Seltzer v. Atlas Roofing Corporation
Filing
36
ORDER granting in part and denying in part (2) Motion to Dismiss for Failure to State a Claim in case 1:13-md-02495-TWT; granting in part and denying in part (21) Motion to Dismiss in case 1:13-cv-04217-TWT. Signed by Judge Thomas W. Thrash, Jr on 6/17/2014. Associated Cases: 1:13-md-02495-TWT, 1:13-cv-04217-TWT(ss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
IN RE ATLAS ROOFING
MDL DOCKET NO. 2495
CORPORATION CHALET SHINGLE 1:13-md-2495-TWT
PRODUCTS LIABILITY
LITIGATION
BRIAN DAVID SELTZER
on behalf of himself and all others
similarly situated,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:13-CV-4217-TWT
ATLAS ROOFING CORPORATION,
Defendant.
OPINION AND ORDER
This is one of a number of actions arising out of the marketing and sale of
allegedly defective roofing shingles. It is before the Court on the Defendant Atlas
Roofing Corporation’s Motion to Dismiss [Doc. 2] Counts II and IV of the Plaintiff
Brian Seltzer’s Complaint. For the reasons set forth below, the Defendant’s Motion
to Dismiss [Doc. 2] is GRANTED in part and DENIED in part.
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I. Background
The Plaintiff Brian Seltzer is a purchaser of the Atlas Chalet Shingles
(“Shingles”), which are designed, manufactured, and sold by the Defendant Atlas
Roofing Corporation (“Atlas”).1 Atlas represented and continues to represent – in
marketing material and on the Shingles packaging – that the Shingles meet applicable
building codes and industry standards.2 Atlas also provides a limited thirty-year
warranty against manufacturing defects.3
The Plaintiff claims that the Shingles are defective due to a flaw in the
manufacturing process. This process – which allegedly does not conform to applicable
building codes and industry standards – “permits moisture to intrude into the Shingles,
creating a gas bubble that expands when the Shingles are exposed to the sun resulting
in cracking, blistering and premature deterioration of the Shingles.”4 The Plaintiff
filed a class action lawsuit in the United States District Court for the Southern District
of Ohio,5 asserting claims for: strict products liability (Count I), negligent design and
1
Compl. ¶¶ 5-6.
2
Compl. ¶ 40.
3
Compl. ¶ 39.
4
Compl. ¶ 46.
5
“[I]n multidistrict litigation under 28 U.S.C. § 1407, the transferee court
applies the state law that the transferor court would have applied.” In re Conagra
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manufacturing (Count II), unjust enrichment (Count III), breach of express warranty
(Count V), and breach of the implied warranty of merchantability (Count VI). The
Plaintiff seeks both damages and equitable relief.6 The Defendant moves to dismiss
Count II and the Plaintiff’s request for equitable relief.
II. Legal Standard
A complaint should be dismissed under Rule 12(b)(6) only where it appears that
the facts alleged fail to state a “plausible” claim for relief.7 A complaint may survive
a motion to dismiss for failure to state a claim, however, even if it is “improbable” that
a plaintiff would be able to prove those facts; even if the possibility of recovery is
extremely “remote and unlikely.”8 In ruling on a motion to dismiss, the court must
accept the facts pleaded in the complaint as true and construe them in the light most
Peanut Butter Products Liab. Litig., 251 F.R.D. 689, 693 (N.D. Ga. 2008); see also In
re Temporomandibular Joint (TMJ) Implants Products Liab. Litig., 97 F.3d 1050,
1055 (8th Cir. 1996) (“When considering questions of state law, however, the
transferee court must apply the state law that would have applied to the individual
cases had they not been transferred for consolidation.”). Here, both parties appear to
agree that Ohio law governs the Plaintiff’s state law claims.
6
The Plaintiff’s request for declaratory relief was labeled Count IV.
7
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); FED. R. CIV. P. 12(b)(6).
