Sandpiper Village, et al v. Louisiana-Pacific Co, et al

Filing 713

Opinion And Order.L-P's and Class Counsel's motion 694 to enforce settlement agreement is granted and denied as set forth above. Plaintiff is hereby ordered to dismiss all claims asserted in his state court complaint except the written 25 -year warranty claim. Plaintiff's motion 710 to strike declaration of Christopher Brain is denied as moot. (see 9 page opinion and order for further details) Signed on 7/26/12 by Judge Robert E. Jones.Associated Cases: 3:95-cv-00879-JO, 3:95-cv-01453-JO (cib)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
IN RE:
LOUISIANA-PACIFIC INNER-SEAL SIDING
LITIGATION

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No. 3:95-cv-00879-JO (LEAD)
OPINION AND ORDER

Warren J. Daheim
GORDON THOMAS HONEYWELL LLP
1201 Pacific Avenue, Suite 21 00
P. 0. Box 1157
Tacoma, WA 98401-1157
Attorneys for Class Member Canterbury Apartment Homes LLC
Julia E. Markley
PERKINS COlE
1120 N.W. Couch Street, Tenth Floor
Portland, OR 97209-4128
Ashley A. Locke
PERKINS COlE
1201 Third A venue, Suite 4800
Seattle, WA 98101-3099
Attorneys for Defendant Louisiana-Pacific Corporation

Christopher I. Brain
TOUSLEY BRAIN STEPHENS PLLC
700 Fifth Avenue, 56th Floor
AT&T Gateway Tower
Seattle, W A 98104-5056
Co-Lead Class Counsel
Christopher I. Brain
TOUSLEY BRAIN STEPHENS, PLLC
1700 Seventh Avenue, Suite 2200
Seattle, WA 98101-1332
JONES,J:
L-P and Class Counsel have filed a joint motion to enforce the settlement agreement in
this hmer-Seal Siding class action against Canterbury Apartment Homes LLC ("plaintiff'),
asking the court to order plaintiff to take no further steps to prosecute any released claims against
L-P and to dismiss with prejudice all claims plaintiff alleges in his Washington state court
complaint, filed in November 2011. Plaintiff opposes the motion and moves to strike the
declaration of Class Counsel Christopher Brain.
BACKGROUND
In October 1995, Magistrate Judge Jelderks preliminarily approved the class action
settlement and an initial form of notice to class members. As defined in the preliminary
settlement agreement, "Settlement Class" included "all Persons who have owned, own, or
subsequently acquire Property on which Exterior Inner-Seal™ Siding has been installed prior to
January 1, 1996 who are given notice in accordance with the Due Process Clause of the United
States Constitution." Declaration of Ashley Locke ("Locke Dec!."), Exhibit ("Exh.") G, p. 6.
The only exclusions from the class were persons who opted out, and persons who were members
of a Florida class action. Id. at pp. 6-7.
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The initial notice informed recipients that:
You may be a part of this Class if you: have owned, own, or subsequently
acquire a home or structure in the United States on which exterior L-P Inner-Seal
Siding was installed prior to January 1, 1996, and that siding is damaged or
becomes damaged and you submit a claim prior to January 1, 2003.
Id. at p. 38. The notice explains who is excluded, i.e., those who opt out and those involved in
the Florida litigation. The notice explains that a settlement class member shall be an "Eligible
Claimant" entitled to the benefits of the settlement agreement "if he or she has incurred damage
or incurs such damage to exterior L-P Inner-Seal Siding installed prior to January 1, 1996, and
files a claim prior to January I, 2003." Id. at p. 39.
At the fairness hearing I conducted in April 1996, I raised concerns about certain aspects
of the settlement, as did participants at the hearing. As a result, on April 26, 1996, counsel
signed an Amendment to Settlement Agreement, Exh. H to the Locke Dec!. As relevant here, the
amendment revised the definition of"Settled Claim" to exclude "claims made against L-P after
the expiration of the term of the Settlement Agreement under the express terms of the L-P
25-year Limited Warranty issued with the product." Locke Dec!., Exh. H, p. 2.
On April 22, 1996, I approved the settlement as amended, and on April 26, 1996, signed
the Order, Final Judgment and Decree, and a Notice of Approval of Settlement. The Approval
Notice described the amendments to the settlement agreement and was sent to persons who had
not opted out of the original version; a similar notice was sent to persons who had opted out. See
Declaration of Christopher Brain ("Brain Dec!."), Exh. 2 (Notice of Approval and cover letter);
and Declaration of Warren Daheim ("Daheim Dec!."), Exh. G (supplemental notice to opt-outs).
For members of the class who had not opted out, the opt out date was extended to May 27, 1996.
Brain Dec!., Exh. 2, p. I.
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Significant to the present controversy is the wording of the amendment to the settlement
agreement concerning the 25-year warranty. The Notice of Approval explains, in a section titled
"New Terms From the Last Notice," that
In the original notice, you were informed that claims under the Settlement
must be made by January 1, 2003, after which L-P had no obligations to replace or
repair damaged siding.
As a result of continuing negotiations, and after considering the views of
Class Members, L-P has now agreed to reinstate the 25 year warranty after
January I, 2003. This means that if you do not make a claim by Januarv 1, 2003,
but your siding fails after Januarv 1, 2003. you can still make a claim under the
warrantv. All claims other than warranty claims (excluding those for
consequential damages as described in Paragraphs 5e and 5i) will be released if
you stay in the Class. You should remember that most warranties issued for L-P
Inner Seal Siding had a depreciation schedule so that by the year 2003 your
recovery under the warranty will have depreciated.
Brain Dec!., Exh. 2, p. 4 (emphasis added).
PLAINTIFF
Plaintiff owns a multi-structure apartment building that was built during 1994-1995. L-P
Inner-Seal siding was installed on the structures in varying amounts and locations. All siding
was installed before January 1, 1996. 1 Thus, plaintiff fits the defmition of"Class Member" as set
forth in the original notice, i.e., "all Persons who have owned, own, or subsequently acquire
Property on which Exterior Inner-Seal™ Siding has been installed prior to January 1, 1996 .... "
Locke Dec!., Exh. G, p. 38. Plaintiff was not, however, an "Eligible Claimant," because it had
not "incurred damage" and did not "incur[] such damage to exterior L-P Inner-Seal Siding

