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Dickerson v. York International Corporation

United States District Court, M.D. Pennsylvania

August 22, 2017

STEVEN DICKERSON, et al., Plaintiffs
v.
YORK INTERNATIONAL CORPORATION, et al., Defendants

          MEMORANDUM

          Christopher C. Conner, Chief Judge United States District Court.

         The above-captioned action involves claims arising from the alleged failure of copper evaporator and condenser coils used by defendants York International Corporation and Johnson Controls, Inc., in residential and light-commercial air-conditioning and heat pump systems. Before the court are a motion (Doc. 94) for final approval of class action settlement and motion (Doc. 92) for attorneys' fees and expenses. For the reasons articulated on the record during a fairness hearing convened on August 16, 2017 and reaffirmed in further detail herein, the court will grant both motions.

         I. Factual Background and Procedural History

         Plaintiffs commenced this litigation by filing a class action complaint (Doc. 1) on June 5, 2015 against York International Corporation and Johnson Controls, Inc. (collectively “JCI”). The matter is currently proceeding on plaintiffs' first amended complaint (Doc. 31) filed September 21, 2015. Therein, plaintiffs assert claims for declaratory relief, injunctive relief, and unjust enrichment, in addition to claims for breach of express and written warranties under federal and state laws. (Id. ¶¶ 121- 278). Plaintiffs' claims concern alleged defects in copper evaporator and condenser coils manufactured and sold by JCI and installed in plaintiffs' air-conditioning and heat pump systems. (See id.) Plaintiffs allege that the uncoated copper coils used by JCI are known to be vulnerable to formicary corrosion, pitting corrosion, and other defects which result in costly refrigerant leaks under normal usage. (See id.) According to plaintiffs, JCI's coils are substandard compared to similar products, viz., tin-coated copper or aluminum coils. (See Id. ¶ 6). Plaintiffs further contend that, although JCI's limited manufacturer's warranty covers a replacement coil itself, the warranty does not cover labor or refrigerant costs, causing homeowners to incur substantial out-of-pocket expenses. (See Id. ¶¶ 106, 108, 112).

         JCI denies these allegations. (See Doc. 95 at 2, 5). JCI maintains that only 1.5 percent of all coils manufactured from 2010 to present have failed for any reason, and that less than 10 percent of that number are believed to have failed due to corrosion. (Id. at 5). JCI also contends that environmental factors rather than manufacturing defects are likely responsible for the limited occasions of corrosion-induced damage. (Id.) JCI moved to dismiss the amended complaint on October 5, 2015. (Doc. 36). The motion is fully briefed and raises timeliness, justiciability, and merits challenges to the various counts of plaintiffs' amended complaint. (See Docs. 39, 48, 51).

         The parties moved to stay these proceedings pending mediation on December 22, 2015. (Doc. 52). The court granted the motion, and the parties participated in several mediation sessions with retired federal magistrate judge Diane M Welsh Those sessions were successful and ultimately produced the settlement agreement currently before the court for approval (Doc 95 at 6-7)

         On November 14 2016 the parties filed a motion (Doc 78) for preliminary approval of class settlement agreement The court granted preliminary approval and provisionally certified a settlement class under Federal Rule of Civil Procedure 23 on November 22 2016 (Doc 80) The settlement documents compartmentalized the relief to be offered into four distinct categories based on the nature of the harm to class members as follows:

• Class members who experienced one copper coil failure between January 1 2008 and the preliminary approval date would receive a $75 service rebate certificate for service performed by an authorized JCI dealer;
• Class members who experienced two or more copper coil failures between January 1 2008 and the preliminary approval date would receive a check as reimbursement of their out-of-pocket expenses up to $55000 for each replacement (but no more than $1100 for all replacements);
• Class members who experience a first copper coil failure after the preliminary approval date would receive an aluminum replacement coil plus a $75 service rebate certificate for service performed by an authorized JCI dealer; and
• Class members who experience two or more copper coil failures with at least one occurring after the preliminary approval date would receive an aluminum replacement coil plus a check as reimbursement of their out-of-pocket expenses up to $55000 for each replacement (but no more than $1100 for all replacements)

(Doc 79-1 ¶¶ 15-18)

         Counsel contacted the court on December 28 2016 to request a telephonic status conference concerning the preliminarily-approved settlement The parties reported recently learning that certain air-conditioning and heat pump systems could not accept replacement aluminum condenser coils (See Doc 83 ¶ 2) The parties initially believed the issue impacted only condenser coil class members but eventually learned that a limited number of systems could not accept aluminum evaporator coils either (See id ¶ 4) We tasked the parties to develop appropriate alternative remedies and to file a renewed motion for preliminary approval With the mediator's assistance the parties negotiated an amended settlement.

