Brown v. Electrolux Home Prods., Inc.

• Citation: 817 F.3d 1225
• Decision Date: 21 March 2016
• Docket Number: No. 15–11455.,15–11455.
• Parties: Robert BROWN, on behalf of himself and all others similarly situated, Michael Vogler, on behalf of himself and all others similarly situated, Plaintiffs–Appellees, v. ELECTROLUX HOME PRODUCTS, INC., d.b.a. Frigidaire, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

817 F.3d 1225

Robert BROWN, on behalf of himself and all others similarly situated, Michael Vogler, on behalf of himself and all others similarly situated, Plaintiffs–Appellees,

v.ELECTROLUX HOME PRODUCTS, INC., d.b.a. Frigidaire, Defendant–Appellant.

No. 15–11455.

United States Court of Appeals, Eleventh Circuit.

March 21, 2016.

John C. Bell, Jr., Lee W. Brigham, Bell & Brigham, Augusta, GA, Robert Brent Irby, McCallum Hoaglund Cook & Irby, LLP, Vestavia Hills, AL, Amy E. Keller, Edward A. Wallace, Kenneth A. Wexler, Wexler Wallace, LLP, Chicago, IL, Jason L. Lichtman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, Charles A. McCallum, III, McCallum Hoaglund Cook & Irby, LLP, Vestavia Hills, AL, Jonathan D. Selbin, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA, Mark J. Tamblyn, Governor's Office of Emergency Services, Sacramento, CA, for Plaintiffs–Appellees.

John Beisner, Skadden Arps Slate Meagher & Flom, LLP, Washington, DC, Benjamin Howard Brewton, Tucker Long, PC, Augusta, GA, James Russell Jackson, Skadden Arps Slate Meagher & Flom, LLP, New York, NY, Chaundra C. King, Philip M. Oliss, Joseph C. Weinstein, Squire Patton Bogg (US) LLP, Cleveland, OH, for Defendant–Appellant.

Before WILSON and WILLIAM PRYOR, Circuit Judges, and BUCKLEW,^* District Judge.

WILLIAM PRYOR, Circuit Judge:

This interlocutory appeal involves a class action over smelly washing machines. Across the country, consumers have filed class actions against the manufacturers of front-loading washing machines. See, e.g., In re Whirlpool Corp. Front–Loading Washer Prods. Liab. Litig., 722 F.3d 838 (6th Cir.2013) ; Butler v. Sears, Roebuck & Co., 727 F.3d 796 (7th Cir.2013) ; Tait v. BSH Home Appliances Corp., 289 F.R.D. 466 (C.D.Cal.2012). Front-loaders are considered an improvement over traditional top-loading machines because they use less water and energy. But 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. After the district court certified two statewide classes, see Terrill v. Electrolux Home Prods., Inc., 295 F.R.D. 671 (S.D.Ga.2013), Electrolux filed this interlocutory appeal. We now vacate the class certification. Although several of Electrolux's arguments fail, we agree with Electrolux that the district court abused its discretion in determining the predominance requirement of Federal Rule of Civil Procedure 23(b)(3). For that reason, we vacate its order and remand for further proceedings.

I. BACKGROUND

Electrolux Home Products, a Delaware corporation headquartered in Georgia, manufactures front-loading washing machines under the Frigidaire brand. Front-loaders are the next stage in the evolution of the washing machine. While traditional top-loading machines completely fill up with water and spin the clothes around with an agitator, front-loading machines only partially fill up and tumble the clothes in and out of the water. This process saves both water and energy.

To prevent water from leaking, front-loaders come with a rubber seal known as a "bellow." Frigidaire machines initially came with a convoluted bellow, which is not as smooth as the S-shaped bellow that is now available. The plaintiffs allege that convoluted bellows are defective because they trap water, which allows mildew to grow in the washing machine. But Electrolux contends that owners can easily avoid the mildew problem by wiping down the machine and leaving the door open after use.

Robert Brown, a Californian, and Michael Vogler, a Texan, purchased Frigidaire front-loading washing machines with convoluted bellows. Vogler saw a poster from Frigidaire in the department store where he bought his machine. But Brown never saw any advertisements from Frigidaire. Both consumers discovered mildew in their machines. All Frigidaire front-loading washing machines come with a full one-year warranty. The warranty includes several exceptions, including damage caused by "misuse."

