Court Opinion

ID: 811793
Source: CourtListenerOpinion
Date Created: 2012-11-13 17:11:02+00
Date Added: 2024-06-11T18:00:42.568719
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit

Nos. 11-8029, 12-8030

L ARRY B UTLER, et al., individually and
    on behalf of all others similarly situated,

                                                Plaintiffs-Appellants,
                                                     Cross-Appellees,
                                  v.

S EARS, R OEBUCK AND C O .,
                                                 Defendant-Appellee,
                                                    Cross-Appellant.

            Appeals from the United States District Court
        for the Northern District of Illinois, Eastern Division.
                     Nos. 06 C 07023, 07 C 00412,
            08 C 01832—Sharon Johnson Coleman, Judge.

 S UBMITTED S EPTEMBER 28, 2012—D ECIDED N OVEMBER 13, 2012

  Before P OSNER, R IPPLE, and H AMILTON, Circuit Judges.
  P OSNER, Circuit Judge. The parties to this class action
suit, which is based on the warranty laws of six states,
petitioned us to review separate orders by the district
2                                     Nos. 11-8029, 12-8030

court ruling on motions for class certification filed by
the plaintiffs. Fed. R. Civ. P. 23(f). The suit is really two
class actions because the classes have different members
and different claims, and therefore they should have
been severed, though both arise from alleged defects
in Kenmore-brand Sears washing machines sold in over-
lapping periods beginning in 2001 and 2004. One class
action complains of a defect that causes mold (the “mold
claim”), the other of a defect that stops the machine
inopportunely (the “control unit claim”). The district
court denied certification of the class complaining
about the defect that causes mold and granted certifica-
tion of the class complaining about the defect that causes
the sudden stoppage. The denial of certification of the
mold class precipitated the petition for review by the
plaintiffs who are complaining about the mold, while
the grant of certification to the plaintiffs (a different set
of named plaintiffs) complaining about the stoppage
precipitated Sears’s petition for review.
   We have accepted the appeals in order to clarify
the concept of “predominance” in class action litigation.
Rule 23(b)(3) conditions the maintenance of a class
action on a finding by the district court “that the ques-
tions of fact or law common to class members
predominate over any questions affecting only indi-
vidual members.” If there are no common questions
or only common questions, the issue of predominance
is automatically resolved. Any other case requires “weigh-
ing” unweighted factors, which is the kind of subjec-
tive determination that usually—including the deter-
Nos. 11-8029, 12-8030                                  3

mination whether to certify a class—is left to the
district court, subject to light appellate review. CE
Design Ltd. v. King Architectural Metals, Inc., 637 F.3d
721, 723 (7th Cir. 2011); Charles Alan Wright, Arthur R.
Miller & Mary K. Kane, 7AA Federal Practice and Pro-
cedure § 1785, pp. 370-72 (3d ed. 2005).
  The mold claim pertains to all Kenmore-brand front-
loading “high efficiency” washing machines manu-
factured by Whirlpool Corporation and sold by Sears
since 2001. The claim is that because of the low volume
of water used in these machines and the low tempera-
ture of the water, compared to the volume and tempera-
ture of the water in the traditional top-loading machine,
they don’t clean themselves adequately and as a result
biofilm—a mass of microbes—forms in the machine’s
drum (where the washing occurs) and creates mold,
which emits bad odors. Traditional household cleaners
do not eliminate the biofilm, the mold, or the odors.
Roughly 200,000 of these Kenmore-brand machines are
sold each year and there have been many thousands
of complaints of bad odors by the owners.
  Sears contends that Whirlpool (which remember is the
actual manufacturer of the washing machines, not Sears)
made a number of design modifications as a result
of which different models are differently defective and
some perhaps not at all, and therefore common ques-
tions of fact concerning the mold problem and its conse-
quences do not predominate over individual questions
of fact. The judge accepted this argument; it is the
ground on which she denied the motion to certify the
mold class.
4                                     Nos. 11-8029, 12-8030

  Although Sears contends that during the period cov-
ered by the complaint it sold 27 different Kenmore-
brand models, Whirlpool made only five design changes
that relate to mold. The basic question in the litiga-
tion—were the machines defective in permitting mold
to accumulate and generate noxious odors?—is common
to the entire mold class, although the answer may vary
with the differences in design. The individual questions
are the amount of damages owed particular class mem-
bers (the owners of the washing machines).
   Predominance is a question of efficiency. See Amchem
Products, Inc. v. Windsor, 521 U.S. 591, 615-16 (1997);
Committee Notes to 1966 Amendment to Fed. R. Civ.
P. 23; Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999,
1005 n. 12 (11th Cir. 1997); William B. Rubenstein, 2
Newberg on Class Actions § 4:49 (5th ed. 2012). Is it more
efficient, in terms both of economy of judicial resources
and of the expense of litigation to the parties, to
decide some issues on a class basis or all issues in
separate trials? A class action is the more efficient proce-
dure for determining liability and damages in a case
such as this involving a defect that may have imposed
costs on tens of thousands of consumers, yet not a cost
to any one of them large enough to justify the expense
of an individual suit. If necessary, a determination of
liability could be followed by individual hearings to
determine the damages sustained by each class member
(probably capped at the cost of replacing a defective
washing machine—there doesn’t seem to be any claim
that the odors caused an illness that might support a
claim for products liability as distinct from one for
Nos. 11-8029, 12-8030                                    5

