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From Products Liability Law Daily, June 3, 2013

U.S. Supreme Court Sends Washing Machine Class Action Request Back to 7th Circuit

By Susan Lasser, J.D.

The U.S. Supreme Court has vacated and remanded a decision by the U.S. Court of Appeals for the Seventh Circuit (sub nom. Butler v. Sears, Roebuck and Co. (7thCir), 702 F.3d 359 (2012)) in which the appellate court had reversed a trial court’s denial of certification of a class of consumers who had purchased a brand-name, front-loading washing machine and who claimed that an alleged defect in the design of the machine caused mold that emitted bad odors (Sears, Roebuck and Co. v. Butler, Dkt. No. 12-1067, petition for cert. filed February 27, 2013; cert. granted, judgment vacated, and case remanded June 3, 2013). The Court sent the case back to the court of appeals for further consideration in light of the Supreme Court’s decision in Comcast Corp. v. Behrend, 569 U.S. __ (2013).

Background. The consumers who sought class status stated that, because of the low volume of water and the low temperature used in the high-efficiency machines at issue in comparison to the volume and temperature of the water in a traditional top-loading machine, the machines did not clean themselves adequately. The consumers alleged that this resulted in a biofilm (a mass of microbes) that formed in the machine’s drum creating a mold that emitted the bad odors.

In response to the mold claims, the retailer argued to the Seventh Circuit that the manufacturer made a number of design modifications and, as a result of these modifications, different models of the machine would be defective in different ways. Therefore, the retailer contended that common questions of fact concerning the mold problem and its consequences did not predominate over individual questions of fact.

The court of appeals stated that it had accepted the case “in order to clarify the concept of ‘predominance’ in class action litigation.” The court noted that, despite the retailer’s contention that the manufacturer sold 27 different models, the manufacturer made only five design changes that related to mold. Concluding that the question of whether the machines were defective in permitting mold to accumulate was common to all purchasers, the appellate court held that a class action was the most efficient procedure for determining liability in such a case that involved a defect that could have imposed costs on tens of thousands of consumers, yet was not a large enough cost that would justify the expense of an individual lawsuit. Because the determination of the amount of damages owed a particular class member involved individual questions, the court of appeals found that individual hearings could be held to answer those questions. Further, the court commented that the fact that the defect might not yet have caused any harm did not negate claims for breach of warranty, provided state law allowed relief for an expected rather than a realized harm from a product defect covered by a warranty. The Seventh Circuit ruled that the defect claim was common to all participating class members who alleged the defect.

Questions presented. In its petition on appeal to the U.S. Supreme Court, the retailer provided the following introduction to its questions presented: “Plaintiffs sought certification of a six-state breach-of-warranty class, claiming that front-loading washing machines they bought from Sears, Roebuck and Co. have a design defect that causes musty odors and a manufacturing defect that interrupts operation with false error codes. Holding that two classes (one for each alleged defect) should be certified under Rule 23(b)(3), the Seventh Circuit ruled that a class action is ‘the more efficient procedure’ based on a single purportedly common question—whether there is a defect. The court did not address any of the many individual questions that would need to be tried, much less determine whether the purportedly common question predominates over individual questions.” The retailer posed the following questions to the court: (1) whether Federal Rule of Civil Procedure 23(b)(3)’s predominance requirement for class action certification can be satisfied based solely on a determination that it would be “efficient” to decide a single common question at trial, without considering any of the individual issues that would also need to be tried, and without determining whether the aggregate of common issues predominates over the aggregate of individual issues; and (2) whether a class may be certified on breach of warranty claims where it is undisputed that most members did not experience the alleged product defect and where fact of injury would have to be litigated on a member-by-member basis.

Comcast Corp. v. Behrend. The Supreme Court ordered that the Seventh Circuit review the current case in light of Comcast Corp. v. Behrend. In that case, because a class of Comcast television subscribers’ damages model, in their antitrust case against the cable provider, failed to establish damages that were capable of measurement on a class-wide basis, the U.S. Supreme Court reversed a class certification order by the U.S. Court of Appeals for the Third Circuit. According to the Court, the damages model failed to meet the requirements of Federal Rules of Civil Procedure 23(a) and (b) because it would require individual inquiries. Specifically, the court stated that the provision at issue was Rule 23(b)(3), which required a court to find that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The court asserted that it had repeatedly emphasized that it “may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,” and indicated that a “rigorous analysis” was necessary to satisfy the prerequisites of Rule 23(a). The court stated that “Rule 23(b)(3)’s predominance criterion” was “even more demanding.”

The case number is 12-1067.

Attorneys: Stephen Shapiro (Mayer Brown LLP) for Sears, Roebuck and Co.; Samuel Issacharoff for Larry Butler, et al.; and Deborah J. La Fetra (Pacific Legal Foundation) for Pacific Legal Foundation.

Companies: Sears, Roebuck and Co.

MainStory: TopStory DesignManufacturingNews HouseholdProductsNews

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