT |
VD |
|
Firehawk ATX |
33X12.50R15LT |
VD |
|
Firehawk ATX |
265/75R16LT |
VD |
|
Firehawk ATX |
255/85R16LT |
VD |
|
Firehawk ATX |
31X10.50R16.5LT |
VD |
|
Firehawk ATX |
33X12.50R16.5LT |
VD |
|
ATX 23 Degree |
31X10.50R15LT |
VD |
|
ATX 23 Degree |
33X12.50R16.5LT |
VD |
|
Widetrack Radial Baja |
P225/75R15 |
HY |
|
Widetrack Radial Baja A/S |
32X11.50R15LT |
VD |
|
Wilderness AT |
P235/70R16 |
W2 |
|
Wilderness AT |
33X12.50R16.5LT |
VD |
|
Wilderness HT |
P255/70R15 |
VD |
* VD means Decatur, Illinois; HY, Oklahoma City, Oklahoma; and W2, Wilson, North Carolina.
46. The August 9, 2000 recall is inadequate. It fails to include many Tires with the Tire Defects. The NHTSA recommendations, if implemented by the Defendants in Canada, would be an improvement, but such recommendations still fail to include some Tires with the Tire Defects.
Consumer
Misrepresentations
47. Since at least 1990 and continuing to the present day, as components of an organized, international advertising and promotional campaign, the Defendants have knowingly, intentionally, recklessly, or negligently made, disseminated, and caused to be made and disseminate misleading television, radio, print and Internet advertisements containing misleading and material misrepresentations and omissions concerning the safety, quality, and value of the Tires and Explorers. These misleading advertisements were placed continuously for an extended period of time with the purpose and result of inducing consumers, including the Plaintiff and Class members, to buy or lease Tires and Explorers. These misleading advertisements were among the primary means by which the Defendants solicited consumers, including the Plaintiff and Class members, to buy or lease Tires and Explorers.
48. Among other things, the Defendants’ advertisements portrayed the Explorer as a vehicle that handled well; was safe and suitable for family use; and portrayed the Tires as high performance, superior-quality, safe tires. The particulars as to the dates of publication of such advertisements, in print, on radio or television, or over the Internet, are known to the Defendants.
49. All of these advertisements uniformly omitted and concealed from the Plaintiff and members of the Class the existence of the Defects. The Defendants knew, or ought to have known of the existence of the Defects. The Defendants further knew, or ought to have known that the omission of any warning about the Defects from these advertisements rendered these advertisements false and misleading.
50. Furthermore, through, among other things, their advertising campaigns, misleading communications with and concealment of information from public regulatory authorities, and attempts to suppress the truth through intimidation of the investigative media, and other means, the Defendants intentionally engaged in a scheme to distort the body of public knowledge regarding the Tires and Explorers, to undermine public understanding of the Defects, and to eliminate any cause for public concern that the Tires and Explorers might harbour the Defects.
51. The Plaintiff and members of the Class, which were classes of victims intended and foreseeable by the Defendants, detrimentally relied on this materially distorted information. Such reliance was reasonable in the totality of the circumstances. Plaintiffs and members of the Class were proximately injured thereby.
52. By concealing the safety risks associated with the Tires and Explorers only until after people had bought or leased millions of such products from the Defendants, the Defendants thereby forced consumers to bear the financial loss associated with the diminished value of the Tires, and Explorers (regardless of the Tires with which they were equipped), now that the truth regarding their dangerousness and the lack of roadworthiness is known. In addition, the Defendants withheld information about safety risks which, if known, would have caused consumers not to buy or lease, or to pay substantially less for, Tires and/or Explorers they purchased.
NEGLIGENCE
53. The Defendants knew, or ought to have known about the Defects, and that such Defects would cause foreseeable harm to Canadians. Each of the Defendants had the capacity to act to prevent such foreseeable harm, but failed to do so. Accordingly, each of the Defendants is in a relationship of sufficient proximity to Class members, as to have a special relationship to Class members, such that a duty of care is owed.
54. The Defendants negligently designed the Tires and the Explorer. The Defendants had available to them reasonable, cost effective, alternative designs which were much safer, and which would prevented the Defects. The Explorer, for example, could have been designed with a better suspension system. The Tires, for example, could have been designed with nylon caps. These changes would have greatly enhanced the safety of these products, and were technically and commercially feasible, and would have been acceptable to consumers. Such changes would have only marginally, if at all, increased the production costs of the products. Indeed, a nylon cap ads less than a dollar to the cost of a Tire, and yet, provides thorough protection against the Tire Defects.
