Date of Settlement: March 20.
Court and Case No.: U.S. District Court, E.D. Pa. No. 2:11-md-02270.
Judge: Thomas N. O’Neill Jr.
Type of Action: Products liability.
Injuries: Economic loss.
Plaintiffs Counsel: Laddie Montague and Shanon Carson, Berger & Montague, Philadelphia; Michael McShane of Audet & Partners.
Defense Counsel: Anthony Vale of Pepper Hamilton, Philadelphia.
Comment: CertainTeed will pay $104 million to resolve claims that its siding prematurely warped and cracked under a national class settlement agreement granted final approval by a federal judge.
U.S. District Judge Thomas N. O’Neill of the Eastern District of Pennsylvania also granted the class counsel’s requested attorney fees of $18.5 million, which is to come out of the settlement fund.
“Approval of the settlement will guarantee a cash payment to class members with qualifying damage. Alternatively, if the parties were to continue to litigate this case, further proceedings would be complex, expensive and lengthy, with contested issues of law and fact regarding whether the siding was defective and CertainTeed’s defenses to plaintiff’s claims,” O’Neill said. “That a settlement would eliminate delay and expenses and provide immediate benefit to the class militates in favor of approval.”
Between 1999 and 2013, CertainTeed processed almost 20,000 warranty claims and the claims rate for all alleged defects for the siding as a percentage of sales was 1.7 percent, according to the opinion.
The allegations on which the case was brought are based on CertainTeed’s marketing of its “siding to be ‘the finest-performing product of its kind,’ and ‘engineered for decades of superior protection, wear and durability,’” according to the opinion. But, “the contrary is true. Instead, they claim that the siding is defectively designed and manufactured in such a way that it prematurely fails, causing damage to underlying structures.”
CertainTeed maintains that its siding was properly manufactured and that any problems that could have arisen from it are due to improper installation or storage.
The class has the potential to reach 300,000 members, O’Neill said, since CertainTeed estimates that the siding at issue is on 300,000 buildings, mostly residential, according to the opinion. About 2 percent of the 300,000 buildings are commercial, according to the opinion.
The class covers anyone who had one of the half-dozen types of siding named in the suit installed on their building before Sept. 30, 2013.
Class counsel sought $18.5 million in attorney fees, which is about 18 percent of the common fund. The class counsel told the court that they spent more than 12,656 hours on the litigation and settlement of the case, which O’Neill said he found reasonable. The lawyers calculated the lodestar to be about $6.9 million, making the approximate multiplier 2.6 for their requested fee, according to the opinion.
Members of the settlement class still have rights to the original limited warranty associated with their purchases, according to the opinion. The settlement is “in essence creating a super warranty on the limited warranty by providing for cash payments that not only include material costs, but also include the costs associated with labor and paint,” O’Neill said.
Payments to class members will be based on the amount of siding each has that is eligible for replacement, the cost of that replacement, and the age of the siding that is being replaced.
The plaintiffs estimated that it would cost about $14,000 to re-side the whole of an average house, according to the opinion.
Claims under the settlement will be paid in two installments, with the first half being paid as soon as the claim is administered and the second half will be paid at the end of the six-year claims submission period if there is enough money left in the fund in order to make sure that all claimants are given equal opportunity to recover regardless of when they file, according to the opinion.
— Saranac Hale Spencer, of the Law Weekly