Co-author: Rand McClellan
In a closely watched decision after remand by the Supreme Court, on July 18, 2013, the Sixth Circuit Court of Appeals upheld for a second time the class certification order in In re Whirlpool Front-Loading Washer Prods. Liab. Litig. ("Whirlpool II")andaffirmed what it labeled a "liability-only class," certified under Fed. Civ. R. 23(b)(3).
This is the second time that the Sixth Circuit has affirmed the underlying class – on May 12, 2012, the Sixth Circuit approved the same class certification order. 678 F.3d 409 (6th Cir. 2012) ("Whirlpool I"). Whirlpool, however, successfully sought a writ of certiorari from the Supreme Court, which vacated and remanded Whirlpool I for reconsideration in light of the Supreme Court's decision in Comcast Corp. v. Behrend, which held that an action cannot be certified when it is evident that "individual damage calculations will inevitably overwhelm questions common to the class." 133 S. Ct. 1426, 1433 (2013).
The plaintiffs in Whirlpool alleged that certain front loading washing machines had a design defect that allowed mold or mildew growth. The district court certified a class of Ohio residents relying in part upon the now-defunct prohibition against inquiring into the merits of a suit in determining whether it may proceed as a class – a notion that was rejected by the Supreme Court in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2552 (2011).
In Whirlpool I, the Sixth Circuit affirmed the district court's decision to certify a class of Ohio owners, finding that the district court properly concluded that whether design defects proximately caused the mold or mildew, and whether Whirlpool adequately warned consumers about the propensity for mold growth, were liability issues common to the class and capable of class wide resolution. The Sixth Circuit rejected Whirlpool's argument that the class as certified was overly broad because it included owners who had not experienced a mold problem. The court found that certification is appropriate if class members complain of a design defect that is generally applicable to the class as a whole even if some class members have not been injured by the challenged practice, relying on a "premium pricing" theory supported by California precedent.
In Whirlpool II, the Sixth Circuit remained satisfied that class certification was proper. After denying Whirlpool's request for a remand to the district court, the Court stated that commonality and typicality were satisfied because plaintiffs' claims turned on whether the alleged design defects caused mold or mildew growth. The Court cited testimony from the plaintiffs' expert – a former Whirlpool engineer – and internal Whirlpool documents that purportedly acknowledged the existence of a defect in support of this finding. The Court also heavily relied on Daffin v. Ford Motor Co. 458 F.3d 449 (6th Cir. 2006), which granted certification of a class of persons who purchased an automobile with an allegedly defective part, and stated that "if a defective design is ultimately proved, all class members will have experienced injury as a result of the decreased value of the product purchased." The Court relied again on a California-based "premium pricing" theory to find actual injury across the class, this time finding implied support for that theory under Ohio law that permits recovery for economic injury only.
On remand, the Sixth Circuit stated that Comcast and Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 133 S. Ct. 1184 (2013), actually "seal[ed] the Court's "conviction" that class certification was appropriate. Citing Amgen, the Court stated that "[a] plaintiff need not prove that each element of a claim can be established by classwide proof." Instead, the Sixth Circuit found that Amgen instructs that the "predominance inquiry must focus on common questions that can be proved through evidence common to the class." The Court found that the claims in Whirlpool met this standard because whether the washing machines contained design defects that caused mold to grow, and whether Whirlpool adequately warned customers about the propensity for mold growth, will cause the claims to "prevail or fail in unison, and thus these common questions predominated over any individual ones.
Despite being ordered to reconsider Whirlpool I in light of Comcast, the Sixth Circuit addressed Comcast onlyat the end of its opinion – extensively quoting the Comcast dissent, including the dissent's statement that Comcast broke no "new ground" regarding certification under Rule 23(b)(3) — and stated that Comcast was "different" because it involved a liability and damages class, whereas the Court of Appeals labeled Whirlpool a liability only class. The Court acknowledged that individual damages issues exist, but stated that the remedy for class members who purchased the front loading washing machines, but have not experienced a mold problem, could be resolved through individual damages determinations. Whirlpool II did specifically address whether these individual determinations would overwhelm the common issues regarding the alleged defect, or Whirlpool's contention that 97% of the purchasers of the front-loading washing machines did not suffer any mold or mildew issues – that they lacked actual injury. Ultimately, the Sixth Circuit concluded that Comcast had little, if any, impact on the outcome.
Whirlpool II also takes the interesting position that Whirlpool should "welcome class certification" if it can prove that most class members have not experienced a mold problem and that it adequately warned consumers of any propensity for mold growth in the washers. Yet, as noted in the district court's class certification opinion, "[b]ecause class actions are exceedingly unlikely to go to trial . . . [plaintiffs in] class actions are likely to obtain at least some recovery via settlement—and something is better than nothing." In re Whirlpool Corp. Front Loading Washing Prods. Litig., Case No. 1:08-WP-6500, at 3 (N.D. Ohio) (emphasis in the original).
Whirlpool I and II provide a powerful weapon for class certification of defective product claims, and for all consumer claims, that absence of proof of actual injury by class members is not an impediment to certification. An appeal seems likely, and the Supreme Court's decision on whether to accept certiorari again in this case will be closely watched.
Co-author: Rand McClellan
Editors' Note: This post is also a Baker Class Action Alert.
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