55. Further, and in the alternative, the Defendants were negligent in the manufacture of the Explorer and the Tires, as they failed to take sufficient care during the manufacturing process to identify and avoid the Defects.
56. The Defendants also negligently failed to warn the Class and public regulatory authorities in Canada about the Defects. The Defendants further negligently breached a statutory duty to alert Transport Canada of the Defects pursuant to the Motor Vehicle Safety Act, R.S.C. 1985, c. M-10.
UNJUST ENRICHMENT
57. As the intended and expected result of their conscious wrongdoing, the Defendants have profited and benefited from the purchase and leasing of Ford Explorers by Class members, and the purchase of Tires, and the purchase and leasing of vehicles equipped with the Tires, by Class members.
58. The Defendants have voluntarily accepted and retained these profits and benefits, derived from Class members with full knowledge that as a result of the Defendants’ wrongdoing, these class members have not received products of the quality, nature and fitness or value that had been represented by the Defendants, or that Class members, as reasonable consumers, expected.
59. Class members have suffered a corresponding deprivation. They purchased or leased products which are unsafe, at prices which far exceeded the values which would have been assigned to the Explorer and to the Tires, if the Defects had been disclosed.
60. By virtue of the Defendants’ conscious wrongdoing as set out herein, the Defendants have been unjustly enriched at the expense of the Class, and there is no juristic reason to permit this enrichment to be retained. The Plaintiff and the Class are entitled in equity to the disgorgement and restitution of the Defendants’ wrongful profits, revenue, and benefits, to the extent, and in the amount, deemed appropriate by the Court; and such other relief as the Court deems just and proper to remedy the Defendants’ unjust enrichment.
COMPETITION ACT
61. The consumer representations and omissions referred to herein were false and misleading in a material respect and were in breach of s.52 of the Competition Act.
62. Such representations were made by the Defendants with the purpose and result of giving the Defendants’ products a competitive advantage over the products of competing companies. The Defendants falsely represented to consumers that the Tires and Explorers were safer than other competing products on the marketplace. As a result, Canadian consumers were induced to buy, and did buy, the Defendants’ products, instead of competing products, which were comparably priced, but considerably safer.
63. Such representations were made by the Defendants for the purpose of promoting a business interest, contrary to s.52 of the Competition Act.
64. The Plaintiff specifically pleads and relies upon s.52(1.1) of the Competition Act and states that it is unnecessary for any person to show actual reliance on the misleading statements of the Defendants for the purposes of showing a breach of the Competition Act.
65. As a result of the said breach of s.52 of the Competition Act, the Plaintiff and members of the Class have suffered damages, and are entitled to a civil remedy pursuant to s.36(1) of the Competition Act.
DAMAGES
66. The Plaintiff and Class members have suffered damages as a result of the Defendants’ wrongful conduct. The Personal Injury Class has suffered personal injuries as result of motor vehicle accidents caused by the Defects. The Property Loss Class has lost property in such motor vehicle accidents. The Derivative Claimant Class is composed of persons who have a claim for damages on account of their family relationship with persons in the Personal Injury Class.
67. The Tire Class has been saddled with Tires which are unsafe because of the Defendants’ wrongful conduct. Many of the Tires have not been recalled by the Defendants, and ought properly to have been recalled. On the basis of the Defendants’ negligence, unjust enrichment and breach of the Competition Act, the Tire Class is entitled to a remedy awarding damages. Members of the Tire Class with Tires which have not been recalled are entitled to damages covering the reasonable replacement cost of those Tires with safer tires. Members of the Tire Class with Tires which have been recalled, and who have responded to the recall, are entitled to damages covering the reasonable out of pocket expenses and inconvenience borne by such persons in responding to the recall.
68. The Explorer Diminution Class has been saddled with a product which has greatly depreciated in value since the August 9, 2000 recall. Explorers have subsequently traded on secondary markets for considerably less than they did prior to the Defects becoming public knowledge. The drop in value of used Explorers is directly attributable to public revelations concerning the Defects. Members of the Explorer Diminution Class purchased or leased Explorers with the reasonable expectation that such vehicles would retain their resale value. Furthermore, members of the Explorer Diminution Class purchased or leased Explorers at prices which far exceeded the values that would have been assigned if the Defects had been publicly revealed. Members of the Explorer Diminution Class have therefore suffered a financial loss as a result of the Defendants’ wrongdoing, and are entitled to a remedy in damages.
