Goodman Could Face $803M in Damages Over Problematic Air Conditioners

Goodman Global Inc. is facing a possible $803 million in damages for defects in its air conditioners and heating problems, the company said this week. The company is currently subject to a lawsuit filed in Pennsylvania that alleges Goodman and Amana heat pumps, air handlers and air conditioners contain defective evaporator coils that can leak, crack, and corrode. Plaintiffs claim Goodman has known about the problem since as far back as 2007 and are seeking compensation for repairs performed on thw allegedly faulty products. Goodman’s damages estimation was part of the company’s efforts to remove the lawsuit to federal court.

Customers have expressed real anger at the persistent leaking

Customers have accused Goodman of manufacturing heat pumps and air conditioners with leaky coils for some time, with many consumers turning to Internet complaint boards to vent their frustrations. The lawsuit’s plaintiff, Robert Kotsur, claims in the complaint that:

Goodman faces accusations of breach of warranty, deceptive business practices, misrepresentation, and failure to notify customers of defects, among others. Plaintiffs are seeking compensation for money spent on repairs, as well as related damages. In its Notice of Removal filed Wednesday with the District Court for the Eastern District of Pennsylvania, Goodman reports that it sold almost 400,000 units in Pennsylvania during the timeframe outlined in the complaint. With Kotsur’s estimation that he spent around $2000 on repairs, the total damages, the company calculates, could come to $803 million before attorneys’ fees.

With that kind of money at stake, and with the number of potential plaintiffs so high, Goodman is asking for the suit to be removed to federal court, in line with the Class Action Fairness Act.

It’s almost guaranteed that the removal will be approved. As if the size of the potential payouts wasn’t enough, Goodman has also noted that the diversity of plaintiffs (citizens of more than one state are likely involved) fulfills another requirement for removal under CAFA.

Last December, the U.S. Judicial Panel on Multidistrict Litigation voted not to centralize six putative class action lawsuits that were filed against Goodman for the same air conditioning leak noted in Kotsur’s suit. At the time, the panel argued that there weren’t enough plaintiffs to warrant such a move, and Goodman may have had reason to hope the suits would leave the company relatively unscathed; however, the sheer number of consumers Kotsur claims to represent makes this new suit a different matter entirely. Customers have expressed real anger at the persistent leaking, with online complaints reporting, for example, that “the [new] coil was rusted and deteriorated as if it were 15 years old,” and “[My] installer says Goodman is low on evaporator coils because of so many of them failing.”

While no official reason has been given for the evaporator coils’ failure, it may be that a new refrigerant, brought into use to fulfill updated environmental regulations in the nineties, was ill suited to Goodman’s existing coils. Still, if this were the case, it’s a problem for the company to address, and not something customers should be forced to fix themselves.

We’ll see how Goodman fares in federal court. As the complaint itself says: “Consumers, as well as HVAC dealers, technicians, and contractors have been publicly complaining about the defective evaporator coils in Goodman Units sold since at least 2007.” The time may finally be here for a solution to be found.