Supreme Court Should Review 'Washing Machine' Class Cases

, New York Law Journal

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Michael Hoenig

In my December 2012 column I reported on two consumer class action suits alleging that millions of front-loading washing machines made by Whirlpool were defective because some customers experienced mold or moldy odors even though the overwhelming majority of users did not.1 At the time, a petition for certiorari had been filed in the U.S. Supreme Court in one of them, Whirlpool v. Glazer, No. 12-322, seeking review of the Sixth Circuit's May 2012 decision certifying a class of some 200,000 Ohio residents who purchased a variety of models of Whirlpool washing machines. The Ohio litigation was a bellwether action for eight similar cases against Whirlpool involving millions of purchasers. Additionally, numerous other lawsuits alleging nearly identical moldy odor problems were commenced against other washing machine manufacturers and sellers including Samsung, General Electric, Electrolux, Sears and Miele.

Because the litigation raised monumental questions about proper application of class action rules, notably the requirements of "commonality" and "predominance," as well as issues of "standing" to certify a class of buyers the majority of which never suffered any injury, my article urged that the Supreme Court should grant certiorari review. For one thing, the factual record in the case was nicely developed. Further, the Petition for Certiorari filed on behalf of Whirlpool and the Opposition filed on behalf of the class plaintiffs were excellent, thereby teeing up the issues rather nicely for the Supreme Court to consider.

A second explosive washing machine class certification decision, Butler v. Sears, Roebuck & Co.,2 had also burst on the scene in mid-November 2012. This involved two class actions brought on behalf of 800,000 purchasers of front-loading, Whirlpool-made washing machines sold by Sears in six states. One class action alleged a defect causing musty or moldy odors in machines dating back to 2001. Another alleged a manufacturing defect in 2004-2007 models causing false error codes that could temporarily stop a washer. (A small percentage of washers were affected by cracked solder pads). In both cases the overwhelming majority of customers did not complain of musty orders or of false error codes. Indeed, of the six named plaintiffs in the Sears case, four had not experienced any mold or odor problem. Because a petition to review the Seventh Circuit's momentous decision likewise was headed to the Supreme Court, that court's review was seen by this writer as "crucial."

Well, the Supreme Court did grant review in both cases—of a sort. The court issued what is known as a "GVR" which stands for "grant, vacate and remand." Essentially, what the court does when it issues a GVR is to "grant" the petition for certiorari, to "vacate" the lower court's decision and then to "remand" the case back to the lower court. In the Glazer Sixth Circuit case, the Supreme Court issued a GVR order that remanded the earlier decision for consideration "in light of Comcast v. Behrend, 133 S. Ct. 426 (2013)." In the Seventh Circuit Butler case, the GVR order also remanded for consideration "in light of" Comcast.

When a GVR order issues "in light of" a named precedent, what message is being sent by the high court to the lower court? As the court has observed, the GVR reflects "substantial doubt on the correctness" of the vacated decision and a "reasonable probability that the decision below rests upon a premise that the lower court would reject if given the opportunity for further consideration."3 The reference to Comcast in the Glazer and Butler GVR orders was significant because Comcast v. Behrend threw out a class certification in an antitrust case where the plaintiffs did not establish that a damages model could be applied across an entire class. The court explained that damages must be "capable of measurement on a classwide basis."4 In Comcast, class-wide treatment was held improper because "[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class" and thereby defeat the "predominance" requirement specified in Federal Civil Procedure Rule 23(b)(3).

Thus, what the Supreme Court's GVRs seemed to be telling the Sixth Circuit in Glazer and the Seventh Circuit in Butler is that those courts needed to reconsider their approaches to class certification because their rulings presented grave "predominance" issues. A class may not be certified when questions involving individual issues requiring individual resolution will inevitably overwhelm the questions claimed to be common to the class. How did the Sixth and Seventh Circuit courts respond to the GVR message? Each circuit panel rejected the Supreme Court's "hint." They decided that Comcast is not influential or applicable to the washing machine litigation, and issued opinions upholding class certification.5 The defendants, respectively, filed petitions for certiorari in the Supreme Court on Oct. 7. Plaintiffs' Oppositions are due soon.

