## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 11

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- 8030 L ARRY B UTLE R, e tal

. , i ndi vi dual l y a nd o n b e ha l fo fa l l o the r s s i mi l a r l y s i t ua t e d, P laint if fs -App el lants , C ross-A pp ellees , v .
S EARS, R OEB UCKAN D C O ., D efend a nt-A pp ellee, Cros s -Appe l l ant
.
A pp ealsfr o m the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on.

No s. 06 C 07023, 07 C00412, 08 C01832

— Sharon J ohn so n C olem an, Judge .
S UB MI TT ED S EP TE MBE R 28, 2012

— D ECI DE D N OVE MBE R 13, 2012

Befo re P OSNER, R IPPLE, a nd H A MI L T ON, C ircu it Judges . P OSNER, Ci r c u i tJ udg e . The par ti es to thi s cl ass act i on sui t, wh i ch i s ba sed o n the w ar ra n ty la w s ofsi x sta tes , petition ed us to r evi ew se parat e o rder s bythe dist ri ct2 N os. 11

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cour t r uling o n m oti ons f orcl ass ce rt ifi cati on fi l ed by t h e p l a i n t i f f s . F e d

. R
. C i v . P
. 2 3 ( f )
. T he sui ti s r e a l l y t wo class action s b e c au se th e classes h ave d ifferent m em bers and di f f er ent cl ai m s, and there f or e they should have been seve re d, though both ar i se f ro m al l ege d defec ts in K en m ore-bran d Sears w ash ing m a c hin es sold in overl ap ping peri ods be gi nning i n 200 1 a nd 20 04. One cl ass ac tio n co m p lain s o f a d efe c t t h at ca u se s m o ld (th e “ m old cl ai m ”) , the o th ero fa de f ec t th ats to ps th e m ach i ne i no pp o r t un e l y ( t he “ c o nt r o l u ni tc l a i m”)
. T he di s t r i ct co ur t den i ed ce r ti fi ca ti o n o fthe c l as s co m pl ai ni ng about t he de f e c ttha tc a us e s mo l d a nd g r a nt e d c e r t i fi cati on o fthe cl ass co m pla i ni ng ab out the defect that causes th e s ud dens to ppag e. The de ni alo fc er ti fi ca ti o n o fthe mo l d c l a s s p r e c i p i t a t e d th e p e t i t i o n f o r r e v i e w by t he p lain tiffs w h o a re co m p lain in g a b ou t t h e m old , w h ile the g ra nt o fcer ti fi cati on t o the pl ai nti ff s ( a di ff er ent s et ofnam ed pla i nti f f s) co m p laining about the s toppage p r e c i p i t a t e d S e a r s ’ s p e t i t i o n fo r r e v i e w. W e h a v e acce p ted the ap p eals i n ord er to clari fy th e co nc epto f“ pr edo m i na nc e” i n c l as s ac ti o n l i ti gati o n. Rule 23( b) ( 3) co nd i ti ons the m ain tenance o fa cl ass acti on o n a fi nd i ng byth e d istri ct c ourt“that the questions of f act or law com m on to c lass m em bers p re d om in a t e o ve r an y q u es tio n s a ffec tin g on ly in d ivi dualmem be r s. ” I fthe r e are no c o m m o n que st i o ns oro nl y c om m on q u est i ons, the i ssue ofpre dom i nance i s au to m at i ca l l y r es o l ve d. Any o th erc as e r equi r es “ wei g hi ng” unw ei ghted f acto rs , wh ich i s the kind o fsubj ectiv e d et er m in at ion t h at u su ally

— includ ing the de ter-N os. 11

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m i nati on w hether to cer ti fy a c lass

— i s l eft to the dist ri ct c ourt, subj ect to l i ght a pp el l ate r evi ew . CE D es ign Ltd. v. Ki n g A rc hite ctural M et als, Inc. , 63 7 F
. 3d 72 1, 7 23 ( 7th Ci r . 2 01 1) ; Cha r l es A lan W r i g ht, ArthurR. Mi l l e r & M a r y K
. K a n e , 7 AA Fe de r al Pr ac t i cean d Pr oced ure § 1785, pp
. 370-72 (3d ed

