Seventh Circuit: “Predominance Is a Question of Efficiency”

The question of Rule 23(b)(3) predominance has become an increasingly thorny one for courts ruling on class certification motions, in no small part due to the Supreme Court’s landmark 2011 opinion in Wal-Mart Stores, Inc. v. Dukes. It was thus a refreshing development when a recent Seventh Circuit opinion undertook to address predominance in strikingly simple terms.

“Predominance is a question of efficiency,” wrote Judge Richard Posner in Butler v. Sears, Roebuck and Co. “Is it more efficient, in terms both of economy of judicial resources and of the expense of litigation to the parties, to decide some issues on a class basis or all issues in separate trials?”

The underlying lawsuit involved a class action involving a pair of defects in Sears washing machines. With respect to one defect, which allegedly caused mold buildup in the machines, the district court denied class certification on the ground that the manufacturer made several design modifications, as a result of which different models were differently defective—and some might not be defective at all. With respect to the other defect, a control unit malfunction that allegedly caused the machines to shut down in mid-cycle, the district court granted class certification.

The Seventh Circuit held that both classes should have been certified. The fundamental question in the mold litigation, the panel held, was “were the machines defective in permitting mold to accumulate and generate noxious odors?” This question, the court said, was “common to the entire mold class, although the answer may vary with differences in design.” To the extent that, as Sears claimed, many class members did not experience a mold problem, the panel held, “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.” For similar reasons, the court upheld class certification in the control unit litigation, holding that “[t]he principal issue is whether the control unit was indeed defective.”

Notably, the Seventh Circuit determined that the issue of whether the product was defective predominated not only over individual questions of damages, but also over differences in state laws that might govern the class’ claims. In particular, the panel noted that in some of the affected states, a defective product can be the subject of a successful suit for breach of warranty even if the defect has not yet caused harm—thus permitting plaintiffs in those states to recover for breach of warranty even if they have not yet encountered an odor or a control unit malfunction. Judge Posner noted only that the district court may want to consider whether the states’ differing laws warrant the creation of subclasses—as might the difference in designs in the various models involved in the mold litigation.

Much ink has been expended over the last couple of years in efforts to weigh common and individual questions for Rule 23(b)(3) purposes. The Butler opinion, short and to the point, is a welcome reminder that identifying the predominant issue in a lawsuit need not always be so difficult.

Posted in Rule 23 Compliance Issues

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