In re IKO Roofing Shingle Products Liability Litigation
757 F.3d 599
7th Cir.2014Background
- Plaintiffs (buyers of "organic" asphalt roofing shingles) sued IKO alleging misrepresentations that shingles met ASTM D225 and were tested under ASTM D228.
- Multiple federal actions were centralized by the MDL Panel to the Central District of Illinois under 28 U.S.C. § 1407 for pretrial coordination.
- The Panel assigned the cases to Judge McCuskey, who (as Chief Judge) reassigned them to Judge Baker without obtaining the Panel’s formal reassignment, contrary to § 1407(b) and the Panel’s rules.
- Judge Baker denied class certification on January 28, 2014; the Panel only formally reassigned the cases to him on February 12, 2014, making his earlier decision technically ultra vires.
- The district court denied class certification largely on the ground that damages were not sufficiently common among class members, relying on Comcast and Wal-Mart.
- The Seventh Circuit vacated the denial (for wrong legal standard on commonality/damages), held the § 1407 assignment error was a nonjurisdictional case‑processing defect forfeited by lack of objection, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Judge Baker had authority to decide pretrial matters after reassignment without MDL Panel approval | Assignment to Judge Baker was valid (practical necessity; cases were heard there) | Reassignment violated § 1407(b) and Panel rules, rendering his acts ultra vires | § 1407(b) violation was a nonjurisdictional, forfeitable case‑processing error; no one objected, so orders need not be vacated on that ground |
| Whether Rule 23(b)(3) requires commonality of damages across class members | Classwide damages models available (price-difference per tile) or liability-only class with buyer-specific damages later | Plaintiffs’ damages are heterogeneous due to differing exposures, installations, and failure causes; therefore class cannot satisfy predominance | District court applied wrong standard: commonality of damages is not always required; certification may be appropriate if damages theory matches liability theory |
| Proper application of Comcast and Wal‑Mart to product-defect class actions | Comcast/Wal‑Mart do not preclude product-defect classes where liability is common and damages theory aligns | Comcast/Wal‑Mart require proof that classwide damages correspond to the liability theory, precluding class here | Comcast addressed matching damages to liability; Wal‑Mart concerns commonality of conduct. Neither bars product-defect classes per se; district court misapplied them |
| Appropriate scope of classwide adjudication and damages methodology | Plaintiffs propose (1) uniform price-difference damages for all purchasers or (2) liability class with individualized damages | Defendant contends buyer-specific causation inquiries defeat predominance and make class treatment unmanageable | Both damage approaches can match liability theory; district court may certify liability issues for class and reserve individual damage inquiries, subject to district judge’s discretion |
Key Cases Cited
- Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998) (MDL transferee courts’ authority is defined and limited by § 1407)
- Nguyen v. United States, 539 U.S. 69 (2003) (participation by an ineligible judge requires vacatur)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (damages methodology must match the theory of liability for class certification under Rule 23(b)(3))
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (Rule 23(a)(2) commonality requires a common question capable of classwide resolution)
- Butler v. Sears, Roebuck & Co., 727 F.3d 796 (7th Cir. 2013) (approved class treatment in consumer-product defect context)
- Pella Corp. v. Saltzman, 606 F.3d 391 (7th Cir. 2010) (certification of liability issues in product-defect class action)
- Parko v. Shell Oil Co., 739 F.3d 1083 (7th Cir. 2014) (district court may abuse discretion by certifying classes despite unmanageable common issues)
- Brunswick Corp. v. Pueblo Bowl‑O‑Mat, Inc., 429 U.S. 477 (1977) (damages in antitrust must flow from the unlawful conduct)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010) (distinguishing jurisdictional rules from waivable case-processing rules)