Baker et al v. Castle & Cooke Homes Hawaii, Inc. et al
Filing
63
ORDER (1) GRANTING IN PART DEFENDANT ZURN INDUSTRIES, LLC AND ZURN PEX, INC.'S MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT, OR, IN THE ALTERNATIVE, MOTION FOR A MORE DEFINITE STATEMENT, AND DENYING DEFENDANT ZURN INDUSTRIES, LLC A ND ZURN PEX, INC.'S MOTION FOR SUMMARY JUDGMENT, AND (2) DENYING CASTLE & COOKE'S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT AND DIRECTING PLAINTIFFS TO SUBMIT MATERIALS 8 ; 10 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 4/25/12. ("Zurn's motion to dismiss is granted as to Count VIII, Count IX, and Count X. Zurn's motion to dismiss is denied with respect to Plaintiffs' other claims. Zurn's request for a more definite statement and its summa ry judgment motion are denied. Plaintiffs are given leave to file an amended Complaint no later than May 21, 2012. The court denies Castle & Cooke's motion, but directs Plaintiffs to file, within two weeks, either a certificate of compliance wit h section 672E-3(c), or an explanation as to why they have not complied. Castle & Cooke may submit a response within two weeks of Plaintiffs' submission. Each party's submission is limited to 1000 words.") (emt, ) CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
JOHN PUPUHI BAKER, JR.,
individually and as Trustee
of the Revocable Trust of
John Pupuhi Baker, Jr.; DIANE
T. BAKER, individually and as
Trustee of The Revocable
Trust of Diane Theresa Baker;
BRANDEN H. BAKER; KIM SALVA
CRUZ BAKER, individually and
on Behalf of a Class of All
Persons Similarly Situated,
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiffs,
)
vs.
)
)
CASTLE & COOKE HOMES HAWAII, )
INC., a Hawaii Corporation;
)
ZURN INDUSTRIES, LLC, a
)
Delaware Limited Liability
)
Corporation; ZURN PEX, INC., )
a Delaware Corporation; S.H. )
LEGITT Co., a Michigan
)
Corporation d/b/a MARSHALL
)
BRASS; WATTS RADIANT, INC., a )
Delaware Corporation; WATTS
)
WATER TECHNOLOGIES, INC., a
)
Delaware Corporation; JOHN
)
and JANE DOES 1-100; DOE
)
PARTNERSHIPS 1-100; DOE
)
CORPORATIONS 1-100; DOE
)
GOVERNMENTAL AGENCIES 1-100; )
and DOE ASSOCIATIONS 1-100,
)
)
Defendants.
)
_____________________________
CIVIL NO. 11-00616 SOM-RLP
ORDER (1) GRANTING IN PART
DEFENDANT ZURN INDUSTRIES,
LLC, AND ZURN PEX, INC.S’
MOTION TO DISMISS THE FIRST
AMENDED CLASS ACTION
COMPLAINT, OR, IN THE
ALTERNATIVE, MOTION FOR A
MORE DEFINITE STATEMENT, AND
DENYING DEFENDANT ZURN
INDUSTRIES, LLC, AND ZURN
PEX, INC.S’ MOTION FOR
SUMMARY JUDGMENT, AND (2)
DENYING CASTLE & COOKE’S
MOTION TO DISMISS THE FIRST
AMENDED COMPLAINT AND
DIRECTING PLAINTIFFS TO
SUBMIT MATERIALS
ORDER (1) GRANTING IN PART DEFENDANT ZURN INDUSTRIES, LLC, AND
ZURN PEX, INC.S’ MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION
COMPLAINT, OR, IN THE ALTERNATIVE, MOTION FOR A MORE DEFINITE
STATEMENT, AND DENYING DEFENDANT ZURN INDUSTRIES, LLC, AND ZURN
PEX, INC.S’ MOTION FOR SUMMARY JUDGMENT, AND
(2) DENYING CASTLE & COOKE’S MOTION TO DISMISS THE FIRST
AMENDED COMPLAINT AND DIRECTING PLAINTIFFS TO SUBMIT MATERIALS.
I.
INTRODUCTION.
This is a putative class action filed by homeowners who
allege that their homes have a construction defect.
They allege
that their plumbing systems include brass fittings susceptible to
corrosion and likely to cause leaks.
They bring this action
against the developer of their homes and the manufacturers of the
brass fittings.
Defendants Zurn Industries, LLC, and Zurn Pex, Inc.
(collectively, “Zurn”), two manufacturers of the allegedly
defective brass fittings, seek dismissal, or, in the alternative,
a more definite statement, of five of the six claims Plaintiffs
assert against them in the First Amended Complaint.
