California District Judge Declines to Certify Class for Third Time in Alleged Water Damage/Mold Cases

September 1, 2010 By Stephen E. Embry, Christopher S. Burnside

In September, a federal judge for the Central District of California for a third time declined to certify a class of California homeowners who allege that insulation manufactured by U.S. Greenfiber LLC (Greenfiber) caused water damage and dangerous mold growth. Steve Embry and Chris Burnside represented Greenfiber throughout this case.

According to the Court, the main impediment to class certification was that any common issues raised by the plaintiffs under California’s “Right of Repair Act” do not predominate over individual ones.

The Court noted that the defendants–Greenfiber, which manufactured the “Cocoon” wet blown cellulose insulation in question; Quality Interiors Inc., which installed the insulation; and Pulte Homes, Inc., which built the plaintiffs’ homes–provided “persuasive evidence” that the amount of insulation, the amount of water added to the insulation, and the amount of time allotted for the insulation to dry varied substantially from place to place.

The fact that moisture travels through interior walls of homes with [the insulation] and that moisture travels to and from [the insulation] is not surprising given that [the insulation] is installed with up[wards] of 25 percent moisture content,” Judge Matz wrote. “But this does not automatically render it an actionable defect.”

Plaintiffs also failed to show on a class-wide basis that the insulation was installed in such a way that allows unintended water into the home, that the insulation caused damage to another “component of the system,” that the insulation was installed in such a way that interferes with its own useful life, and that the insulation contains a public health hazard, according to the judge. The Court also found that there would be substantial individual issues raised by the “Right of Repair Act: affirmative defenses and that the cost of repairing and replacing the insulation would vary given various individual factors.

In their complaint, originally filed in late 2007, the plaintiffs alleged that they purchased homes in which the insulation was defective and did not meet building standards under California’s Right to Repair Act. The plaintiffs, who said there were thousands of potential class members, also alleged that the insulation caused property damage and created an unreasonable risk of harm.

However, in March 2009, Judge Matz denied their first motion for class certification, finding that they failed to allege questions of law or fact common to the class, or to show that the claims of the named plaintiff were typical of the class. The Court declined to certify a class under traditional product liability and negligence concepts since to the cause of the alleged harm–mold–would vary from house to house. The proposed class was also poorly defined, the judge said.

A second motion for class certification was denied in September 2009, with Judge Matz ruling that the named plaintiff had not properly pursued the Right to Repair Act’s pre-litigation requirement. The plaintiff then demanded that Pulte repair their home, precipitating the new certification motion. 

If the class was approved, it would have been open to all Californians who owned homes built by Pulte since 2003 that contained Greenfiber’s cocoon insulation. 

One subclass would have consisted of those California homeowners whose Pulte-built homes were installed with the Cocoon insulation by Quality Interiors, while a second subclass would have consisted of those Californians who were original purchasers of Pulte-built homes, according to court documents.

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