The Associated Press reports that Toyota faces a plethora of class action lawsuits from its customers – not because people suffered physical injuries from defective cars, but because the cars have “lost” value:
Such class-action lawsuits “are more scary for Toyota than the cases where people actually got injured,” said Tom Baker, a University of Pennsylvania law professor. “A 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’d be more worried about those cases.”
[ . . . ]
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’s 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 “rights” in the value of a good — as opposed to the right to simply posses a good — is a tent-pole of modern consumerist philosophy. We see this same reasoning in antitrust, where customers have a “right” to expect a certain price level. And it’s a key component of the real estate cycle, as consumers are told not to merely purchase housing, but to “invest” in “building equity” 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’s an excellent vehicle for decoupling judicial power from the traditional concept of fraud. Libertarians acknowledge fraud as a form of theft. But it’s 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’s 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 “guarantee” 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 “guarantee”? 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. “A” cannot hold “B” liable because at some future point, there is no “C” who will agree to pay a certain amount for a good that “B” previously sold to “A.”
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 “evidence” of lost value to date is the Kelley Blue Book’s decision to lower its own estimates of resale prices. But the Blue Book is nothing more than a third party’s opinion: “A” cannot hold “B” liable just because “C” states an opinion that the good B sold A might be worth less than B assumed.