Zurn moves
for summary judgment on the sixth claim and alternatively seeks
summary judgment on one of the five claims it seeks to have
dismissed.
The court grants in part the motion to dismiss and
denies the motion for summary judgment.
Defendant Castle & Cooke Homes Hawaii, Inc. (“Castle &
Cooke”), the developer, seeks dismissal of the First Amended
Complaint on the ground that Plaintiffs have not complied with
Hawaii’s Contractor Repair Act, chapter 672E of Hawaii Revised
2
Statutes, which requires, among other things, a plaintiff to give
a contractor the results of any testing done before filing an
action against that contractor.
Because, on the present record,
the court cannot determine certain facts essential to ruling on
Castle & Cooke’s motion, the court here denies the motion but
orders Plaintiffs to submit the material described in this order
by the stated deadline.
If Plaintiffs do not comply with this
order, Castle & Cooke’s motion may be granted or the claims
against it stayed.
If Plaintiffs meet the deadline but Castle &
Cooke continues to assert a chapter 672E violation, Castle &
Cooke should so inform the court.
Depending on what Castle &
Cooke’s submissions state, the court may reinstate Castle &
Cooke’s motion as if never ruled on.
II.
FACTUAL BACKGROUND.
Plaintiffs John Pupuhi Baker and Diane T. Baker own a
home in the Mililani Mauka subdivision.
First Amended Complaint
(“Complaint”) ¶¶ 3,5, Oct. 20, 2011, ECF No. 7.
They purchased
their home from Castle & Cooke on December 16, 2005, before it
was completely constructed.
or around March 2006.
Id.
Id. ¶ 3.
The home was completed in
On December 20, 2003, Plaintiffs
Branden H. Baker and Kim Salva Cruz Baker purchased their home in
the same subdivision from Castle & Cooke.
Id. ¶ 5.
began and was completed shortly thereafter.
3
Id.
Construction
Plaintiffs’ homes were built using pipes made of
flexible plastic called cross-linked polyethylene (“PEX”).
The
PEX pipes are joined together by a fitting made of “yellow
brass.”
Id. ¶¶ 22, 23, 37.
yellow brass fittings.
The focus in this case is on the
The Complaint states that Plaintiffs want
to represent the class of individuals who own homes in Miliani
Mauka built by Castle & Cooke with yellow brass fittings.
Id. ¶ 83.
Plaintiffs allege that yellow brass is particularly
susceptible to dezincification, a corrosion process in which zinc
leaches into potable water that comes into contact with the
brass.
Id. ¶ 36.
According to Plaintiffs, as the brass
corrodes, it becomes porous and mechanically weak.
Id.
Plaintiffs further allege that the PEX systems in the putative
class members’ homes have begun to, or are about to, leak water
into the walls, ceilings, and floors of their homes.
Id. ¶ 72.
Plaintiffs allege that the leakage will cause water damage and
mold growth, exposing the occupants to toxins.
Id. ¶ 76.
Defendants Zurn, Watts Radiant, Inc., Watts Water
Technologies, Inc., and S.H. Legitt Co. allegedly manufactured
and sold Castle & Cooke the PEX piping and the yellow brass
fittings in issue.
See id. ¶¶ 14, 15, 16, 19, 23.
Plaintiffs
allege that Zurn “has concealed from developers, designers,
contractors and homeowners that fittings made from Yellow Brass
4
corrode (dezincify) and fail when used in PEX Systems that
distribute potable water in the United States.”
Id. ¶ 50.
Plaintiffs filed this putative class action in state
court on July 20, 2011.
Notice of Removal of State Court Action
to Federal Court, Oct. 14, 2011, ECF No. 1.
The Watts Defendants
removed the action to federal court on October 14, 2011, pursuant
to 28 U.S.C. § 1332(d)(2).
Id. ¶ 5.
On October 20, 2011,
Plaintiffs filed their First Amended Complaint, asserting eight
claims against Castle & Cooke, six against Zurn and the Watts
Defendants, and five against S.H. Legitt.1
Defendant Zurn now
seeks dismissal of five of the six claims against it pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Zurn
alternatively seeks summary judgment on one of those five claims
pursuant to Rule 56(a) of the Federal Rules of Civil Procedure.
Zurn also seeks summary judgment on a sixth claim.
Castle &
Cooke seeks dismissal of the action against it on the ground that
Plaintiffs have not complied with chapter 672E of Hawaii Revised
Statutes.
