Class-Action Lawsuits Get Boost from Supreme Court

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Consumer class actions get boost from U.S. top court
Michael Fein/Bloomberg via Getty Images
By Lawrence Hurley
and Jonathan Stempel

WASHINGTON and NEW YORK -- The U.S. Supreme Court gave consumers a victory Monday by allowing them to proceed with class-action lawsuits alleging that millions of front-loading washing machines they bought suffered from mold or musty odors.

By refusing to hear the appeals in three lawsuits, the court allowed claims against Whirlpool (WHR), Sears Holdings (SHLD) and a unit of Germany's BSH Bosch und Siemens Hausgeraete to move forward as class actions in lower courts.

Business groups such as the U.S. Chamber of Commerce and the Association of Home Appliance Manufacturers had urged the Supreme Court to hear the companies' appeals.

The court has in recent years cut back on the ability of plaintiffs to pursue class actions, which can lead to bigger jury awards and settlements than individual lawsuits, as in cases against AT&T (T), Comcast (CMCSA) (CMCSK) and Walmart Stores (WMT).

At issue in the washing machine cases was whether claims that Whirlpool washers, Kenmore-brand washers made for Sears by Whirlpool, and washers from BSH Home Appliance were defective were sufficiently similar to be heard at the same time.

Consumers said that the machines didn't clean themselves properly, %VIRTUAL-article-sponsoredlinks%while the companies said only a small number of machines had problems.

Whirlpool said in a statement that it would keep vigorously defending against the lawsuits, which it called an "attack" on American manufacturing.

"The facts remain unchanged: the vast majority of class members have not been harmed and never will be," it said.

Sears said in a statement that it disagreed with the decision and that an "overwhelming majority" of owners of its Kenmore front-loading washers were pleased with them.

BSH declined to comment.

Samuel Issacharoff, a New York University law professor who represents Sears and Whirlpool consumers, called the court's decision "a big win," adding: "There is nothing un-American about manufacturers having to stand behind their products."

Opening the Door

The 6th U.S. Circuit Court of Appeals in Cincinnati and the 7th U.S. Circuit Court of Appeals in Chicago had allowed consumers to pursue respective claims as groups against Whirlpool in Ohio, and Sears in six U.S. states.

Those courts' initial rulings for the consumers were later thrown out after the Supreme Court ruled for Comcast over cable TV subscribers who accused it of overcharging them. The court said the proposed class was too diverse.

The 6th Circuit and 7th Circuit nonetheless later ruled for the washing machine plaintiffs a second time.

Sears had said the 7th Circuit decision by Judge Richard Posner "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."

Another appeals court, the 9th Circuit, refused to let BSH appeal a December 2012 ruling by a federal judge in Santa Ana, Calif., allowing a class action against that company to go ahead.

Whirlpool is based in Benton Harbor, Mich.; Sears in Hoffman Estates, Ill.; and BSH Bosch in Munich.

The cases are BSH Home Appliances Corp. v. Cobb et al., 13-138; Sears, Roebuck & Co. v. Butler et al., 13-430, and Whirlpool Corp. v. Glazer et al., 13-431.

17 Tricks Stores Use to Make You Spend More Money
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Class-Action Lawsuits Get Boost from Supreme Court

A big, bold "SALE" sign helps get people in the store, where they are likely to buy non-sale items.

Once you enter, there's the shopping cart. This invention was designed in the late 1930s to help customers make larger purchases more easily.


In supermarkets, high margin departments like floral and fresh baked goods are placed near the front door, so you encounter them when your cart is empty and your spirits are high.    
Flowers and baked goods also sit near the front of stores because their appealing smell activates your salivary glands, making you more likely to purchase on impulse.

Supermarkets like to hide dairy products and other essentials on the back wall, forcing you to go through the whole store to reach them.



Once customers start walking through a store's maze of aisles, they are conditioned to walk up and down each one without deviating.

Most stores move customers from right to left. This, combined with the fact that America drives on the right, makes people more likely to purchase items on the right-hand side of the aisle.

Anything a store really wants customers to buy is placed at eye level. Particularly favored items are highlighted at the ends of aisles.

There's also kid eye level. This is where stores place toys, games, sugary cereal, candy, and other items a kid will see and beg his parents to buy.
Sample stations and other displays slow you down while exposing you to new products.
Stores also want items to be in easy reach. Research shows that touching items increases the chance of a purchase.

Color affects shoppers, too. People are drawn into stores by warm hues like reds, oranges, and yellows, but once inside cool colors like blues and greens encourage them to spend more.

Hear that music? Studies show that slow music makes people shop leisurely and spend more. Loud music hurries them through the store and doesn't affect sales. Classical music encourages more expensive purchases.
Store size matters, too. In crowded places, people spend less time shopping, make fewer purchases (planned and impulsive), and feel less comfortable
Stores not only entice you with sales, they also use limited-time offers to increase your sense of urgency in making a purchase.
The most profitable area of the store is the checkout line. Stores bank on customers succumbing to the candy and magazine racks while they wait.
Finally, there is the ubiquitous "valued shopper" card. This card gives you an occasional deal in exchange for your customer loyalty and valuable personal data.
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