Plaintiffs often use the depreciation-based theory to support standing in a product liability litigation. Plaintiffs have increasingly tested this theory by their bar to support the assertion of standing required to bring a product liability case.
The theory states that if a plaintiff has purchased a product, it depreciates due to a defect. They have sufficient standing to bring a lawsuit if they allegedly have suffered an injury due to this defect. However, this theory is notably missing; in the colloquial sense, physical injury to the plaintiff is usually associated with product cases.
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The Basis of the Depreciation-Based Injury Theory
This theory is based on the idea that a product sold with issues is worth less than without the issues. To put it more simply, the defect or issues reduce the product’s value, causing the plaintiff to suffer financial injury.
In pursuing this theory in a product liability case, the plaintiff would typically seek monetary damages for the overpayment. Also, they would argue that had they known about the product’s defective nature, they would not have bought it. They would have opted for a safer, defect-free product; if they did buy it, they would not have spent as much.
The battle over the specifics of depreciation can get complex, and so can the mechanics for calculating it. Nevertheless, the plaintiffs’ bar is still rooted in the straightforward allegation that they (the plaintiffs) paid too much for something they did not receive. Courts may conclude that the amount of the product’s depreciation should not be handled at the pleading stage but best left to experts.
Examples of Cases That Had the Depreciation-Based Injury Theory as Standing
This battle of product value depreciation has played out in recent years. In a recent case in California, consumers alleged that a product manufacturer’s representation of their product had made them overpay for the product. They sued the manufacturer for a specific product misrepresentation that caused the consumer to pay a premium for a feature the product did not have.
Another case is Victor v. R.C. Bigelow Inc., which occurred in 2014. Here, the plaintiff alleged that they paid a premium for purported health and nutritional benefits the product did not have.
In In re Clorox Consumer Litig., the plaintiff alleged that the product did not perform as advertised, yet they paid a premium for the non-performing features. Further, in Morgan v. Wallaby Yogurt Co., Inc., the plaintiff alleged they paid a premium for undesirable or inferior ingredients.
The Future of Depreciation-Based Injury Theory in Product Liability Cases
This depreciation-based theory continues to be tested and will likely continue evolving over the years. More so, there are higher acceptability chances in cases alleging that a defect significantly affects a product’s value rather than minutely.
The plaintiffs’ bar has found that this theory is useful in cases where the defect does not necessarily cause property damage or physical harm. “There is legal standing if all it does is cause a financial loss for the plaintiff, even that of little or theoretical significance. As there is continued litigation of this theory, chances are that we will see it in more jurisdictions in the future,” says attorney Jan Dils.
Conclusion
The slope has become slippery because this theory could transform many low-level product defect cases into national class actions. As such, courts might want to pause rushing into this reality. Depreciation-based injury theory remains a trending discussion in product liability and should be watched closely in the future.
