Dzielak v. Whirlpool Corp.

• Decision Date: 05 December 2019
• Docket Number: Civ. No. 12-89 (KM) (JBC)
• Parties: CHARLENE DZIELAK, SHELLEY BAKER, FRANCIS ANGELONE, BRIAN MAXWELL, JEFFREY McLENNA, JEFFREY REID, KARI PARSONS, CHARLES BEYER, JONATHAN COHEN, JENNIFER SCHRAMM, and ASPASIA CHRISTY, Plaintiffs, v. WHIRLPOOL CORPORATION, LOWE'S COMPANIES, INC., SEARS HOLDING CORPORATION, THE HOME DEPOT, INC., FRY'S ELECTRONICS, INC., APPLIANCE RECYCLING CENTERS OF AMERICA, INC., LOWE'S HOME CENTER, AND LOWE'S HOME CENTER, LLC, Defendants.
• Court: U.S. District Court — District of New Jersey

CHARLENE DZIELAK, SHELLEY BAKER,
FRANCIS ANGELONE, BRIAN MAXWELL,
JEFFREY McLENNA, JEFFREY REID,
KARI PARSONS, CHARLES BEYER,
JONATHAN COHEN, JENNIFER SCHRAMM,
and ASPASIA CHRISTY, Plaintiffs,
v.
WHIRLPOOL CORPORATION,
LOWE'S COMPANIES, INC.,
SEARS HOLDING CORPORATION,
THE HOME DEPOT, INC., FRY'S ELECTRONICS, INC.,
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.,
LOWE'S HOME CENTER,
AND LOWE'S HOME CENTER, LLC, Defendants.

Civ. No. 12-89 (KM) (JBC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

December 5, 2019

OPINION

KEVIN MCNULTY, U.S.D.J.:

Now before the Court in this class action are two motions for summary judgment: one filed by defendants Whirlpool Corporation, Lowe's Home Centers, LLC, Sears Holding Corporation, and Fry's Electronics, Inc. (DE 309); and one filed by defendant The Home Depot, Inc. (DE 315).¹ For the reasons set forth below, the motions are GRANTED. Also before the Court is defendant Whirlpool Corporation's motion to decertify classes (DE 312), which is DENIED as moot.

The named plaintiffs, purchasers of Maytag washing machines, are Charlene Dzielak, Shelley Baker, Francis Angelone, Brian Maxwell, Jeffrey

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McLenna, Jeffrey Reid, Kari Parsons, Charles Beyer, Jonathan Cohen, Jennifer Schramm, and Aspasia Christy.

The first named defendant is the manufacturer of Maytag washing machines, Whirlpool Corporation ("Whirlpool").² The remaining defendants are the retailers from whom the plaintiffs purchased the Maytag washers: Lowe's Home Center ("Lowe's"), Sears Holding Corporation ("Sears"), The Home Depot, Inc. ("Home Depot"), Fry's Electronics, Inc. ("Fry's"), and Appliance Recycling Centers of America, Inc. ("ARCA").³

The Department of Energy ("DOE") Energy Star program authorizes manufacturers to affix an Energy Star label signifying that an appliance meets certain standards of energy efficiency. Each Maytag washing machine at issue in this case bore an Energy Star label at the time of purchase. Thereafter, however, the DOE determined that Maytag Centennial washing machine model number C6-1 did not comply with Energy Star requirements, and the

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Environmental Protection Agency ("EPA") disqualified the machine from the Energy Star program. That noncompliance determination and disqualification allegedly apply equally to Maytag Centennial model numbers C6-0, C6-1, and C7-0.⁴

According to Plaintiffs, Energy Star-qualified washing machines cost more than others but save consumers money over time because they consume less energy. Plaintiffs allege that they paid a price premium attributable to the "Mislabeled Washing Machine's supposed energy efficiency and ENERGY STAR® qualification." (DE 29 ¶ 46). But those non-compliant machines, say Plaintiffs, wound up costing more to operate than a truly Energy Star-compliant machine. (Id. ¶ 47).

The complaint asserts causes of action for breach of express warranty, breach of the implied warranty of merchantability, unjust enrichment, violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. ("MMWA"), and violations of California, Florida, Indiana, Michigan, New Jersey, Ohio, and Texas consumer fraud statutes.⁵ Other purchasers of these washing machines, Plaintiffs say, stand in precisely the same shoes, and Plaintiffs therefore filed their action as a putative class action on behalf of such purchasers.

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Named plaintiffs Maxwell, Christy, and Baker bought their washers in California; Reid in Florida; Beyer in Indiana; McLenna in Michigan; Dzielak and Angelone in New Jersey; Parsons in Ohio; Cohen in Texas; and Schramm in Virginia.

Plaintiffs moved to certify the class on two theories of harms: (1) that the washers' price was inflated because consumers pay a premium for Energy Star-qualified machines; and (2) that each purchaser incurred greater water and energy costs than he or she would have if the washer had been truly Energy Star-qualified. I certified Plaintiffs' class on the price-premium energy theory only, against Whirlpool only (because it was Whirlpool that was responsible for obtaining Energy Star certification and placing the Energy Star labels on the washers). The class now comprises subclasses of purchasers in those seven states: California, Florida, Indiana, New Jersey, Ohio, Texas, and Virginia.