8
Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007).
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favorable to the plaintiff.9 Generally, notice pleading is all that is required for a valid
complaint.10 Under notice pleading, the plaintiff need only give the defendant fair
notice of the plaintiff’s claim and the grounds upon which it rests.11
III. Discussion
A. Declaratory and Injunctive Relief
The Plaintiff requests that the Court issue a declaratory judgment stating that:
a. The Shingles [have] a defect which results in premature failure;
b. Defendant’s warranty fails of its essential purpose;
c. Defendant’s warranty is void as unconscionable[.]12
In addition, the Plaintiff also requests that the Court issue an injunction mandating
that:
d. Defendant must notify owners of the defect;
e. Defendant will reassess all prior warranty claims and pay the full costs
of repairs and damages; and
9
See Quality Foods de Centro America, S.A. v. Latin American
Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir. 1983); see also
Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th
Cir. 1994) (noting that at the pleading stage, the plaintiff “receives the benefit of
imagination”).
10
See Lombard’s, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th Cir.
1985), cert. denied, 474 U.S. 1082 (1986).
11
See Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Twombly, 127 S.
Ct. at 1964).
12
Compl. ¶ 94.
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f. Defendant will pay the costs of inspection to determine whether any
Class member’s Shingles [need] replacement.13
To begin, the Plaintiff’s request for injunctive relief must be dismissed.
Injunctive relief is only appropriate “when [a] legal right asserted has been infringed,”
and there will be irreparable injury “for which there is no adequate legal remedy.”14
Here, the Defendant argues – correctly – that the Plaintiff does not even allege that
legal remedies would be inadequate. Monetary damages would sufficiently
compensate the Plaintiff for the Shingles that have blistered and/or cracked. In
response, the Plaintiff argues that he is allowed to plead alternative and inconsistent
claims. But the problem here is not that the Plaintiff’s request for injunctive relief is
inconsistent with his other claims, it is that he has failed to state a plausible claim for
injunctive relief to begin with.15
13
Compl. ¶ 94.
14
Alabama v. U.S. Army Corps of Engineers, 424 F.3d 1117, 1127 (11th
Cir. 2005) (emphasis added).
15
As a technical matter, the Court must dismiss the Plaintiff’s first
requested injunction – that the Defendant must notify owners of the defect – on
jurisdictional grounds. “[S]tanding is a threshold jurisdictional question which must
be addressed prior to . . . the merits of a party’s claims.” Bochese v. Town of Ponce
Inlet, 405 F.3d 964, 974 (11th Cir. 2005) (internal quotation marks omitted). “In the
absence of standing, a court is not free to opine in an advisory capacity about the
merits of a plaintiff’s claims.” Id. “To have Article III standing to pursue injunctive
relief . . . a plaintiff must have . . . an injury in fact that is capable of being redressed
by the injunction.” Virdi v. Dekalb Cnty. Sch. Dist., 216 Fed. Appx. 867, 871 (11th
Cir. 2007). Here, the Defendant correctly notes that the Plaintiff would not benefit
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To receive declaratory relief, however, the Plaintiff does not have to establish
irreparable injury or the inadequacy of legal remedies.16 In moving to dismiss the
claim for declaratory relief, the Defendant first argues that the Plaintiff does not have
standing because the requested declarations will not redress his injury. To satisfy the
constitutional case-or-controversy requirement, “[a] plaintiff must allege personal
injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be
redressed by the requested relief.”17 “[A] plaintiff seeking only . . . declaratory relief
must prove not only an injury, but also a ‘real and immediate threat’ of future injury
in order to satisfy the ‘injury in fact’ requirement.”18 The Plaintiff may establish
redressability if he shows that the “practical consequence” of the declaratory relief
“would amount to a significant increase in the likelihood that the plaintiff would
from this injunction. If, during this litigation, it is established that the Shingles are
indeed defective, it is unclear what the Plaintiff would gain from having the Defendant
simply notify him of this fact.
