Skip to main content

US Supreme Court Rejects Challenge to Class-Action Lawsuits

Court Stays Out of Dispute Over Allegedly Defective Washing Machines

The Supreme Court on Monday turned away challenges to large lawsuits over allegedly defective washing machines, rejecting appeals that sought to place new limits on class-action claims.

The court's decision to stay out of the dispute marks a breather for justices who in recent years have issued a string of rulings disallowing class-action cases. Business groups had filed briefs supporting the defendants in the washing-machine cases, hoping the court would yet again cut back on lawsuits in which litigants make claims on behalf of a large group of plaintiffs.

At issue were class actions alleging certain models of front-loading washing machines contained defects that caused them to accumulate mold.

The defendants, including Whirlpool Corp.  and a subsidiary of Sears Holding Corp. , argued the cases involved too many individualized issues to proceed as class actions. Washer owners varied in how they used their machines and whether they experienced moldy odors from the products, the defendants said.

The class actions, if allowed, could produce "windfalls for multitudes of uninjured persons and class-action lawyers," Whirlpool said in a court brief.

The plaintiffs said their lawsuits were precisely the type that deserved to proceed as class-actions. The washer models in dispute, sold since 2001, were delivered with a uniform design defect that caused mold accumulation, and buyers had to absorb time and expense to try to fix the issue, the plaintiffs said in a court brief.

The washers "were designed and delivered to purchasers in a form unsuitable for their ordinary and intended use," they said.

Companies dislike class-actions because they threaten to impose large-scale financial liability. Businesses say that once courts allow class-actions to proceed defendants face enormous pressures to settle, even in cases that lack merit.

Consumer advocates say class-actions are an important tool for people to vindicate their legal rights, particularly in relatively small-money cases where it might not be feasible for consumers to pursue legal relief individually.

U.S. appeals courts decided to allow the washer cases against Whirlpool and Sears to proceed as class-actions, ruling the lawsuits were unaffected by a Supreme Court ruling last year that tossed out a class-action lawsuit against Comcast Corp.

In a related matter, a federal court in California allowed a similar class-action lawsuit over Bosch brand washing machines.

The Supreme Court on Monday left those rulings in place, rejecting the defendants' appeals without comment.

Article referred: http://online.wsj.com/news/articles/SB10001424052702304834704579402902603942782?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304834704579402902603942782.html

Comments

Post a Comment

Most viewed this month

Right of pre-emption under West Bengal Land Reform Act

In Rabindra Nath Kundu & Anr vs Sudhir Hira, Bijoy Krishna Hira being the owner in the suit plot, gifted to Santosh Kumar Hira demarcated 11 decimals of land vide deed of gift dated 27.4.2004 and the latter sold 9 decimals out of 11 decimals of land to Sudhir Hira the preemptor/opposite party no. 1 and well demarcated 1.65 decimals of land in the said plot along with several other plots were sold, transferred and conveyed to the preemptees/petitioners herein by a registered deed of sale dated 10.8.2010, the subject matter of preemption. It is argued on behalf of the preemptees that  the present opposite party no. 1/preemptor Sudhir Hira has no relationship of co-sharership with Santosh Kumar Hira opposite party no. 2 as the demarcated portion of land has been purchased. It is settled principle of law that partial preemption is not permissible and this was what the view adopted by this Hon'ble High Court is Surendra Vs. Abhimannu reported in (1980) 1 Cal LJ 135 whe...
Post a Comment
Read more

Merits and the terms of contract are irrelevant for invoking of the bank guarantees

In Sabarkantha Annuity Pvt. Ltd. Vs. NHAI and Ors, the Petitioner filed before the Delhi High Court  petition under Section 9 of the Arbitration and Conciliation (Amendment) Act, 2015 with a prayer that, Respondents be restrained from acting upon the letter dated 15th September, 2017 or from invoking the Bid securities of the Petitioner to the tune of Rs. 10.93 Crores and also restraining the banks from honouring the invocation of said bank guarantees on behalf of Respondent No. 1 acting in terms of letter dated 3rd November, 2007. Petitioner has relied upon Clauses Nos. 9.1.1, 9.1.2 and 4.3 of the agreement dated 28th April, 2017 entered into between the parties to say the claim for damages since is not a claim for a sum presently due and payable and the respondent would be entitled to damages only on proof of loss, per Clause 4.3 of the agreement and hence is not entitle to the entire sum of bid security.  The Court found that Clause No. 9.1.2 speaks of an exclusiv...
Post a Comment
Read more

Supreme Court clarified on how to determine if an allegation of fraud falls under “Fraud Exception” to Arbitrability

In AVITEL POST STUDIOZ LIMITED & ORS. vs HSBC PI HOLDINGS (MAURITIUS) LIMITED, the Supreme Court was hearing an appeal from the interlocutory judgment and order passed in the appeal under section 9 of the Arbitration and Conciliation Act, 1996 by the Bombay High Court in a dispute between HSBC and Avitel India. HSBC had alleged that the Appellants had committed fraud by siphoning off the funds provided by them. As the agreement entered into by HSBC and the Appellants contained arbitration clause, HSBC approached the Singapore Arbitration Centre and the arbitration committee so formed executed award in favour of HSBC who filed application before the Bombay High Court for execution of the award. The Appellants contended objected to the award on various grounds and further argued that as fraud has been alleged, the dispute cannot be arbitrated.  The Supreme Court has held that “serious allegations of fraud” as a ground for exemption from arbitral proceedings arise only if either o...
Post a Comment
Read more