A federal court in Massachusetts federal court recently denied class certification to consumers who claimed their wood-plastic composite decks were defective. See Anthony Pagliaroni et al. v. Mastic Home Exteriors Inc. and Deceuninck North America LLC, No. 1:12-cv-10164 D. Mass. 9/22/15). Readers may find the analysis of the Rule 23(a) factors of typicality and commonality useful.
Oasis is a manufactured composite decking material made of wood flour, high-density polyethylene (“HDPE”) and micro ingredients such as talc. Plaintiffs submitted a report by experts opining on a defect in the material and the alleged cause of Oasis’s failure in the decks. Importantly, they concluded that Oasis “suffers from the common defect of excessive water absorption” that results in swelling, cupping and cracking of the product. Thus, plaintiffs alleged that defendant misrepresented the composition of Oasis, and that the product failed to comply with building codes. (Defendant marketed Oasis using a variety of written marketing materials, including print advertisements, brochures, website materials, tear sheets, physical samples and point of purchase displays that varied from material to material and year to year.)
The product initially came with a ten-year limited warranty. The warranty stated that Oasis “products will not crack, split, splinter, or suffer structural damage due to termites, insects, or fungal decay.” The warranty excluded damage done by various specific factors, such as improper installation. The ten-year warranty was not transferrable. Mastic changed this warranty in 2006, extending the period to twenty-five years and making the warranty transferrable to future homeowners.
Plaintiffs also submitted an expert report purporting to set forth a formula to calculate damages as measured by the repair or replacement costs to homeowners. This formula was based upon the size of the deck and its location, with additional considerations pertaining to the scope of damage and the surrounding landscape. The damages report posited that an inspector could identify which deck components require replacement by placing a sticker on each damaged component and taking photographs of the entire deck. Plaintiffs asserted that this formula could be applied uniformly to estimate damages.
The court rejected Daubert challenges, finding the issues with the common defect opinion went to the weight of the testimony, not its admissibility.
Plaintiffs then moved to certify a class defined as all individuals and entities that own homes, residences, buildings, or other structures physically located in the states of Massachusetts, Minnesota, New York, and Oregon in which Oasis decking is or has been installed. The Court noted that it must conduct a rigorous analysis of the prerequisites established by Rule 23 before certifying a class. In doing so, a court may probe behind the pleadings to formulate some prediction as to how specific issues will play out. In re New Motor Vehicles Canadian Export Antitrust Litig., 522 F.3d 6, 17 (1st Cir. 2008) (internal citations and quotation marks omitted). This is because the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.
The Court focused first on commonality. In light of Wal-Mart, the possibility of a yes or no answer to a class-wide question is inadequate to establish commonality. Plaintiffs must show that the proposed common questions will lead to answers "apt to drive the resolution of the litigation,” meaning that they “will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S.Ct. at 2551. Plaintiffs offered five questions to show commonality and were correct that the five questions offered could be answered yes or no for the entire class. However, further inquiry is necessary to determine whether these answers would drive the resolution of any of plaintiffs’ causes of action.
Plaintiffs asserted express warranty claims, governed by § 2-313 of the Uniform Commercial Code, which provides that any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. First, plaintiffs argued that defendant Mastic breached an express warranty about the product’s durability, an another about the limited warranty. The Court concluded that plaintiffs had not offered a common question that would drive the resolution of the litigation under either of these express warranty theories, because determining which, if any, representations became a basis of the bargain with a plaintiff would be driven by individualized proof, especially in light of the fact that there was a multi-tiered distribution system and defendant did not sell Oasis directly to homeowners.
Regarding implied warranty, and fitness for ordinary use, the Court observed that some consumers received Oasis decks that were alleged to be unfit for ordinary use, whereas others have had no performance problems with their decks. In light of this record, whether a particular Oasis deck fails ordinary expectations for use was not a common question susceptible to class-wide proof or determination.
None of the common questions proposed by plaintiffs could generate answers that could drive the resolution of the unjust enrichment claims either. To resolve these claims, individual plaintiffs would need to demonstrate that due to the condition of their decks and notwithstanding any warranty payments offered by defendants (and accepted or rejected by Plaintiffs), the plaintiff conveyed on defendants a benefit that would be unjust for defendants to retain.
Regarding the consumer fraud claims, these laws require a showing of injury and causation. See Tyler v. Michaels Stores, Inc., 464 Mass. 492, 503, (2013); LensCrafters, Inc. v. Vision World, Inc., 943 F. Supp. 1481, 1488 (D. Minn. 1996); City of New York v. Smokes-Spirits.Com, Inc., 911 N.E.2d 834, 838 (N.Y. 2009). Questions of injury and causation are not amenable to common resolution for this proposed class, where the record raises individualized questions of proof as to whether an Oasis owner has actually suffered any injury, whether that injury has already been remedied by the Oasis warranty program and whether a particular representation or action by defendants caused that owner’s damages. Hence, insufficient commonality.
The Court also concluded that given the breadth of the proposed class definition the named plaintiffs had not met the typicality requirement, for several reasons. First, the named plaintiffs alleged that they suffered failure of their Oasis decks, whereas most class members have not reported any problems with their Oasis decks, so the alleged injury suffered was not common. There is no legally cognizable injury in a product defect case, regardless of whether the claim is for fraud, violation of consumer protection statutes, breach of warranty, or any other theory, unless the alleged defect has manifested itself in the product used by the claimant, observed the Court.
Next, the named plaintiffs were also atypical of the class because the four named plaintiffs either did not accept the warranty payments offered to them by defendants or were deemed ineligible for warranty compensation due to installation error, whereas most class members who submitted claims for damage to their Oasis decks accepted warranty payments, some of which payments included costs beyond those covered by the warranty program such as labor costs. Finally, the breadth of the proposed class definition presented additional problems. The class included purchasers of Oasis and transferee owners who purchased a building that already had Oasis installed. The named plaintiffs were all direct purchasers of Oasis decks and their theory of liability would differ from the claims of a transferee owner who did not view any representations by Mastic about Oasis and did not select or pay for Oasis.
Class certification denied.