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Gulbankian v. Mw Manufacturers, Inc.

United States District Court, D. Massachusetts

December 29, 2014

JOHN GULBANKIAN, et al.
v.
MW MANUFACTURERS, INC.

MEMORANDUM OF DECISION

RYA W. ZOBEL, District Judge.

After review of the objections and record, the court certifies the Settlement Class under Federal Rule of Civil Procedure ("FRCP") 23(b)(3), and approves the class settlement under Rule 23(e) as it is fair, reasonable, and adequate.

I. Facts

This is a national class action against defendant, MW Manufacturers, Inc. ("MW"), for breach of warranty for its vinyl-clad windows. The windows in question were those known as Freedom, V-Wood, Freedom 600, and Freedom 800. These windows are constructed of wood coated with PVC (vinyl). MW manufactured Freedom windows from 1987 to 2003, V-Wood windows from 1995 to 2006, Freedom 600 from 2006 to the present, and Freedom 800 windows from 2003 to the present.

Plaintiffs allege that each of these lines of windows suffer from a common design defect: a gap in the vinyl where the window jamb meets the window sill that allows water to penetrate into the window, causing water damage and, ultimately, rot. Plaintiffs also contend that MW failed to properly test the windows and falsely advertised and marketed them. Defendant disputes all of these allegations. Experts from both sides have produced conflicting testimony regarding the design and performance of the windows.

MW provided warranty coverage for the windows through two uniform written warranties relevant to the claims in this suit. The first covered windows produced from the introduction of the products until 1998; the second, for windows produced since 1998. The warranties guaranteed the original homeowner who purchased the product that the windows would be free from manufacturing defects in materials and workmanship for a specified length of time for each warranty, one year or ten years.

This case has been extensively litigated since its inception in 2010. The parties have produced thousands of pages of documents, conducted over a dozen depositions of fact witnesses and multiple expert depositions. There have been numerous contested motions to compel and challenges to portions of each side's expert testimony.

After the close of discovery, the parties engaged in several rounds of mediation with Professor Eric Green of Resolutions, LLC, an experienced and well-qualified mediator, which eventually resulted in the proposed Settlement Agreement ("Agreement"). Notice was provided to the Settlement Class after Preliminary Approval of the settlement, and this motion followed.

II. Standard

Under Rule 23(e)(2), a class settlement must be fair, reasonable, and adequate. The First Circuit has not established a fixed test for evaluating the fairness of a settlement. New England Carpenters Health Benefits Fund v. First Databank, Inc., 602 F.Supp.2d 277, 280 (D. Mass. 2009). There is no single litmus test for a settlement's approval; it is instead examined as a gestalt to determine its reasonableness in light of the uncertainty of litigation. See Bussie v. Allmerica Fin. Corp., 50 F.Supp.2d 59, 72 (D. Mass. 1999).

The courts of this district have frequently used the factors articulated by the Second Circuit to examine the fairness of settlements:

(1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

New England Carpenters Health Benefits Fund v. First DataBank, Inc., 602 F.Supp.2d 277, 280-81 (D. Mass.), aff'd sub nom. Nat'l Ass'n of Chain Drug Stores v. New England Carpenters Health Benefits Fund, 582 F.3d 30 (1st Cir. 2009) (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974).

Where the settlement was the product of arms-length negotiation following extensive discovery, its fairness is presumed. In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24, 32-33 (1st Cir. 2009); In re Celexa & Lexapro Mktg. & Sales Practices Litig., No. MDL 09-2067-NMG, 2014 WL 4446464, at *5 (D. Mass. Sept. 8, 2014).

III. Discussion

Upon consideration of the submissions of the parties and the evidence presented at the final fairness hearing, the court finds the Proposed Settlement Agreement to be fair, reasonable, and adequate. The Settlement Agreement is presumptively reasonable because it was the product of arms-length negotiations following extensive discovery. Pharm. Indus. Average Wholesale Price Litig., 588 F.3d at 32-33. Even if the settlement were not presumed reasonable, it satisfies all of the factors of reasonableness generally relied on in this court.

A. Complexity, Expense, and Likely Duration of Litigation

The first factor to examine is the complexity, expense, and likely duration of litigation. Continued litigation here would be expensive, exceedingly complex, and above all protracted. Even without accounting for delays caused by appeal of any class certification order, there are difficult issues of proof and substantial costs and time involved in preparation for and execution of a trial. All of that additional cost ...


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