16
See Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 241
(1937) (“[A]llegations that irreparable injury is threatened are not required.”);
Katzenbach v. McClung, 379 U.S. 294, 296 (1964) (“Rule 57 of the Federal Rules of
Civil Procedure permits declaratory relief although another adequate remedy exists.”).
17
Allen v. Wright, 468 U.S. 737, 751 (1984).
18
Koziara v. City of Casselberry, 392 F.3d 1302, 1305 (11th Cir. 2004)
(internal quotation marks omitted).
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obtain relief that directly redresses the injury suffered.”19 Here, the requested
declarations – e.g., that the Shingles are defective – would make it more likely that the
Plaintiff would obtain the necessary relief from the Defendant because it would
establish an essential component to liability. And although the Plaintiff’s remaining
claims may provide more direct relief, the Declaratory Judgment Act allows a plaintiff
to seek a declaration of rights “whether or not further relief is or could be sought.”20
The Defendant then argues that the Court ought to use its discretion to decline
the Plaintiff’s declaratory relief request because it overlaps with other claims brought
in this action.21 For example, the Defendant argues that many of the Plaintiff’s other
claims will require a determination as to whether the Shingles were defective. “Since
its inception, the Declaratory Judgment Act has been understood to confer on federal
courts unique and substantial discretion in deciding whether to declare the rights of
litigants.”22 “In the declaratory judgment context, the normal principle that federal
courts should adjudicate claims within their jurisdiction yields to considerations of
19
Utah v. Evans, 536 U.S. 452, 464 (2002).
20
28 U.S.C. § 2201.
21
Def.’s Mot. to Dismiss, at 13-15.
22
Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995).
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practicality and wise judicial administration.”23 “[T]he range of considerations
available to the district court in deciding whether to entertain the declaratory action
is vast.”24 The Eleventh Circuit “has previously recognized convenience of the parties
. . . as relevant.”25 Here, the Plaintiff’s argument is that – assuming he successfully
obtains class certification – there may be class members whose Shingles have not yet
blistered or cracked. Consequently, he argues, they will not have ripe claims for
breach of warranty and products liability. Thus, there will be no redundancy for these
class members because – at the time of litigation – they will only qualify for
23
Id. at 288.
24
Manuel v. Convergys Corp., 430 F.3d 1132, 1137-38 (11th Cir. 2005).
25
Id. at 1135.
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declaratory relief.26 This is a permissible purpose for seeking declaratory relief.27 And
given that the Court will have to resolve nearly identical factual issues with the other
claims, it would be an efficient use of judicial resources to permit this declaratory
judgment claim.
Finally, the Defendant argues that the Plaintiff’s declaratory judgment claim
must be dismissed because it abridges the Defendant’s right to a jury trial. But as the
Eighth Circuit Court of Appeals has explained, “[a] litigant is not necessarily deprived
of a jury trial merely because it is a party to a declaratory judgment action . . . if there
26
The Seventh Circuit explained the mechanics of such an approach when
it affirmed a district court’s decision to certify two classes in a products liability suit:
The court split the purchasers of windows into two groups: those who have
replaced their windows, and those who have not. Those who have replaced their
windows are properly members of the (b)(3) class because they require the
award of damages to make them whole. Those who have not replaced their
windows but might in the future because of the purported design flaw are
properly members of a (b)(2) class. Such purchasers would want declarations
that there is an inherent design flaw, that the warranty extends to them and
specific performance of the warranty to replace the windows when they
manifest the defect, or final equitable relief.
Pella Corp. v. Saltzman, 606 F.3d 391, 395 (7th Cir. 2010) (emphasis added).
27
See Hardware Mut. Cas. Co. v. Schantz, 178 F.2d 779, 780 (5th Cir.
