ATLANTA (Legal Newsline) - Last week, a federal appeals court reversed certification of two statewide classes of purchasers in yet another class action involving front-loading washing machines.
A three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit filed its opinion in Brown v. Electrolux Home Products Inc. March 21.
Circuit Judge William Pryor authored the 27-page ruling, saying the U.S. District Court for the Southern District of Georgia “too hastily concluded” that several questions in the litigation were common to the class.
“On remand, the district court must reconsider these questions,” Pryor wrote. “We express no view about them and leave them, like all questions of class certification, to the discretion of the district court.”
Across the country, consumers have filed class actions against the manufacturers of front-loading washing machines.
Front-loaders are considered an improvement over traditional top-loading machines because they use less water and energy.
However, the initial models have a problem: the rubber seal on the front door of the machine retains water, which allows mildew to grow. The mildew then stains clothes and creates a foul odor.
In this case, consumers from California and Texas filed a class action against Electrolux Home Products, the manufacturer of Frigidaire front-loading washing machines.
Robert Brown, a Californian, and Michael Vogler, a Texan, both purchased Frigidaire front-loading washing machines with convoluted bellows.
After the district court certified the two statewide classes, Electrolux filed an interlocutory appeal with the Eleventh Circuit.
Electrolux challenged the class certification on two primary grounds: it argued the district court articulated the wrong standard for class certification and that Brown and Vogler cannot satisfy the predominance requirement of Rule 23(b)(3).
Rule 23(b)(3), in class action law, requires that judges not certify or authorize a class unless he or she finds that common issues of law or fact predominate.
In particular, Electrolux argued the district court made two misstatements of law when it articulated the standard for class certification.
First, the district court erred by stating that it “resolves doubts related to class certification in favor of certifying the class.” Second, the company argued, the court erred by stating that it “accepts the allegations in the complaint as true,” and “draws all inferences and presents all evidence in the light most favorable to” the party seeking class certification.
“The parties are correct that the district court misstated the law when it said that it ‘resolves doubts related to class certification in favor of certifying the class,’” Pryor explained. “The party seeking class certification has the burden of proof. And the entire point of a burden of proof is that, if doubts remain about whether the standard is satisfied, ‘the party with the burden of proof loses.’”
The judge added, “A district court that has doubts about whether ‘the requirements of Rule 23 have been met should refuse certification until they have been met.’”
The panel said the district court also misstated the law when it said it “accepts the allegations in the complaint as true,” and “draws all inferences and presents all evidence in the light most favorable to Plaintiffs.”
The party seeking class certification has a burden of proof, not a burden of pleading, the Eleventh Circuit noted.
“A district court must conduct a ‘rigorous analysis’ to determine whether the movant carried his burden, which ‘will frequently entail overlap with the merits of the plaintiff’s underlying claim.’” Pryor explained. “Of course, the district court can consider the merits ‘only’ to the extent ‘they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.’
“But if a question of fact or law is relevant to that determination, then the district court has a duty to actually decide it and not accept it as true or construe it in anyone’s favor.”
The Eleventh Circuit said it also must vacate the class certification because the district court abused its discretion in assessing predominance.
“District courts should assess predominance with its overarching purpose in mind -- namely, ensuring that ‘a class action would achieve economies of time, effort, and expense, and promote... uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results,’” Pryor wrote.
Electrolux made four arguments about predominance.
First, it argued the plaintiffs cannot prove causation -- an element of their consumer claims -- on a classwide basis. Second, it argued the district court was wrong to conclude that predominance is satisfied for the warranty claims without first answering several preliminary questions of state law. Third, Electrolux argued the plaintiffs cannot prove damages on a classwide basis for any of their claims. Finally, the company argued that misuse -- one of its defenses to the plaintiffs’ warranty claims -- will require individual proof.
The Eleventh Circuit agreed with Electrolux’s first two arguments, but said the district court should revisit the last two arguments on remand.
“The questions of state law that Electrolux asked the district court to resolve -- whether the plaintiffs must prove pre-suit notice, an opportunity to cure, and manifestation of the defect -- bear on predominance,” Pryor wrote for the panel. “If California and Texas law do not excuse pre-suit notice and an opportunity to cure when the defendant had ‘prior knowledge of the design defect,’ as the district court speculated, then each class member will need to prove that he gave Electrolux pre-suit notice and an opportunity to cure. This showing could require individual proof.”
The judge continued, “And if California and Texas law require the defect to manifest, then each class member will need to prove that his washing machine actually grew mildew during the warranty period. This showing could also require individual proof.
“Because the answers to these preliminary questions of California and Texas law could affect whether Rule 23(b)(3) is satisfied, the district court had a duty to resolve them.”
The panel said it is “confident” the district court will apply the correct standard for class certification on remand.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.