Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—7thCir: Class Action Certified Against Sears for Selling Defective Washing Machines , (Nov 14, 2012)

By Jody Coultas, J.D.

The U.S. Court of Appeals in Chicago affirmed the grant of class certification of a claim filed by washing machine purchasers against Sears, Roebuck and Co. (Butler v. Sears, Roebuck and Co., November 13, 2012, Posner, R.). The court reversed denial of certification of a class of washing machines purchasers that had been consolidated with the other class claim.

One class alleged that Kenmore-brand frontloading high efficiency washing machines manufactured by Whirlpool and sold by Sears did not adequately clean themselves because of the low volume of water used in these machines and the low temperature of the water resulting in biofilm forming and creating mold. The other class alleged that the manufacturing process for the machines’ central control unit inadvertently damaged a layer of solder, causing some of the units mistakenly to “believe” that a serious error had occurred and therefore to order the machine to shut down even though nothing was the matter with it.

A district court denied certification of the class complaining about the defect that caused mold and granted certification of the class complaining about the defect that caused the sudden stoppage. The mold class and Sears appealed.

Federal Rule of Civil Procedure 23(b)(3) required the district court to consider whether questions of fact or law common to class members predominated over any questions affecting only individual members.

Common issues of fact predominated with regard to the mold defect class, according to the court. Sears argued, and the district court agreed, that common questions of fact did not predominate over individual issues because Whirlpool made a number of design modifications as a result of which different models are differently defective and some perhaps not at all. The basic question in the litigation of whether the machines permitted mold to accumulate and generate noxious odors was common to the entire mold class. Every class member who claims an odor problem will have to prove odor in order to obtain damages, but class members who have not yet encountered odor can still obtain damages for breach of warranty, where state law allows such relief. While large differences in the mold defect among the five differently designed washing machines at issue may exist and subclasses may become necessary, that possibility is not an obstacle to certification of a single mold class.

The district court correctly found that common issue of fact predominated in the control unit class, according to the court. Sears allegedly knew about the issue and charged owners hundreds of dollars to repair the central control unit. Whether the control unit was defective was the common issue and should be resolved in a single proceeding rather than separately in hundreds of different trials. The amount of harm to each class members will differ and the district court may create different subclasses for purchasers from different states.

The cases are Nos. 11-8029 and 12-8030.

Jason L. Lichtman (Lieff, Cabraser, Heimann & Bernstein, LLP) for Larry Butler. Joel S. Neckers (Wheeler Trigg O'Donnell LLP) for Sears, Roebuck & Co.

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