Court Reinstates Class Claims Against Sears

(CN) - A recent Supreme Court ruling does not derail class-action claims against Sears, Roebuck & Co. over allegedly defective Kenmore washing machines, the 7th Circuit ruled.

The federal appeals court in Chicago revisited, in light of the high court's March ruling in Comcast Corp. v. Behrend, its earlier decision to certify two classes of washing machine buyers.

One group argued that defective front-loading washing machines caused mold buildup and foul odors; the other claimed the washing machines had faulty control units that caused the machine to shut down before the cycle had finished.

The classes sued Sears under the breach-of-warranty laws of six states for Kenmore machines sold from 2001 to 2004.

A federal judge certified the control-unit class but denied certification to the mold class, and the 7th Circuit reinstated the mold class last November.

The Supreme Court sent the case back to the 7th Circuit in light of Comcast, in which the justices disbanded certification of a class action accusing the cable company of trying to monopolize the market for non-basic cable television.

"Comcast holds that a damages suit cannot be certified to proceed as a class action unless the damages sought are the result of the class-wide injury that the suit alleges," the 7th Circuit's Judge Richard Posner explained. (Emphasis in original.)

"Comcast was an antitrust suit, and the court said that 'if [the plaintiffs] prevail on their claims, they would be entitled only to damages resulting from reduced overbuilder competition, since that is the only theory of antitrust impact accepted for class-action treatment by the district court," Posner wrote for the three-judge panel.

"Unlike the situation in Comcast, there is no possibility in this case that damages could be attributable to acts of the defendants that are not challenged on a class-wide basis; all members of the mold class attribute their damages to mold and all members of the control-unit class to a defect in the control unit," he wrote.

Posner rejected Sears' comparison of washing machine design changes that may have affected the severity of the mold problems to the varying antitrust liability theories in Comcast.

"It was not the existence of multiple theories in that case that precluded class certification; it was plaintiffs' failure to base all the damages they sought on the antitrust impact - the injury - of which the plaintiffs were complaining," Posner wrote. "In contrast, any buyer of a Kenmore washing machine who experienced a mold problem was harmed by a breach of warranty alleged in the complaint."

He said the Supreme Court likely remanded the case, though it differed from Comcast, because of the emphasis that the majority placed on the requirement of proof of predominance at the class certification stage rather than during later stages in the litigation.

"The court doesn't want a class action suit to drag on for years with the parties and the district judge trying to figure out whether it should have been certified," Posner wrote. "Because the class in Comcast was (in the view of the majority) seeking damages beyond those flowing from the theory of antitrust injury alleged by the plaintiffs, the possibility loomed that 'questions affecting only individual members' of the class would predominate over questions 'common to class members,' rather than ... the reverse." (Parentheses in original.)

He said predominance is not just a numbers game.

"Sears thinks that predominance is determined simply by counting noses: that is, determining whether there are more common issues or more individual issues,regardless of relative importance," Posner wrote.

"That's incorrect," he ruled. "An issue 'central to the validity of each one of the claims' in a class action, if it can be resolved 'in one stroke,' can justify class treatment."

Though separate defects are alleged, Posner said the case "is really two class actions."

"There is a single, central, common issue of liability: whether the Sears washing machine was defective," he wrote.

The court reinstated its earlier ruling for the plaintiffs.

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