Opinion
2:14-mn-00001-DCN
07-21-2017
IN RE: PELLA CORPORATION ARCHITECT AND DESIGNER SERIES WINDOWS MARKETING, SALES PRACTICES AND PRODUCTS LIBAILITY LITIGATION.
ORDER
This matter is before the court on defendant Pella Corporation's ("Pella") motion to deny class certification in all remaining cases. For the reasons set forth below, the court denies Pella's motion.
I. BACKGROUND
The plaintiffs in this consolidated multi-district litigation are owners of certain Pella Architect Series and Designer Series Windows manufactured between 1997 and 2007 (the "Windows"). Plaintiffs allege that the Windows suffer from a common design defect and that this defect is exacerbated by the use of inadequate, or inadequately applied, wood treatment and preservative. Plaintiffs have filed a number of class action complaints in separate jurisdictions based on these allegations, which have been referred to this court for coordinated or consolidated pretrial proceedings. ECF No. 1, MDL Panel Consolidation Order.
Case Management Order No. 5 ("CMO-5") outlines the procedure by which class certification issues are being addressed in this MDL. ECF No. 21, CMO-5 ¶¶ 7-16. CMO-5 first required the parties to select three cases for briefing on class certification. Id. ¶ 7. Plaintiffs and Pella were each permitted to select one case, while the third case was selected "at random" from the remaining cases. Id. CMO-5 provides that "[a]fter the [c]ourt's decision of class certification for the 3 cases, the [c]ourt and the [p]arties will confer and discuss the impact of the [c]ourt's ruling(s) on all remaining class action complaints," and states that the court may ask for briefing on this issue. Id. ¶ 16.
In November of 2015, plaintiffs moved for class certification in three cases. One of these cases was dismissed before the court could rule on class certification, leaving only Romig v. Pella Corp., Case No. 2:14-cv-0433-DCN ("Romig") and Naparala v. Pella Corp., Case No. 2:14-cv-3465-DCN ("Naparala"). In both cases, plaintiffs' claims were winnowed down to a single breach of express warranty claim. See, e.g., Romig Class Cert. Order 2. Plaintiffs correspondingly narrowed their class definition to "current or former owners of structures [containing the subject Windows] who made a claim under Pella's Limited Warranty." See, e.g., Romig Pl.'s Reply 3. Plaintiffs argued that the Windows suffer from a defective "water management system" comprised of three distinct "failure paths" that permit water intrusion, and that the class should be certified for the purposes of resolving this common defect issue. Romig Class Cert. Order 6, 12.
On June 3, 2016, the court issued orders denying class certification in both Romig and Naparala. These orders relied on substantially similar reasoning, holding that (1) when plaintiffs' breach of warranty claims were considered in their entirety, "individual issues predominate[d] over the common defect issue" under Federal Rule of Civil Procedure 23(b)(3), and (2) even if the class could escape the predominance inquiry by seeking certification on just the defect issue, certification was still inappropriate under the superiority requirement of Rule 23(b)(3). Id. at 20-35. The court highlighted the individualized inquiries that would be required to assess causation of each class member's damages and to resolve Pella's affirmative defenses—particularly with respect to the statute of limitations. Id. at 20-21. The court also noted that the nature of plaintiffs' breach of warranty claims made these causation issues particularly problematic because, at least in certain cases, plaintiffs would be required to prove that their initial warranty claim was caused by the defect in addition to proving causation of damages.
More precisely, the court found that plaintiffs would be required to prove both elements in every case, but that in certain cases—where a plaintiff made a warranty claim and actually received a replacement Window—these elements would not merge into the same inquiry. Romig Class Cert. Order 15-16.
Pella filed the instant motion on July 15, 2016, arguing that the principles laid down in the court's recent class certification orders should be applied to all remaining class actions in this MDL. ECF No. 156. Plaintiffs filed a response to this motion on August 12, 2016, ECF No. 158, and Pella replied on August 26, 2016. ECF No. 159. A hearing was held on September 8, 2016. The matter is now ripe for the court's review.
II. DISCUSSION
A. Availability of Pella's Requested Relief
Pella seeks an order denying class certification in all remaining cases involved in this MDL. This request does not arise under any Federal Rule of Civil Procedure or other established body of law. Indeed, neither party has been able to find a case addressing the precise issue presented here. The court is therefore faced with an initial question of whether the requested relief is even available, and if it is, what standards should guide the courts' decision to grant or withhold it.
Plaintiffs argue that such relief would unconstitutionally deprive them of their right to procedural due process. Pls.' Resp. 4-7. Pella argues that its request is simply an application of the principles of stare decisis, rather than issue preclusion or res judicata which might raise due process concerns. Def.'s Mot. 13-14. But even if plaintiffs' due process concerns can be set aside, the court is not convinced that the principle of stare decisis provides a sufficiently strong foundation for preemptively denying class certification in this MDL. Pella cites a law review article for the proposition that
Because the court finds that Pella's motion should be denied even if it does not implicate the Due Process Clause, the court does not address this argument.
