Court of Appeals Reaffirms Class Certification after Supreme Court Remand


The U.S. Court of Appeals for the Seventh Circuit last week reaffirmed its prior decision in favor of class certification in a breach of warranty case involving washing machines. Butler v. Sears, Roebuck and Co. was among several appellate decisions upholding class certification that required reconsideration after being vacated earlier this year by the U.S. Supreme Court. The cases were sent back to the Courts of Appeals after the Supreme Court reversed class certification in its watershed decision in Comcast Corp. v. Behrend.

In an opinion authored by the highly influential Judge Richard Posner, the Seventh Circuit rejected the defendant's broad reading of the Comcast decision. The court emphasized that "the fact that damages are not identical across all class members should not preclude class certification." Judge Posner declared that "[i]t would drive a stake through the heart of the class action device… to require that every member of the class have identical damages." The opinion also stated that "a class action limited to determining liability on a class-wide basis, with separate hearings to determine – if liability is established – the damages of individual class members, or homogeneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed."

Sears argued that class certification was inappropriate because most members of the plaintiff class had not experienced any mold problem. The Seventh Circuit found, however, that this was "an argument not for refusing to certify the class but for certifying it and then entering a judgment that would 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."

Judge Posner's opinion also noted that in a similar washing machine class action against Whirlpool in the Sixth Circuit (Glazer v. Whirlpool Corp.), the Court of Appeals had likewise reaffirmed its decision upholding class certification after the Supreme Court vacated that earlier decision and remanded for reconsideration in light of the Comcast ruling.

The recent decisions by the Sixth and Seventh Circuits make clear that the breadth and impact of the Comcast decision on class certification is still uncertain, particularly regarding the issue of damages.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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