Class Actions -- 2016



Terrill 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 11/1/2013 in the 11th Circuit supporting an appeal by a company that makes 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 have mold and odors. Our brief questions the ruling of a trial judge who allowed the case to proceed as a class action that included purchasers who may never have experienced or will experience any manifestation of the alleged defect.

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 court also ignored evidence showing 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 any moldy odors, many knew of the widely publicized potential prior to purchase, and many received a free warranty replacement of the allegedly defective part. The court also did not recognize the legal standard that eliminates claims based on alleged malfunctions that might never happen.

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.

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 amicus brief  (November 1, 2013)

 


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