United States District Court, E.D. Pennsylvania
DAVID FLEISHER, MICHAEL CLIME, GARY IPPOLITO, ROBERT L. LIVINGSTON, DAVID TAILLON, on behalf of themselves and all others similarly situated,
FIBER COMPOSITES, LLC
JOHN R. PADOVA, Judge.
This is a putative class action in which Plaintiffs allege that Defendant Fiber Composites, LLC ("Fiber") sold defective decking materials that grew mold and fungus. Plaintiffs, who reside in Pennsylvania, New Jersey, New York, and Massachusetts, have reached a settlement agreement with Fiber, which United States Magistrate Judge Timothy R. Rice has preliminarily approved. Before the Court are Plaintiffs' (1) Unopposed Motion for Final Approval of Action Class Settlement (Docket No. 67) and (2) Motion for Award of Attorneys' Fees, Expenses, and Service Awards (Docket No. 62). One objection to the proposed settlement agreement was filed on October 24, 2013 (Docket No. 63). After a Final Approval Hearing held on November 27, 2013, and for the reasons that follow, the Court grants both Motions.
A. Factual History
Plaintiffs' Second Amended Class Action Complaint ("SAC") alleges the following facts. Defendant Fiber manufactured, advertised, and sold Portico Series Decking products, including Portico Advantage and Eclipse composite decking ("Portico"), to consumers throughout the United States. (SAC ¶¶ 1, 2.) Unlike natural wood decking products, Portico is made up of a composite material comprised of equal parts wood fiber and polyethylene, a thermoplastic material. (Id. ¶ 3.) Portico is manufactured by a process of direct extrusion, in which the polyethylene and wood fibers are mixed together and melted in an extruder, then forced through a die to form the finished structural part. (Id. ¶ 42.) This process is designed to completely encapsulate the wood fibers in the polyethylene, rendering them virtually moisture proof. (Id.) The final Portico product was sold at 1.5 to 2 times the price of natural wood products. (Id. ¶ 51.)
Fiber expressly warranted Portico for a twenty-year period, guaranteeing that "the Decking & Railing will not check, splinter, peel, rot, or suffer structural damage from fungal decay." (SAC Ex. A, "Limited Warranty.") This warranty was limited by a disclaimer that reads:
THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER WARRANTIES WITH RESPECT TO Portico FIBER COMPOSITE MATERIAL. WARRANTOR DISCLAIMS ANY AND ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Purchaser's sole remedy for any claim whatsoever arising out of the purchase, use, storage or possession of Portico Fiber Composite Material (whether such claim arises is contract, warranty, tort, strict liability or otherwise), including without limitation any claim that Portico Fiber Composite Material failed to perform as warranted above, shall be replaced with new Portico... in an amount equal to the volume of defective material as scheduled on the prorated warranty schedule.
In addition to the Limited Warranty, Fiber posted language on its website and on contractors' websites stating that Portico decks are unlike "[t]raditional wood decking [that] fades, molds, cracks, splinters, and needs to be treated and sealed regularly for the deck to maintain its original look and feel" (Id. ¶ 52); "Portico Eclipse is slip resistant, has a quality surface finish that reduces dirt and mold buildup and will not check, split, or warp" (Id. ¶ 50); it has "just about eliminated the problems associated with typical wood decking" (Id. ¶ 52); and it is "able to resist moisture penetration and degradation from fungal rot as the plastic encapsulates and binds the wood together." (Id. ¶ 47.) Fiber also stated on its website that "[l]ong after installation, [Portico]... will stay beautiful and provide you with years of outdoor enjoyment;" and that Portico has "consistent color throughout the board." (Id. ¶¶ 57-58.)
The named Plaintiffs are consumers from Pennsylvania, New Jersey, New York, and Massachusetts, who purchased Portico decking materials in Pennsylvania, New Jersey, New York and Massachusetts, respectively. (Id. ¶¶ 10-36.) Soon after installation, Plaintiffs noticed dark spotting on the surface of their decks. (Id. ¶¶ 11, 17, 23, 29, 33.) The spotting is allegedly extensive mold, mildew, and/or fungal growth ("fungal growth") resulting in discoloration of the deck surface. (Id. ¶ 6.) Plaintiffs allege that the fungal growth is due to a uniform latent defect in Portico that occurs regardless of proper installation, maintenance, and cleaning, and cannot be prevented or remediated. (Id.) Plaintiffs allege that the manufacturing process is defective because complete encapsulation of the wood fibers does not occur, making Portico susceptible to moisture and microbe penetration to the internal wood fibers. (Id. ¶ 43.) In addition, Portico was manufactured with micro-DOME technology, which creates an embossed surface on the boards which collects standing water and promotes fungal growth. (Id. ¶ 46.) Plaintiffs allege that Fiber knew of this latent defect in the design and manufacture of Portico, but failed to inform consumers of the irremediable defect. (Id. ¶ 66.)
