Toyota owners seek to sue carmaker for lost value
The that Toyota faces a plethora of class action lawsuits from its customers 鈥� not because people suffered physical injuries from defective cars, but because the cars have 鈥渓ost鈥� value:
Such class-action lawsuits 鈥渁re more scary for Toyota than the cases where people actually got injured,鈥� said Tom Baker, a University of Pennsylvania law professor. 鈥淎 super-big injury case would be $20 million. But you could have millions of individual car owners who could (each) be owed $1,000. If I were Toyota, I鈥檇 be more worried about those cases.鈥�
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Toyota owners suing the company contend their vehicles have dropped in value because of the recalls and that Toyota knew all along about safety problems but concealed them from buyers. They point to evidence such as Kelley Blue Book鈥檚 decision this month to lower the resale value of recalled Toyotas an average of 3.5 percent, ranging from $300 less for a Corolla to $750 less for a Sequoia.
The idea that a customer has 鈥渞ights鈥� in the value of a good 鈥� as opposed to the right to simply posses a good 鈥� is a tent-pole of modern consumerist philosophy. We see this same reasoning in antitrust, where customers have a 鈥渞ight鈥� to expect a certain price level. And it鈥檚 a key component of the real estate cycle, as consumers are told not to merely purchase housing, but to 鈥渋nvest鈥� in 鈥渂uilding equity鈥� via 30-year mortgages. The customer is taught to look at value as tangible, objective, and an entitlement.
The state has embraced consumerist thinking because it鈥檚 an excellent vehicle for decoupling judicial power from the traditional concept of fraud. Libertarians acknowledge fraud as a form of theft. But it鈥檚 a constrained definition. The victim must show he has been deprived of his property without consent. Certainly, consent may be conditioned on certain warranties as to a good鈥檚 condition and usability. But the indeterminate future value of a good is not a normal condition or warranty. That is precisely because value is always subjective, and as the immediate seller, I cannot 鈥済uarantee鈥� you will be able to resell the good x years in the future for y dollars.
But what if a seller did make such a 鈥済uarantee鈥�? He would still not have committed fraud in the ordinary sense, because the customer still cannot reasonably rely on such a promise. The customer who feels entitled to a future resale value is, quite frankly, an imbecile. 鈥淎鈥� cannot hold 鈥淏鈥� liable because at some future point, there is no 鈥淐鈥� who will agree to pay a certain amount for a good that 鈥淏鈥� previously sold to 鈥淎.鈥�
Of course, the cases against Toyota are unlikely to alleged the company itself made any such claims about resale value. As the AP article notes, the principle 鈥渆vidence鈥� of lost value to date is the Kelley Blue Book鈥檚 decision to lower its own estimates of resale prices. But the Blue Book is nothing more than a third party鈥檚 opinion: 鈥淎鈥� cannot hold 鈥淏鈥� liable just because 鈥淐鈥� states an opinion that the good B sold A might be worth less than B assumed.
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