breach of warranty). But probably the parties would
agree on a schedule of damages based on the cost of
fixing or replacing class members’ mold-contaminated
washing machines. The class action procedure would
be efficient not only in cost, but also in efficacy, if we
are right that the stakes in an individual case would be
too small to justify the expense of suing, in which event
denial of class certification would preclude any relief.
  Sears argues that most members of the plaintiff class
did not experience a mold problem. But if so that is an
argument not for refusing to certify the class but for
certifying it and then entering a judgment that will
largely exonerate Sears—a course it should welcome, as
all class members who did not opt out of the class
action would be bound by the judgment.
  In two states (see Hicks v. Kaufman & Broad Home Corp.,
89 Cal. App. 4th 908, 920-23 (2001); Schiffner v. Motorola,
Inc., 697 N.E.2d 868, 874-76 (Ill. App. 1998)), or possibly
three (see DaimlerChrysler Corp. v. Inman, 252 S.W.3d
299, 304-07 (Tex. 2008)), of the six states in which
members of the class reside, a defective product can be
the subject of a successful suit for breach of warranty
even if the defect has not yet caused any harm. If, as
appears to be the case, the defect in a Kenmore-brand
washing machine can precipitate a mold problem at any
time, the defect is an expected harm, just as having
symptomless high blood pressure creates harm in the
form of an abnormally high risk of stroke. A person who
feels fine, despite having high blood pressure, and will
continue feeling fine until he has a stroke or heart
6                                    Nos. 11-8029, 12-8030

attack, would expect compensation for an unlawful act
that had caused his high blood pressure even though
he has yet to suffer the consequences. Every class
member who claims an odor problem will have to
prove odor in order to obtain damages, but class
members who have not yet encountered odor can still
obtain damages for breach of warranty, where state
law allows such relief—relief for an expected rather
than for only a realized harm from a product defect
covered by an express or implied warranty.
  Sears does not contend that any of Whirlpool’s design
changes eliminated the odor problem but only that
they reduced its incidence or gravity. The number of
buyers of each design of the Kenmore-brand machine
who encountered mold would have been large even if
those who bought later in the product cycle were less
likely to encounter the problem. Should it turn out as
the litigation progresses that there are large differences
in the mold defect among the five differently designed
washing machines, the judge may wish to create sub-
classes; but that possibility is not an obstacle to certif-
ication of a single mold class at this juncture.
  Sears argues inconsequently that it did not know about
the defects in all the different models. But liability
for breach of warranty is strict. Sears may be able by
means of a suit for contribution or indemnity to shift
the cost of any damages it incurs in the present case
to Whirlpool, but that is not a defense to liability.
  Sears also makes arguments that were not considered
by the district court, such as that mold problems may
Nos. 11-8029, 12-8030                                    7

reflect how the owner of a washing machine uses it. That
would be a defense of mishandling to the charge of
breach of warranty. Sears offers no details.
  The Sixth Circuit recently upheld the certification of a
single mold class in a case, identical to this one (except
that it did not involve the other claim in this case, the
control unit claim), against Whirlpool. In re Whirlpool
Corp. Front-Loading Washer Products Liability Litigation,
678 F.3d 409 (6th Cir. 2012). For us to uphold the
district court’s refusal to certify such a class would
be to create an intercircuit conflict—and a gratuitous
one, because, as should be apparent from the preceding
discussion, we agree with the Sixth Circuit’s decision.
  We turn to Sears’s appeal from the certification of a
class of buyers of Kenmore-brand washing machines
who incurred a harm because of the defective control
unit. Each washing machine has a computer device
that gives instructions to the machine’s moving parts.
This “central control unit” consists of circuit boards that
are soldered together. In 2004 a company called Bitron
that supplied the central control units in the Kenmore-
brand washing machines altered its manufacturing
process in a way that inadvertently damaged the layer of
solder, causing some of the control units mistakenly
to “believe” that a serious error had occurred and there-
fore to order the machine to shut down even though
nothing was the matter with it. Sears is alleged
to have known about the problem but to have charged
each owner of a defective machine hundreds of dollars
to repair the central control unit. The defect was cor-
8                                    Nos. 11-8029, 12-8030

rected in 2005 but Sears continued to ship machines con-
taining the earlier-manufactured, defective control units.
  The principal issue is whether the control unit was
indeed defective. The only individual issues—issues
found in virtually every class action in which damages
are sought—concern the amount of harm to particular
class members. It is more efficient for the question
whether the washing machines were defective—the
question common to all class members—to be resolved
in a single proceeding than for it to be litigated
separately in hundreds of different trials, though, were
that approach taken, at some point principles of res
judicata or collateral estoppel would resolve the com-
mon issue for the remaining cases.
  Again the district court will want to consider whether
to create different subclasses of the control unit class
for the different states. That should depend on whether
there are big enough differences among the relevant laws
of those states to make it impossible to draft a single,
coherent set of jury instructions should the case ever
go to trial before a jury.
  To summarize, the denial of class certification re-
garding the mold claim is reversed and the grant of class
certification regarding the control unit claim is affirmed.

                          11-13-12