FREDERICK P. STAMP, JR., UNITED STATES DISTRICT JUDGE.
This case is about a washing machine and the products liability suit it inspired. After years of use, the plaintiffs allege that they found their washer had developed a "biofilm" that ruined their clothing and
The plaintiffs live in Weirton, West Virginia. They purchased an Electrolux "high efficiency" washing machine at a Sears Department Store in Steubenville, Ohio in 2009. After years of use, the plaintiffs noticed a noxious odor coming from their washing machine. They contacted Electrolux in July 2013 and were told that they should leave the door of the machine open and run regular cycles with a product called "Affresh®." The plaintiffs tried these suggestions but saw no positive results.
Upon further investigation, the plaintiffs discovered that their washer had developed a coat of "biofilm," consisting of bacteria and mold, in the washer drum. This biofilm caused the odor and was transferred to clothing and other articles washed in the machine. The plaintiffs allege that Electrolux knew its washers allowed biofilm to develop, but continued to market them with a special "Deep Clean Sanitize" cycle that it claimed would kill "99.9% of bacteria with no carryover of bacteria between loads." ECF No. 46 at 19.
The plaintiffs filed this class action in West Virginia state court alleging consumer fraud, breach of warranties, and unjust enrichment on behalf of all persons in West Virginia who own a washing machine manufactured by Electrolux. The defendants removed the case to this Court under the Class Action Fairness Act, 28 U.S.C. §§ 1453, 1711-1715. Electrolux then moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), and the plaintiffs filed a motion to remand and alternatively for leave to amend the complaint. This Court denied the motion to remand and granted leave to amend the complaint. The plaintiffs filed their amended complaint defining a new class of persons in Ohio who purchased or own a washer manufactured by Electrolux.
The amended complaint alleges violations of the West Virginia Consumer Credit and Protection Act ("WVCCPA"), W. Va. Code §§ 46A-6-101 to 46A-6-110, violations of the Ohio Consumer Sales Practices Act ("OCSPA"), Ohio Rev. Code Ann. §§ 1345.01-1345.13, breach of express warranties, breach of the implied warranty of merchantability, tortious breach of warranties, negligent design and failure to warn, and unjust enrichment. Electrolux then renewed its motion to dismiss and moved to strike the Ohio Class.
Under Federal Rule of Civil Procedure 12(f), a court "may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "Rule 12(f) motions are generally viewed with disfavor `because striking a portion of a pleading is a drastic remedy and because it is often sought by the movant simply as a dilatory tactic.'"
Electrolux asks this Court to strike from the amended complaint the Ohio class definition, arguing that the plaintiffs do
ECF No. 38 at 6. Despite Electrolux's characterization of these definitions, they are ambiguous regarding class-members' residency. Moreover, Electrolux's problem with these definitions comes down to whether the named plaintiffs are representative of each class; a question to be decided on a motion to certify the classes. Therefore, this Court finds that Electrolux's motion to strike the Ohio class is premature.
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
Under Federal Rule of Civil Procedure 15(a)(2), a plaintiff may amend the complaint with the court's leave, and a "court should freely give leave [to amend a complaint] when justice so requires." Fed. R. Civ. P. 15(a)(2). A court has broad discretion concerning amendments to pleadings, but leave should be granted unless "the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the [amending] party, or the amendment would have been futile."
While exercising diversity jurisdiction, this Court must apply West Virginia's choice of law principles.
The plaintiffs' claims for breach of express and implied warranties and for unjust enrichment clearly sound in contract, as they are based on an alleged contractual, or quasi-contractual, relationship between the parties. The claims for negligent design and failure to warn and for tortious breach of warranty clearly sound in tort, as they seek compensation for allegedly wrongful conduct. The plaintiffs' claims for violations of Ohio and West Virginia's consumer fraud statutes are not as easy to define.
Both the Ohio and West Virginia statutes create private causes of action for consumers against sellers of goods who violate the statutes' prohibitions against unfair or deceptive trade practices. Ohio Rev. Stat. § 1345.09; W. Va. Code § 46A-6-106. A cause of action under each statute
Because the plaintiffs' claims arise out of a purported contract for the sale of goods, the choice of law provisions in the Uniform Commercial Code as adopted by West Virginia apply. West Virginia Code § 46-1-301 provides that where the parties did not agree on what law should apply to their contract, West Virginia law applies so long as the contract "bears an appropriate relation to [West Virginia]." W. Va. Code § 46-1-301(b). Although West Virginia courts have not yet applied § 46-1-301 in that regard, those courts likely would apply West Virginia's common law choice of laws analysis to determine whether the contract "bears an appropriate relation" to West Virginia.
West Virginia considers the place of contracting, the place of performance, and which state has the most significant relationship to the contract under the Restatement (Second) of Conflict of Laws.
