Whirlpool Corp. had major reason to celebrate last week; a federal jury rejected class-action claims that “Duet” front-load washing machines sold in Ohio between 2001 and 2009 were defective because of their alleged tendency to develop a moldy smell. This “smelly washer” case has drawn significant media attention in recent years after it twice reached the U.S. Supreme Court on the issue of whether the case should be certified as a class action. The High Court in 2013 vacated a U.S. Court of Appeals for the Sixth Circuit decision certifying a class of more than 100,000 Ohio consumers; but after the Sixth Circuit reaffirmed its decision on remand, the Supreme Court denied review this past February—thus setting the stage for the three-week trial that just ended last Thursday. But if history is any guide, plaintiffs’ lawyers will not willingly accept that the verdict binds all the absent class members (only two class members actually participated in the trial).
Indeed, the ongoing challenge Whirlpool faces underscores why plaintiff classes should rarely, if ever, be certified in consumer product defect cases. Federal Rule of Civil Procedure 23 states that suits seeking monetary damages are not appropriate for class action treatment unless common issues of fact and law “predominate” over individual issues of fact and law. As the Washington Legal Foundation explained in the brief it filed when this case was before the Supreme Court, individual issues (e.g., whether an individual plaintiff’s product was defective and whether that defect caused injury) will almost always overwhelm common issues of fact in the typical consumer product suit. Moreover, Rule 23 requires that the named plaintiffs demonstrate that they can adequately represent the interests of absent class members; if representation is inadequate (e.g., if their interests diverge from those of absent class members), due process case law dictates that absent class members are not bound by any judgment adverse to the class. Thus, the defendant in a certified consumer-product class action often faces a heads-you-win-tails-I lose dilemma: if a company goes to trial and loses to the class, it faces a massive liability award, but if it prevails at trial, absent class members are likely to resist any res judicata claim.
Despite facing that risk, Whirlpool (unlike most defendants, who generally agree to a settlement following class certification) chose to go to trial, and it won—the first of many certified class actions raising similar “smelly washer” claims to go to trial. All the while, Whirlpool filed a series of motions explaining why class certification was inappropriate. It filed its most recent motion to decertify on October 27 at the tail end of the three-week Ohio trial. It explained in detail how the evidence at trial had demonstrated that individual factual issues regarding defect, causation, damages, and comparative negligence overwhelmed common issues, and why the two named plaintiffs could not adequately represent the interests of absent class members. In particular, Whirlpool noted trial evidence that it sold 20 different Duet washing machine models, each with significantly different features; thus, evidence that the two models purchased by the two named plaintiffs were or were not defective was of little relevance in determining whether the 18 other Duet models sold to Ohio consumers were defective. Last Tuesday, the trial judge summarily denied the motion to decertify. Two days later, the jury concluded—based on the experience of two Ohio consumers—that none of the Duet washers sold in Ohio were defective.
Whirlpool’s decertification motions perversely provide plaintiffs’ lawyers with arguments to resist res judicata. Ohio consumers who purchased any of the other 18 models of Duet washers can point to those motions as evidence that they were not adequately represented by the named plaintiffs, and thus should not be bound by Thursday’s verdict. Indeed, it is not only product manufacturers who suffer when, as here, a trial court inappropriately certifies a plaintiff class. Some of the absent class members may have possessed defect and causation claims that—based on a different set of facts—were stronger than the claims of the two named plaintiffs. But plaintiffs’ lawyers have little interest in excluding those stronger claims from the class so that plaintiff-friendly facts can be argued separately. Rather, their principal interest is in making the plaintiff class as large as possible for the purpose of maximizing the potential judgment and fees. Absent class members have reason to complain when class counsel sacrifice their interests in order to obtain a class certification order that will impose immense settlement pressure on product manufacturers.
Advocates of class certification in cases of this sort, such as Seventh Circuit Judge Richard Posner, view certification as the most efficient means of addressing claims that an entire product line is defective. The Ohio smelly washer case and its potentially messy aftermath ought to cause those advocates to rethink their position. The Whirlpool trial illustrates well the inherently individualized nature of product defect claims and the unfairness—to both defendants and unnamed plaintiffs alike—of granting class certification to such claims.
Also published by Forbes.com at WLF’s contributor page