         The parties filed a motion (Doc 89) for preliminary approval of the amended settlement agreement on March 8 2017 The categories of relief are unchanged for class members who experience copper coil failures prior to preliminary approval (Doc 90-1 ¶¶ 15-16) For copper coil failures post-dating the preliminary approval date the parties propose the following relief:

         • Class members who experience a first copper coil failure after the preliminary approval date will receive:

o If the failed coil is an evaporator coil either an aluminum replacement coil or a tin-coated copper coil (if aluminum is not feasible) in addition to a $75 service rebate certificate for service performed by an authorized JCI dealer; or
o If the failed coil is a condenser coil a new copper replacement coil with an extended copper coil warranty and a $75 service rebate certificate for service performed by an authorized JCI dealer

         • Class members who experience two or more copper coil failures after the preliminary approval date will receive:

o If the failed coil is an evaporator coil either an aluminum replacement coil or a tin-coated copper coil (if aluminum is not feasible) in addition to a check as reimbursement for out-of-pocket expenses up to $550 for each replacement (but no more than $1100 for all replacements); or
o If the failed coil is a condenser coil, a new copper replacement coil with an extended copper coil warranty in addition to a check as reimbursement for out-of-pocket expenses up to $550 for each replacement (but no more than $1, 100 for all replacements).

(Id. ¶¶ 17-18). The settlement allows reimbursement and replacement regardless of the cause of the failure. (See Doc. 95 at 8). The terms of the settlement apply only to copper coil failures that occur while the coil in question is covered by the original manufacturer's warranty. (See Doc. 90-1 ¶¶ 15-18). For those class members whose systems cannot accept a replacement aluminum or tin-coated copper coil, JCI will provide a replacement uncoated copper coil with an extended eight-year parts and labor warranty, in addition to the rebate or reimbursement described above. (See Id. ¶¶ 14(O), 17-18). The deadline for filing claims is 120 days after the date of final approval or 120 days after the class member experiences a coil failure, whichever is later. (See Id. ¶ 14(F)).

         By order dated March 15, 2017, we provisionally certified the settlement class, preliminarily approved the amended settlement agreement, and scheduled a final approval hearing for August 16, 2017. (Doc. 91). The settlement administrator thereafter provided notice to class members in accordance with the court-approved notice plan. (See Doc. 97 ¶¶ 7-12). In addition to internet banner ads, publication notice, and press releases, the settlement administrator disseminated direct notice to 893, 620 settlement class members. (See id.) Of those class members, 11, 403 returned claim forms.[1] Only twelve objections were received. (See Id. ¶ 20).

         The court convened a final approval hearing on August 16, 2017. (Doc. 91). None of the twelve objectors appeared personally or through counsel. During the hearing, the court pressed all counsel about particular aspects of the settlement and fully explored the parties' proposed resolution. We noted on the record that the settlement appears to be fair, reasonable, and adequate. This memorandum supplements and memorializes the court's findings.

         II. Discussion

         A. Rule 23 Class Certification

         Class certification under Rule 23 requires a two-step process. First, a putative class must meet each of four requirements of Rule 23(a): numerosity, commonality, typicality, and adequacy. See In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309 n.6 (3d Cir. 2008). These determinations require a court to conduct a “rigorous analysis” of the relevant evidence to determine whether the elements of Rule 23 have been met. Id. at 310. In considering the evidence, courts should address all relevant legal and factual issues and make preliminary inquiries into the merits of the case. See Id. at 317. The party seeking class certification bears the burden to prove, by a preponderance of the evidence, each requirement of Rule 23(a). In re NFL Players Concussion Injury Litig., 821 F.3d 410, 426 (3d Cir. 2016) (quoting In re Cmty. Bank of N. Va. Mortg. Lending Practices Litig., 795 F.3d 380, 391 (3d Cir. 2015)).

         Once the elements of Rule 23(a) are satisfied, the suit must fit within one of three categories described in subsection (b). Rule 23(b)(3) certification is proper if a court finds “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The dual requirements of Rule 23(b)(3) are referred to as predominance and superiority. In re Hydrogen Peroxide, 552 F.3d at 310.

         The parties posit that the elements of Rule 23(a) and 23(b)(3) are easily satisfied. We will address each of the prerequisites seriatim. Ultimately, the court agrees that certification of this settlement class is appropriate under Federal Rule of Civil Procedure 23.

         1. ...


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