SUSAN D. WIGENTON, District Judge.
Before this Court is Defendant Honeywell International, Inc.'s ("Defendant") Motion to Dismiss Plaintiffs Loretta Butera ("Butera") and Greg Holden's ("Holden") (collectively, "Plaintiffs") Second Amended Class Action Complaint (D.E. 22, "SAC") pursuant to Federal Rules of Civil Procedure ("Rule") 12(b)(6) and 9(b). Jurisdiction is proper pursuant to 28 U.S.C. § 1332(d). Venue is proper pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument pursuant to Rule 78. For the reasons stated herein, the Motion to Dismiss is
Defendant is a Delaware corporation with a principal place of business in New Jersey. (SAC ¶¶ 1, 10.) Defendant is a designer and manufacturer of commercial and consumer products including "sensors, switches, and instruments for measuring temperature, control and metering of gas and electricity." (Id. ¶ 11.) Plaintiffs allege that between 2010 and 2012, Defendant "designed, manufactured, sold, and distributed" gas valves for residential hot water heaters bearing model number WV8840 (the "Valves") "without disclosing to consumers that [the Valves'] temperature sensor ["Sensor"] . . . is defective." (Id. ¶ 2.) The Valves were "installed in and sold with gas hot water heaters . . . manufactured and sold under various brand names, including, but not limited to: Bradford White, American Water Heater, Proline, Whirlpool, U.S. Craftsman, Rheem, Kenmore, and A.O. Smith." (Id. ¶ 3.) Plaintiffs allege that the Valves are "unsuitable for [their] intended use" because their Sensors are enclosed in a "plastic polymeric casing" (known as a "thermowell") instead of a metal casing. (Id. ¶¶ 2, 4-5.) The plastic casing "prematurely erodes or otherwise deteriorates . . . causing water to leak through an affected thermowell and in turn through the [] Valve to the surrounding premises," damaging consumers' water heaters and their homes. (Id. ¶¶ 5-6.)
Butera is a citizen and resident of Tennessee who purchased a water heater from her "local Lowe's in February of 2012." (Id. ¶¶ 8, 49.) Butera does not identify what brand heater she purchased. Just over six years later, on March 24, 2018, "her water heater began leaking" from the Valve, flooding her garage and damaging the basement below. (Id. ¶ 50.) Butera paid a plumber $308.00 to repair the water heater and replace the Valve. (Id. ¶ 51.) Butera also contends that she will incur additional costs to fix the flood damage to her home. (Id.)
Holden is a citizen and resident of California who purchased a water heater "outfitted with the [Valve] from his local Home Depot in 2012." (Id. ¶¶ 9, 53.) Holden does not identify what brand heater he purchased. Six years later, on April 23, 2018, "his water heater began leaking, flooding his garage and resulting in water damage to nearby cabinetry and drywall." (Id. ¶ 54.) Holden does not indicate what caused the water heater to leak. He contends his water heater could not be repaired and that he paid $600.00 to replace it and another $1,400.00 to repair the damage to his property. (Id. ¶ 55.)
On August 30, 2018, Plaintiffs filed a putative class action Complaint in this Court. (D.E. 1.) Plaintiffs subsequently filed their First Amended Class Action Complaint (D.E. 9, "FAC") on December 7, 2018. This Court granted in part Defendant's Motion to Dismiss the FAC on April 18, 2019 (D.E. 20, "Opinion"), but gave Plaintiffs 30 days to amend.
An adequate complaint must be "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2). This Rule "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level[.]" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted); see also Phillips v. Cty. of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) (stating that Rule 8 "requires a `showing,' rather than a blanket assertion, of an entitlement to relief").
In considering a Motion to Dismiss under Rule 12(b)(6), the Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips, 515 F.3d at 231 (external citation omitted). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (discussing the Iqbal standard). Determining whether the allegations in a complaint are "plausible" is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. If the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct," the complaint should be dismissed for failing to "show[] that the pleader is entitled to relief" as required by Rule 8(a)(2). Id.
Rule 9(b) requires that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Rule 9(b). Plaintiffs "alleging fraud must state the circumstances of the alleged fraud[ulent act] with sufficient particularity to place the defendant on notice of the `precise misconduct with which [it is] charged.'" Park v. M & T Bank Corp., Civ. No. 09-02921, 2010 WL 1032649, at *5 (D.N.J. Mar. 16, 2010) (citing Lum v. Bank of Am., 361 F.3d 217, 223-24 (3d Cir. 2004)).