. 2005). The m ol d cl ai m per tai ns to al l Kenm or e-brand fro ntl o a d i n g“ h i g h e f fi c i e n c y ” wa s h i n gma c h i n e s manufactu red by W hirlpool C orp oration an d sold by Sears s i n c e 2 0 0 1
. T h e c l a i m i s th a tb e c a u s e o fth e l o w v o l u me ofwater used i n the se m achi nes a nd the l ow tem perature of the w ate r, com pared to the vol um e an d te m perat ur e o fthe wa t e r i n the t r a di t i o na l t o p- l o a di ngma c hi ne, th ey d on ’t c lea n th em se lve s a d eq u a t e l y a n d as a re su lt b iofilm

— a m ass o fm i cro bes

— form s in th e m ach ine’s dr um ( whe r e the wa shi ngo c c ur s ) a nd c r e a t e s mo l d, w hich em its bad odors

. Trad iti ona l hou seh old clean ers do not el i m i nate the b i ofi l m , the m ol d, orthe odor s. R ou gh ly 2 0 0 , 000 of thes e K en m ore-bran d m ach ines are s o l d e a c h y e a r a nd the r e h a v e b e e n man y tho us an ds ofco m pla i nts o fbad o dors by the o w ners . S ea r s co nt en ds th atW hi r l po o l ( w hich r ememberi s th e actual m anufa cture r ofthe w ashi ng m achi nes, notS ear s) m ad e a n u m b er of d es ign m o d i fica tio n s a s a res u lt o fwhi chdi f f er en t m o del s ar e di ff er en tl y de fe ct i ve a nd som e perhaps not at al l, and there f or e com m on q u esti ons off act concerni ng t h e m old pro bl em and i ts conse que nc es do no t pr edo m i na te over i ndi vi dualque st i o ns o ff ac t
. T h e j u d g e a c c e p t e d th i s a r g u me n t ; i ti s the g r o und o n whi chs he de ni ed the mot i o n t o c er ti fy the m ol d cl ass .4 N os. 11

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- 8030 A l though S ear s co ntends thatduri ng the per i od cov

er ed by the c om pla i nt i t s ol d 27 di ff er ent Kenm or ebra nd m odel s, W h irl poolm ade onl y fi ve desi gn change s that re l ate to m ol d. The basi c questi on i n the l i ti gati on

— w er e t h e m ac h in es d efe c tiv e in p er m itt in g m old to accum u late and ge nera te noxi ous o dors?

— i s co m m on to the entire m old class, al th ou gh the an sw er m ay vary wi th th e di f f er en ce s i n des i g n. The i ndi vi d ua l que st i o ns a r e th e a mo u n to fda ma g e s o we d p a r t i c u l a r c l a s s me mbers (the ow ne rs of th e w ash ing m ach ines). Predom i nance is a questi on o feffi ci ency. S ee A m ch em Prod uc t s , Inc . v. Winds or, 521 U
. S. 591, 615-16 (1997 ); Com m i tte e Notes to 19 66 A m endm ent t o Fed. R. Ci v. P . 23; Jackson v. M otel 6 M ultipurpose, Inc. , 13 0 F
. 3d 999, 10 05 n . 12 (1 1t h C ir. 19 97 ); W illiam B . Ru b en st ein , 2 Ne wb e rg o n Cl a s s Act i ons § 4: 49 (5th ed

. 2012). I s it m ore e f fi c i e nt, i n t e r ms b o th o fe c o no my o fj ud i c i a l r e s o ur c es and ofthe expense o fl i ti gat i on to the part i es, to d ec id e s om e i ss u es on a c las s b as is or all iss u es in separ ate t ria ls? A cl ass act i on i s the m or e e ffi ci ent pr oce du re f ord et er m i ni ng l i abi l i ty and dam age s i n a c ase such as thi s i nvol vi ng a defe ct th at m ay have i m posed cos ts on ten s of thousands o fco nsum er s, ye t no t a co st to any o ne o fthem l ar ge en ou gh to j usti fy the expense ofan i nd i vi du alsui t. I fnece ssa ry, a deter m i na tio n of l i abi l i ty coul d be f ol l owed by i nd i vi du alhear i ngs t o det er m i ne the dam age s s ustai ned by e ach cl ass m em ber ( probabl y c ap p ed at the c osto fr epl aci ng a defe cti ve w ashi ngmachine

— ther e doe sn’ t s eem to be any c l aim that th e o dors caused an i l l ness that m i ght s up porta cl ai m f orpro du cts l i abi l i ty as di sti nct fro m o ne f orN os. 11