69. The Defendants’ actions are reckless or intentional, and show a callous disregard for public safety. The Defendants have acted in a high-handed manner towards the public, including the Plaintiff and Class members, and have engaged in conduct which is reprehensible and which cries out for punishment. The Defects described herein are not the first time that these Defendants have placed unsafe tires and vehicles onto Canada’s highways. Both the Ford Defendants and the Firestone Defendants have previously sold unsafe products in Canada, and have benefited therefrom. In 1978, Firestone recalled Firestone 500 tires from the North American market after reports of injuries and deaths resulting from tread separations. The Ford Defendants had previously been advised of deaths and injuries caused by roll-over problems with the Ford Bronco II, and have previously acted to conceal defects from public regulatory authorities in the case of the Ford Pinto. Under the circumstances, an award of punitive damages is necessary to deter future misconduct, both by these Defendants and other potential wrongdoers.
SERVICE OUTSIDE
ONTARIO WITHOUT LEAVE
70. The Plaintiff
relies on the material facts set out above, and upon section 17.02 (a)(g) and
(h) of the Rules of Civil Procedure
in support of service of the claim herein upon the Defendants Ford, Firestone
and Bridgestone outside of the province.
The Plaintiff further pleads as follows.
71. The North American market for tires and SUVs is highly integrated and is treated as such by the Defendants. Design, manufacturing and marketing decisions are made by the Defendants for North America as a whole. The Explorers and Tires designed and sold in Canada are not materially different from the Explorers and Tires designed and sold in the United States. Components for such products are manufactured on both sides of the border. The Defects and the consumer misrepresentations were the materially same on both sides of the border. The Defendants know, and intend, that misrepresentations made in the American media reach Canadian consumers, and affect the buying decisions of class members.
72. The Defects are not the result of localized climatic factors. The Defendants knew, or ought to have known, that hot weather in the Southern United States is not the cause of the Defects. Persons in cold climates are also vulnerable to the Defects.
73. The Tire Defects are not restricted to Tires from Firestone’s manufacturing plant in Decatur, Illinois. Tires manufactured at the Firestone Defendants plant in Joliette, Quebec, are also defective. The Tires made at Joliette have not been recalled by the Defendants.
74. The decision regarding the timing and the extent of the recall of the Tires by the Defendants from the North American market was a single decision, made jointly by the Defendants. The recall was the same on both sides of the border. The Defendants knew, or ought to have known of the Defects, and of the harm caused around the world by the Defects. Decisions made by the Defendants regarding the design, manufacture and market of the Explorer and the Tires has caused foreseeable harm to Canadians. The failure of the Defendants to institute an immediate and complete recall of the Tires caused foreseeable harm to Canadians.
75. The Defendants knew, or ought to have known, that Transport Canada and the U.S. NHTSA collaborate with each other and share information about vehicle safety. The Defendants knew that concealing information about the Defects from NHTSA also denied Transport Canada this same information, and vice versa. The Defendants, by their actions, both inside Canada, and abroad, intended to deprive and did deprive the Canadian public, and Canadian regulators, of early and immediate knowledge of the Defects.
76. The Plaintiff proposes that this action proceed under the Class Proceedings Act, 1992.
The Plaintiff proposes that this action be tried at Toronto.
DATE:
May 9, 2001
ROCHON GENOVA
Barristers and
Solicitors
Suite 903
121 Richmond Street
West
Toronto, Ontario
M5H 2K1
Vincent
Genova
L.S.U.C.
#29490T
Joel
P. Rochon
L.S.U.C. #28222Q
Tel: (416) 363-1867
Fax: (416) 363-0263
Solicitors for the
Plaintiffs
Zarek, Taylor, Grossman, Hanrahan LLP
Barristers & Solicitors
36 Toronto St. Suite 410
Toronto, ON
M5C 2C5
David Zarek
L.S.U.C
#25202S
Tel: (416) 777- 2811
Fax: (416) 777-2050
Solicitors for the Plaintiffs