622-4444 Attorneys for Defendants Whirlpool Corporation, Lowe’S Home Centers, LLC, Sears Holdings Corporation, and Fry’S Electronics, Inc
Total Page:16
File Type:pdf, Size:1020Kb
Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 1 of 43 PageID: 4648 McCARTER & ENGLISH, LLP Four Gateway Center 100 Mulberry Street P.O. Box 652 Newark, New Jersey 07101-0652 (973) 622-4444 Attorneys for Defendants Whirlpool Corporation, Lowe’s Home Centers, LLC, Sears Holdings Corporation, and Fry’s Electronics, Inc. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CHARLENE DZIELAK, SHELLEY BAKER, FRANCIS ANGELONE, BRIAN Case No. 2:12-cv-00089-KM-JBC MAXWELL, JEFFERY REID, KARI Honorable Kevin McNulty PARSONS, CHARLES BEYER, Honorable James B. Clark, III JONATHAN COHEN, JENNIFER SCHRAMM, and ASPASIA CHRISTY on behalf of themselves and all others similarly situated, Plaintiffs, DEFENDANTS’ BRIEF IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS v. CERTIFICATION WHIRLPOOL CORPORATION, LOWE’S HOME CENTERS, LLC, SEARS HOLDINGS CORPORATION, THE HOME DEPOT (U.S.A.), INC., FRY’S ELECTRONICS, INC. and APPLIANCE RECYCLING CENTERS OF AMERICA, INC., Defendants. Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 2 of 43 PageID: 4649 TABLE OF CONTENTS Page INTRODUCTION .......................................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 2 I. THE ENERGY STAR PROGRAM.................................................................................... 2 II. THE DOE INSTRUCTED WHIRLPOOL HOW TO MEASURE ITS TOP- LOADING WASHERS FOR ENERGY STAR COMPLIANCE ...................................... 3 III. WHIRLPOOL FOLLOWED THE DOE’S GUIDANCE IN DESIGNING THE MAYTAG CENTENNIAL WASHERS TO QUALIFY FOR ENERGY STAR ................................................................................................................. 4 IV. WHIRLPOOL NEVER SOLD A “DISQUALIFIED” CLOTHES WASHER TO ANY PLAINTIFF OR PUTATIVE CLASS MEMBER .............................................. 5 V. THE ENERGY STAR TEST DOES NOT MIMIC HOW CONSUMERS USE THE WASHERS IN THE REAL WORLD ............................................................... 6 VI. ACTUAL MARKET DATA SHOWS THAT THE WASHERS DID NOT COMMAND A PREMIUM DUE TO THE ENERGY STAR LOGO ............................... 7 VII. PLAINTIFFS HAVE DIFFERENT UNDERSTANDINGS OF WHAT THE ENERGY STAR LOGO “MEANS” AND WHAT WAS “PROMISED” TO THEM ................................................................................................................................. 7 ARGUMENT .................................................................................................................................. 9 I. LEGAL STANDARD ......................................................................................................... 9 II. PLAINTIFFS IGNORE KEY DIFFERENCES IN THE STATES’ LAWS, WHICH CAUSE INDIVIDUAL ISSUES OF LAW TO OVERWHELM COMMON ISSUES AND RENDER CLASS TREATMENT UNMANAGEABLE ........................................................................................................... 9 A. Plaintiffs Fail to Satisfy their Burden of Showing that New Jersey’s Express Warranty, Implied Warranty, and Unjust Enrichment Laws Apply ......................................................................................... 9 B. This Court Must Apply the Warranty and Unjust Enrichment Laws of All Seven States, Which Prevents Plaintiffs from Satisfying Rule 23(b)(3) ......................................................................................................... 10 i Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 3 of 43 PageID: 4650 1. Actual conflicts of law exist between the states’ express- and implied-warranty and unjust enrichment laws ........................................................................................................... 10 2. Individual questions of warranty and unjust enrichment law overwhelm common issues, making a class trial unmanageable and inferior ....................................................... 14 C. Differences among the Nine Consumer Protection Statutes Render Class Treatment Unmanageable and Inferior to Individual Actions .................... 15 III. PLAINTIFFS IGNORE THE MANY INDIVIDUALIZED FACTS THAT WILL PREDOMINATE AND OVERWHELM ANY CLASS TRIAL .......................... 17 A. Whether Any Warranty Was “Breached” or Any Fact “Misrepresented” or Whether Defendants’ Conduct Was Authorized by Federal Law Will Necessarily Raise Individualized Questions of Fact .................................................................................................. 17 B. Several of Plaintiffs’ Express Warranty, Consumer Fraud, and Unjust Enrichment Claims Require Individual Proof of Reliance or State-of-Mind ........................................................................................................ 