SPF Lawsuits: MDL Panel Won’t Combine SPF Cases

Law360, New York (June 06, 2013, 6:21 PM ET) -- The U.S. Judicial Panel on Multidistrict Litigation on Thursday rejected an attempt to consolidate eight lawsuits alleging injuries and damages caused by various spray polyurethane foam insulation products installed on consumers' properties, saying the cases are too unique to decide as a group.

The spray foam litigation, which has cases in Connecticut, Florida, Michigan, New Jersey, New York, Pennsylvania and Wisconsin, has been compared to recent Chinese drywall cases, which were consolidated into an MDL in New Orleans before a settlement estimated at more than $1 billion was reached in February.

The spray foam plaintiffs filed a motion to consolidate the cases in February, but the defendants, including manufacturer Demilec LLC and building products giant Masco Corp., argued the cases were too varied to make a consolidation more efficient. They also claimed the plaintiffs' counsel strategically filed the cases "solely to manufacture the appearance that a MDL is necessary" and, in one case, to get around discovery deadlines.

The defendants argued that different manufacturers, products and installers are involved in the litigation, the actions are local in nature, highly individualized facts concerning the circumstances of installation will predominate and voluntary coordination by the parties will be sufficient to address any overlapping pretrial proceedings in light of the low number of actions and the involvement of common counsel.

In response, the plaintiffs contended that centralization was warranted because common factual questions predominate on the core issue of whether spray foam insulation products emit volatile organic compounds after installation as a result of a defect in the products' design, manufacture and installation instructions.

"Although these actions share factual questions arising out of allegations that SPF insulation products emit VOCs as a result of one or more defects associated with the product, the panel is not persuaded that ... centralization is necessary either to assure the convenience of the parties and witnesses or for the just and efficient conduct of this litigation," the JPML said.

The panel said it agreed that individualized facts concerning the chemical composition of the different products, the training and practices of each installer, and the circumstances of installation at each residence will predominate over the common factual issues alleged by plaintiffs.

"Additionally, placing direct competitor manufacturer defendants into the same litigation would require protecting trade secret and confidential information from disclosure to all parties and complicate case management," the panel said.

The panel recommended voluntary coordination among the parties, many of whom are represented by the same counsel, and the involved judges is a preferable alternative to centralization.

The eight cases sought nationwide class certification for suits against manufacturers, installers and distributors of spray foam insulation, alleging the foam remains toxic after being installed in homes and that it poses such risks to homeowners and their residences that the only remedy is complete removal.

Manufacturers have marketed spray foam as a nontoxic, environmentally safe product, the plaintiffs say. But the plaintiffs claim it is defectively designed and continues to emit chemicals under a process after installation known as off-gassing, in which dangerous volatile organic compounds are released into the air.

Demilec's attorney Alan Feldman of Lydecker Diaz said the company is very pleased with the JPML's decision.

"Demilec's strategy will be to continue to vigorously defend the allegations of the putative class actions filed against it," he said.

Counsel for the other parties did not immediately respond to requests for comment Thursday.

Lead plaintiff Lucille Renzi is represented by David S. Ratner, Jeremy W. Alters and Matthew T. Moore of Morelli Alters Ratner PA, Vincent J. Pravato of the Law Offices of Wolf & Pravato and David C. Rash.

The defendants are represented by Mark S. Mester of Latham & Watkins LLP, Alan Feldman of Lydecker Diaz, Robert W. Gifford of McElroy Deutsch Mulvaney & Carpenter LLP, Jerald J. Howarth of Howarth & Associates LLC and Miles N. Esty of Esty & Buckmir LLC, among others.

The case is In re: Spray Polyurethane Foam Insulation Products Liability Litigation, case number 2444, in the U.S. Judicial Panel on Multidistrict Litigation.