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A consumer class action against Goodyear Tire & Rubber Co. over alleged defects in a hose used for home heating systems is headed back to the Philadelphia Court of Common Pleas now that a federal judge has ruled that Goodyear can’t show that “each and every” potential class member would satisfy the $75,000 federal damages minimum. A similar consumer suit in Colorado state court resulted in a $23 million verdict earlier this year to a group of six homeowners who alleged that Goodyear’s “Entran II” hydronic heating hose was defective. But in an earlier trial in federal court in Ohio, the jury rejected the plaintiffs’ claims and found that the Entran II hose is “merchantable.” Now a federal judge in Philadelphia has ruled that a class action on behalf of all Pennsylvanian homeowners who installed Entran II should be sent back to the state courts. In his 11-page opinion in Crawford v. Goodyear, U.S. District Judge Bruce W. Kauffman rejected Goodyear’s argument that the federal diversity jurisdiction minimum was satisfied since each of the “named” plaintiffs has a claim worth more than $75,000. Goodyear’s lawyers argued that Kauffman should keep the case and, if it is later certified as a class action, simply dismiss the claims of any unnamed class members whose claims are jurisdictionally deficient. Kauffman disagreed, saying “in the interests of fairness and judicial economy, remand of the entire action is proper unless Goodyear can show by a preponderance of evidence that each and every member of the putative class action asserts claims exceeding the jurisdictional threshold.” The burden was on Goodyear, Kauffman said, to prove that the claims of each and every potential class member would meet the minimum. Goodyear failed, Kauffman found, since the evidence showed that some of the class members may have damage claims of less than $3,500. Even if the $3,500 figure is trebled in a verdict under consumer protection laws and potential punitive damages and attorney fees are considered, Kauffman found that it would still be far shy of the $75,000 minimum. The ruling is a victory for attorneys David H. Weinstein and Kellie A. Allen of Weinstein Kitchenoff Scarlato & Goldman who filed the suit on behalf of a class of Pennsylvania homeowners who have installed radiant heating and snowmelt systems that include Entran II. According to the suit, the Entran II hose was installed under floors, above ceilings, behind dry wall and paneling, below patios and decks, in crawl spaces and sometimes directly encased in concrete. The orange-colored hose is connected to manifolds and one or more boilers, and heat is transferred throughout the system by the water and glycol fluid. The suit alleges that Entran II was warranted for 20 years, but that defects sometimes arise within just a few years. The hose discolors, grows brittle and cracks, the suit alleges, leading to heating system failures and, in some cases, extensive damage from leaking water and glycol fluid. Goodyear, in a statement released after the Colorado verdict, said it is “confident that on appeal the court will recognize that the Entran II hose, when used in systems that have been properly designed, installed and maintained, will provide many years of service.” The Ohio jury correctly exonerated Goodyear, the statement said, because “more than 95 percent of the Entran II hose installed in homes, much of it in use for 10 years or more, is functioning with no problems.” In the Colorado case, the jury awarded $5.8 million in compensatory damages and $5.8 million in punitive damages. The compensatory award was automatically trebled because the jury also found that Goodyear had violated the Colorado Consumer Protection Act. In the Pennsylvania case, Goodyear’s lawyers — James M. Brogan, Joseph Kernen and Jennifer E. Clark of Piper Rudnick — argued that the size of the Colorado verdict proves that each member of any possible Pennsylvania class would have a claim worth more than $75,000. Each of the six Colorado plaintiffs stands to receive more than $950,000 as a pro rata share of the punitive damages award, the defense team noted. As a result, they said, a Pennsylvania plaintiff who has a small compensatory damages claim may nonetheless receive enough in punitives alone to meet the $75,000 federal minimum. But Kauffman found the defense lawyers’ math was faulty since it was premised on the assumption that the Pennsylvania class will consist of just 90 members. “Goodyear asks the court to assume that there will be at most 90 class members to share in these awards,” Kauffman wrote. The defense arrived at its estimate, Kauffman said, by doubling the number of potential class members listed by the plaintiffs in their response to an interrogatory regarding all potential class members identified to date. But Kauffman said the plaintiffs “explicitly stated” that they expect “many more putative class members will be identified during the course of discovery in this case.” As a result, Kauffman found that “hundreds if not thousands of class members” could share in any awards of punitive damages. With a class of that size, Kauffman said, it is “too remote a possibility” that a class member with compensatory damages of $3,500 would also receive punitive damages and attorney fees equal to “nearly 25 times his actual damages.”

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