Pelletz v. Weyerhaeuser Co.

All persons and entities who own decks constructed of Product originally purchased on or after January 1, 2004, and before January 1, 2008, and additionally persons and entities who own decks constructed of Product originally purchased after December 31, 2007, and can establish that the Product was manufactured between January 1, 2004, and October 1, 2006, using the manufacture date stamped into the end of the Product. Included within the Class are the legal representatives, heirs, successors in interest, transferees and assigns of all such foregoing holders and/or owners, immediate and remote, who currently own decks constructed of Product originally purchased on or after January 1, 2004, and before January 1, 2008 (the "Class").

(a) constituted the best practicable notice to Class Members under the circumstances of this action;

(b) were reasonably calculated, under the circumstances, to apprise Class Members of (i) the pendency of this class action, (ii) their right to exclude themselves from the Class and the proposed settlement, (iii) their right to object to any aspect of the proposed settlement (including final certification of the settlement class, the fairness, reasonableness or adequacy of the proposed settlement, the adequacy of the Class's representation by Plaintiffs or Class Counsel, and/or the award of attorneys' and representative fees), (iv) if they did not exclude themselves from the Class, their right to appear at the Fairness Hearing (either on their own or through counsel hired at their own expense), and (v) the binding effect of the orders and Final Order and Judgment in this action, whether favorable or unfavorable, on all persons who do not request exclusion from the Class;

(c) was reasonable and constituted due, adequate and sufficient notice to all persons entitled to be provided with notice; and

(d) fully satisfied the requirements of the Federal Rules of Civil Procedure, including Fed.R.Civ.P.23(c)(2) and (e), the United States Constitution (includingWest Page 542the Due Process Clause), the Rules of this Court, and any other applicable law.

(a) The strength of the Plaintiffs' case: The Court finds that the strength of Plaintiffs' case supports approval of the class settlement. Defendants argue that mold and mildew can grow on any item left outdoors. (AERT Answer ¶ 6.3 (Dkt. No. 29 at 4).) Without reaching the actual merits of Plaintiffs' case, the Court is not convinced that Plaintiffs' case is so strong that its bargaining position should have resulted in a more generous benefit for the Class.

(b) The risk, expense, complexity, and likely duration of further litigation: Again, the Court is not convinced that Plaintiffs' case is so strong that the inherent risks of trying the case before a jury would have been obviated. In addition, pursuing trial would have delayed the distribution of any benefits to the Class and would likely have incurred far more expenses. Further, the settlement ensures recovery for the Class by taking into account Defendant AERT's financial condition, as the company apparently has cash flow limitations. The settlement is designed to work within those limitations.

(c) The risk of maintaining the class action throughout the trial: The Court finds that the risk of maintaining the class action throughout the trial was probably minimal; however, the balance of these factors favors approval, and the Court is not persuaded that this factor alone militates a different result.

(d) The amount offered in settlement: The settlement provides substantial relief to the Class members, summarized as follows. For Class members whose decks exhibit "Significant Mold Spotting," (which is determined by anPage 11analysis of photographs submitted by the Class member) and who agree to allow AERTWest Page 543to inspect their deck and take a small sample for testing will receive one free cleaning and the application of a mold inhibitor. Whether or not the Class member is entitled to further relief depends upon whether mold returns within 18 months. If it does not return, then the Class member is not entitled to further relief, but their rights under the original warranty are preserved except for those relating to claims arising from mold. This is because the Class member will then have what he or she paid for: a deck without significant mold spotting.