After Michael Terrill, a consumer from Wisconsin, filed a putative class action against Electrolux in the district court and amended the complaint to add Brown, Vogler, Palecia Boyd, and Denise Pack as named plaintiffs, the district court dismissed all of the named plaintiffs except Brown and Vogler. The amended complaint alleges two types of claims: warranty claims and consumer claims. The warranty claims include breach of express warranty under California law, breach of the implied warranty of merchantability under California and Texas law, and violations of the Magnuson–Moss Warranty Act, 15 U.S.C. § 2310. The claims under the Magnuson–Moss Act are identical to the other warranty claims because they are also based on state law. See Walsh v. Ford Motor Co., 807 F.2d 1000, 1012 (D.C.Cir.1986). The consumer claims include violations of the California Unfair Competition Law and violations of the Texas Deceptive Trade Practices–Consumer Protection Act. The consumer claims stem from Electrolux's failure to disclose the defective nature of the convoluted bellow in its advertisements and marketing materials. For example, the Frigidaire website boasted that its front-loading washing machines would "keep your clothes looking their best" without mentioning the defective bellow or the mildew problem. The amended complaint seeks damages in the form of a refund of the purchase price or the difference in the resale value of the washing machines, as well as any injuries caused by the mildew, including soiled laundry.

Brown and Vogler moved for class certification, which the district court granted. The district court certified the following two statewide classes:

California Class : All persons and entities who purchased, other than for resale, after March 5, 2004, and while in the State of California, a Frigidaire front-loading washing machine with a convoluted bellow.

Texas Class : All persons and entities who purchased, other than for resale, after March 5, 2004, and while in the State of Texas, a Frigidaire front-loading washing machine with a convoluted bellow.

Brown represents the California class for the claims under California law, and Vogler represents the Texas class for the claims under Texas law.

The district court recognized that it must conduct a "rigorous analysis" to determine whether a class action satisfies Rule 23. Terrill, 295 F.R.D. at 682 (quoting Vega v. T–Mobile USA, Inc., 564 F.3d 1256, 1266 (11th Cir.2009) ). And it explained that "[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule." Id. (quoting Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011) ). But the district court also stated that it "resolves doubts related to class certification in favor of certifying the class," id. at 683, and that it "accepts the allegations in the complaint as true," id. at 682 (quoting Mazur v. eBay Inc., 257 F.R.D. 563, 566 (N.D.Cal.2009) ), and "draws all inferences and presents all evidence in the light most favorable to" the party seeking class certification, id. at 680.

The district court concluded that "the questions of law or fact common to class members predominate over any questions affecting only individual members," Fed.R.Civ.P. 23(b)(3). With respect to the consumer claims, the district court concluded that every element was susceptible to classwide proof. Electrolux argued that causation would require individual proof because the class members must prove that they did not already know about the mildew problem, which was well-publicized at the time, when they purchased their front-loading washing machines. But the district court concluded that "each class member presumably relied on the fact that Defendant provided Washing Machines suited for cleaning and freshening clothing." Terrill, 295 F.R.D. at 696. The district court explained that the class members "can show their reliance on Defendant's failure to disclose the Washing Machines' alleged design defect and the inevitable consequences of that defect through classwide proof that they purchased Machines to clean and freshen their clothes rather than to soil and odorize them." Id. As for the warranty claims, the district court concluded that most of the elements were susceptible to classwide proof. It rejected Electrolux's argument that the questions whether the class members gave Electrolux pre-suit notice of the defect, whether the class members gave Electrolux an opportunity to cure the defect, and whether the defect manifested during the warranty period would require individual proof. The district court speculated that Brown and Vogler might not need to prove pre-suit notice, an opportunity to cure, or manifestation of the defect under California or Texas law: pre-suit notice and an opportunity to cure might not be required when the defendant had "prior knowledge of the design defect," id. at 689, 692, and manifestation of the defect might not be required "when a latent defect existed during the warranty period but was discovered after the warranty period," id. at 691. But the district court never answered these preliminary questions of state law. Instead, it concluded that the questions whether pre-suit notice, an opportunity to cure, and manifestation of the defect are required under California and Texas law are "common questions" that weigh in favor of class certification. Id. at 689–92.

The district court also rejected several other challenges to predominance. For example, Electrolux argued that the individual nature of the plaintiffs' damages defeats predominance for every claim. The district court disagreed because the "many ... common issues" of liability outweigh the individual issues of damages. Id. at 697. It cited the general rule that "the...