On August 16, 2021, the Eighth Circuit affirmed the district court’s grant of a motion to dismiss filed by off-road vehicle manufacturer Polaris in a putative class action alleging a design defect in certain Polaris off-road vehicles. The court ruled that plaintiffs whose vehicles did not manifest the alleged defect did not have viable claims against Polaris.

• Fourteen plaintiffs who had purchased off-road vehicles manufactured and designed by Polaris filed a putative class action alleging a design defect in the vehicles caused the engine to produce excessive heat, resulting in degraded vehicle parts, reduced service life, and a risk of catastrophic fires. Seven of the plaintiffs alleged that their vehicles had caught fire and were destroyed. The other seven plaintiffs had not experienced fires (the so-called “no-fire” purchasers).
• Polaris moved to dismiss the claims of the no-fire purchasers, arguing that they failed to allege an injury in fact as required to establish Article III standing. The district court granted the motion.
• The no-fire purchasers appealed to the Eighth Circuit. On appeal, they argued that they had suffered a particularized and actual injury because they overpaid for vehicles at the time of purchase. But the Eighth Circuit found that the no-fire purchasers’ bare allegations of overpayment were insufficient because they had not alleged that any defect had manifested in their vehicles, and thus they had not alleged that they did not receive the benefit of their bargain.
• The court also rejected the no-fire purchasers’ argument that certain of them could “feel excessive heat” when operating their vehicles, because the purchasers had not alleged how the production of heat by itself resulted in an injury. Without a connection to a particularized injury, the court held, the no-fire purchasers lacked standing.
• The court reasoned that the no-fire purchasers’ allegations were similar to those in two prior Eighth Circuit cases where the court affirmed the dismissal of the claims asserted by purchasers who had not alleged that a defect manifested in the product they purchased:
  • First, the court compared the no-fire purchasers to the plaintiffs in O’Neil v. Simplicity, Inc., 574 F.3d 501 (8th Cir. 2009), who alleged that they did not receive the benefit of their bargain when they purchased a defective crib and could not use the crib as a result of the defect. But the court dismissed that claim because there was no allegation that the plaintiffs’ specific cribs exhibited the alleged defect.
  • The court also compared the no-fire purchasers’ claims to those asserted in Briehl v. General Motors Corp., 172 F.3d 623 (8th Cir. 1999), where a group of plaintiffs sued based on an alleged defect in an anti-lock brake system. There, the plaintiffs’ allegations that their vehicles had diminished resale values were insufficient, because the plaintiffs had not alleged that their brakes had actually malfunctioned or failed.
  • Likewise, here, none of the no-fire purchasers alleged that their vehicles had exhibited any damage or degradation, that any replacement parts or servicing had been required, or that the vehicles had failed to perform as intended. As such, the no-fire purchasers had failed to allege an injury sufficient to confer standing.
  • Notably, the Eighth Circuit distinguished the facts of the case from those in In re Zurn Pex Plumbing Products Liability Litigation, 644 F.3d 604 (8th Cir. 2011), involving allegedly defective plumbing systems that exhibited “stress corrosion cracking” that began at the time of installation. In that case, although the pipes had not begun leaking, the cracking was “already manifest,” rather than a hypothetical risk.
• The Eighth Circuit’s opinion is significant for product manufacturers and retailers who face putative class actions by plaintiffs who claim that the products they purchased are defective but that have not manifested the alleged defect. Although many courts are reluctant to dismiss such economic loss class actions on standing grounds at the Rule 12 stage—even when the purported diminished-value damages are purely hypothetical—the Eighth Circuit’s reasoning provides a roadmap for defendants to raise such a challenge. Moreover, certain elements of the Supreme Court’s opinion in TransUnion LLC v. Ramirez (discussed here) may provide renewed support for this argument.
• Read the Eighth Circuit’s opinion here.