'Message' Rejected

In Glazer, on remand, a two-judge panel of the Sixth Circuit described Comcast as having "limited application" and therefore reaffirmed its earlier decision. Certification of the class was based on two supposed common questions: whether there is a defect that proximately causes odor and whether Whirlpool adequately warned of that defect. Since the district court had "certified only a liability class" and left "individual damages" to "subsequent proceedings," the appellate panel viewed this case as being different from Comcast where the court had certified a "liability and damages" class.

One major problem with this rationale is that the two "common" liability issues the court identified, a possible defect causing odors and whether adequate warnings were given, themselves bristle with numerous individualized questions that require individual determinations. Such individual issues would overwhelm the too-simply-stated common issues the circuit panel identified and also would defeat the "predominance" requirement to certify a class. So, the panel's approach of whisking Comcast away as a Supreme Court ruling on "damages" only seems wrong. Further, when the Supreme Court issued its GVR order, it surely knew that Glazer was a certified "defect" and "warnings" class. And the court certainly knew the intended effect of its Comcast holding. If Comcast were only a "damages" case, why did the court apply that reference to vacate and order reconsideration of a certified class on liability?

Predominance also must govern "liability" issues. That's the plain reading of Rule 23(b)(3). If "defect" and "inadequate warnings" are certified by the courts as class issues, individual issues should not predominate. But in the washing machine odor claims, they do, abundantly so. Comcast was a "predominance" message, not a "damages-only" message. And, when it comes to purported "odor"-creation, almost by definition, odor is an inherently subjective fact dependent on a host of factual variables such as the olfactory capacity of the individual, the particular environment in which the individual's perception is detected (e.g., closed or open space), the intensity of the individual's sensation, and external influences such as the detergent used (and how much), and so on.

Odor perception in a given setting, quite simply, is a fact-laden inquiry. For example, here is what Idaho's Department of Environmental Quality (DEQ) says about its authority and the regulation of odors. It defines "odor" in its air pollution control rules as "the sensation resulting from stimulation of the human sense of smell." Odor is a sensitive subject "because perception of odors is subjective. What smells bad to one person may not offend another. Our sensitivities and reactions to odors are influenced by personal preferences, opinions, experiences, and the varying sensitivities of our olfactory systems" (see Idaho DEQ, "Odor Management," http://www.deq.idaho.gov/air-quality/air-pollutants/odors.aspx). Even when it comes to "health impacts of odors," the DEQ states that "odors are a complex mixture of gases, vapors and dust." Any potential health impact would depend upon "the concentration of odorous emissions as well as the frequency and duration of exposure."6

In an article, "Is Odor Measurement Subjective or Based on Science," writer Thierry Page acknowledges the oft-repeated statement that odor measurement is subjective. This, in part, is likely "due to the variation in people's sensitivity to odor or personal appreciation of different odors." Odor measurement is, in fact, "a dose-response relationship evaluation of an odorous substance." The dose-response relationship or exposure-response relationship, describes "the change in effect on an organism caused by differing levels of exposure (or doses) to a stressor (usually a chemical) after a certain exposure time." Says the author, "It is absolutely valid to consider the odors subjective in terms of the appreciation of their quality. This belongs to the taste and experiences of each individual." (http://blog.odotech.com/bid/60027/Is-odor-measurement-subjective-or-based-on-science). See also E. Peterson, "Old Factories and Olfactory: How the Subjective Sense of Smell Steers Citations," (http://wfpl.org/post/old-factories-and-olfactory-how-subjective-sense-smell-steers-citations) (dealing with regulation by Air Pollution Control Districts; to some extent, smells are subjective).

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