As a federal court sitting in diversity, this Court would normally engage in a choice of law analysis to determine which state's law applies to each of the instant claims.
Butera's sole state claim is for violation of the TPLA, which subsumes all product liability actions in Tennessee. See Strayhorn v. Wyeth Pharm., Inc., 737 F.3d 378, 392 (6th Cir. 2013) (internal citation omitted). Butera's allegations are couched in terms of defective design/ manufacture and failure to warn. Specifically, Butera alleges that the Valves "were not reasonably safe for their ordinary and intended use; [Defendant] failed to provide . . . adequate and sufficient warnings regarding the known and foreseeable risks and dangers inherent in the [] Valves; and the design, methods of manufacture, and testing of the [] Valves were inadequate and produced defective products." (SAC ¶ 89.)
In Tennessee, "in order for a plaintiff to recover under any theory of product liability, the plaintiff must establish that the product was defective and unreasonably dangerous at the time the product left the control of the manufacturer." Moore v. C.R. Bard, Inc., 217 F.Supp.3d 990, 994 (E.D. Tenn. 2016) (quoting Higgs v. Gen. Motors Corp., 655 F.Supp. 22, 23 (E.D. Tenn. 1985)). Here, Butera fails to allege sufficient facts for the Court to infer that her Valve was defective or unreasonably dangerous. She alleges that her Valve was defective because Defendant used plastic in the construction of its thermowell and that plastic is unsuitable because it "prematurely erodes or otherwise deteriorates such that pin-sized holes form in the thermowell." (SAC ¶ 5.) However, the fact that the thermowell was made from plastic, standing alone, does not show that her Valve was defective. Under the TPLA, Butera must present "evidence or authority that the use of [plastic] makes the products per se defective or unreasonably dangerous." Moore, 217 F. Supp. 3d at 995. Providing no such authority, her "assertions are speculative and conclusory, akin to [the] allegations that were specifically considered—and rejected—by Iqbal." Id. (granting motion to dismiss). Count I, therefore, must be dismissed.
The SAC alleges that Defendant "expressly warranted that the [Valves] were free from defect in materials and workmanship and promised it would replace all defective parts and provide replacement units for those that developed water leaks." (SAC ¶ 94.) The SAC further alleges that Defendant's "time limits on its warranties are unconscionable" because the Valve defect was often only discoverable after the warranty period expired, preventing Holden from timely exercising his rights under the warranty. (Id. ¶ 97.)
"To state a claim for breach of express warranty under California law, a plaintiff must allege (1) the exact terms of the warranty; (2) reasonable reliance thereon; and (3) a breach of warranty which proximately caused plaintiff's injury." T & M Solar & Air Conditioning, Inc. v. Lennox Int'l Inc., 83 F.Supp.3d 855, 875 (N.D. Cal. 2015) (internal citations omitted). "To allege facts identifying the exact terms of the warranty, a plaintiff must provide `specifics' about what the warranty statement was, and how and when it was breached." Id.
Here, Holden does not plead facts sufficient to allege that Defendant breached its express warranty and that the breach caused Holden's injury. First, even taking the SAC's brief summary of the warranty terms at face value,
The SAC also fails to allege that Holden reasonably relied on or even saw Defendant's express warranty. Although California courts do not require reliance where there is privity between the parties, see Asghari v. Volkswagen Grp. of Am., Inc., 42 F.Supp.3d 1306, 1334 (C.D. Cal. 2013), no privity exists here. Holden bought his water heater from a Home Depot; the water heater was manufactured by an unnamed company using a component made by Defendant. See Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) ("A buyer and seller stand in privity if they are in adjoining links of the distribution chain. Thus, an end consumer . . . who buys from a retailer is not in privity with a manufacturer." (citations omitted)); Yu-Santos v. Ford Motor Co., Civ. No. 06-1773, 2009 WL 1392085, at *21 (E.D. Cal. May 14, 2009) (dismissing car purchaser's breach of warranty claim against seatbelt manufacturer for lack of privity).
Because the SAC fails to sufficiently plead breach, reasonable reliance, or proximate causation, Count II must be dismissed.
According to the SAC, Defendant warranted that the Valves "were of merchantable quality and fit for their ordinary purpose," and that they "would operate properly." (SAC ¶ 101.) Holden alleges that Defendant breached this warranty of merchantability when parts of the Valves prematurely deteriorated and caused water heaters to leak. (Id.) The Valves thus failed to function as intended and were not of merchantable quality when they left Defendant's control. (Id. ¶¶ 101-102.)
