January 29, 2016
On January 29, 2016, Weil secured a significant victory on behalf of client Nortek Global HVAC, LLC, a leading manufacturer of air conditioning and heating products. Nortek faced a putative class action alleging that it failed to disclose a purported defect in the copper evaporator coils contained within its HVAC systems. The plaintiffs claimed that the use of copper in the coils constituted a defect because copper is susceptible to a form of corrosion known as “formicary corrosion,” which can cause leaks in the coil and eventual failure of the HVAC system. The plaintiffs brought claims under Florida’s Deceptive and Unfair Trade Practices Act and for unjust enrichment on the basis of these allegations. Judge Beth Bloom, of the U.S. District Court for the Southern District of Florida, denied plaintiffs’ motion for class certification, which requested certification of a Rule 23(b)(3) damages class, a Rule 23(b)(2) injunctive-relief class, and a Rule 23(c)(4) issue-only class.
In her 38-page order denying class certification, Judge Bloom expressed significant concerns with the adequacy of plaintiffs’ class definition given that it included both class members whose product had manifested the defect as well those whose product had functioned properly. The court held that this mixed system was problematic because it “potentially overcompensates class members.” The court further noted that even if the class definition was adequate, there “remain significant questions as to the feasibility of Plaintiffs’ proposed mechanism for identifying members of the class.” The court highlighted the lack of readily available data from which to identify consumers who had purchased Nortek’s HVAC units, as well as the inability to feasibly identify consumers who were excluded from the class because they had purchased an extended warranty.
The court also found that individualized issues predominated with respect to the Rule 23(b)(3) damages class. In particular, the plaintiffs’ proposed class included different models of evaporator coils, which contained material differences impacting the propagation and risk of formicary corrosion. The court held that these material differences would require individualized inquiries to determine “whether the class members were actually aggrieved by defendant’s alleged deceptive practice.” Additionally, the court had concerns that the plaintiffs’ proposed damages model would require an individualized determination of damages, which was particularly problematic given the individualized issues that existed as to Nortek’s liability. Because predominance could not be satisfied in light of these issues, the court also found that certification of a Rule 23(c)(4) issue-only class was inappropriate.
Finally, the court denied the Rule 23(b)(2) injunctive-relief class, finding that the plaintiffs’ claims were “largely premised on monetary relief.” As such, monetary relief was not incidental to the requested injunctive and declaratory relief, which is required for certification of a Rule 23(b)(2) class under Eleventh Circuit law.
The Weil team was led by partners and Product Liability Chair Arvin Maskin and Complex Commercial Litigation Co-Chair Edward Soto and included associates Erica Rutner, Pravin Patel, Lorell Guerrero and Brian Liegel in Miami as well as Emily Pincow and Alexis Kellert in New York.