At the hearing on the present motions, the crux of
Zurn’s argument was that, because their yellow brass fittings
have not failed to date, Plaintiffs fail to allege, and have no
evidence showing, that they have suffered any actual injury.
1
Plaintiffs have since dismissed the Watts Defendants from
this action. See ECF No. 57.
5
Plaintiffs responded that, even if the fittings have not failed
as of today, failure in the future is inevitable.
Whether Plaintiffs have suffered any injury, or whether
Plaintiffs are attempting to proceed based solely on future
injury, implicates Plaintiffs’ standing to bring this action, as
well as whether this case is ripe for adjudication.
Because
issues of standing and ripeness go to this court’s subject-matter
jurisdiction, the court asked the parties to submit supplemental
briefing on whether this case should be dismissed pursuant to
Rule 12(b)(1).
In supplemental briefs, Zurn argues that
dismissal is appropriate because Plaintiffs lack standing, and
Castle & Cooke argues that dismissal is appropriate because
Plaintiffs’ claims are not ripe.
III.
SUBJECT-MATTER JURISDICTION.
Zurn challenges Plaintiffs’ standing to proceed, while
Castle & Cooke challenges Plaintiffs’ claims as unripe.
The
court construes their arguments as factual attacks on this
court’s subject-matter jurisdiction.
A.
Legal Standard.
Article III, section 2, of the United States
Constitution sets forth constitutional limits on a court’s
subject-matter jurisdiction; it confines federal courts to
deciding cases or controversies.
No case or controversy exists
when a plaintiff lacks standing to make the claims asserted or
6
when a case is not ripe for adjudication.
Cetacean Cmty. v.
Bush, 386 F.3d 1169, 1174 (9th Cir. 2004); Thomas v. Anchorage
Equal Rights Comm’n, 200 F.3d 1134, 1139 (9th Cir. 1999) (en
banc).
A federal court therefore does not have subject-matter
jurisdiction over a suit by a plaintiff who lacks standing or a
suit that is not ripe.
See White v. Lee, 227 F.3d 1214, 1242
(9th Cir. 2000) (stating that standing pertains to a federal
court's subject-matter jurisdiction); St. Clair v. City of Chico,
880 F.2d 199, 201 (9th Cir. 1989) (stating that ripeness pertains
to the court's subject-matter jurisdiction).
A motion to dismiss for lack of standing or ripeness is
a motion under Rule 12(b)(1), which expressly provides for a
motion to dismiss that asserts the defense of “lack of subjectmatter jurisdiction.”
Such a motion may either attack the
allegations of the complaint as insufficient to confer subjectmatter jurisdiction upon the court, or attack the existence of
subject-matter jurisdiction in fact.
Safe Air for Everyone v.
Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).
When the motion to
dismiss attacks the allegations of the complaint as insufficient
to confer subject-matter jurisdiction–-a facial challenge--all
allegations of material fact are taken as true and construed in
the light most favorable to the nonmoving party.
Fed’n of
African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207
(9th Cir. 1996).
When the motion to dismiss is a factual attack
7
on subject-matter jurisdiction, no presumption of truth attaches
to the plaintiff’s allegations, and the existence of disputed
material facts will not preclude the trial court from evaluating
for itself the existence of subject-matter jurisdiction in fact.
Safe Air for Everyone, 373 F.3d at 1039.
B.
Standing.
To establish standing, a plaintiff must demonstrate
three things.
First, the plaintiff must suffer an “injury-in-
fact,” which means that there must be a concrete and
particularized “invasion of a legally protected interest” and the
invasion is actual or imminent.
504 U.S. 555, 560 (1992).
Lujan v. Defenders of Wildlife,
Second, the injury must be fairly
traceable to the challenged action.
Third, a favorable decision
must be likely to redress the injury.
Id.
It is the first
element (injury-in-fact) that is in issue here.
Although the burden of establishing standing lies with
the party asserting federal jurisdiction, the manner and degree
of evidence necessary to meet this burden may vary depending on
the stage of litigation.
Id. at 561.
At the pleading stage,
“general factual allegations of injury resulting from the
defendant's conduct may suffice.”
Id. (internal citations and
quotations omitted).
After the pleading stage, the burden on a
plaintiff increases.
The present motion challenging standing
8
comes at the outset of the case, when no discovery has been
taken.
Zurn contends that Plaintiffs do not have standing to
bring this action because, as no pipes have failed and Plaintiffs
have not experienced any leaks in their homes, they have not
suffered an injury-in-fact.
Plaintiffs argue that the fittings
need not have actually failed for an injury to have occurred.
