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EDITORIAL: Reining in class action
The Supreme Court applies a smell test to jackpot justice
Question of the Day
Trial lawyers saw their dreams of striking it rich diminish significantly Wednesday. The Supreme Court ruled that classes for class-action lawsuits must be certified based on facts. Comcast v. Behrend puts lower courts on notice. On Friday, the court should send a warning to the trial bar by agreeing to hear an appeal in the case of the smelly washing machines.
Several years ago, a group of lawyers decided they could clean up by going after Whirlpool, a major appliance manufacturer. By placing ads in newspapers and online seeking dissatisfied buyers of Whirlpool front-loading washers, the lawyers collected a handful of "victims" in Ohio. They asked a federal district court to receive class certification. Getting certification meant they could sue on behalf of every buyer in the state of Ohio. The U.S. Court of Appeals for the 6th Circuit went along with what clearly smells like a scam.
Class certification is a pivotal part of the strategy of jackpot lawyers because it expands potential damage awards from the price of a handful of washing machines to the price of 10 million machines nationwide. The dirty little secret of class-action lawsuits is that a class-certified complaint is much more likely to score a fat settlement than a court judgment, no matter how frivolous the underlying case may be. A runaway jury can cost a company millions — or even billions — of dollars, so risk-averse corporations understandably see an out-of-court settlement as the sensible option.
Whirlpool decided this time to fight; the case couldn't pass a smell test. Two Ohio residents said their front-loading washer has a musty odor, and they're demanding compensation from the company, even though they didn't follow the manufacturer's recommendations for preventing odors.
Stinky washers aren't a particularly common problem, according to Sears, one of the top appliance sellers (and itself the target of a copycat suit in the 7th Circuit). Fewer than 3 percent of buyers notice an unpleasant scent in the first five years they own the machines. Under the 6th Circuit's decision, however, consumers who have never caught the scent would still find themselves as plaintiffs in the lawsuit. This illustrates how the system is broken. "The basic purpose of a class action is to aggregate many individualized claims into one representative lawsuit,"J. Gregory Sidak, professor of law and economics at Tilburg University, wrote in an op-ed essay in The Washington Times. "When a certified class includes members who have not suffered and are not even likely to suffer harm, it includes parties whom a court would never allow to pursue individual actions. Therefore, the class should include only those plaintiffs who actually have a legitimate claim of harm."
As long as the 6th Circuit decision holds the force of law in the heartland of American manufacturing, manufacturers will continue to be forced to pay damages to customers who haven't been injured in any way. The Supreme Court must take this opportunity to shut down the shakedown by taking up Whirlpool v. Glazer.
The Washington Times
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