Class Actions -- 2016



Brown v. Electrolux Home Prods., Inc.   (11th Circuit)

Class action certification without injury

The NAM joined with the Chamber of Commerce and the Association of Home Appliance Manufacturers in an amicus brief filed June 22, 2015 in the 11th Circuit supporting Electrolux’s appeal of an improper class action certification regarding front-loading clothes washers. The company is a defendant in a class-action suit alleging that the washers are more likely than top-loading washers to develop mold and odors. Our brief urges the Court to reverse a trial judge’s ruling that allowed the case to proceed as a class action that included purchasers who never experienced or may never experience any manifestation of the alleged defect.

The plaintiffs presented no evidence of classwide injury, and the court ignored evidence that the vast majority of class members would be unable to assert or prevail on any claim because more than 99% of them never experienced moldy odors, many knew of the widely publicized potential prior to purchase, and many received a free warranty replacement of the allegedly defective part. Our amicus brief argues that the trial court improperly took the position that all doubts about certifying a class should be resolved in favor of certification. Instead, it should follow the Supreme Court’s view that class actions remain “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.”

The NAM is concerned that the improper certification of cases as class actions puts undue pressure on companies to settle otherwise meritless cases, and acts to replace satisfactory warranty programs with litigation by a few dissatisfied customers. Research shows these class action suits ultimately harm consumers.

On March 21, 2016, the 11th Circuit ruled that class certification was improperly granted. It agreed with our argument that doubts about certification should not favor the party seeking to have a case certified. It also ruled that because proving causation may require so much individual proof that common issues of this element of the case do not predominate among members of the class. It sent the case back to the trial court to determine whether there were sufficient common issues of causation. Many members of the class may never have seen any advertisements that allegedly constituted unfair or fraudulent business practices under the relevant California statute, nor were any shown to have relied on advertisements as required under the relevant Texas statute.

On the issue of classwide damages, the court said that individual damages do not always defeat a predominance determination. There is an exception if computing individual damages will be "so complex, fact-specific, and difficult that the burden on the court system would be simply intolerable." The court left it to the trial court to decide whether this exception applies in this case.


Related Documents:
NAM brief  (June 22, 2015)

 


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