Corzine v. Maytag Corporation

Background

Julie Corzine filed a class action alleging a defect in certain Whirlpool-manufactured refrigerators. The refrigerators’ freezer drain tubes could become clogged with debris, causing water to freeze and accumulate. The resulting ice and water could leak from the freezer, into the refrigerator compartment, and sometimes onto the ground.

The court had preliminarily approved a nationwide settlement class consisting of people in the United States and its territories who purchased a new qualifying refrigerator, acquired one through the purchase or remodeling of a home, or received one as a qualifying gift. The court excluded Whirlpool’s officers, directors, employees, parents, subsidiaries, insurers, subrogees, and providers of extended warranties or service contracts. The court had appointed Corzine as class representative and attorneys from Kasdan LippSmith Weber Turner LLP as class counsel.

Settlement Terms

The settlement effectively creates an expanded warranty and repair-reimbursement program. Whirlpool agreed to keep its existing voluntary repair program open for multiple additional years, expand the number of qualifying refrigerators, and reimburse certain labor costs.

For a freezing event occurring before September 5, 2019, an eligible class member must submit a claim form with the required refrigerator information and proof of purchase, the freezing event, and a paid qualifying repair. Eligible claimants may receive up to $150 for qualifying repairs incurred within five years of purchase. The settlement provides 100% reimbursement for qualifying repairs during years one through three, 100% reimbursement for parts and 65% of labor costs during year four, and 100% reimbursement for parts and 50% of labor costs during year five. Benefits may be reduced if the claimant previously received compensation from Whirlpool for the same freezing event.

For freezing events occurring on or after September 5, 2019, class members may receive the same benefits by contacting Whirlpool through a dedicated toll-free number within 90 days after first experiencing the event. The claims process allows certain declarations and other forms of proof when documentary evidence is unavailable.

Notice and Class Certification

The court concluded that the settlement class met the requirements for certification under Federal Rule of Civil Procedure 23. Those requirements included sufficient common issues, typical claims, adequate representation, predominance of common issues, and superiority of the class-action procedure for settlement purposes.

The notice program included email and mailed notices, publication in People magazine, internet advertising, a settlement website, an online claims portal, and a toll-free telephone line. The court found that the notice fairly and reasonably informed class members about the lawsuit, settlement terms, claims process, and procedures for objecting or opting out. By November 6, 2019, the administrator had received 18 objections, 199 timely opt-out requests, and more than 18,000 claim forms, although the opinion reports different claim-form totals in different portions of the notice discussion.

Final Approval

The court evaluated the settlement under Rule 23(e), which requires a class settlement to be fair, reasonable, and adequate. The court found no indication of collusion because the settlement followed discovery, motion practice, and arm’s-length negotiations assisted by two mediators. The court also considered the risks, expense, complexity, and likely duration of continued litigation; the risk that the class might not be certified; the settlement’s estimated value; class counsel’s experience; and the class members’ response.

The court estimated the class benefit at $12,949,789 and Whirlpool’s cost at $17,826,684. Including notice and administration costs, attorneys’ fees, litigation costs, and the service award, the settlement’s estimated value was stated as $15,866,883.54, with Whirlpool’s expected payout approximately $20,743,778.54.

The court overruled objections concerning the five-year limit, the absence of reimbursement for purchased extended warranties, the amount and scope of settlement benefits, delayed notice, and other criticisms. The court found that these objections did not show that the settlement was unfair or inadequate. It also noted that certain property-damage claims involving something other than the refrigerator were not released and could be pursued individually against Whirlpool, according to the settlement terms.

Attorneys’ Fees, Costs, and Service Award

Class counsel requested $1,823,394.75 in attorneys’ fees and $26,605.25 in cost reimbursement. Because the case was brought under the Magnuson-Moss Warranty Act, a statute that can shift fees, the court used the lodestar method. That method multiplies reasonable hours by reasonable hourly rates and may apply a multiplier based on factors such as the quality of representation, benefits obtained, complexity, and risk of nonpayment.

The court found counsel’s hourly rates, ranging from $300 to $800 for attorneys and $150 to $200 for paralegals, reasonable for the Northern District of California. It also found the nearly 2,000 hours spent on the case, including an estimated 250 hours of future claims-administration work through 2026, reasonable. The court approved a lodestar multiplier of 1.86 and found that a percentage-of-recovery cross-check also supported the requested fee. The court therefore found the requested attorneys’ fee of $1,823,394.75 reasonable and approved the requested $26,605.25 in costs.

Corzine requested a $5,000 service award. The court found that her participation had been substantial and essential throughout the case and concluded that the requested award was proportional and reasonable.

Disposition

The court granted the class’s motion for final approval of the class-action settlement. It also granted the class’s motion for attorneys’ fees, costs, and incentive award. The clerk was directed to close the file pursuant to the order and the simultaneously issued final judgment.