If the mold returns within 18 months, then the Class member has two options. First, she or he can choose to have the deck tested. If the sample does not meet a minimum plastic percentage requirement, then the claimant is entitled to 100% cash reimbursement of the purchase price, new ChoiceDek material for the construction of a new deck, or three additional annual cleanings along with mold inhibitor applications. Second, the Class member has the option of obtaining various levels of relief depending on four factors designed to assess the severity of the problem. If, after an initial cleaning and mold inhibitor application, the mold returns within six months, and the boards were properly gapped, the claimant periodically cleaned the deck as recommended in the past, and the claimant continued to clean the deck periodically after the initial cleaning by AERT, then the claimant is entitled to a 100% reimbursement or three additional annual cleanings and inhibitor applications. If the mold returns within six and eighteen months, the claimantPage 12is eligible for a combination of rebate vouchers, additional cleanings, and/or coupons for deck cleanings. In addition, Defendants are required to discontinue advertising the product as maintenance-free, are required to maintain a Customer Service Hotline to answer questions regarding maintenance, and AERT is required to provide maintenance information on its website. The Court finds that these benefits are adequate, fair, and reasonable to the Class members.

(e) The extent of discovery completed and the stage of the proceedings: Although formal discovery was not completed in this case, the parties engaged in extensive investigation of Plaintiffs' claims, including the lab testing of fourteen decks around the country. The parties exchanged expert reports of a mycologist and a wood scientist and lab analyses of the samples. Plaintiffs' counsel received confidential, proprietary information on ChoiceDek product formulation. Additionally, Plaintiffs' counsel was in contact with over 900 absent Class members and gathered detailed information from almost 500 of them about their experiences and problems with the ChoiceDek product. By the time the settlement was reached, the parties had discovered sufficient information to determine the relative strengths and weaknesses of their respective positions. Both sides were well-prepared to reach an adequate settlement and decide on appropriate remedies based on the strengths and weaknesses of their bargaining positions ascertained during the investigation.

(f) The experience and views of counsel: Class counsel are highly experienced in class action litigation, as supported by their declarations and the exhibitsPage 13attached thereto. The fact that they view the settlement as fair, reasonable, and adequate supports the Court's finding the same.

(g) The presence of a governmental participant: The Court has considered the fact that no governmental agent has responded to the proposed settlement, despite the class settlement notifications sent to the appropriate federal and state officials.

(h) The reaction of the Class members to the proposed settlement: The positive response to the Settlement by the Class — evidenced by a very small percentage of opt-outs and objections — further supports final approval. Of theWest Page 544estimated 110,000 to 140,000 Class members, only 119 opted out and only three (3) objected.CompareChurchill Vill., L.L.C. v. GE,361 F.3d 566,577(9th Cir. 2004) (affirming the district court's approval where 45 of 90,000 notified Class members objected to the settlement, and 500 Class members opted out of the settlement). Plaintiffs' counsel represented at the fairness hearing that those who opted out largely did so on grounds that they did not personally have any problems with their ChoiceDek deck, that they thought the relief was inadequate, or that they did not approve of class actions in general. The Court notes that it was not verified that all of those who opted out were actually Class members.

The Court has considered the objections of Ted Volin (Docket No. 92), Kevin and Karilee Olsen (Docket No. 147), and Lane Downs (Docket No. 148), and hereby overrules them. The three objectors generally argue that the Settlement could have been better by providing different or additional relief,Page 14or by utilizing a different claims procedure. However, as the Ninth Circuit has made clear, the Court's inquiry "is not whether the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from collusion."Hanlon v. ChryslerCorp.,150 F.3d 1011,1027(9th Cir. 1998). The Court finds that the Settlement meets this standard.

Mr. Volin installed a 998-square-foot ChoiceDek deck in 2006 at his home on Vashon Island, Washington. (Dkt. No. 92.) He seems to take the position that this action should be dismissed because homeowners can simply clean their decks periodically with aggressive, environmentally friendly techniques, such as using a pressure-washer, which he used to good effect. He also argues that the claim forms and photographic proof required for compensation are too complicated and time-consuming for the average homeowner to complete. In addition, he complains that there is no provision in the settlement for recovering the labor cost of the initial installation of the deck.

