Chambers v. Whirlpool Corp.

214 F.Supp.3d 877

Steve CHAMBERS, et al., Plaintiffs,

v.WHIRLPOOL CORPORATION, et al., Defendants.

Case No. CV 11–1733 FMO (JCGx)

United States District Court, C.D. California.

Signed October 11, 2016

Charles S. Fax, Liesel Schopler, Rafkin Weiner Livingston Levitan and Silver LLC, Bethesda, MD, David H. Weinstein, Robert S. Kitchenoff, Weinstein Kitchenoff and Asher LLC, Philadelphia, PA, Henry Nicholls, Jeffrey Michael Cohon, Kristina S. Keller, Cohon and Pollak LLP, Los Angeles, CA, Nicole D. Sugnet, Lieff Cabraser Heimann and Bernstein LLP, San Francisco, CA, Steven A. Schwartz, Timothy N. Mathews, Chimicles and Tikellis LLP, Haverford, PA, for Plaintiffs.

Andrew M. Unthank, Catherine R. Ruhland, Cedric D. Logan, Michael T. Williams, Norman Reid Neureiter, Galen Driscoll Bellamy, Wheeler Trigg O'Donnell LLP, Denver, CO, Carole E. Reagan, Dean J. Zipser, Umberg Zipser LLP, Irvine, CA, for Defendants.

ORDER RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; MOTION FOR AWARD OF ATTORNEY'S FEES AND EXPENSES

Fernando M. Olguin, United States District Judge

Having reviewed and considered all the briefing filed with respect to the parties' Joint Motion for Final Approval of Class Action Settlement (Dkt. 254, "Final Approval Motion") and plaintiffs' Motion for Award of Attorneys' Fees and Expenses and for Service Awards for Plaintiffs (Dkt. 218, "Fees Motion"), as well as the oral argument presented during the final approval hearing on August 25, 2016, the court concludes as follows.

INTRODUCTION

On November 9, 2011, plaintiffs filed this class action against Whirlpool Corporation ("Whirlpool"), Sears Holdings Corp., and Sears, Roebuck & Co., Inc. (together with Sears Holdings Corp., "Sears") (collectively, "defendants"). (See Dkt. 1, Complaint). The Fourth Amended Complaint (Dkt. 98, "4AC"), the operative complaint in this matter, alleges 25 causes of action for violations of: the Magnuson–Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. ; breach of express and implied warranty; violations of the Song–Beverly Act, Cal. Civ. Code §§ 1792 et seq. ; strict product liability; failure to warn; unjust enrichment/restitution; fraudulent concealment/nondisclosure; negligence; violations of the consumer protection statutes of the states of Ohio, California, Georgia, Illinois, Maryland, Massachusetts, Missouri, New Jersey, New York, Utah, and Virginia; and declaratory judgment, 28 U.S.C. § 2201. (See id. at ¶¶ 216–553).

After conducting extensive discovery and engaging in substantial settlement negotiations, the parties reached a settlement and filed a joint motion for preliminary approval on September 11, 2015. (See Dkt. 192, Joint Motion of All Parties for Preliminary Approval of Class Action Settlement). On November 12, 2015, the court granted preliminary approval of the settlement, (see Dkt. 199, Court's Order of November 12, 2015 ("Preliminary Approval Order" or "PAO") at 32), appointed Kurtzman Carson Consultants, LLC ("KCC") as the Claims Administrator, (see id. at 33), directed KCC to provide notice to the class members, (see id. ), and scheduled a final approval hearing for June 10, 2016. (See id. at 34). At the request of the parties, the court subsequently rescheduled the final approval hearing for August 25, 2016. (See Dkt. 207, Court's Order of February 23, 2016, at 3).

BACKGROUND

I. PLAINTIFFS' ALLEGATIONS.

This case arises out of plaintiffs' allegations that certain Whirlpool-manufactured dishwashers branded "Whirlpool®," "Kenmore®," and "KitchenAid®" had a design defect that caused overheating in high current connections to the electronic control board ("ECB"), causing the ECB consoles to smoke, emit fumes and sparks, or catch fire, thereby posing a safety risk. (See Dkt. 199, PAO at 2). Plaintiffs allege that these Overheating Events¹ were caused by a design defect that rendered certain high-current connections to the ECBs insufficiently robust. (See Dkt. 98, 4AC at ¶¶ 163–65). This defect led to the gradual degradation of the electrical pathways, which caused overheating to extreme temperatures and ignition of surrounding plastics and wire insulation. (See id. at ¶¶ 7–8, 50 & 164–65). According to plaintiffs, defendants failed to disclose, or actively concealed, this defect. (See id. at ¶¶ 189–91). The group of plaintiffs, 18 persons from 11 different states, sued on behalf of a class of millions of consumers who have owned the subject Whirlpool-manufactured dishwashers. (See Dkt. 199, PAO at 2).