19 C. Plaintiffs’ Warranty Claims Require Individual Proof of Pre-Suit Notice .................................................................................................................... 20 D. Plaintiffs’ Unjust Enrichment Claims Are Inappropriate For Certification .......................................................................................................... 21 E. Plaintiffs Must Prove That the Energy Star Logo Was “Material” to Each Plaintiff and Putative Class Member ....................................................... 22 F. There is No Common Evidence of “Energy Expense” Injury .............................. 23 IV. PLAINTIFFS’ DAMAGES MODELS ARE NOT TIED TO THEIR THEORY OF LIABILITY AND FAIL TO MEASURE DAMAGES ON A CLASSWIDE BASIS ....................................................................................................... 24 A. Plaintiffs’ “Price Premium” Damages Model Is Fundamentally Flawed and Not Tied to Their Theory of Liability ............................................... 24 1. Plaintiffs’ “price premium” models improperly measure only a subjective “willingness-to-pay,” not actual market value ................................................................................... 25 2. Plaintiffs’ “price premium” model improperly treats the Energy Star logo as a binary concept, not as a symbol of relative efficiency .................................................................... 27 ii Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 4 of 43 PageID: 4651 B. Plaintiffs’ “Energy Expense” Model Is Fundamentally Flawed, Not Tied to Their Theory of Liability, and Cannot Measure Classwide Damages ................................................................................................................ 28 V. THE CLASS DEFINITION IS FATALLY OVERBROAD BECAUSE IT INCLUDES UNINJURED RENTAL COMPANIES ...................................................... 30 CONCLUSION ............................................................................................................................. 30 iii Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 5 of 43 PageID: 4652 TABLE OF AUTHORITIES Page Cases A.J.’s Auto. Sales, Inc. v. Freet, 725 N.E.2d 955 (Ind. Ct. App. 2000)............................................................................................ 16 Agrarian Grain Co. v. Meeker, 526 N.E.2d 1189 (Ind. Ct. App. 1988).......................................................................................... 21 Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013) .................................................................................................................... 9 Anderson v. Gulf Stream Coach, Inc., 662 F.3d 775 (7th Cir. 2011) ........................................................................................................ 21 Apple, Inc. v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2014 WL 976898 (N.D. Cal. Mar. 6, 2014) ......................................... 26 Avram v. Samsung Elecs. Am., Inc., Nos. 2:11-6973 (KM) & 2:12-976(KM), 2013 WL 3654090 (D.N.J. July 11, 2013) .................................................................................... 30 Baughman v. State Farm Mut. Auto. Ins. Co., 88 Ohio St. 3d 480 (Ohio 2000).................................................................................................... 12 Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) ...................................................................................................... 15 Best Buy Co. v. Barrera, 248 S.W.3d 160 (Tex. 2007) ......................................................................................................... 22 Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) ...................................................................................................................... 12 Brown v. Electrolux Home Prods., Inc., 817 F.3d 1225 (11th Cir. 2016) .................................................................................................... 12 Brown v. The Am. Tobacco Co., No. JCCP 4042, 2013 WL 7154428 (Cal. Super. Ct. Sept. 23, 2013) .............................. 26, 27, 28 Califano v. Yamasaki, 442 U.S. 682 (1979) ........................................................................................................................ 9 Captain & Co., Inc. v. Stenberg, 505 N.E.2d 88 (Ind. Ct. App. 1987).............................................................................................. 24 iv Case 2:12-cv-00089-KM-JBC Document 178 Filed 05/20/16 Page 6 of 43 PageID: 4653 Cel-Tech Commc’ns., Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527 (Cal. 1999) .............................................................................................................