Here, the claims arise out of a consumer contract for the purchase of a washer and any terms attached to it. The place of contracting was Ohio because the plaintiffs purchased their machine there. The subject matter of the contract moved between Ohio and West Virginia, because the plaintiffs moved the machine from the Sears store in Ohio to their home in West Virginia. The plaintiffs reside in West Virginia, and Electrolux is incorporated in Delaware and with its principal place of business in North Carolina. Because the contract was formed in Ohio, that state has the most significant relationship to the contract. Therefore, Ohio law applies to the plaintiffs'
In West Virginia, the law of the place of harm applies in tort actions.
The plaintiffs allege that Electrolux breached express warranties contained in advertising and a repair-and-replace warranty contained in the washer's "Use and Care Guide." However, the plaintiffs fail to allege sufficient facts showing that Electrolux's advertising created express warranties. They also fail to allege that Electrolux breached the repair-and-replace warranty within its one-year limitation.
Under Ohio law, an ultimate consumer may maintain an action directly against a manufacturer, without privity, for breach of an express warranty where: (1) the manufacturer makes representations regarding the quality and merit of its product; (2) the representations are aimed directly at the ultimate consumer; (3) the consumer purchases the product in reliance on the manufacturer's representations; and (4) the consumer is harmed because of that reliance.
The plaintiffs allege that Electrolux represented in advertising that its machines "exclusive technology gets [consumers'] clothes cleaner than any other washer," and that its sanitizing cycle "will kill 99.9% of bacteria with no carryover of bacteria between loads." ECF No. 46 at 19. Electrolux argues that these statements did not create express warranties because they are mere puffery.
Under Ohio law, a manufacturer's advertisements for its products create an express warranty if the statement is either an "affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain," or the statement constitutes a "description of the goods which is made part of the basis of the bargain." Ohio Rev. Code § 1302.26(A);
Electrolux's statements that its washers "get[] [consumers'] clothes cleaner than any other washer" or "will kill 99.9% of bacteria with no carryover of bacteria between loads" are unverifiable expressions of opinion. This Court finds that no reasonable consumer would take those statements as an "affirmation of fact or promise,"
The plaintiffs allege that Electrolux breached its express warranty contained in the machine's Use and Care Guide to repair or replace defective parts. Electrolux does not contest that the Use and Care Guide contained a "one year limited warranty" obligating Electrolux to "repair or replace any parts of [the machine] that prove to be defective in materials or workmanship when such [machine] is installed, used, and maintained in accordance with the provided instructions." ECF No. 4 Ex. 1 at 32. Nor does Electrolux deny that it refused to repair or replace any part of the machine when the plaintiffs called in 2013 to complain about the biofilm buildup. Rather, Electrolux argues that the claim is barred because the plaintiffs made their complaints after the one-year limitation period ran. The plaintiffs argue that their claim is not barred by the one-year limitation because it is unconscionable.
"Unconscionability includes both an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party."
In assessing substantive unconscionability, courts must consider whether the terms of the contract are "commercially reasonable."
Electrolux's limited warranty obligated it to repair or replace its washer's defective parts within one year of purchase. Thus, Electrolux "assume[d] some form of responsibility for the performance or maintenance" of its machines.
To determine whether a contract is procedurally unconscionable, courts must consider "the circumstances surrounding the contracting parties' bargaining," including: (1) "the parties' age, education, intelligence, business acumen, and experience"; (2) "who drafted the contract"; (3) "whether alterations in the printed terms were possible"; (4) "whether there were alternative sources of supply for the goods in question"; (5) "belief by the stronger party that there is no reasonable probability that the weaker party will fully perform the contract"; (6) knowledge of the stronger party that the weaker party will be unable to receive substantial benefits from the contract"; and (7) knowledge of the stronger party that the weaker party is unable reasonably to protect his interests by reason of physical or mental infirmities, ignorance, illiteracy[,] or inability to understand the language of the agreement."
The plaintiffs argue that the warranty terms contained in the Use and Care Guide constitute a contract of adhesion. Although Ohio law suggests that contracts of adhesion may be per se procedurally unconscionable,
Claims for breach of an implied warranty are governed by Ohio Revised Code § 1302.27. "Unless excluded or modified..., a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." Ohio Rev. Code § 1302.27(A). So, to state a breach of implied warranty claim, the plaintiff must show: (1) that the defendant is a "merchant with respect to goods of that kind,"
The plaintiffs purchased their washer from a retailer, not directly from Electrolux. Thus, the parties are not in privity of contract. Nevertheless, the plaintiffs argue that an exception to the privity requirement applies here because they were an intended third-party beneficiary to a contract between Sears and Electrolux.
The privity requirement does not apply where either: (a) "the manufacturer is so involved in the sales transaction that the distributor merely becomes the agent of the manufacturer"; or (b) the consumer is "an intended third-party beneficiary to a contract."