However, the Court finds that the claims process is reasonable, as it only requires that Class members answer two reasonable claim forms and submit a total of 10 photographs of the mold spotting. This is far less than the Class members would have to produce in order to pursue individual litigation of their claims. Also, if the photographs are not adequate or the claimant fails to provide other requested information, AERT will notify the claimant and ask that they supplement their claim. There is a toll-free number established to assist with claims. In addition, the Court finds that the Settlement benefits — which include full materials costs reimbursement or full replacement materialPage 15under certain circumstances — are fair and reasonable in light of the parties' claims and defenses. Labor costs would have been a hotly contested issue, since the express warranty does not provide for labor and since the product does not completely fail but merely requires allegedly unreasonable maintenance efforts. For these reasons, Mr. Volin's objection is overruled.

The Olsens purchased ChoiceDek decking materials based on Defendants' representations that the materials had a longer warranty period and that the materials would be maintenance free. (Dkt. No. 147.) They object to the settlement on grounds that it is not fair to completely release Defendants from any claims the Olsens may have against them and on grounds that the settlement benefits are inadequate. However, Class members retain their rights under the original warranty, except for mold issues (unless personal injury or wrongful death is alleged). Therefore, the Court finds that the scope of the release is appropriate. If Class members did not want to agree to this release, they were free to opt out of the settlement. In addition, under the settlement, the Olsens may be entitled to a full replacement or full cash refund if their deck meets certain requirements. Therefore, it is not clear to the Court that the settlement benefits are inadequate as to the Olsens or as to any Class members.

Finally, Mr. Downs spent over $6,000 for his ChoiceDek deck. He argues that laborWest Page 545to remove and replace the boards will cost over $5,200. He asks rhetorically, "Why would I want an offer to clean and apply a mold inhibitor to my supposed low maintenance deck?" and further queries why relief isPage 16dependent on the efficacy of the mold inhibitor. He also argues that it is onerous to have to show proof of cleaning history, especially when the deck was supposed to have been maintenance-free.

The Court finds that, for reasons stated above, it is reasonable for the settlement benefits not to include the cost of labor. In addition, the Court finds the rationale for the remedies system to be reasonable: if the deck fails to develop mold after a cleaning and application of a mold inhibitor, then the Class member essentially has what he paid for — that is, a deck that can be kept clean with reasonable maintenance. Apparently, AERT recommended to its customers that they clean their decks twice a year. Therefore, it is reasonable for claimants to have to show some proof of cleaning history. Without such a requirement, AERT would have argued that lack of routine maintenance contributed to mold growth. Plaintiffs' counsel reasonably took this legitimate argument into account when negotiating the settlement. The Court notes that claimants are only required to verify on their claims form that they cleaned their deck twice a year using homemade or commercial cleaners. No receipts or other verification of cleaning is required. (SeeDkt. Nos. 40-2 at 64, 69.)

Therefore, the Court finds that the cleaning requirement is appropriately included in the claims procedure, given the relevance of this issue to the parties' claims and defenses. The Court also finds that the prior cleaning requirement is included in a fair and reasonable manner, particularly since Class members who do not meet it are still eligible for substantial relief,Page 17including the highest tier of relief under certain circumstances. The Court has therefore considered and hereby overrules Mr. Downs' objection.

Accordingly, the Court overrules all objections and approves the Settlement as fair, adequate, and reasonable. The Parties and Class Members are hereby directed to implement and consummate the Settlement Agreement according to its terms and provisions.

(a) enforcing the terms and conditions of the Settlement Agreement and resolving any disputes, claims or causes of action that, in whole or in part, are related to or arise out of the Settlement Agreement, and/or this Final Order and Judgment (including, without limitation, whether a person or entity is or is not a Class Member; whether claims or causes of action allegedly related to this case are or are not barred or released by this Final Order and Judgment, etc.);

(b) entering such additional orders, if any, as may be necessary or appropriate to protect or effectuate this Final Order and Judgment and the SettlementPage 20Agreement, or to ensure the fair and orderly administration of the settlement; and

(c) entering any other necessary or appropriate orders to protect and effectuate this Court's retention of continuing jurisdiction.