Fleisher v. Fiber Composites, LLC, PICS Case No. 14-0401 (E.D. Pa. March 5, 2014) Padova, J. (31 pages).

U.S. DISTRICT COURT-EASTERN

The Legal Intelligencer

CIVIL PROCEDURE

Class Actions • Settlement Agreements • Class Certification • Attorney Fees

Fleisher v. Fiber Composites, LLC, PICS Case No. 14-0401 (E.D. Pa. March 5, 2014) Padova, J. (31 pages).

Consumers from Pennsylvania, New Jersey, New York and Massachusetts who purchased Portico's composite decking products filed suit alleging manufacturing defects that make the decking susceptible to moisture and microbe penetration and a design defect that promotes fungal growth. Plaintiffs and defendant reached a settlement agreement which is before the court in motions for final approval of the class action and settlement agreement and for the award of attorney fees and expenses. Motions granted.

Defendant manufactured a decking product made up of a moisture-proof, composite material comprised of wood fiber and polyethylene. Fiber warranted its product for 20 years guaranteeing no "structural damage from fungal rot" among other promises. Plaintiff consumers purchased and used the decking materials and found that fungal growth stained and marred the product. Plaintiffs alleged that the manufacturing process was defective.

After discovering the problems, plaintiffs filed complaints with Fiber, which refused to refund or replace the decks and recommended cleaning with chemicals. Plaintiffs followed the cleaning directions, but the problem remained. Fiber refused to provide any further relief. Plaintiffs alleged violations of the Magnuson-Moss Consumer Products Warranties Act; breach of implied warranty of merchantability; violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law; violations of Massachusetts, New Jersey and New York consumer protection acts and unjust enrichment.

The settlement agreement defined the settlement class, divided the class into three tiers and provided vouchers to plaintiffs depending upon their tier and provides that Fiber was to pay up to $385,000 to plaintiffs and class counsel. One objection to the proposed settlement agreement was filed. Counsel contended that the objection was procedurally deficient because it does not establish standing as a class member.

The class was preliminarily certified on Sept. 4, 2013. The proposed class satisfied the requirements of Rule 23(a) and (b)(3). Fiber's discovery production showed that it received hundreds of complaints relating to fungal spotting, thus the class satisfied the numerosity requirement. The members shared numerous common questions of law and fact so the commonality requirement was satisfied. The typicality requirement was satisfied because the named plaintiffs and all class members allegedly had been injured by the same defect in Fiber's products. Plaintiffs' claims were co-extensive with those of the members of the class and all asserted the same legal claim and seek identical relief. Thus, plaintiffs satisfied the adequacy of representation requirement.

The notice provided in this case satisfied the requirements of due process and the civil procedure rules. The notice program that the court preliminarily approved was fully carried out. The claims administrator sent notices by email and U.S. mail to class members identified through Fiber's records and published notice on the website and in magazines and newspapers.

The settlement agreement resulted from three mediation sessions with Fiber's counsel and the magistrate judge and was reached after extensive discovery involving the production of over 10,000 pages of documents. Plaintiffs also conferred with their consulting experts regarding the alleged defect. Of the nine Girsh factors, only one disfavored the settlement agreement and it is outweighed by the other factors favoring the agreement. Thus, the agreement was fair, adequate and reasonable. The requests for attorney fees and expenses were reasonable. The requested incentive payments in the amount of $2,500 to the named plaintiffs were reasonable where the named plaintiffs worked closely with counsel through the investigation, prosecution and settlement of the claims.

The great costs of continuing the litigation would outweigh any potential for greater recovery at trial and the settlement agreement provided immediate relief to remediate the fungal spotting giving rise to the claims and if, unsuccessful, it also provided monetary relief to the class.

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