The court agrees with Plaintiffs.
“Standing merely requires a redressable injury that is
fairly traceable to [a defendant's] conduct.
Whether a plaintiff
can recover for that injury under a particular theory of
liability is a separate question.”
In re Toyota Motor Corp.
Unintended Acceleration Marketing, Sales Practices, Products
Liability Litigation (“Toyota”), 754 F. Supp. 2d 1145, 1161 (C.D.
Cal. 2010).
An injury-in-fact for standing purposes may be “the
possibility of future injury.”
Krottner v. Starbucks Corp., 628
F.3d 1139, 1142 (9th Cir. 2010) (quoting Cent. Delta Water Agency
v. United States, 306 F.3d 938, 947 (9th Cir. 2010)).
The Ninth
Circuit has held that the threat of future harm is sufficient if
the threat is “credible” and “both real and immediate, not
conjectural or hypothetical.”
Id. (holding that the plaintiffs
adequately pled an injury-in-fact by alleging that they had an
increased risk of future identify theft stemming from the theft
of a laptop containing their unencrypted personal data) (quoting
9
Cent. Delta Water, 306 F.3d at 947, and City of L.A. v. Lyons,
461 U.S. 95, 102 (1983)); Scott v. Pasadena Unified School Dist.,
306 F.3d 646, 656 (9th Cir. 2002).
Citing United States Supreme Court cases on the issue,
the Second Circuit has held, “an injury-in-fact differs from a
‘legal interest’; an injury-in-fact need not be capable of
sustaining a valid cause of action under applicable tort law.
An
injury-in-fact may simply be the fear or anxiety of future harm.”
Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006).
The Second Circuit explained:
For example, exposure to toxic or harmful
substances has been held sufficient to
satisfy the Article III injury-in-fact
requirement even without physical symptoms of
injury caused by the exposure, and even
though exposure alone may not provide
sufficient ground for a claim under state
tort law. See [Whitmore v. Arkansas, 495
U.S. 149, 155 (1990)](“Our threshold inquiry
into standing ‘in no way depends on the
merits of the [plaintiff's claim.]’”)
(quoting [Warth v. Seldin, 422 U.S. 490, 500
(1975)]); In re Agent Orange Prod. Liab.
Litig. (Ivy v. Diamond Shamrock Chemicals
Co.), 996 F.2d 1425, 1434 (2d Cir. 1993)
(rejecting argument that “injury in fact
means injury that is manifest, diagnosable or
compensable”) (internal quotation marks
omitted), overruled in part on other grounds
by Syngenta Crop Prot., Inc. v. Henson, 537
U.S. 28, 123 S. Ct. 366, 154 L. Ed. 2d 368
(2002); Wright, Miller & Kane, supra, §
1785.1 (“[T]his requisite of an injury is not
applied too restrictively. If plaintiff can
show that there is a possibility that
defendant's conduct may have a future effect,
even if injury has not yet occurred, the
court may hold that standing has been
10
satisfied.”). The risk of future harm may
also entail economic costs, such as medical
monitoring and preventative steps; but
aesthetic, emotional or psychological harms
also suffice for standing purposes. See Ass'n
of Data Processing Serv. Orgs., Inc. v. Camp,
397 U.S. 150, 154, 90 S. Ct. 827, 25 L. Ed.
2d 184 (1970). Moreover, the fact that an
injury may be outweighed by other benefits,
while often sufficient to defeat a claim for
damages, does not negate standing. See
Sutton, 419 F.3d at 574-75 (holding that the
increased risk that a faulty medical device
may malfunction constituted a sufficient
injury-in-fact even though the class members'
own devices had not malfunctioned and may
have actually been beneficial).
Id.
In the present case, Plaintiffs allege that the yellow
brass fittings installed in their homes have failed or will soon
begin to fail.
They allege that the failure will damage their
homes and expose them to dangerous toxins that will cause
physical injury.
The allegation that the fittings have already
failed would constitute a present injury; however, at the hearing
on this motion, Plaintiffs repeatedly conceded that none of the
fittings in their homes has failed to date.
In arguing that they
nevertheless have standing to sue, Plaintiffs rely on the
declaration of Randy Kent, an engineer who says he has been
investigating failures in PEX systems for more than four years.
Kent says that the fittings in the Mililani Mauka homes “will
corrode until they catastrophically fail” and that the corrosion
“cannot be stopped.”
Decl. of Randy K. Kent ¶ 12, ECF No. 58-1.
11
This threat of injury is credible for Article III standing
purposes.
