Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D.S.C.: Window closed on class certification of claims against Pella, (Jun 7, 2016)

By Edward L. Puzzo, J.D.

Claims against window manufacturer Pella were inappropriate for class certification—even where certification was sought only as to the issue of the existence of a product defect— because the issues of causation and damages will require individualized inquires that make a class action inferior to alternative methods of litigating the dispute, the federal district court in Charleston, South Carolina has ruled (Naparala v. Pella Corporation, June 3, 2016, Norton, D.).

Ted Naparala, Sr., a purchaser of windows sold by Pella Corporation, alleged that Pella’s Architect Series and Designer Series aluminum-clad casement windows manufactured from 1997 to 2007 were uniformly defective due to an inadequate water management system and inadequate wood preservative. Naparala alleged that the windows manufactured during the class period were incapable of repair, leaving the repair and replace remedies under the windows' limited warranty meaningless. He alleged that Pella had violated the Wisconsin Deceptive Trade Practices Act, breached its express warranty with respect to its limited warranty on the windows, and violated the Magnuson-Moss Warranty Act (MMWA).

Naparala sought certification of a class, consisting of those who purchased the aforementioned windows and made a claim under Pella's limited warranty, solely for a determination as to whether the windows in question were defective. Only if a determination is made that such a defect exists, the plaintiff stated, would there be a second phase of the litigation where individual issues of causation and damages would be litigated on behalf of all class members that submitted sufficient documentation.

The court examined whether plaintiff's claims met the requirements for class certification set forth in Federal Rule of Civil Procedure 23.

Ascertainability and numerosity. The ascertainability requirement was met because members of the proposed class are identifiable through Pella's warranty claims database and dealer records. The breadth of plaintiff's proposed class, covering any purchaser of the named windows during the named time period that made a warranty claim, clearly satisfied the numerosity requirement, the court found.

Commonality. Plaintiff argued that common proof could resolve whether the windows in question "suffered from an inadequate water management system and an inadequate wood preservative system." Pella countered that the windows did not share a common design and the defects alleged were a number of defects and not a single defect.

The court said that, at this point, design variations among windows did not bar certification because the alleged deficiencies were common to all windows manufactured during the class period. As to Pella's second objection, the court noted that, although plaintiff characterized his claim as an allegation of a single defect in the windows' "water management system," the three "failure paths" identified by plaintiff's expert function separately and would require separate inquiries. The only common issue, the existence of a defect, was decidedly narrow, the court noted.

Typicality. Pella challenged the typicality of plaintiff's claims by arguing that there would be individualized issues of causation, damages, and its affirmative defenses. The court found that the proposed issue—whether the windows in question were defective—was so narrow that issues of causation and damages were not considerations. The court found that plaintiff's claim was clearly typical with regard to the narrow defect issue.

Predominance. The court noted that the case will involve a number of individualized fact-intensive inquiries regarding causation, not only as to each class member's damages but also as to satisfaction of the notice requirement under Pella's limited warranty. Pella may also have affirmative defenses available such as statute of limitations arguments. Generally, individual inquiries into causation and affirmative defenses may preclude class certification, the court stated. But in this case, plaintiff was not seeking certification as to the entire claim. He sought certification only as to the existence of a defect. The prevailing case law was that a class may be certified as to an issue regardless of whether the claim as a whole satisfies the predominance test of Rule 23(b)(3). Using this approach, plaintiff met the predominance test, the court ruled.

Superiority. Even if class treatment of a particular issue will advance the litigation, class certification may nevertheless be inappropriate if that advance is insubstantial when measured against the remaining issues, the court stated. The value of settling the defect issue through a class trial must be considered against the burdensome individual inquiries required to determine: (1) whether the original warranty claim caused by defect; (2) whether any of Pella’s affirmative defenses apply; (3) the causation of each class member’s damages; and (4) the amount of such damages.

It appeared that resolving the defect issue on a class basis would do little to increase the efficiency of the litigation. Thus, class certification—even on the limited issue of whether the Windows contained a defect—was not superior to other methods of adjudication. On this basis, the court denied plaintiff's motion for class certification.

Separately, the same court on the same day denied class certification in a similar claim against Pella (Romig v. Pella Corporation, June 3, 2016, Norton, D.).

The case is Civil Action No. 2:14-cv-03465-DCN.

Attorneys: Jonathan Shub (Kohn Swift & Graf) for Ted Naparala, Sr. John P. Mandler (Faegre Baker Daniels LLP) and Michael Tucker Cole (Nelson Mullins Riley & Scarborough LLP) for Pella Corporation.

Companies: Pella Corporation

Cases: StateUnfairTradePractices SouthCarolinaNews