"The implied warranty of merchantability requires that `every sale of consumer goods that are sold at retail in [California] shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable.'" Stewart v. Electrolux Home Prods., Inc., 304 F.Supp.3d 894, 912 (E.D. Cal. 2018) (quoting Cal. Civ. Code § 1792). "To state a claim for breach of implied warranty of merchantability, a party must plead facts sufficient to show that `the product did not possess even the most basic degree of fitness for ordinary use.'" Pini USA, Inc. v. NB Glob. Commodities, LLC, Civ. No. 17-4763, 2017 WL 5054655, at *5 (C.D. Cal. Oct. 31, 2017) (quoting Mocek v. Alfa Leisure, Inc., 114 Cal.App.4th 402, 406 (Cal. Ct. App. 2003)). As with breach of express warranty, "[u]nder California law, the general rule is that privity of contract is required in an action for breach of . . . implied warranty." Stewart, 304 F. Supp. 3d at 914 (citation and some punctuation omitted). "An end consumer who buys from a retailer is not in privity with a manufacturer." Id.
Holden does not allege facts sufficient to show that his Valve did not possess "even the most basic degree of fitness for ordinary use." Birdsong v. Apple, Inc., 590 F.3d 955, 958 (9th Cir. 2009) (quoting Mocek, 114 Cal. App. 4th at 406). Instead, Holden alleges that his water heater "began leaking," without alleging that the leak originated with the Valve. (SAC ¶ 54.) Holden further alleges that the leak occurred six years after he purchased the water heater, and after the Valve's express warranty expired. (Id. ¶¶ 53-54; see ¶ 106.) An "implied warranty provides for a minimum level of quality." Birdsong, 590 F.3d at 958 (quotation marks and citation omitted). Holden's allegations are insufficient for the Court to infer that the Valve did not meet this minimum level. Therefore, Count III must be dismissed.
Holden's negligence claim alleges that Defendant owed Holden a duty of reasonable care to ensure that the Valve operated safely for its intended purpose and reasonably expected use. (SAC ¶ 110.) The SAC alleges that Defendant breached this duty: (1) by failing to ensure that the Valve was free from defect and (2) by failing to warn that the Valve was defective and posed a safety hazard, resulting in damages to Holden. (Id. ¶¶ 111-13.)
"A negligence claim under California law requires plaintiff to allege that defendant owed plaintiff a legal duty, breached the duty, and that the breach was a proximate or legal cause of plaintiff's injury. In the context of a products liability lawsuit, under a negligence theory, a plaintiff must also prove that the defect in the product was due to negligence of the defendant." In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices & Prod. Liab. Litig., 754 F.Supp.2d 1208, 1223 (C.D. Cal. 2010) (internal citations and some punctuation omitted).
As with his breach of express warranty claim, Holden's failure to plead facts sufficient to allege proximate causation is fatal to his negligence claim. Holden does not allege that the Valve in his water heater leaked; he only alleges that his water heater, made by an unnamed manufacturer, leaked. (SAC ¶ 54.) With the only facts being that his water heater leaked six years after he purchased it, Holden also fails to sufficiently allege that Defendant breached its duty to him. The Court cannot infer from these facts that a water heater leaking after six years of use suffered from a defect of any component, let alone specifically its Valve.
Holden also fails to sufficiently allege that Defendant owed him a legal duty to warn. It is not plausible on these facts that consumers needed to be warned that a six-year-old water heater may leak. See Lucas v. City of Visalia, 726 F.Supp.2d 1149, 1158 (E.D. Cal. 2010) (noting that a "manufacturer has a duty to use reasonable care to give warning of the dangerous condition of the product . . . if the manufacturer has reason to believe that [those who use the product] will not realize its dangerous condition" (internal citation omitted)).
In fact, Defendant only had a legal obligation to warn consumers about dangers that a "reasonably prudent manufacturer would have known and warned about." Carlin v. Superior Court, 920 P.2d 1347, 1351 (Cal. 1996). Plaintiffs do not provide facts sufficient to allege that Defendant knew about or should have known about the Valves' alleged premature deterioration. Plaintiffs allege that Defendant is a member of the water heater component industry and eventually replaced its plastic thermowells with metal thermowells, (SAC ¶¶ 35-48), but these facts alone are insufficient to allege that Defendant knew or should have known of the "particular risk." See Carlin, 920 P.2d at 1351; see also Coleman-Anacleto v. Samsung Elecs. Am., Inc., Civ No. 16-02941, 2016 WL 4729302, at *13-14, *19 (N.D. Cal. Sept. 12, 2016) (dismissing negligentfailure-to-warn claim for failure to allege facts showing that defendant knew of defect). Therefore, Count Four must be dismissed.