With respect to the requirement that the threat of
injury also be immediate, Plaintiffs contend that the corroded
pipes will leak soon given the tremendous water pressure they are
under.
Transcript of Proceedings on Feb. 13, 2012, at 28:3-13,
ECF No. 52 (“Transcript”).
Even if the court could not rely on the allegations
that the pipes will soon leak, the court would conclude that, for
standing purposes, Plaintiffs have a sufficient injury-in-fact in
the form of their alleged economic loss.
They provide
declarations stating that the PEX systems in their homes are
inherently defective and violate the Honolulu Plumbing Code.
See
Decl. of Randy Kent ¶ 6; Decl. of Fred Volkers ¶ 19, ECF No.
58-2.
They say that they must therefore replace their entire PEX
systems.
Dec. of Randy Kent ¶ 12.
At the hearing, Plaintiffs
argued that the value of their homes has already actually
decreased because they cannot sell or refinance their homes given
the Honolulu Plumbing Code violations.
Plaintiffs also argue
in their opposition to Zurn’s motion to dismiss that the inherent
construction defects and code violations rob them of the benefit
of the bargain they made in buying their homes.
The consideration of economic loss allegations in the
context of analyzing whether a plaintiff has been injured for
standing purposes is sometimes distinguished from the
12
consideration of economic loss allegations for Rule 12(b)(6)
purposes.
The United Stated District Court for the Central
District Court of California, in Toyota, had before it plaintiffs
who sought to represent the class of individuals and businesses
that had purchased allegedly defective vehicles.
The plaintiffs
sought damages for the alleged diminution in the market value of
their vehicles.
Toyota, 754 F. Supp. 2d at 1155, 1160.
They
alleged that certain Toyota models suffered from a defective
throttle system that, in some situations, caused “sudden
unintended acceleration” (“SUA”) that had led to at least two
serious accidents.
Id. at 1156-57.
members had experienced no SUA.
Most of the putative class
Id. at 1161.
The plaintiffs
asserted, among other claims, that Toyota had violated various
California consumer protection laws and breached express and
implied warranties.
tort claims.
Id. at 1155.
The plaintiffs asserted no
Id.
The Toyota plaintiffs proceeded primarily on the theory
that, having not received the “benefit of their bargain” to buy
safe vehicles, they had sustained economic loss.
Id. at 1165-66.
Relying on the Fifth Circuit’s reasoning in Cole v. General
Motors Corp., 484 F.3d 717, 722-23 (5th Cir. 2007), Judge Selna
held that “‘overpayment, loss in value, or loss of usefulness’ is
13
sufficient to confer standing.”2
Toyota, 754 F. Supp. 2d at 1162
(quoting Cole, 484 F.3d at 723).
Cole, another vehicle defect case, involved side air
bags that allegedly deployed unexpectedly.
484 F.3d at 722-23.
The plaintiffs in Cole had air bags that had never actually
inadvertently deployed.
They sought the difference between the
diminished value of their vehicles and vehicles that satisfied
warranties.
The Fifth Circuit explained:
2
According to press reports, Judge Selna has recently
announced a tentative ruling in Toyota, in which he indicates
that claims brought by plaintiffs in Florida and New York
alleging only economic loss may be dismissed. See Ciaran McEvoy,
Economic Damages Litigation Against Toyota May Shrink, DAILY
JOURNAL; Toyota, Case No. 8:10-ml-02151-JVS-FMO in the United
States District Court for the Central District of California,
Minutes of Hearing Re: Defendants' Motion to Dismiss the Claims
of All New York and Florida Plaintiff, Apr. 23, 2012, ECF No.
2444. (The California case has been consolidated with cases from
Florida and New York.) This court does not have the tentative
ruling.
According to the Daily Journal, the tentative ruling
states that class representatives in Florida and New York cannot
sue for economic damages if they failed to allege that their
vehicles actually exhibited SUA. California class
representatives may be allowed to proceed.
Even assuming Judge Selna’s tentative ruling is eventually
incorporated into an actual filed order, that order will not
affect this court’s standing analysis. Judge Selna is presently
addressing motions to dismiss for failure to state a claim, not
motions to dismiss for lack of subject-matter jurisdiction.
Thus, his tentative ruling turns on the laws of several states,
not on the jurisdictional requirements addressed in his Toyota
order relied on here. The tentative ruling is thus apparently
dealing with issues addressed by this court in Part IV of the
present motion.
14
Plaintiffs seek recovery for their actual
economic harm (e.g., overpayment, loss in
value, or loss of usefulness) emanating from
the loss of their benefit of the bargain.
