Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—11th Cir.: Class improperly certified in ‘smelly washing machines’ suit, (Mar 22, 2016)

By Greg Hammond, J.D.

The federal district court in Augusta, Georgia, abused its discretion in assessing predominance and granting class certification in an action alleging that a manufacturer of front-loading washing machines violated California’s Unfair Competition Law (UCL) and the Texas Trade Practices-Consumer Protection Act by failing to disclose the defective nature of its washing machines. In vacating the class certification order, the U.S. Court of Appeals in Atlanta concluded that the consumers did not prove causation on a class-wide basis (Brown v. Electrolux Home Products, Inc., March 21, 2016, Pryor, W.).

Electrolux Home Products, Inc. manufactures and sells home appliances, including Frigidaire front-load washing machines. A defect in the convoluted bellows employed in certain models of those washing machines caused the machines to accumulate mold and mildew and emit an odor, allegedly resulting in damage to clothes. Electrolux challenges the trial court’s order granting class certification, arguing that the lower court abused its discretion when it decided that questions of law or fact common to class members predominate over any questions affecting only individual members.

California UCL claim. The appellate court first concluded that the lower court misunderstood the consumers’ complaint. The California consumer alleged that Electrolux engaged in unfair competition by omitting essential information in its advertisements, according to the appellate court. The only advertisements that the consumer identified were on the Frigidaire website. However, the consumer made no effort to prove that any member of the California class visited the website before purchasing a washing machine. Rather, the consumer admitted that he never saw any advertisements from Frigidaire. Because the class members were not exposed to a uniform misrepresentation, the appellate court concluded that the UCL claim is unsuitable for class treatment.

Texas deceptive trade practices claim. The Texas law claim was equally unavailing because the court has “no inkling” whether the class members saw any advertisements from Frigidaire, much less uniform advertisements, before they purchased their washing machines. The Texas class will therefore be required to prove reliance on an individual basis, demonstrating that the Texas Deceptive Trade Practices-Consumer Protection Act claim cannot proceed as a class action.

The appellate court additionally found that the lower court: (1) misstated the standard for class certification; and (2) abused its discretion by certifying breach of warranty claims without first resolving preliminary questions of state law that bear on predominance.

The case is No. 15-11455.

Attorneys: Edward A. Wallace (Wexler Wallace, LLP) for Robert Brown. John Beisner (Skadden Arps Slate Meagher & Flom, LLP) and Benjamin Howard Brewton (Tucker Long, PC) for Electrolux Home Products, Inc.

Companies: Electrolux Home Products, Inc.

Cases: Advertising ConsumerProtection StateUnfairTradePractices AlabamaNews FloridaNews GeorgiaNews