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From Products Liability Law Daily, October 11, 2017

Settlement proposed for two class actions over mildew/mold/odor defect in Electrolux washing machines

By John W. Scanlan, J.D.

Electrolux Home Products, Inc. and the plaintiffs in two class actions have filed with a federal district court in Florida for its approval a proposed agreement to settle their litigation over allegedly defective high-efficiency front-loading automatic washing machines with a propensity to develop mold, mildew, and odor issues. Purchasers of the machines would be allowed to choose between receiving a cash payment, a rebate on a new appliance, or reimbursement for out-of-pocket damages or repairs (Grasso v. Electrolux Home Products, Inc., October 10, 2017, Honeywell, C.).

Two Florida residents who had purchased an Electrolux-manufactured Frigidaire washing machine in 2010 filed a putative class action lawsuit against Electrolux in 2015 after discovering noxious odors in their clothes along with black streaks resulting from mold, mildew, and biofilm buildup in the machine that could not be removed [see Products Liability Law Daily’s January 13, 2015 analysis]. A similar action was filed in Georgia in 2008, now currently pending in the Southern District of Georgia (Brown v. Electrolux Home Prods., Inc., No.1:08-cv-00030-LGW-BKE). The plaintiffs alleged claims for negligent design, breach of express and implied warranties, violations of state consumer protection statutes, violations of the Magnuson Moss Warranty Act, and unjust enrichment. According to the plaintiffs, the washing machines were defective because they had an undisclosed propensity to accumulate bacteria and mold.

The plaintiffs stated that the two suits had proceeded through the court system for years (nine years for the Brown case), and had been "hotly contested," with more than 100,000 pages of documents produced in discovery, dozens of depositions conducted, dozens of motions filed, and the Brown case had gone to the Eleventh Circuit Court of Appeals on the issue of class certification. In late 2016, the parties began settlement negotiations that they stated were adversarial and non-collusive. They asserted that the present settlement proposal was the result of arm’s-length negotiation following aggressive litigation, and was within the zone of reasonableness considering the risks and uncertainty of ongoing litigation. According to the parties, the terms of the agreement were modeled after a previous settlement reached in other litigation involving Whirlpool washing machines [see Products Liability Law Daily’s September 27, 2016 analysis] and the relief provided to consumers would exceed that provided in other litigation.

The plaintiffs moved for preliminary approval of the settlement, certification of the class for settlement purposes only, appointment of class counsel and class representatives, establishment of deadlines for notice and opt-outs and objections, and setting of a date for final hearing. If accepted, the agreement would settle both class actions.

Eligibility. All individual consumers who purchased a "class washer" in the United States from 2004 through 2011 would be members of the class, which was estimated to amount to "hundreds of thousands" of consumers. Class washers would include new and previously unused high-efficiency front-load washing machines manufactured by Electrolux and sold under the Electrolux, Frigidaire, Crosley, White-Westinghouse, or Kenmore brand names.

Benefits to consumers. Consumers who experienced a mold, mildew, or odor problem within 5 years of purchasing one of the class washers would be given the choice of a $50 cash payment; a 20-percent cash rebate off the retail purchase price of a new Electrolux-manufactured appliance from a list of eligible appliances, which would be transferable to immediate family members; or reimbursement of up to $500 for the costs of repair or replacement of class washers, including up to $150 for damaged clothes or fabrics. Class members who did not experience a problem within 5 years of purchase would receive a 5-percent rebate off the retail purchase price of a new Electrolux-made appliance.

Attorney fees/costs. Electrolux would pay up to $3.3 million in attorney fees, $400,000 in litigation expenses and costs, and would pay for the reasonable costs of claims administration.

Dates. Notice would be sent by first class mail to every identifiable class member within 45 days of the court’s order granting preliminary approval. The settlement administrator would set up a website to process claims by that same date. Class members would have 60 days after the notice commencement date to opt-out or file an objection, and proof of claim forms, with documentation, would be due within 120 days.

The case is No. 8:16-cv-00911-CEH-TGW.

Attorneys: Adam A. Edwards (Greg Coleman Law PC) for Wendy Grasso. Christopher D. Cox (Skadden, Arps, Slate, Meagher & Flom, LLP) for Electrolux Home Products, Inc.

Companies: Electrolux Home Products, Inc.

MainStory: TopStory SettlementAgreementsNews ClassActLitigationNews DesignManufacturingNews DamagesNews HouseholdProductsNews FloridaNews

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