Notably in this case, plaintiffs may bring
claims under a contract theory based on the
express and implied warranties they allege.
Whether recovery for such a claim is
permitted under governing law is a separate
question; it is sufficient for standing
purposes that the plaintiffs seek recovery
for an economic harm that they allege they
have suffered.
Id. at 723.
Adopting the Fifth Circuit’s reasoning, Judge Selna
concluded that the Toyota plaintiffs had sufficiently established
injury in the form of the diminished value of their homes or
diminished sales proceeds upon selling their vehicles.
Id. at
1166.
Plaintiffs in the present case do not expressly allege
a diminution in the value of their homes.
They refer generally
to “damages,” with specific reference to damage to their homes
and their health.
However, nothing requires a claimant to detail
all forms of loss in a complaint to avoid dismissal based on a
lack of subject-matter jurisdiction.
Therefore, considering the
allegations concerning, for example, code violations, warranties,
and “damages,” as well as the arguments at the hearing and in
Plaintiffs’ opposition to Zurn’s motion to dismiss, this court
concludes that, for jurisdictional purpose Plaintiffs have an
injury-in-fact.
15
C.
Ripeness.
Castle & Cooke frames its jurisdictional challenge as
one of ripeness, asserting that the only damages in issue are
based on the occurrence of future injury.
“Ripeness has both
constitutional and prudential components.”
Wolfson v. Brammer,
616 F.3d 1045, 1058 (9th Cir. 2010) (citations omitted).
By
challenging whether Plaintiffs assert sufficient damages, Castle
& Cooke raises constitutional considerations.
See Portman v.
Cnty. of Santa Clara, 995 F.2d 898, 902-03 (9th Cir. 1993) (“The
constitutional component focuses on whether there is sufficient
injury”).
The Ninth Circuit has explained that “[t]he
constitutional component of ripeness overlaps with the ‘injury in
fact’ analysis for Article III standing.”
Wolfson, 616 F.3d at
1058 (citing Thomas, 220 F.3d at 1138–39, and United States
Parole Comm'n v. Geraghty, 445 U.S. 388, 397 (1980)).
“Whether
framed as an issue of standing or ripeness, the inquiry is
largely the same: whether the issues presented are definite and
concrete, not hypothetical or abstract.”
omitted).
Id. (citations
For the same reasons Plaintiffs satisfy the injury-in-
fact requirement for standing purposes, they satisfy the
constitutional ripeness requirement.
16
To the extent Zurn and Castle & Cooke seek dismissal
for lack of subject-matter jurisdiction, their motions are
denied.
IV.
ZURN’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM.
Plaintiffs assert six counts against Zurn: Count VIII
for product liability, Count IX for negligence, Count X for
strict liability, Count XI for breach of express warranty, Count
XII for breach of the implied warranty of merchantability, and
Count XIII for a violation of section 480-2 of Hawaii Revised
Statutes.
Zurn seeks dismissal of Counts VIII, IX, X, XII, and
XIII for failure to state a claim.
Zurn’s summary judgment motion.)
(Count XI is the subject of
The court grants Zurn’s motion
as to Counts VIII, IX, and X only.
A.
Legal Standard.
Rule 12(b)(6) of the Federal Rules of Civil Procedure
provides that a party “may assert the following defense[] by
motion: . . . (6) failure to state a claim upon which relief can
be granted[.]”
Dismissal under Rule 12(b)(6) may be based on either
(1) the lack of a cognizable legal theory, or (2) insufficient
facts to support a cognizable legal theory.
Balistreri v.
Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988) (citing
Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34
(9th Cir. 1984)).
To state a claim, a pleading must contain a
17
“short and plain statement of the claim showing that the pleader
is entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
While Rule 8
does not demand detailed factual allegations, “it demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
On a Rule 12(b)(6) motion, the court takes all
allegations of material fact as true and construes them in the
light most favorable to the nonmoving party.
574 F.3d 1182, 1184 (9th Cir. 2009).
Marcus v. Holder,
To survive a motion to
dismiss, a complaint must contain sufficient factual matter to
“state a claim to relief that is plausible on its face.”
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Bell
“A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
at 678.
Iqbal, 556 U.S.
“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.”
Id. (citing Twombly, 550 U.S. at 554).
Whether a complaint
states a plausible claim for relief is “context-specific,” and
such a determination “requires the reviewing court to draw on its
judicial experience and common sense.”
U.S. at 555).
18
Id. (citing Twombly, 550
B.
Counts VIII, XI, and X.
Counts VIII (product liability), IX (negligence), and X
(strict liability) sound in tort.
