The Fourth Circuit recently reinstated a wrongful death suit against a defendant, holding that the release in a settlement of consumer class actions against the defendant did not preclude plaintiff’s personal injury suit against that same defendant.  See In re Lumber Liquidators Chinese-Manufactured Flooring Prod. Mktg., Sales Pracs. & Prod. Liab. Litig., — F. 4th —, 2024 WL 174363 (4th Cir. Jan. 17, 2024).  The Fourth Circuit’s decision is notable given that class members—including plaintiff—explicitly agreed to release all personal injury claims against the defendant, yet the Fourth Circuit held that the plain language of the release was limited by the “identical factual predicate” doctrine and allowed the class member to raise this challenge in a subsequent lawsuit.

Starting in 2015, several lawsuits were filed against Lumber Liquidators.  These actions alleged that the company misrepresented the levels of formaldehyde in its laminate flooring and further misrepresented the durability and longevity of its laminate flooring products.  These suits were consolidated into two MDLs in the Eastern District of Virginia.  The class plaintiffs in these MDLs did not bring claims or seek damages for personal injury or wrongful death. 

In 2018, the parties agreed to a class action settlement.  The classwide release covered “any and all claims . . . including but not limited to any . . . personal injury claim” related to Lumber Liquidator’s Chinese-manufactured laminate flooring sold from 2009 to 2015.  Id. at *2.

The plaintiff in this case brought wrongful death claims against Lumber Liquidators on behalf of her deceased husband, who purchased and used Lumber Liquidators’ laminate flooring in 2014 and 2015.  The plaintiff alleged that the decedent’s liver and pancreatic cancer was caused by formaldehyde in Lumber Liquidator’s products.  Although the decedent received notice of the class action settlement, neither he nor his wife opted him out of the settlement agreement.  The district court dismissed plaintiff’s case, holding that, among other things, the settlement agreement’s release barred plaintiff’s wrongful death claim. 

The Fourth Circuit disagreed.  The court emphasized that the settlement class representatives “made clear that they were not pursuing personal injury claims on a class-wide basis.”  Id. at *8.  Because the class actions pertained only to the alleged quality and deceptive marketing of Lumber Liquidator’s flooring, not any alleged injuries or death caused by the flooring, the court found that the settlement agreement “did not settle claims premised on bodily injury or wrongful death.”  See id. at *7.  In particular, because the class action’s consumer protection claims “are not likely to depend upon the very same set of facts as personal injury or wrongful death claims,” the settlement agreement did not have an “identical factual predicate” for plaintiff’s personal injury claims and thus did not bar such claims.  Id. at *6–8.  Accordingly, even though the decedent was a member of the settlement class, and even though the decedent had agreed to release any personal injury claims against Lumber Liquidators, the Fourth Circuit held that plaintiff’s lawsuit was not precluded by the settlement agreement. 

In a concurring opinion, Judge Wilkinson warned that “restrict[ing] releases unduly risks undermining the utility of an important tool in class action litigation.”  Id. at *8.  Judge Wilkinson therefore explained that he did not “understand the majority to say that releases cannot bar claims that have not been brought or fully litigated, but only those claims that lie distinctly outside the ambit of the class action proper,” and that he also did not understand the majority opinion as “announc[ing] a per se rule that a release in every products liability suit necessarily allows subsequent actions for injuries arising from the product itself.”  Id.  As Judge Wilkinson noted, “[r]ules that broad could well drain all meaning from the release.”  Id.

The Fourth Circuit’s decision should remind companies who are negotiating settlement agreements in consumer class actions that a classwide release of claims may not preclude personal injury claims related to the same products at issue in the class action, no matter how carefully the release is drafted.  Companies should keep this in mind when valuing such settlements, which may not necessarily “buy peace” for all actions—particularly personal injury claims—related to the same products as the underlying class action.  And, to the extent parties in a consumer class action agree to release all personal injury claims, the Fourth Circuit’s decision may open the door for collateral attacks on such a settlement.  Defendants should carefully police such efforts to ensure Judge Wilkinson’s warning about a per se rule barring personal injury releases in class action settlements does not become a reality.

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Photo of Stephen Rees Stephen Rees

Stephen Rees is an associate in the firm’s Washington, DC office and member of the Litigation and Investigations Practice Group. He has handled litigation matters involving a range of issues, including antitrust, product liability, ERISA, insurance, breach of contract, and tort claims.

Stephen…

Stephen Rees is an associate in the firm’s Washington, DC office and member of the Litigation and Investigations Practice Group. He has handled litigation matters involving a range of issues, including antitrust, product liability, ERISA, insurance, breach of contract, and tort claims.

Stephen has experience in all stages of litigation, including:

  • dispositive motions;
  • fact and expert discovery;
  • class certification;
  • summary judgment;
  • mediation; and
  • arbitration

Stephen has first-chaired fact witness depositions and has drafted dispositive motions in both federal and state court for clients. In addition, he maintains an active pro bono practice, with an emphasis on immigration-related impact litigation and criminal law matters.

Stephen is a member of the Bar of Illinois. District of Columbia bar application pending; supervised by principals of the firm.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which were defeated through dispositive pre-trial motions.
Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.

Prior to practicing law, Andrew worked as a journalist.