Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Cal.: Refrigerator purchasers obtain class certification against Whirlpool, (Apr 29, 2015)

By Greg Hammond, J.D.

Consumers who purchased certain Whirlpool refrigerators were granted class certification in their suit against Whirlpool Corp., alleging violations of California’s Consumers Legal Remedies Act (CLRA), Unfair Competition Law (UCL), and False Advertising Law (FAL). The federal district court in Sacramento partially denied class certification, however, for the express warranty claims arising under the laws of 32 states and the District of Columbia (Dei Rossi v. Whirlpool Corp., April 27, 2015, Nunley, T.).

Background. Plaintiffs Kyle Dei Rossi and Mark Linthicum purchased Whirlpool manufactured refrigerators that had the Energy Star logo on them. Energy Star is a government-backed program intended to identify and promote energy efficient products. However, the refrigerators were subsequently determined by the Department of Energy not to comply with Energy Star requirements and were disqualified from the program. The plaintiffs moved for class certification on their CLRA, UCL, FAL, and breach of express warranty claims. Specifically, they seek class certification for: (1) a subclass defined as all members of the class who purchased the refrigerators at issue in California; and (2) all persons who purchased the refrigerators at issue mislabeled as Energy Star qualified in 32 states and the District of Columbia.

California subclass. The court determined that the consumers met the requirements of Federal Rule of Civil Procedure 23(a) for the CLRA, UCL, and FAL claims. First, there was evidence that thousands of people in California purchased the two models of refrigerators, satisfying the numerosity requirement. Second, common questions of fact predominate in this case, including (1) whether Whirlpool labeled and advertised the refrigerators as Energy Star qualified; (2) whether the refrigerators met the Energy Star efficiency standards; (3) whether the Energy Star mark and advertising were material to class members’ decision to purchase the products; and (4) whether class members were damaged by the refrigerators at issue. Third, the typicality requirement was satisfied because the named plaintiffs and the proposed class members’ claims arose from the same events, share the same legal theory, and are “reasonably co-extensive.” Fourth, the adequacy requirement was met because the named plaintiffs have the same interests as the class members and have sworn to fairly and adequately represent the class’ interests, and the record demonstrates class counsel is adequate.

Concerning the predominance requirement of Rule 23(b), Whirlpool argued that the consumers will vary in whether the Energy Star logo was material to their purchasing decision, creating individual issues of materiality, and that the plaintiffs cannot demonstrate that all class members suffered some injury. The court rejected both arguments, finding that a presumption of reliance as to class members is appropriate in this case, because Whirlpool engaged in a nationwide marketing campaign, displaying the Energy Star logo uniformly in advertising and at the point of purchase on every refrigerator. The court noted that the Department of Energy tested the same refrigerator models that the plaintiffs purchased and found that they did not comply with the Energy Star program requirements, and Whirlpool failed to suggest any differences between the tested refrigerators and those the plaintiffs purchased.

Finally, the court found that given the small size of each class member’s claims in the California subclass, class treatment would not only be superior, but the only way to ensure fair and efficient adjudication in this case. The court noted that each proposed class member individually litigating their UCL, CLRA, and FAL claims would burden the judiciary, which would be contrary to Rule 23 goals of efficiency and judicial economy.

Express warranty claims. The court denied class certification for the consumers’ breach of express warranty claims, finding that differences and nuances involving the laws of the 33 jurisdictions governing the consumers’ breach of express warranty allegations prevents common questions of law and fact from predominating any of the proposed class’ claims. Further, the consumers did not meet their burden of demonstrating that litigating the warranty laws of 33 jurisdictions in one class action would be superior to other methods of litigating the claims.

The case number is 2:12-cv-00125-TLN-CKD.

Attorneys: Annick Marie Persinger (Bursor & Fisher, PA) for Kyle Dei Rossi. Bradley A. Benbrook (Benbrook Law Group) and Cedric D. Logan (Wheeler Trigg O'Donnell LLP) for Whirlpool Corp.

Companies: Whirlpool Corp.

Cases: Advertising CaliforniaNews