Zurn argues that, because
Plaintiffs allege no injury other than to the PEX systems and the
yellow brass fittings themselves, the economic loss rule bars
their tort claims.
The court agrees.
The economic loss rule, when it applies, precludes a
plaintiff from recovering in tort for purely economic losses that
stem from injury only to the product itself.
Ass'n of Apartment
Owners of Newtown Meadows v. Venture 15, Inc., 115 Haw. 232, 285,
167 P.3d 225, 278 (Haw. 2007) (“Newtown Meadows”); City Exp.,
Inc. v. Express Partners, 87 Haw. 466, 469, 959 P.2d 836, 839
(Haw. 1998).
The United States Supreme Court explains, “Damage
to a product itself is most naturally understood as a warranty
claim.
Such damage means simply that the product has not met the
customer's expectations, or, in other words, that the customer
has received ‘insufficient product value.’”
East River S.S. Corp
v. Transamerica Delaval, Inc., 476 U.S. 858, 872 (1986) (citation
omitted) (quoted in State v. U.S. Steel Corp., 82 Haw. 32, 40,
919 P.2d 294, 302 (Haw. 1996)).
Broadly speaking, the economic loss rule is designed to
maintain a distinction between damage remedies for breach of
contract and for tort.
The Hawaii Supreme Court has discussed
19
the economic loss rule in the context of construction defect
cases:
The crux of [the economic loss rule] is the
premise that economic interests are
protected, if at all, by contract principles,
rather than tort principles. Contract law is
designed to enforce the expectancy interests
created by agreement between the parties and
seeks to enforce standards of quality. This
standard of quality must be defined by
reference to that which the parties have
agreed upon. In contrast, tort law is
designed to secure the protection of all
citizens from the danger of physical harm to
their persons or to their property and seeks
to enforce standards of conduct. These
standards are imposed by society, without
regard to any agreement. Tort law has not
traditionally protected strictly economic
interests related to product quality--in
other words, courts have generally refused to
create a duty in tort to prevent such
economic losses.
Id. at 291, 167 P.3d at 284 (quoting Calloway v. City of Reno,
116 Nev. 250, 993 P.2d 1259 (Nev. 2000), overruled on other
grounds by Olson v. Richard, 120 Nev. 240, 89 P.3d 31 (Nev.
2004)).
The economic loss rules applies even when, as here, the
plaintiff and the defendant are not in privity of contract.
Id.
(“[W]e agree with those jurisdictions that bar economic recovery
in negligence where there was no privity of contract between the
plaintiff and the defendant when allowing such recovery would
blur the distinction between contract and tort law.”).
The Hawaii Supreme Court has defined economic loss
damages as “those that pertain solely to the costs related to the
20
operation and value of the building itself.”
P.3d at 279.
Id. at 286, 167
“Excluded are costs for personal injuries caused by
the defective design or damage to property other than the
building itself.”
Id.
Newtown Meadows involved a claim by an association of
apartment owners (“AOAO”) that sought to recover damages from,
among other defendants, a masonry subcontractor that had
installed allegedly defective concrete slabs for Newtown Meadows,
a residential townhouse condominium.
231-32.
Id. at 238-39, 167 P.3d at
The AOAO alleged that, partly as a result of the
defective slabs, the buildings and foundations at Newtown Meadows
had shifted, settled, and cracked.
Id.
Among the AOAO’s claims
were claims based on breach of express and implied warranties,
negligence, and strict product liability.
at 239.
Id. at 232, 167 P.3d
The Hawaii Supreme Court read the AOAO’s negligence
claims as based on the subcontractors’ alleged violations of
contract specifications and the Uniform Building Code.
Id. at
292, 167 P.3d at 285.
The AOAO argued that the defective concrete slabs
damaged more than the property itself because they allegedly
resulted in cracked floor tiles, demising walls, skewed door
jambs and windows, and damage caused by termites entering through
floor cracks.
Id. at 293, 167 P.3d at 286.
The Hawaii Supreme
Court held that those losses were purely economic and did not
21
constitute damage to other property.
Id. at 294-95, 167 P.3d at
287-88.
Unlike this case, Newtown Meadows involved a masonry
subcontractor that actually participated in building the homes in
issue, rather than a manufacturer that played no role in
constructing the end product.
However, courts in other
jurisdictions, some of which were cited in Newtown Meadows, have
applied the economic loss rule to a product manufacturer.
In
Oceanside at Pine Point Condominium Owners Association v.