1949) (“The purpose of the Declaratory Judgment Act is to settle ‘actual
controversies’ before they ripen into violations of law or a breach of some contractual
duty.”); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950) (“The
Declaratory Judgment Act allowed relief to be given by way of recognizing the
plaintiff’s right even though no immediate enforcement of it was asked.”).
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would have been a right to a jury trial on the issue had it arisen in an action other than
one for declaratory judgment, then there is a right to a jury trial in the declaratory
judgment action.”28 Accordingly, the Plaintiff may pursue his claim for declaratory
relief for now.
B. Negligent Design and Manufacturing
The Defendant argues that the Plaintiff’s negligent design and manufacturing
claim is partially preempted by the Ohio Product Liability Act (“OPLA”). “The Ohio
Product Liability Act was intended to ‘abrogate all common law product liability
claims or causes of action.’”29 The OPLA defines “product liability claim” as a claim
“that seeks to recover compensatory damages from a manufacturer or supplier for
death, physical injury to person, emotional distress, or physical damage to property
other than the product in question, that allegedly arose from . . . (a) The design . . .
28
Northgate Homes, Inc. v. City of Dayton, 126 F.3d 1095, 1098-99 (8th
Cir. 1997); see also Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 504 (1959)
(“[T]he Declaratory Judgment Act . . . specifically preserves the right to jury trial for
both parties.”); Simler v. Conner, 372 U.S. 221, 223 (1963) (“The fact that the action
is in form a declaratory judgment case should not obscure the essentially legal nature
of the action. The questions involved are traditional common-law issues which can be
and should have been submitted to a jury under appropriate instructions as petitioner
requested . . . [and] the courts below erred in denying petitioner the jury trial
guaranteed him by the Seventh Amendment.”).
29
Roshong v. Fitness Brands Inc., 3:10CV2656, 2012 WL 1899696, at *2
(N.D. Ohio May 24, 2012) (quoting O.R.C. § 2307.71(B)).
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[or] production . . . of that product . . ..”30 Thus, the OPLA does not prevent a plaintiff
from asserting a common law claim against a products designer or manufacturer if the
plaintiff is only seeking recovery for economic loss.31 Here, both parties agree that the
Plaintiff’s negligence claim is preempted, but only to the extent that the Plaintiff is
seeking to recover for damage to property other than the Shingles themselves.32
C. Equitable Estoppel
In his Complaint, the Plaintiff claimed that the Defendant was equitably
estopped from arguing that the Plaintiff’s claims are time-barred. The Defendant, in
its Motion to Dismiss, argues that the Plaintiff’s allegations do not support an
equitable estoppel argument. The Plaintiff correctly points out that there is no reason
for the Court to resolve this issue now.33 In moving to dismiss, the Defendant does not
argue that the Plaintiff’s claims are time-barred. Thus, the Court need not address the
30
O.R.C. § 2307.71(A)(13)(emphasis added).
31
See O.R.C. § 2307.72(C) (“Any recovery of compensatory damages for
economic loss based on a claim that is asserted in a civil action, other than a product
liability claim, is not subject to sections 2307.71 to 2307.79 of the Revised Code, but
may occur under the common law of this state or other applicable sections of the
Revised Code.”); Huffman v. Electrolux N. Am., Inc., 961 F. Supp. 2d 875, 880-82
(N.D. Ohio 2013) (concluding that a plaintiff may pursue both an OPLA claim and a
common law claim to recover for economic loss).
32
Def.’s Reply in Supp. of Mot. to Dismiss, at 13; Pl.’s Resp. to Mot. to
Dismiss, at 12-15.
33
Pl.’s Resp. to Mot. to Dismiss, at 20.
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merits of the Plaintiff’s equitable estoppel and tolling arguments at this stage of the
litigation.
IV. Conclusion
For these reasons, the Court GRANTS in part and DENIES in part the
Defendant Atlas Roofing Corporation’s Motion to Dismiss [Doc. 2].
SO ORDERED, this 17 day of June, 2014.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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