II. SETTLEMENT TERMS.

After "litigating intensively[,]" (Dkt. 192–3, Declaration of Charles S. Fax in Support of Joint Motion for Preliminary Approval [ ] ("Fax Decl.") at ¶ 12), and "engaging in settlement negotiations in six full days of mediation sessions with one of the nation's most esteemed mediators," (see Dkt. 192–4, Settlement Agreement at 3), the parties reached a settlement that plaintiffs assert "provides substantial relief to the Class, including considerable monetary and injunctive relief that will protect Class Members, Non–Class Members² and other consumers going forward." (Dkt. 254–2, Plaintiffs' Memorandum in Support of Joint Motion for Final Approval of Class Action Settlement ("Pls.' Final Approval Brief") at 11). The Settlement Class³ is comprised of certain purchasers and owners of Class Dishwashers,⁴ (see Dkt. 192–4, Settlement Agreement at 13, ¶ ZZ) (defining the "Settlement Class"), and includes two subclasses: the Past Overheating Subclass, consisting of those who experienced an Overheating Event within 12 years after the purchase date but before the Notice Date;⁵ and the Future Overheating Subclass, consisting of those who experience an Overheating Event within ten years after the purchase date or within two years of the Notice Date, whichever is later. (See Dkt. 199, PAO at 3–4).

All members of the Settlement Class, including the subclasses, will receive the following benefits under the Settlement Agreement:

a full recovery of costs spent on repairs; $200 to $300 in cash for Class Members who replaced their Dishwashers; $100 or a 30% rebate on the purchase of a new dishwasher [for] Class Members who experience an Overheating Event in the future; a rebate of 10% to 15% on the purchase of a new dishwasher to all Class Members regardless of whether they ever experience an Overheating Event; and enhanced safety warnings to service personnel about the dangers of bypassing Thermal Cut–Offs ("TCOs") (a safety shut-off device).

(Dkt. 254–2, Pls.' Final Approval Brief at 1; see Dkt. 199, PAO at 4–5 (describing the settlement terms)). The Settlement Agreement provides similar benefits to Non–Class Members, except that rebates will not be provided to those who have not experienced an Overheating Event. (See Dkt. 254–2, Pls.' Final Approval Brief at 1).

The settlement amount is uncapped, as defendants have agreed to compensate all eligible class members. (See Dkt. 199, PAO at 5). Defendants have also agreed to pay class counsel's attorney's fees, costs, and expenses awarded by the court, in addition to the costs and notice of settlement administration. (See id. ). Finally, defendants have agreed to pay a $4,000.00 service award to each named plaintiff and to purchase the websites of lead plaintiff Steve Chambers. (See Dkt. 192–4, Settlement Agreement at 47, ¶ IX.D).

III. RELEASE OF CLAIMS.

Upon final approval, Class Members who have not validly requested exclusion from the settlement will release all claims that they "now have or, absent [the settlement], may in the future have had ... by reason of any act, omission, harm, matter, cause, or event ... that relates to any of the defects, malfunctions, or inadequacies of the Class Dishwashers that are alleged or could have been alleged" in this lawsuit. (Dkt. 192–4, Settlement Agreement at 48–49, § X.A). The release includes "future injuries, damages, losses, or future consequences or results, excluding any future injury to person or to property other than the Class Dishwasher itself[,]" (id. at 50, § X.E), as well as unknown claims which would otherwise be preserved under California Civil Code § 1542. (See id. at 50–51, § X.F). The release does not extinguish "claims for personal injury or for damage to property other than to the Class Dishwasher itself." (Id. at 49, § X.B).

IV. NOTICE TO CLASS.

The court-appointed Claims Administrator, KCC, has implemented the multi-pronged notice program previously approved by the court. (See Dkt. 254–2, Pls.' Final Approval Brief at 7–8; see also Dkt. 199, PAO at 28–32 (approving multi-pronged notice program)). In accordance with that program, KCC: mailed and e-mailed summary notices and TCO repair notices to 4,162,934 Class members for whom Whirlpool's and Sears' records contained contact information; published notices in the national editions of certain magazines and on a variety of websites; purchased 14,000,000 internet banner impressions on a variety websites, partially targeted to reach adults 25 and older who were behaviorally categorized as "Dishwashing Machine/Home Appliance/Home Owners" on Facebook; and maintained a settlement website, www.dishwashersettlement.com, which received a total of 249,711 visits. (See Dkt. 254–6, Suppl. Passarella Decl. at ¶¶ 3–7 & 13). KCC also operated an Interactive Voice Response ("IVR") system via a toll-free telephone number, which received a total of 20,411 calls. (See id. at ¶ 12).

As of July 7, 2016, KCC had received a total of 133,040 claims, which includes: 106,331 claims for a rebate; 15,963 claims for both a rebate and a reimbursement; 10,417 claims for a reimbursement only; and 329 claims that were received near the claims deadline and had yet to be categorized. (See Dkt. 254–6, Suppl. Passarella Decl. at ¶ 18). Of the total 26,380 reimbursement claims, KCC was "unable to estimate how many claims will be accepted, deemed deficient with an opportunity to correct, or rejected after the time to correct deficiencies has passed." (Id. ). Also, as of July 7, 2016, KCC received 498...