Case: Thorogood v. Sears, Roebuck & Co., Seventh Cir. No. 08-1590 (10/28/08)
The One Sentence Summary: Class action certification was reversed because allegations of deceptive advertising in the sale of Sears Kenmore washing machines with stainless steel drums would require individual determinations of whether buyers were deceived, and deception was unlikely where advertisements did not indicate that stainless steel drums prevented rust stains on clothes.
What They Were Fighting About: The district court had jurisdiction over the class action under the Class Action Fairness Act, 28 U.S.C. §§ 1332(d), 1453, 1711-1715. The district court granted the motion to certify the class, and defendant appealed.
Seventh Circuit Holdings:
- The panel explained that the advantage of class actions in enabling the litigation of small claims comes with many downsides.
- One downside of class action litigation is conflict between the class members who have small economic interests in the litigation, and class counsel who may receive large fees.
- Class actions also create huge risks for companies because many individual cases are consolidated before a single court that may err in the outcome. Thus, even claims of little merit may be settled to avoid risk.
- Judge Posner’s opinion further opined that class actions tend to undermine federalism because a single jury must try to apply an amalgamated law from many states.
- This class should not have been certified by the district court because there was no evidence that anyone other than the named plaintiff was deceived into believing that a stainless steel washer drum would prevent rust stains on clothes.