Evidently the original owner was Firgrove Associates, which merged with plaintiff
in December 1998. Ray Dally and his wife beneficially owned and still own majority interests in
Firgrove and plaintiff.
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installed prior to January 1, 1996" during the settlement period that ended January 1, 2003. Id. at
39 (emphasis added).
Plaintiff states that in 1995, its predecessor Firgrove purchased and properly installed L-P
Inner-Seal siding. It did so knowing of publicity concerning potential problems with the siding,
but "was assured by the distributor that LP had made product changes which cured the problems
that brought about the class action." Plaintiffs Opposition, p. 4. According to plaintiff, the
siding did not become damaged "at any point prior to January 1, 2003." Id. at 5.
Plaintiffs state court complaint, Exhibit A to the Locke Dec!., alleges that plaintiffs
siding, which falls within the parameters of the siding addressed in the class action, did not fail
until after termination of the settlement period, that is, did not fail before January 1, 2003. It
appears from documents of record that plaintiff first noticed early signs of deterioration in
December 2008. See Daheim Dec!., Exh. D.
Plaintiff made a claim under the L-P 25-year warranty. After inspection ofall24
buildings, calculation of the damaged area, and considering the depreciation schedule under the
warranty, etc., L-P offered plaintiff $8,383.32. Locke Dec!., Exh. 3. Plaintiff rejected the offer,
and in September 2011, plaintiff began replacing all of the siding rather than selectively replacing
it, incurring approximately $900,000 in replacement costs, which is the amount plaintiff seeks in
damages.
Plaintiff filed his state court complaint on November 15, 2011. The complaint alleges
three claims: breach of the written warranty; breach of warranties created by advertising and
similar communications to the public; and violation ofthe Washington Consumer Protection Act.

PAGE 5 - OPINION AND ORDER

THE PARTIES' ARGUMENTS
Plaintiffs argument is fairly straightforward. Plaintiff proposes that it reasonably
believed it was not a class member due to the class description:
The Settlement Class is currently composed of those who meet the following
criteria:
You may be part of this Class if you: have owned, own, or subsequently
acquire a home or structure in the United States on which exterior L-P Inner-Seal
Siding was installed prior to January I, 1996, and that siding is damaged or
becomes damaged and you submit a claim prior to January I, 2003.
"And" is emphasized in that paragraph because that is the focus of plaintiffs argument, that
when it received the notice, the siding was intact and remained intact through January 1, 2003.
See Plaintiffs Opposition, pp. 4-5.
Essentially, plaintiff asserts that the class action notice was unconstitutionally misleading
in that it did not apprise potential class members "with sufficient clarity to enable them to make
reasoned decisions about how to proceed." Id. at p. 8. Plaintiff also argues that even if it was
bound by the class notice, any release of claims was not binding as plaintiff received no
consideration. Finally, plaintiff contends, relying on Amchem Prods., Inc. v. Windsor, 521 U.S.
591 (1997), that any class settlement purporting to resolve the claims of potential, future
plaintiffs who have suffered no injury at the time of class certification is invalid.
With respect to the Amchem case, which involved the class certification of asbestosrelated claims for the purpose of settlement, it does not hold, as plaintiff suggests, that inclusion
of plaintiffs who had not yet suffered injury is invalid. As L-P correctly observes:
Amchem involved the class certification of asbestos-related claims for the
purpose of settlement. 521 U.S. at 591. Plaintiff cites Amchem in arguing that the
Claimant Notice here was inadequate, but Amchem actually centered on the scope
PAGE 6 - OPINION AND ORDER