After discovering the fungal growth on their decks, Plaintiffs filed complaints with Fiber. (Id. ¶ 7.) Fiber refused to refund or replace the decks under the Limited Warranty and advised Plaintiffs to chemically clean their decks. (Id.) Plaintiffs cleaned their decks as directed, but the chemical products only worked briefly, or failed to work altogether, resulting in the recurrence of the fungal growth. (Id.) Fiber has not provided any further relief. (Id. ¶ 63.)
The SAC asserts the following causes of action:
Count I: Violation of Magnuson-Moss Consumer Products Warranties Act (all classes)
Count II: Breach of Implied Warranty of Merchantability (all classes except New York sub-class)
Count III: Violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law (Pennsylvania sub-class)
Count IV: Violation of Massachusetts Consumer Protection Act (Massachusetts sub-class)
Count V: Violation of New Jersey Consumer Fraud Act (New Jersey sub-class)
Count VI: Violation of New York Consumer Protection Act (New York sub-class)
Count VII: Declaratory Relief (Injunctive/Declaratory Relief class)
Count VIII: Unjust Enrichment (all classes)
(Id. ¶¶ 86-160.)
B. Litigation History
Plaintiffs filed the Complaint on March 14, 2012. Fiber filed a Motion to Dismiss on May 18, 2012, and Plaintiffs responded by filing their First Amended Complaint on June 11, 2012. Fiber filed a Motion to Dismiss the First Amended Complaint on July 10, 2012. On November 2, 2012, we granted in part and denied in part Fiber's Motion to Dismiss. On December 7, 2012, Fiber filed the Answer to the First Amended Complaint. On January 7, 2013, we referred the case to Magistrate Judge Rice for settlement negotiations.
Following those settlement negotiations, on August 30, 2013, Plaintiffs filed an Unopposed Motion for Preliminary Approval of Class Settlement, Provisional Certification of Settlement Class, Authorization to Disseminate Class Notice, and Appointment of Class Representatives and Class Counsel, which Magistrate Judge Rice granted on September 4, 2013. On August 30, 2013, Plaintiffs and Fiber stipulated that Plaintiffs may file a Second Amended Complaint, which Plaintiffs filed on September 5, 2013. On October 22, 2013, Plaintiffs filed the Motion for Award of Attorneys' Fees, Expenses, and Service Awards for Class Representatives and, on November 13, 2013, the Unopposed Motion for Final Approval of Class Action Settlement. One objection to the proposed settlement agreement was filed by Stan Nordlund on October 24, 2013. On November 19, 2013, we vacated our previous order referring the case to Magistrate Judge Rice. On November 27, 2013, we held a hearing on Plaintiffs' two pending Motions.
C. The Settlement Agreement
The Class Action Settlement Agreement (Pls.' Unopposed Mot. for Prelim. Approval, Ex. 1 (the "Settlement Agreement")) includes the following terms.
1. Settlement Class
The Settlement Agreement defines the settlement class (the "Class") as follows: all owners of residences or commercial buildings or other structures (other than commercial buildings and other structures in "marine environments") in the United States with a deck constructed of composite decking, railing, or fencing material sold under certain brands or trademarks purchased and installed after March 14, 2008. (Settlement Agreement at 5.)
2. Settlement Benefits
Under the proposed settlement, claimants receive different benefits depending on their "tier." Eligible "Tier I" claimants are Class members whose Fiber deck has dark spotting on at least one-third of the deck due to mold, mildew or fungal growth. (Id.) They will receive a voucher for a cleaning product redeemable at Home Depot stores. (Id. at 6.) "Tier II" claimants are those who, after application of the cleaning product, still have visible spotting due to mold, mildew or fungal growth on at least one-third of their deck. (Id.) They will receive an additional voucher for deck stain redeemable at Home Depot stores. (Id. at ...