Background
The claimant bought a used Knaus BoxStar 540 MQ Road motorhome from a third party in November 2016. Its Fiat Ducato base vehicle, manufactured by the defendant, had a 2.3-liter Euro 5 diesel engine. The claimant alleged that the vehicle employed unlawful emissions-control defeat devices, including a temperature-dependent exhaust-gas-recirculation strategy known as a “thermal window.” An Italian authority, the Ministry of Infrastructure and Transport, had granted EC type approval for the base-vehicle type.
The claimant sought repayment of the purchase price, less compensation for use, in exchange for returning the vehicle, as well as related declaratory relief, legal expenses, and interest. The Trier Regional Court dismissed the action, and the Koblenz Higher Regional Court affirmed. The appellate court found no intentional immoral conduct under Sections 826 and 31 of the German Civil Code and rejected negligence-based liability under Section 823(2), reasoning in part that the Italian authority knew of the challenged functions, had not deemed them unlawful, and had ordered no recall.
The Court’s Holding
The Federal Court of Justice vacated the appellate judgment and remanded. It left intact the rejection of liability for intentional immoral conduct and agreed that the claimant was not entitled to “large damages”—rescission-like recovery of the purchase price under the asserted statutory-tort theory. But the lower court had failed to consider whether the claimant could recover differential damages representing the vehicle’s diminished value under Section 823(2) of the Civil Code together with Sections 6(1) and 27(1) of the EC Vehicle Approval Regulation.
The Court explained that those approval provisions protect a buyer from financial loss caused by purchasing a vehicle that, contrary to its certificate of conformity, contains an unlawful defeat device. The manufacturer could not defeat the claim merely by invoking the Italian authority’s knowledge and inaction: to rebut the presumption of fault through an unavoidable mistake of law, it had to plead and prove the specific mistake of the persons responsible under Section 31 of the Civil Code, and the appellate court had made no such findings.
Nor could the absence of a recall, threatened decommissioning, or operating restriction establish that no loss existed. A vehicle’s objective value may be reduced by an unlawful defeat device even without those regulatory consequences. On remand, the claimant may allege differential damages and amend his requested relief, and the appellate court must determine the existence and amount of any liability under the standards identified by the Federal Court.
Key Takeaways
- A purchaser may claim differential damages when a vehicle’s certificate of conformity is inaccurate because the vehicle contains an unlawful defeat device.
- Regulatory knowledge, approval, or failure to order a recall does not by itself establish that the manufacturer acted without negligence.
- A manufacturer asserting an unavoidable mistake of law must specifically plead and prove the mistake as it affected the legally responsible corporate personnel.
- Diminished value may constitute compensable loss even when the vehicle faces no recall, decommissioning, or operating restriction.
Why It Matters
The ruling confirms that German diesel-emissions claims are not limited to purchase-price repayment or cases involving an official recall. Buyers may instead recover the difference between the price paid and the vehicle’s value at purchase with the unlawful defeat device, subject to proof and judicial estimation of that loss.
For manufacturers, reliance on a type-approval authority’s awareness or inaction is insufficient without evidence establishing an unavoidable legal error by the relevant responsible personnel. The decision applies those principles specifically in the motorhome context, where the alleged defect concerns the manufacturer of the base vehicle rather than the completed recreational vehicle.