I did not certify the class against the retailer defendants, i.e., Lowe's, Sears, The Home Depot, Fry's, and ARCA. Against them, only the individual claims of Dzielak, Angelone, Baker, Maxwell, Reid, Parsons, Beyer, Cohen, Schramm, and Christy are currently pending.

I. FACTS

A. Background

The Energy Policy and Conservation Act of 1975 ("EPCA"), 42 U.S.C. §§ 6291, et seq., together with the National Energy Conservation Policy Act of 1978 ("NECPA") and National Appliance Energy Conservation Act of 1987 ("NAECA"), established an energy conservation program for major household appliances. (DE 78 at 4). These statutes and related regulations led to the Energy Star program, "a voluntary program to identify and promote energy-efficient products and buildings in order to reduce energy consumption, improve energy security, and reduce pollution through voluntary labeling of, or other forms of communication about, products and buildings that meet the highest energy conservation standards." 42 U.S.C. § 6294(a). To qualify for the

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Energy Star program, a product must meet certain efficiency standards promulgated by the DOE. See C.F.R. §§ 430.1, et seq.

The Energy Star program was authorized by the Energy Policy and Conservation Act. 42 U.S.C. §§ 6291-6309. (DE 349 ¶ 1). Energy Star is a "voluntary program to identify and promote energy-efficient products." 42 U.S.C. § 6294a(a). (DE 349 ¶ 2). Under the program, the DOE creates Energy Star testing standards, and the EPA enforces them. (DE 349 ¶ 3). Products can earn Energy Star-qualification by meeting the energy efficiency testing standards and, if applicable, the water efficiency testing standards set by the DOE. (DE 349 ¶ 4). Products that earn Energy Star-qualification may display the Energy Star logo. (DE 349 ¶ 5).

Separately, the Federal Trade Commission ("FTC") requires that all clothes washers display an EnergyGuide label. (DE 349 ¶ 10). Consumers may consult the EnergyGuide label to obtain information about a clothes washer's relative electricity consumption and operational costs compared to other similar models. (DE 349 ¶ 11). For clothes washers, the EnergyGuide label contains information about how many kWh per year the clothes washer will use under certain laboratory conditions, and how the operational costs compare to other, similar models, based on an assumed number of washes per year and using national average energy costs. (DE 349 ¶ 12). Until 2011, there existed no analogous federal labeling requirement that included the absolute and relative water consumption of a clothes washer. (DE 349 ¶ 13).

In September 2010, the EPA published a presentation entitled "Energy Star® Sales Associate Training - Clothes Washers." (DE 325 ¶ 11). The EPA's presentation also included a slide showing the ENERGY STAR® label has an influence on 91% of consumers. (DE 325 ¶ 13). In 2014, the EPA published a book entitled "Energy Star® Products - 20 Years of Helping America Save Energy, Save Money and Protect the Environment." In the book, the EPA stated that "ENERGY STAR is a global symbol for energy efficiency. . . . More than 80 percent of U.S. consumers recognize and understand the label . . . ." (DE 325 ¶ 14).

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Michael Todman, President of Whirlpool North America, explained that

ENERGY STAR qualifications essentially say that there are significant savings from a consumer perspective. So against the conventional appliances for electricity, okay, with an appliance that's ENERGY STAR qualified is on average about a 31% savings. . . . If you put it into real terms, there is a slight premium that consumers will pay for [Energy Star] appliances. But they're looking for pay back and right now on average the pay[-]back period for [Energy Star] qualified appliances is around three, a little over three years, 3.4 years.

(DE 325¶ 16). Whirlpool's Chairman and Chief Executive Officer, Jeff Fettig explained that

[y]ou can see the conventional appliance, which is what I would call a non-ENERGY STAR appliance. Although the initial purchase price is less, the cost of ownership over a 10-year cycle is higher. The product on the right is a comparable product with energy efficiency ratings. You pay a little bit more on the front end, but you save about 20% over the life of the product.

(DE 325 ¶ 18).

Plaintiffs now maintain that the Energy Star logo is widely recognized and understood to be a key influencer of appliance purchase decisions. (DE 325 ¶ 19-28). Plaintiffs allege that they all understood the Energy Star label when they purchased their Maytag washing machines. (DE 325 ¶ 19-28). Defendants disagree with this characterization and that any plaintiff's testimony was similar to the others. (DE 325 ¶ 19-28). Instead, Defendants allege that Plaintiffs gave widely disparate interpretations of what they understood the Energy Star logo to mean. (DE 325 ¶ 19-28).

Tests employed by the DOE to calculate compliance with Energy Star are the same as those used to populate the data on the EnergyGuide label. (DE 349 ¶ 15). In fact, "[a]ll of the metrics used by the EnergyGuide and Energy Star labeling programs are based on the DOE test procedure." (DE 349 ¶ 16). Between 1997 and 2012, those tests were found in 10 CFR 430, Subpart B, Appendix J1 (the "J1 Test Procedure"). (DE 349 ¶ 17).

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B. The J1 Test Procedure

The J1 Test Procedure is designed to be repeatable between laboratories. (DE 349 ¶ 18). Under the J1 Test Procedure, a clothes washer's energy efficiency is measured by the Modified Energy Factor ("MEF") (DE 349 ¶ 21) and a clothes washer's water efficiency is measured by the Water Factor ("WF") (DE 349 ¶ 22). The MEF is calculated by dividing the capacity of the clothes washer's "clothes...