The Third Circuit Court of Appeals recently affirmed a district court order denying certification to a group of homeowners in four states who alleged roof shingle manufacturer Owens Corning sold defective roof shingles and misrepresented their expected useful life. Specifically, plaintiffs alleged claims for breach of express warranty, breach of implied warranty of merchantability, and violation of various state consumer protection statutes because the shingles installed on their homes were plagued by several design flaws that resulted in cracking, curling, and degranulation during the warranty period.
The district court initially denied certification because plaintiffs had not met their burden under Rule 23(b)(3) to show that questions of law or fact common to class members predominated over individual questions. The Third Circuit agreed and focused its analysis on the nature of the alleged defective design because whether the design "is susceptible to class-wide evidence is dispositive of whether Plaintiffs can satisfy predominance."
During the proposed class period, Owens Corning designed 23 types of shingles according to 500 different specifications. Plaintiffs argued that their theory of defective design did not require them to show that all shingles were prone to fail during their warranty period but that all shingles could be considered defectively designed, regardless of performance, because the design specifications provided for a range of measurements that resulted in some shingles having a higher than advertised likelihood of failing before their warranties expired. In this sense, plaintiffs argued that regardless of the quality of the shingles on their own roofs, all customers had unknowingly entered a "shingle lottery" and thus a predominant common question existed under Rule 23(b)(3). The lower court dismissed this argument and stated that the design defect, which was an essential element of plaintiffs' claims, could not be proved by common evidence and thus predominance was not present.
On appeal, plaintiffs likened their case to a number of product-defect cases in which courts have certified a class despite an alleged defect that did not manifest itself in each product. For example, plaintiffs cited Sixth and Seventh Circuit cases involving Whirlpool washing machines that were manufactured with a design defect that caused them to accumulate mold. The Third Circuit said the cases were not analogous because the Whirlpool washing machines were all built according to nearly identical designs and thus the defect was allegedly present in all washing machines even if the defect had not yet manifested itself. In this case however, plaintiffs failed to identify a single particular defect that could be a attributed to all shingles. The Third Circuit stated that Rule 23 requires a class to describe a product's defect on a class-wide basis, which plaintiffs here could not do.
Finally, plaintiffs reliance on the Supreme Court's Tyson Foods decision (https://classifiedclassaction.com/tyson-employee-class-wins-significant-narrow-supreme-court-victory/) was misplaced. In Tyson, the Supreme Court held Rule 23's predominance requirement was properly satisfied when the district court allowed plaintiff to ignore individual differences as to the actual time spent "donning" and "doffing" equipment by using a class-wide study. The Third Circuit differentiated Tyson because resolution of the FLSA question there would determine the scope of all class members' rights and leave only the question of individual damages. Here, by contrast, the defect issue can only be resolved by examining each individual shingle or accepting a speculative theory of defect. Plaintiffs here did not allege a defect common to the class that could be proved by class-wide evidence. Instead, the court stated plaintiffs "invite us to equate the existence of a defect with the mere possibility that one might exist."
The Third Circuit also rejected plaintiffs' Amgen argument that the lower court put the cart before the horse by improperly weighing the merits of the case prior to certification. The court indicated that merits determinations are permitted to the extent relevant to determining whether Rule 23 prerequisites are satisfied. The District Court merely conducted the "rigorous analysis" required to determine if predominance was met.
Finally, the Third Circuit shut down plaintiffs' attempt to pursue their claims as an issue class under Rule 23(c)(4) because the issues were not susceptible to proof by common evidence and thus no efficiencies could be gained by litigating them on a class-wide basis.
Gonzales, et al. v. Owens Corning; Owens Corning Sales LLC, No. 16-2653 (3rd Cir. Mar. 19, 2018)
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