Moldy Washer Cases Can Proceed as Court Rebuffs Whirlpool

The U.S. Supreme Court let consumers press ahead with class action lawsuits claiming that washing machines made by Whirlpool Corp. (WHR) developed a smelly buildup of mold.

The justices today turned away appeals from Whirlpool in a case filed by Ohio customers, and from Sears Holdings Corp. (SHLD) in a suit by consumers in six states over Whirlpool-made machines. The court also rejected a similar appeal by a unit of BSH Bosch und Siemens Hausgeraete GmbH over its washers.

The rebuff is a setback for business groups, including the U.S. Chamber of Commerce, that backed the appeals. The groups sought to build on Supreme Court victories they won in 2011 in a case involving Wal-Mart Stores Inc. (WMT) and last year in a case concerning Comcast Corp. (CMCSA)

The consumers say their front-loading washers didn’t clean themselves adequately. The companies say the problem affected only a small minority of the people who bought the washer models at issue in the cases.

Sears said the appeals court decision in the retailer’s case “opens the door to class actions based on any mass-produced product’s failure to meet expectations of a handful of consumers, no matter how few other buyers had the same problem.”

Whirlpool has agreed to compensate Sears for any damages assessed in the case.

Suing Customers

The Sears lawsuit covers breach-of-warranty complaints by consumers in six states -- California, Indiana, Illinois, Kentucky, Minnesota and Texas. The consumers who sued are seeking to represent 800,000 purchasers. The customers told the Supreme Court they had enough in common to meet the requirements of the federal rules that govern class actions.

The washers had a “uniform design defect that causes them to accumulate mold,” the customers argued. “The defect was present across all machines at the time of sale and rendered them all incapable of performing as warranted.”

A Chicago-based appeals court said a class action would be the most efficient way to resolve the dispute.

“There is a single, central, common issue of liability: whether the Sears washing machine is defective,” Judge Richard Posner wrote for the appeals court.

The Sears case also involves claims that many of the washers had a defective control unit that caused the machines to shut down.

In the Whirlpool case, the consumers are seeking to represent 200,000 Ohio purchasers. Bosch is fighting claims from consumers in California, Illinois, New York and Maryland.

Repeat Trip

The Sears and Whirlpool cases were making their second trip to the nation’s highest court. The justices previously told the appeals courts to revisit the cases in light of the Comcast ruling.

At least eight sellers or manufacturers of front-loading washers have been sued. Together, the lawsuits involve tens of millions of consumers and virtually every front-loading machine sold for more than a decade, according to Sears.

Sears, controlled by hedge fund manager Edward Lampert, is based in the Chicago suburb of Hoffman Estates, Illinois. Whirlpool is based in Benton Harbor, Michigan. BSH Bosch is based in Munich.

The Sears case is Sears, Roebuck & Co. v. Butler, 13-430. The Whirlpool case is Whirlpool v. Glazer, 13-431. The Bosch case is BSM Home Appliances v. Cobb, 13-138.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net

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