No Deal According to Judge in RV Fridge Defect Class Action

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A California federal judge rejected a proposed settlement in the class action lawsuit accusing small fridge manufacturers Norcold Inc., Thetford Corp. and Dyson-Kissner-Moran Corp. of proliferating defective fridges often used in boats and large recreational vehicles (RVs) that had a tendency to start fires.

On Thursday, a redacted order was issued rejecting a proposed $33 million settlement deal in the RV fridge defect class action lawsuit. In her order, U.S. District Judge Josephine Staton said that the revised settlement fails to adequately compensate buyers of some fridge models or alleviate concerns that the named plaintiffs are being paid off to support the deal.

Judge Staton has issued an order requiring revisions to the initially proposed settlement deal, including in October and June. In October, Judge Stanton denied the plaintiffs’ request to approve the refrigerator defect class action settlement, stating she needed more information about the incentive awards that would be provided to the named plaintiffs. In June, the judge rejected the settlement because it was not clear as to the limits the companies could pay per year under the terms of the settlement.

In the most recent order the judge issued rejecting the proposed settlement, the judge said, “The court simply is not convinced that $33 million is a reasonable settlement based on defendants’ financial condition, as defendants have claimed throughout this litigation.”

The plaintiffs filed the class action lawsuit in 2012 alleging that certain RV fridges designed and manufactured by the defendants contained a defect that caused corrosion, overheating and potentially fires.

After several tries, the judge has finally said that the representative awards can be approved because they are limited to $7,500 per representative rather than an hourly amount. However, the judge rejected the portion of the settlement does not address the issue of individual settlements, according to the judge’s order on Thursday. According to the judge, another problem is the proposed distribution schedule.

According to the order, the proposed RV fridge class action settlement is unfair because it would about $175 to $3,508 for current owners of the N1200 model or former owners who paid to have the unit repaired, while those who have N6 or N8 models would be awarded only $21 to $421. The judge pointed out that the latter models cost about $1,129 to replace and the only way to ensure a fair settlement would be to have the companies pay more.

Judge Stanton was also unconvinced that the companies were limited to $33 million to settle the deal. “Defendants’ argument for why they can only pay $11 million per year for a three-year period is unconvincing when it seems solely to be based on the uncertainty associated with projecting financial performance in 2018 and beyond,” the judge said in her order.

The plaintiffs are represented by Hart L. Rabinovich and Bradley C. Buhrow of Zimmerman Reed PLLP and Christopher P. Ridout of Ridout Lyon & Ottoson LLP.

The RV Fridge Defect Class Action Lawsuit is Jeffrey Etter, et al. v. Thetford Corp., et al., Case No. 8:13-cv-00081, in the U.S. District Court for the Central District of California.

UPDATE: On July 21, 2017, Top Class Actions viewers started receiving the first of four checks in the mail from the Norcold RV refrigerator defect class action settlement. 

UPDATE 2: On July 5, 2018, Top Class Actions viewers started receiving the second of four checks in the mail from the Norcold class action settlement worth as much as $307.52! 

UPDATE 3: On July 5, 2019, Top Class Actions viewers started receiving the third of four checks in the mail from the Norcold class action settlement worth as much as $307.52!