Ontario SCJ Dismisses Class Action Against State Farm

On May 8, 2009, the Ontario Superior Court of Justice ordered that Risorto and Malik v. State Farm Mutual Automobile Insurance Company be discontinued as a class proceeding and dismissed without costs.

This marked the conclusion to State Farm's nine-year defence of a proposed class action. The plaintiffs alleged that during the 1990s State Farm had specified and paid for insured vehicles to be repaired using “crash parts” (external sheet metal and plastic parts such as fenders) that were not manufactured by the original equipment manufacturers (OEMs), such as Ford, but rather by aftermarket manufacturers (Non-OEMs). The plaintiffs alleged that the terms of their policies required the use of OEM replacement parts.

The action was commenced in 2000. The plaintiffs' motion for certification of the action as a class proceeding was dismissed in February 2007, largely because the plaintiffs' expert evidence was ruled inadmissible.

The plaintiffs appealed from the certification decision. At the same time, they brought a motion to re-open the certification hearing so they could introduce replacement evidence from another expert. The plaintiffs' attempt to introduce replacement expert evidence was eventually rejected by the Divisional Court in a decision dated February 18, 2009. The appeal from certification was never argued and the action was settled shortly thereafter. No payments were made to the plaintiffs or their counsel.

Similar actions involving the use of Non-OEM crash parts were launched in Ontario against essentially all of the major insurance companies. Since the release of the certification decision in State Farm, these actions have all been dismissed on consent. The lone exception was the action against Liberty Mutual Insurance Company, which was certified as a class proceeding in 2005 and subsequently settled.

State Farm was represented by Mark A. Gelowitz and Alexander Cobb of Osler, Hoskin & Harcourt LLP.

The plaintiffs were represented by Harvin Pitch of Teplitsky, Colson LLP and Colin Stevenson of Stevensons LLP (for the certification hearing) Ronald Slaght of Lenczner Slaght Royce Smith Griffin LLP (for the appeal from the certification hearing) and Kirk Baert and Jonathan Ptak of Koskie Minsky LLP (for the replacement evidence motion).