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- 8030 5 b re ac h of w ar ra n ty ). B u t p ro b ab ly th e p ar tie s w ou ld ag re e on a sche du l e o fdam age s ba sed o n the cos t o f fi xi ng o r re pla ci ng cla ss m em ber s’ m ol d-co ntam i nated w as h in g m ac h in es . T h e c las s a c tio n p ro c ed u re w ou ld b e e f fi c i e n tn o to n l y i n c o s t, b u ta l s o i n e ffi ca cy , i fwe ar e r i ght that the st ake s i n an i nd i vi du alcas e would be to o s m al l t o j us ti fy the e xpe ns e o fs ui ng, i n whi che ve nt d en ialof class certifi cation w ou ld p reclud e any rel ief

. Se ar s ar gues that m ost m em ber s of the pla i ntiff cla ss did notexper i ence a m ol d proble m . But i fso thati s a n ar gum ent no t f or r efu si ng to cer ti fy the cl ass but f or c er tify in g it a n d th en en te rin g a j u d g m en t th at w ill larg e ly ex one rate Sears

— a co urse i t s houl d w el com e, as al l cl ass m em ber s who did noto pt out ofthe cl ass acti on would be bo und by the j ud gm ent. I n two sta tes ( see H i cks v. Kaufm a n & Broad H om eCorp. , 89 C al. A p p . 4th 90 8, 92 0-2 3 (2 00 1); Sc hi f f ne r v. M ot or ol a, Inc. , 6 9 7 N .E .2d 86 8, 87 4-7 6 (Ill. A p p . 199 8)), or p os sib ly thre e ( see D ai m lerC hrys l e rCorp. v. Inm an , 25 2 S
. W
. 3d 299, 30 4- 07 ( Tex. 20 08) ) , o fthe six state s i n w hi ch m em ber s o fthe cl ass reside, a defe cti ve product ca n be the s ubj ect ofa succes sful sui t f orbr eac h ofwarra nty e v e n i fth e d e f e c th a s n o ty e tc a u s e d a n y h a r m. I f, as appe ar s to b e th e ca se , the d efe cti n a Ken m o r e-br an d was h i n g ma c h i n e c a n p r e c i p i t a t e a mo l d p r o b l e m a t an y ti m e, the de f ec t i s ane xpe ct ed ha r m , j us t as ha vi ng sy m pto m l es s hi g h b l o od p re ss ur e cr ea te s ha r m i n the f o r m o fa n abn o r m al l y hi g h r i sko fs tr o k e. A per so n who fee ls f i n e , d es p ite h av in g h igh blo od p re ss u re , an d w ill con tinu e feel ing fi ne un til h e has a stroke or heart6 N os. 11

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- 8030 att ack, would expect com p en sat i on f oran unl aw ful act th at h ad caused hi s hi gh bl oo d press ure eve n though he has yetto suff erthe conse quences. Every cl ass m em ber w ho cl ai m s an odor probl em w i l l ha ve to prove o dor i n or der t o obt ai n d am ag es, but cl ass m em b er s w h o h av e n ot ye t e n c ou n te re d od or ca n st ill obta in d am age s f orbr each ofwarra nty, wh er e s tat e l aw al l ows such re l i ef

— re l i eff oran e xpec te d r ather than f oro nl y a r eal i zed har m fro m a p ro d uct defect cove re d by a n expres s o r i m pli ed w ar ra nty. Se ar s doe s no t co ntend that any o fW hirlpoo l ’ s desi gn changes el i m i nated the o dor probl em b u t o nl y that they re du ced i ts i nci dence orgr avi ty. The num bero f buy er s ofe ac h de si g n o fthe Ken m o r e-br an d m ac hi ne w h o e n c ou n te re d m old w ou ld h av e b ee n larg e e ve n if tho s e who b o ught l a t e r i n the pr o du c t c y c l e we re l ess l i kel y t o encounterthe probl em . S h oul d i t turn o ut as the l i ti gat i on pro gr ess es that there a re l ar ge diff er ences i n the m ol d defec t a m on g the fi ve diff er entl y desi gned w ashi ng m achi nes, the j ud ge m ay w i sh to cr eat e s ubclasses; but that pos sibil ity i s not an o b stac le to certifi cati on o fa si ngl e m ol d cl ass atthi s j uncture. S ea r s ar g ue s i nc o ns eque nt l y th at i t di d no t k now abo ut the defects i n a ll the diff er ent m odel s. But l i abi l i ty f orbr each o fwarra nty i s s tr i ct. Sea rs m ay be abl e by m e a n s of a suit for con tribution or ind em nity to shift the c osto fany dam age s i t incurs in the pre sent case to W hi rl pool, but that i s no t a defense to l i abi l i ty. Se ar s a l so m akes a rg um ents that w er e no t co nsi dered by the di str i ct c ourt, such a s that m ol d problem s m ayN os. 11