of the class certification itself, not the notice provided. !d. at 606, 628. The
A me hem court evaluated the scope of the class members because the A mehem
class embraced "hundreds of thousands, perhaps millions, of individuals," id. at
597, including those exposed to asbestos or products containing asbestos that
were traced back to any one or more of a number of different defendants, and
those exposed to asbestos or products containing asbestos by virtue of a spouse's
or household member's exposure, id. at 602.
The Amchem class included members who already suffered physical injuries as
well as members who had not manifested any personal injuries from asbestos. Id.
at 603. The settlement outlined four types of categories of disease that those who
had not yet manifested personal injuries could suffer: mesothelioma, lung cancer,
other cancers, and non-malignant conditions. Id. The Supreme Court described the
significant factual differences in the class members and their injuries: "In contrast
to mass torts involving a single accident, class members in this case were exposed
to different asbestos-containing products, in different ways, over different periods,
and for different amounts of time .... Each has a different history of cigarette
smoking, a factor that complicates the causation inquiry." Id. at 609, 624
(quotation marks and citation omitted). It was against this backdrop that the Court
evaluated the proposed class certification for settlement purposes, finding that the
"disparate questions" in each Amchem class member's case rendered the class
certification unable to sufficiently benefit each class member. Id at 624 (finding
commonality and adequacy of representation not met).
Unlike Amchem, here the potential damage triggering event here was definedinstallation of one specific manufacturer's specific type of siding - and purely
economic.
Reply in Support of Joint Motion, pp. 9-10.
With respect to plaintiffs argument that it did not receive consideration, if plaintiff is a
class member, then it got the same consideration all class members got: the right to file claims
for damage every year for seven years, plus the right to pursue future damages under the 25-year
warranty.

PAGE 7 - OPINION AND ORDER

Finally, with respect to plaintiffs arguments about notice, L-P puts its emphasis on a
different aspect of the class description; specifically, on the language "is damaged or becomes
damaged," and contends that the highlighted language put recipients "on notice that they were

Class Members even if their LP Siding had not yet suffered damage." Reply in Support, p. 8
(emphasis added). In this court's view, an even more compelling reason for finding that plaintiff
did indeed receive reasonable notice that it was a class member is the language concerning the
25-year warranty added by amendment to the settlement agreement and included in the Notice of
Approval. That language plainly informs recipients, including plaintiff, 2 that:
As a result of continuing negotiations, and after considering the views of
Class Members, L-P has now agreed to reinstate the 25 year warranty after
January 1, 2003. This means that if you do not make a claim by Januarv 1. 2003,
but your siding fails after January 1. 2003, you can still make a claim under the
warranty.
Brain Dec!., Exh. 2, p. 4. At that point, plaintiff still could have opted out of the class action, as
the opt out date was extended, but chose not to.
In summary, I conclude that plaintiff is a class member and plaintiffs remedy, if any, is
the 25-year warranty. L-P claims that plaintiff cannot pursue the warranty claim in state court,
but the warranty does not contain any language precluding state court action . Thus, I grant L-P's
and Class Counsel's motion ( # 694) with respect to all of plaintiffs claims except the warranty
claim. 3

2

Plaintiff does not contend that it did not receive the initial class action notice or the
Notice of Approval, which explained the amendments to the original settlement terms. Instead,
plaintiff disregarded the notices because it concluded that it was not a member of the settlement
class.
3

Plaintiff moves(# 710) to strike the Declaration of Christopher Brain for a variety
(continued ... )

PAGE 8 - OPINION AND ORDER

CONCLUSION
L-P's and Class Counsel's motion(# 694) to enforce settlement agreement is granted and
denied as set forth above. Plaintiff is hereby ordered to dismiss all claims asserted in his state
court complaint except the written 25-year warranty claim. Plaintiffs motion(# 710) to strike
declaration of Christopher Brain is denied as moot.
IT IS SO ORDERED.
DATED this 26th day of July, 2012.

3

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continued)

of reasons, but because I relied only on the exhibits to the declaration, not Brain's statements, the
motion is denied as moot.
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