The plaintiffs argue that they were intended beneficiaries of a warranty of merchantability conveyed from Electrolux to Sears because Electrolux intended that its washers would be sold to individual consumers. But the plaintiffs have not plead any facts regarding a contract between Electrolux and Sears, or whether that contract included or excluded the implied warranty of merchantability. Even if Electrolux conveyed a warranty of merchantability to Sears, at most the plaintiffs only incidentally benefitted from it. The performance of Electrolux's promise of merchantability to Sears did not satisfy a duty owed by Electrolux to the plaintiffs because Electrolux owed no duty to the plaintiffs. Therefore, the plaintiffs were not intended third-party beneficiaries of any assumed warranty of merchantability between Electrolux and Sears.
Even if the plaintiffs were in privity with Electrolux, their claim is barred because they were not brought within the one-year period set out in the Use and Care Guide. The Guide provided that
To state a claim for unjust enrichment under Ohio law, a plaintiff must prove: (1) that the plaintiff conferred a benefit on the defendant; (2) that the defendant had knowledge of the benefit; (3) that the defendant retained the benefit; and (4) that it would be unjust for the defendant to retain the benefit without paying the plaintiff.
The plaintiffs allege that Electrolux received a tangible economic benefit in that the plaintiffs "paid a premium price for the[ir washer] that Electrolux represented as being suitable for ordinary use, and merchantable," and that Electrolux was able to "avoid[] costs associated with correcting the defects, making repairs, and recalling the defective [w]ashing [m]achines." ECF No. 38 at 26. However, even if Electrolux tangentially benefitted as the plaintiffs claim, this "benefit" does not constitute an economic transaction between the parties as required under Ohio law. Therefore, the plaintiffs cannot establish that they conferred a benefit on Electrolux that it unjustly retained.
In West Virginia, a manufacturer is strictly liable for injuries caused by its products if "the involved product is
The plaintiffs plead both design defectiveness and use defectiveness. To show design defectiveness, a plaintiff must show that "the physical condition of the product ... renders it unsafe when the product is used in a reasonably intended manner."
The plaintiffs allege that Electrolux's washers develop biofilm, made up of bacteria and mold, in the washer drum in the course of ordinary use, and that Electrolux knew of this defect. Electrolux did not provide warnings to consumers that the machines "carried with them greater risks of bacteria, biofilm, and mold growth and health hazards tha[t] an ordinary consumer would not expect when using the [m]achines." ECF No. 38 at 25. Electrolux argues that the plaintiffs' claims fail because they have not sufficiently plead that the alleged defect and failure to warn makes the washers "unsafe" or that the named plaintiffs incurred a non-economic loss.
First, "[t]he term `unsafe' imparts a standard that the product is to be tested by what the reasonably prudent manufacturer would accomplish in regard to the safety of the product, having in mind the general state of the art of the manufacturing process, including design, labels and warnings, as it relates to economic costs, at the time the product was made."
Second, in a strict products liability suit, plaintiffs may recover damages for personal injury and for "damage to property
Electrolux notes that the plaintiffs seek damages for "spend[ing] money to repair and/or replace the defective" washer, ECF No. 38 at 25, and argues that these constitute damages for diminution in value, not for personal injury or property damage. The plaintiffs generally plead that Electrolux's washers transfer biofilm to clothing and other articles washed in them, and that the machines "can lead to a host of health problems, including allergies and complications due to asthma." ECF No. 38 at 2. However, the present allegations are not specific to the named plaintiffs. This Court is unable to ascertain whether the named plaintiffs specifically suffered personal injury or property damaged due to their defective washer. Therefore, the plaintiffs fail to sufficiently plead damages proximately caused by Electrolux's conduct. Because the plaintiffs generally plead damages to consumers caused by the alleged defects, the plaintiffs likely can plead damages specifically sustained by the named plaintiffs without prejudicing Electrolux. Thus, this Court will permit the plaintiffs to file a second amended complaint providing allegations of damages specifically incurred by the named plaintiffs due to Electrolux's alleged negligent design and failure to warn.
The plaintiffs allege a claim for tortious breach of warranty under Ohio law. A claim for tortious breach of warranty in Ohio is one for strict products liability.
The WVCCPA provides a private right of action to consumers who suffer economic loss due to unfair or deceptive trade practices. W. Va. Code § 46A-6-106(a). A plaintiff must show: (1) that the defendant employed "[u]nfair methods of competition or deceptive acts or practices,"
The plaintiffs also claim unfair or deceptive trade practices under the OCSPA. Because West Virginia law applies to the plaintiffs' consumer fraud based claims, the plaintiffs may not state a second consumer fraud claim under Ohio law.
The plaintiffs failed to state a claim upon which relief can be granted. However, this Court grants the plaintiffs the opportunity to file a second amended complaint solely regarding damages the named plaintiffs personally suffered due to the defendant's alleged negligence in designing their washer and its failure to warn about the potential development of biofilm. Accordingly, the defendant's motion to strike the Ohio class (ECF No. 41) is DENIED AS PREMATURE, the defendant's motion to dismiss (ECF No. 39) is GRANTED, but the plaintiffs may file
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this order to counsel of record herein.