[c]onstant relitigation of essentially the same legal issues, at the successive behests of a multitude of litigants, should not be permitted in section 1407 transferee courts. To allow such relitigation would undermine the purposes of expediting litigation through coordinated pretrial under a single judge. . . . Stare decisis, rather than law of the case, should be looked to when newcomers to the section 1407 transferee court seek to be heard on issues already considered in other cases in the pretrial consolidation group.Id. (quoting Joan Steinman, Law of the Case: A Judicial Puzzle in Consolidated and Transferred Cases and in Multidistrict Litigation, 135 U. Pa. L. Rev. 595, 669, 699 (1987)). But the concept of stare decisis presupposes a determination that an issue has been previously decided in prior litigation. STARE DECISIS, Black's Law Dictionary (10th ed. 2014) ("The doctrine of precedent, under which a court must follow earlier judicial decisions when the same points arise again in litigation."). Even when this occurs, "the rule of stare decisis is not an 'inexorable command,'" but rather a policy that can be set aside in certain—admittedly rare—circumstances. Planned Parenthood of Se. Pennsylvania v. Casey, 505 U.S. 833, 854 (1992) (quoting Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 405-411 (1932) (Brandeis, J., dissenting)). One such circumstance is when "facts have so changed, or come to be seen so differently, as to have robbed the old rule of significant application or justification." Id. at 855. Because stare decisis involves a reapplication, rather than an extension, of a prior ruling, it necessarily creates a new ruling, suggesting that the parties should be given a full opportunity to address the reapplication of the old rule to new facts.
The court also notes that the principle of stare decisis is justified by its tendency to "promote[] the evenhanded, predictable, and consistent development of legal principles, foster[] reliance on judicial decisions, and contribute[] to the actual and perceived integrity of the judicial process." Payne v. Tennessee, 501 U.S. 808, 827 (1991). Pella undoubtedly believes that its proposed relief would further these goals by ensuring consistency on the issue of class certification. Assuming this is true, one might still wonder how the court's decision would be perceived procedurally. Given that no other court has taken this course, the court thinks there is at least some risk that parties will be less inclined to rely on this court's procedural decisions, and may perceive less integrity in the judicial process. --------
Additionally, while deciding all remaining class certification questions in one fell swoop would doubtlessly provide some benefits to judicial economy, these benefits should not be overstated. If Pella is correct, and the rationale laid down in the Romig and Naparalla orders would clearly dispose of any subsequent class certification motions, then it should not be particularly difficult for Pella to brief, or for the court to resolve, such motions. Alternatively, if these questions are not easily resolved, that suggests the court should not be denying class certification without a full briefing in each individual case. Certainly, if Pella's assessment of the issues is correct, there is some unfairness in requiring it to address subsequent class certification motions at all, regardless of how easily they can be resolved. But this may be a necessary cost in order to ensure that all issues in this litigation are fully and fairly decided.
Ultimately, the court need not decide whether it is possible to preemptively deny class certification motions in other cases. However, to the extent such relief is available, the court is convinced that it should only be granted in rare circumstances and only after the defendant has made an exceptionally strong showing that future motions for class certification would be futile. Any ambiguities in the Romig and Naparalla orders or inferences about future class certification motions must therefore be resolved in the plaintiffs' favor.
B. Pella's Showing of Futility
Turning to the substance of Pella's arguments, it seems likely that the bulk of the court's previous analysis would apply to any future class certification motion that involves claims similar to those in Romig and Naparala. So long as plaintiffs seek consequential damages, they will need to prove that the alleged defect in the Windows was the source of their damages. This gives rise to the host of individualized inquiries described in Romig and Naparalla, including "improper installation, condensation, or even other 'failure paths' that are not deemed defective." Romig Cert. Order 21.
However, the court did note one way in which Romig and Naparalla's breach of warranty claims presented especially problematic causation issues. Because the Pella Limited Warranty included a requirement that the claimant provide notice of a "defect," the court found that plaintiffs would need to prove that the defect caused both the problems that gave rise to their warranty claim and their damages. The court further observed that "[t]hese inquiries might merge where a warranty claim was denied, but are likely to be separate where a class member actually received repairs or replacement Windows." Id. at 21. This peculiarity could be avoided under a fraud or negligence theory, and indeed, some of the cases in this MDL involve fraud or negligence claims. See Def.'s Mot. Ex. B (chart summarizing claims in all MDL actions). It could also be avoided under an implied warranty claim, which would not include a notice requirement. Admittedly, this concern only applied to a subset of the plaintiffs in Romig and Naparalla; in instances where the warranty claim was denied, the two causation inquiries could merge. Nevertheless, it represents one way in which a future class action might avoid some of the individualized inquiries that concerned the court in Romig and Naparalla.
The court also noted that Pella's affirmative defenses would require their own set of individualized inquiries. The court specifically highlighted Pella's statute of limitations defenses and reasoned that plaintiffs would likely need to succeed on individualized issues to utilize the doctrine of equitable estoppel. The court noted that New York and Wisconsin law required the plaintiffs to have exercised due diligence and reasonably relied on Pella's representations in failing to bring their claims within the statute of limitations. E.g. Romig Cert. Order 21-22. Because this analysis was predicated on state law, it would not apply in states that utilized substantially different statute of limitations or equitable estoppel principles.
Thus, the court concludes that there are enough ways in which the remaining cases in this MDL might be distinguished from Romig and Pella. The court does not mean to suggest that it believes any of the issues that might distinguish future motions for class certification would be meritorious. The court offers no such opinion. Instead, the court simply finds that, because some potential arguments have not been fully explored, it would be, at best, imprudent—if not unconstitutional—to deny the remaining plaintiffs the opportunity to advance such arguments.
III. CONLCUSION
For the foregoing reasons, the court DENIES Pella's motion to deny class certification.
AND IT IS SO ORDERED.
/s/ _________
DAVID C. NORTON
UNITED STATES DISTRICT JUDGE July 21, 2017
Charleston, South Carolina