Why Whirlpool’s win in moldy washer trial vindicates consumer class actions

October 30, 2014

On Monday, just days before jurors in federal court in Cleveland concluded that Whirlpool was not negligent in the design of front-loading washing machines with a supposed propensity to develop a moldy smell, Whirlpool’s lawyers asked U.S. District Judge Christopher Boyko to overturn his decision to permit Ohio buyers of the machines to litigate as a class. Whirlpool argued that the three-week trial to determine whether 20 washing machine models were poorly designed hadn’t established a common question to bind the purchasers’ class together. Judge Boyko quickly denied the motion, ruling Tuesday that the design of the machines is a common issue for all purchasers in the class.

I bet Whirlpool is now secretly thrilled to have lost that decertification motion. The defense verdict that the jury delivered Thursday binds all Ohio consumers who sued the company over moldy washing machines (except those who may have opted out). In one stroke, these Ohio jurors have erased Whirlpool’s potential exposure across the state. The company’s design has been exonerated, and Whirlpool needn’t concern itself with thousands of individual proceedings to determine its liability to thousands of Ohio purchasers of front-loading washing machines: It has none.

That outcome is a vindication of consumer class actions.

Whirlpool doesn’t think so. You wouldn’t expect it to, considering that no company in recent memory has worked more assiduously to attack class actions involving supposedly uninjured plaintiffs. Earlier this year, you probably recall, business-friendly groups rallied around Whirlpool and Sears (in related moldy washer cases) when they asked the U.S. Supreme Court to review decisions by the 6th and 7th U.S. Circuit Courts of Appeal that permitted washing machine buyers to proceed as a class, even though most consumers’ machines never developed a moldy smell. Whirlpool and Sears, both represented by Mayer Brown, told the Supreme Court that their cases presented the perfect opportunity for the justices to rein in abusive class actions in which plaintiffs’ lawyers force defendants to settle solely to avoid the risk of crippling classwide liability.

If the Supreme Court had taken the cases, consumer class action litigation might have been imperiled. But Whirlpool and Sears ended up failing to persuade the justices to take their cases, just as they had previously failed to convince the 6th and 7th Circuits – twice each – to decertify consumer classes to test their liability for the design of the washing machines.

Whirlpool, which even after Thursday’s verdict remains a defendant in multiple cases by washing machine buyers in states other than Ohio, continues to rail against consumer class actions. Corporate counsel Eric Sharon said in a post-verdict statement that Ohio jurors had delivered a “complete rejection of the class-action lawyers’ attempt to enrich themselves on the backs of consumers who have never had a complaint about their front-load washing machines,” the statement said. “This outcome also sends a strong message that this kind of abusive class litigation, targeting American manufacturing and comprised almost entirely of uninjured people, has no place in the landscape of American jurisprudence.”

The company’s frustration, Sharon said in a followup interview, has been that the vast majority of its customers are perfectly happy with the Whirlpool washing machines targeted in the class actions. It took years of expensive litigation, he said, to get the merits of the case before a jury, and many defendants wouldn’t have been as resolute as Whirlpool in refusing to settle.

Those are fair points, though it’s also true that consumers in the moldy washer cases had to survive quite a lot of judicial scrutiny, including two rounds of petitions to the Supreme Court, to get to the liability trial. Sure, Whirlpool would rather not have had to defend its products, but that’s the consequence of an adversarial legal system and federal rules that permit plaintiffs to band together as a class to pursue their claims.

My argument is that class litigation gives companies like Whirlpool a giant reward if they’re willing to take the risk of a classwide liability trial – which is exactly what the 6th and 7th Circuits said when they refused to decertify moldy washer classes last year. Judge Richard Posner, who wrote the 7th Circuit’s opinion, even said that defendants should welcome class action liability trials if they’re so convinced of the quality of their products. Class actions, according to both appeals courts, are the fairest and most efficient way to determine whether a product is defective – for defendants and class members alike. The Whirlpool verdict shows that the 6th and 7th Circuits were right. Jonathan Selbin of Lieff Cabraser Heimann & Bernstein, who represents the moldy washer class, told me Thursday that he wasn’t happy about the outcome in Ohio, but that the trial ratified the process. “We just showed how liability can be litigated on a classwide basis,” he said. (The class intends to appeal some of Judge Boyko’s decisions before and during the trial, including the judge’s refusal to let in evidence of the health risks of mold in washing machines.)

After Thursday’s verdict, the big question for both Whirlpool and class action lawyers is the impact this jury’s liability finding will have in other moldy washer cases against Whirlpool. Plaintiffs’ lawyer Selbin said it will have none because the Ohio jury made a determination under only Ohio law. Purchasers in other states, he said, cannot be bound by the Ohio verdict. “If we had won we could have used res judicata against them,” he said. “But they get zero value from this.” Selbin told me that purchasers are prepared to try liability cases in every other state as soon as Boyko, who is overseeing the consolidated litigation, certifies classes and remands cases. “We’re going to litigate this as many times as we have to,” he said.

Whirlpool lawyer Sharon said plaintiffs shouldn’t be so sure that the Ohio verdict won’t reverberate elsewhere. “It serves as a strong message for other jurisdictions,” he said. “I fully expect not only that we would raise it, but that other judges would take note on their own.”

If they do, it’s going to be tough for Whirlpool to keep arguing that class action liability trials are a bad thing.

(This post has been corrected. A previous version incorrectly suggested that plaintiffs allege mold develops only on washing machine doors.)

5 comments

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It might have been worth mentioning that the manufacturers of front-loading washing machines give very explicit and easy to follow instructions which, judging by the relatively small number of complaints, prevent mold. This probably explains the Cleveland decision and the likely outcome of the other cases.

Posted by Zaichik | Report as abusive

The class-action suit may give Whirlpool some liability protection, but how many consumers could afford individual lawsuits over mold in a washing machine? No attorney would take a case like that individually. Without cause for some kind of serious punitive damages, what would they win, a new pair of udnderwear? Without class action, nobody could afford any kind of action.

Posted by peskymeme | Report as abusive

Class action or no class action is primarily about getting lawyers paid not about justice. Consumers do not ever win in class actions only lawyers.

Mold or no mold should not be the question. Poor design should not be grounds for a lawsuit only negligent design. The courts seem no longer able to make that distinction.

Posted by QuietThinker | Report as abusive

Class actions make lawyers rich–and legal firms aggressively seek out class actions in order to make more money. Check out recent class actions and the division of the spoils between defendants and lawyers.

When the issue is something like asbestos, or other serious, and demonstrable health risk–class actions seem necessary and acceptable. But when this law is used for minor and possibly spurious consumer complaints drummed up by lawyers–class actions seem an onerous burden on business and ultimately the consumer.

Posted by MaskOfZero | Report as abusive

A Whirlpool washing machine? no thank you, what else have you got?
When winning really isn’t.

Posted by Whipsplash | Report as abusive