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re fl ect how the own ero fa w ashi ng m achi ne uses i t. That w oul d be a defense ofm i shandli ng to the charg e o f bre ach o fwarra nty. S ear s o ffer s no detai l s. T he Si xt h C ircuit recen t ly up he ld th e certifi cation of a s i ng l e mo l d c l a s s i n a c a s e , i de nt i c a l to this o ne ( e xc e pt th ati t di d no t i nv o l ve the o th erc l ai m i n thi s ca se , the c on tr ol u n it c laim ), aga in st W h i r l p oo l. In reW hi r l pool Corp
. Front

- Load i ng Was he rPr oduc t s Li ab i l i ty L i t igat i on , 67 8 F
. 3d 40 9 ( 6th C ir. 20 12 )
. F o r us t o upho l d the d ist ric t co urt’ s r efusalto cer ti fy s uch a cl ass wou ld be t o cre ate an i nter ci rcui t co nfl i ct

— an d a g r atui to us o ne , be ca us e, as sh o ul d be appa r en t f r o m the p r ec edi ng di sc us si o n, we ag r ee wi ththe S i xth Ci r cui t’ s dec i si o n. W e t u r n to Sears’s app eal from the ce rtification of a cl ass o fbuye rs o fKenm or e-bra nd w as hi ng m achi nes w ho i ncurr ed a har m bec ause ofthe d efe c ti ve contr ol unit . E ach washingm achi ne has a co m pu terdevi ce that gi ves i nstr ucti ons to the m achi ne’ s m ovi ng par ts. This “centr al c ontroluni t” consi sts o fci rcui t bo ar ds that ar e s ol dered to gether. I n 200 4 a co m pany ca l l ed Bit ro n that supp l i ed the centr alco ntro l uni ts i n the K enm or ebr an d was hi ngmachine s al te r ed i ts manuf ac tu r i ng proce ss in a w ay that i nadvert entl y dam age d the l aye r of so ld er , ca u sin g s om e o f th e co n tr ol u n its m ist ak en ly to “bel i eve ” that a ser i ous er ro r had o ccurr ed and t h er ef or e t o or d er the m achi ne to shut down even though no t hi ngwa s the ma t t e r wi th i t
. S e a r s i s a l l ege d to have known about the probl em but to have ch ar ged each ow ne r ofa defec tive m ac h in e hu nd red s of d oll ars to rep air th e cen tral con trol un it. Th e d efect w as cor-8 N os. 11

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r ec te d i n 2 00 5 butS ea r s co nt i nue d t o s hip machine s co ntai ni ng the ea rl i er - m anufa cture d, defe cti ve contr oluni ts. The pri nci pal i ssue i s whether the c ontr oluni t was i nd ee d defecti ve. The o nl y i nd i vi du ali ssues

— i ssues f oun d in v i r t ua l l y e v e r y c l a s s a c t i o n i n whi c h da mages a r e s o ug ht

— concern the am ount o fhar m to part i cul ar cl ass m em ber s. Iti s m or e e ffi ci ent f orthe questi on w hetherthe w ashi ng m achi nes were defecti ve

— th e qu estion com m on to all class m em bers

— to b e r eso l ved i n a si ngl e proce edi ng than f or i t to be litigated sep arately in hu nd red s of d iffer e n t trials, thou gh, w ere that approach tak en, atso m e poi nt p rin c i ple s o fr es j u di c a t a o r c o l l a t e r a l e s t o p p e lw o u l d r e s o l v e th e c o mm on i ssue f orthe re m ai ni ng ca ses . A gai n the dist ri ct c ourtwil l want to cons ider w hether to cre ate di f f er ent s ubcl ass es ofthe contr oluni t cl ass f or the diff er ent sta tes
. That shoul d depend on w h et her t h e r e a r e b i ge n o u g h d i ff e r e n c e s a mo n gth e r e l e v a n tl a ws of thos e sta tes to m ake i t i m possibl e to draft a sin gle, coher ent s et ofj ury i nstr ucti ons should the case ev er go to tr i albef or e a j ury. To sum m ar i ze, the denia l o fc l ass cer ti fi cati on r egar ding th e m old cla i m i s r eve rs ed and the g ra nt o fcl ass c e r t i fi c a t i o n r e g a r di ngthe c o nt r o l u ni tc l a i m i s a ffi r med

.

11- 13- 12