"[C]ourts have repeatedly held that `there is no cause of action in California for unjust enrichment.'" In re Apple & AT & T iPad Unlimited Data Plan Litig., 802 F.Supp.2d 1070, 1077 (N.D. Cal. 2011) (quoting Melchior v. New Line Prods., Inc., 131 Cal.Rptr.2d 347 (Cal. Ct. App. 2003)); see also Aguiar v. Merisant Co., Civ. No. 14-670, 2014 WL 6492220, at *9 (C.D. Cal. Mar. 24, 2014) ("Defendants contend that California law does not recognize a cause of action for unjust enrichment. The Court agrees."); In re Ford Tailgate Litig., Civ. No. 11-2953, 2014 WL 1007066, at *5 (N.D. Cal. Mar. 12, 2014) ("California, among other jurisdictions, has rejected independent unjust enrichment claims." (citation omitted)). Therefore, Count Six is dismissed.
Under California law, "[t]he elements of a strict products liability cause of action are [i] a defect in the manufacture or design of the product or a failure to warn, [ii] causation, and [iii] injury." Park-Kim v. Daikin Indus., Ltd, Civ. No. 15-9523, 2016 WL 5958251, at *9 (C.D. Cal. Aug. 3, 2016) (quoting Cnty. of Santa Clara v. Atl. Richfield Co., 137 Cal.App.4th 292, 318 (Cal. Ct. App. 2006)). Holden's strict liability claim asserts all three theories: manufacturing defect, design defect, and failure to warn. (SAC ¶¶ 134-45.) However, for the reasons discussed above, Holden fails to allege a defect or causation. Although the SAC states that Holden's "water heater began leaking," there is no allegation that the leak originated in the Valve, let alone that the leak was caused by plastic deterioration in his Valve's thermowell. (SAC ¶ 54.) Because Holden does not factually allege that his Valve was defective and that his injury was caused by the Valve's defective condition, Count Seven must be dismissed.
Holden's UCL claim must meet the pleading standards of both Rules 12(b)(6) and 9(b). See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (recognizing that "Rule 9(b)'s heightened pleading standards apply to claims for violations of the . . . UCL"); Keegan v. Am. Honda Motor Co., 838 F.Supp.2d 929, 937 (C.D. Cal. 2012) (noting that UCL claims "sound in fraud, and are therefore subject to the heightened pleading requirement of Rule 9(b)"). Here, the SAC alleges that Defendant "failed to disclose its knowledge of the Defect at the point of sale" and that Defendant "knowingly concealed that the [Valves] suffered from [a] Defect which caused them to fail before their anticipated useful life." (SAC ¶¶ 148, 151.) A claim for failure to disclose pursuant to the UCL must show: "(1) the existence of a design defect; (2) the existence of an unreasonable safety hazard; (3) a causal connection between the alleged defect and the alleged safety hazard; and [(4)] that the manufacturer knew of the defect at the time a sale was made." Williams v. Yamaha Motor Co., 851 F.3d 1015, 1025 (9th Cir. 2017) (citations omitted); see also Afzal v. BMW of N. Am., LLC, Civ. No. 15-8009, 2016 WL 6126913, at *8 (D.N.J. Oct. 17, 2016).
Once again, Holden fails to plead facts sufficient to sustain a UCL claim. The SAC pleads that Defendant, "as a member of the water heater component industry—knew or should have known of the existence of the Defect prior to sale of the [] Valves," but does not allege any facts to support a finding that membership in the industry gave Defendant actual or constructive knowledge of the Valves' alleged premature degradation. (SAC ¶ 149.) This is insufficient under both Rule 12(b)(6) and the heightened pleading requirements of Rule 9(b). See Riachi v. Prometheus Grp., Civ. No. 17-811, 2017 WL 2438838, at *3 (D.N.J. June 6, 2017) (citing In re Advanta Corp. Sec. Litig., 180 F.3d 525, 534 (3d Cir. 1999)).
For the reasons set forth above, Defendant's Motion to Dismiss is
