The case of the moldy washing machines
Gina Glazer says that the smelly mold started growing in her Whirlpool front-loading washing machine about six months after she bought it. Glazer scrubbed. She left the machine’s door open when she wasn’t using it. The mold wouldn’t go away, and neither would the smell. Glazer called Whirlpool to complain.
Oh, and was she ever one of many. The first astonishing number in the Case of the Moldy Washing Machines is this one: 1.3 million. According to the U.S. Court of Appeals for the 6th Circuit, that’s how many calls Whirlpool got about odor and mold in its front-loading machines (which use less water than top-loaders and are sold under the Kenmore brand). And that’s just between 2003, when the complaints started, and the end of 2006.
Whirlpool told frustrated customer after customer to leave the doors of their washing machines open when they weren’t in use and to switch cleaning products. The mold still wouldn’t go away. In 2007, the company started selling a special cleaning product, called Affresh, which was supposed to solve the mold problem. And here’s the second astonishing number: $195 million. The 6th Circuit said that’s the top estimate for the revenue Whirlpool expected Affresh to bring in. It’s kind of genius, when you think about it: keep selling washing machines that grow mold, and then make more money by marketing special soap to kill the mold. Except that Affresh didn’t cure the mold, the court said. Whirlpool made design changes that reduced the mold problem, but even Sears, which sold the machines, says the alterations reduced the mold but didn’t eliminate it, according to another federal appeals court. Yet both Whirlpool and Sears continued to sell these washing machines, at the also astonishing number of 200,000 a year. (You might think customer reviews on the internet would put a stop to this, but don’t forget all the people who buy goods in actual stores without doing research online.)
I’m no domestic goddess, but I do most of the laundry in my house, and this is a story that struck fear into my consumer heart. It made me run down to my basement to check the brand of our front-loading washing machine. (Maytag, phew.) It didn’t dismay me in the slightest to learn that Glazer sued, on behalf of herself and tens of thousands of other mold-plagued Whirlpool customers in Ohio, where she lives. Another lawsuit is pending that involves the machines sold by Sears.
Because the moldy washing machine owners are suing in groups, their lawsuits are called class actions. This is the efficient way to go – a couple of mass cases instead of a zillion individual ones. For a problem like a moldy washing machine, where the damages for each person are relatively small, a class action is often the only way to find a plaintiff’s lawyer willing to invest time in the case. After all, however infuriating it would be to find you can’t keep your washing machine clean, you’re not going to die or lose a limb over it.
The 6th Circuit, in Glazer’s case against Whirlpool, and also the 7th Circuit, in the case against Sears, each ruled that the suits should go forward as class actions. To be clear, these rulings say nothing about who will win – they’re just allowing Glazer and the other disappointed washing machine owners to get into court as a group. But that preliminary decision has made these cases the latest whipping boys of corporate defense lawyers and the U.S. Chamber of Commerce. Both have wildly cheered as over the past few years, the Supreme Court, usually by a 5-4 vote of conservatives vs. liberals, has made it harder and harder to bring a class action. As Yale law professor Judith Resnik puts it, “The rule for class actions, written in 1966, was designed to make it easier to get into court, by banding small-value claims together. But the 2013 Supreme Court is unraveling those bands, piece by piece.”
Defense lawyers and the Chamber of Commerce – the group that is the most successful in getting the Supreme Court’s attention – are pushing hard for the Supreme Court to hear the moldy washing machine cases. “The Sears case clearly has defense lawyers rattled,” Forbes writer Daniel Fisher wrote in May. “They’ve mounted an aggressive public relations campaign to get reporters like me to write about it.” Fisher did, along with the Wall Street Journal editorial page (“the justices should hear a misguided class-action case”) and the Washington Times in multiple pieces.
I guess the chamber is only looking for a certain kind of pro-business coverage, though: When I called and emailed its press office over a couple of days, no one responded. Oh well.
I’ll tell you about the chamber’s argument for overturning the appeals court rulings anyway. The rule for this kind of class action requires the questions of law and fact common to all the customers who are suing to “predominate over any questions affecting only individual members.” In the two washing machine cases, the members of the class include customers who have already had their front-loaders turn moldy and smelly, as well customers who have one of the models shown to grow the mold but who haven’t noticed mold yet. So Sears and Whirlpool argue that common questions don’t predominate.
In one of the two appellate rulings, Judge Richard Posner of the 7th Circuit rejected this argument for this stage of the case. “Sears argues that most members of the plaintiff class did not experience a mold problem,” he wrote. “But if so that is an argument not for refusing to certify the class but for certifying it and then entering a judgment that will largely exonerate Sears – a course it should welcome.” Posner also pointed out that “every class member who claims an odor problem will have to prove odor to obtain damages.” Sears and Whirlpool also say the class shouldn’t include customers who bought different models of washing machines. But the companies don’t say that any of the design changes to the machines over the years eliminated the mold problem – just that they made it less bad. And if it turns out that the mold defect varies a lot by model as the lawsuit progresses, the district court judge overseeing the case can break the class into pieces later, Posner said.
Posner has taken a hit in the press coverage the Chamber of Commerce and the defense bar drummed up. He’s supposed to be guilty of hypocrisy because in 1995, in an entirely different case, he pointed out that large class actions can put “intense pressure to settle” on defendants. As Fisher says in Forbes, his decision to allow the case against Sears is a particular problem for the opponents because he is “one of the nation’s most respected legal theorists,” doesn’t fit into any ideological pigeon hole, and is a judge “other judges listen to.”
Judge Jane Stranch of the 6th Circuit, who wrote the other appellate decision, is an Obama appointee. The defense lawyers in the case against Whirlpool went after her in their petition for Supreme Court review by noting gratuitously that her husband and son “are class action attorneys at Judge Stranch’s former law firm.”
The Supreme Court has so far sent the cases back to Posner and Stranch for reconsideration in light of the justices’ decision this term in Comcast v. Behrend, one of the 5-4 rulings that narrowed the opening for getting a class action into court. Stranch has issued a new opinion saying that she is sticking to her guns. She said this case is different from Comcast because the class action so far is proceeding to decide liability, not damages. (Also instructive: “Whirlpool’s own documents confirmed that its design engineers knew the mold problem occurred despite variations in consumer-laundry habits and despite remedial efforts undertaken by consumers and service technicians to ameliorate the mold problem.”) Posner hasn’t spoken yet.
Here’s what’s at stake in these cases: If you buy a $1,000 appliance expecting it to last for 10 years only to find that it’s faulty, can you get back at least a few hundred dollars, or does the company get to keep your money, and everyone else’s, too? That’s the sucker punch the consumer class action blocks. Unless they can band together, each customer walks away with nothing.
The moldy washing machine cases are such a pungent example that I wonder if the Chamber of Commerce and the corporate defense bar are making a mistake by urging the Supreme Court to take this case. This is the one they just have to lose.