Peachtree Doors, Inc., 659 A.2d 267, 271 (Me. 1995), the economic
loss rule barred the plaintiffs’ tort claims arising out of an
allegedly defective window that was manufactured, but not
installed, by the defendant.
The plaintiffs alleged that they
had sustained significant water damage around the windows in
issue.
Id. at 268.
The Maine Supreme Judicial Court explained:
Whether a product has injured only itself
may, of course, be a difficult question to
answer. We follow the approach taken by those
courts when considering facts analogous to
those before us, and look to the product
purchased by the plaintiff, as opposed to the
product sold by the defendant, to determine
whether a product has injured only itself.
Id. at 271 (citations omitted) (quoted with approval in Newtown
Meadows, 115 Haw. at 294, 167 P.3d at 287).
In Casa Clara Condominium Association, Inc. v. Charley
Toppino and Sons, 620 So. 2d 1244, 1247-48 (Fla. 1993), the
economic loss rule similarly barred negligence claims against a
22
defendant that had supplied allegedly defective concrete that was
used in the plaintiffs’ homes.
The plaintiffs alleged that some
of the concrete contained a high content of salt, which had
caused the reinforcing steel inserted in the concrete to rust,
then to crack and break off.
Id. at 1245.
The Florida Supreme
Court rejected the plaintiffs’ argument that the individual
components and items of building material, not the homes
themselves, constituted the products purchased:
The character of a loss determines the
appropriate remedies, and, to determine the
character of a loss, one must look to the
product purchased by the plaintiff, not the
product sold by the defendant. King v.
Hilton-Davis, 855 F.2d 1047 (3d Cir. 1988).
Generally, house buyers have little or no
interest in how or where the individual
components of a house are obtained. They are
content to let the builder produce the
finished product, i.e., a house. These
homeowners bought finished products-dwellings--not the individual components of
those dwellings. They bargained for the
finished products, not their various
components. The concrete became an integral
part of the finished product and, thus, did
not injure “other” property.
Id. at 1247-48.
In Calloway v. City of Reno, discussed in depth in
Newtown Meadows, the Nevada Supreme Court disapproved its earlier
dictum in a case factually similar to the present case.
That
dictum had suggested that the economic loss rule did not apply to
an apartment owner’s negligence and strict liability claims
against the manufacturer of allegedly defective fittings used in
23
the apartment building’s plumbing and heating systems.
116 Nev.
at 263-64, 993 P.2d at 1267-68 (discussing Oak Grove Inv. v. Bell
& Gosett Co., 99 Nev. 616, 625, 668 P.2d 1075, 1081 (Nev. 1983)).
In Oak Grove, the fittings had allegedly caused extensive
erosion, corrosion, and leakage throughout the apartment complex.
Id.
The Calloway court, rejecting its suggestion in Oak Ridge,
held that, “when a heating and plumbing system damages the
building as a whole, the building has injured itself and only
economic losses have occurred.
We therefore disapprove of our
dictum in Oak Grove, which stated that the leaky fittings had not
caused purely economic losses.”
Id. at 1268.
Given the reasoning of Newtown Meadows and the cases it
cites with approval, this court concludes that, to the extent
Plaintiffs are asserting tort claims in connection with damage to
their plumbing systems and/or homes, those tort claims are barred
by the economic loss rule.
Any claim based on product liability,
negligence, or strict liability would have to based on injury to
a person or damage to other property, such as furniture.
Plaintiffs do not sufficiently plead such injury or damage.
Although the Complaint alleges that Zurn’s conduct has caused
“serious bodily injury, such as illness related to toxic mold and
metal contamination from the drinking water,”
Compl. ¶¶ 138,
147, 151, 152, Plaintiffs were forthright at the hearing on this
motion and conceded that, to date, they have not actually
24
suffered any physical injury.
Transcript at 28:03-13.
Questioned by the court on this very issue, Plaintiffs said that
the Complaint, which states that Zurn’s conduct “has exposed”
Plaintiffs to bodily injury, was not intended to be read as
alleging that the yellow brass fittings have already caused any
physical injury.
Plaintiffs explained that “the reason we plead
that in the Complaint . . . is because we were afraid [that]
between now and the time this [case] gets resolved, . . . if
there’s a leak, somebody will get hurt.”
Id. at 28:5-8.
Even if future bodily injury is compensable under other
legal theories, it cannot sustain the tort claims asserted here.
Actual damages are an essential element of a negligence claim,
just as actual injury is one of the elements of a products
liability or strict liability claim.
See, e.g., Weite v.
Momohara, 124 Haw. 236, 253, 240 P.3d 899, 916 (Haw. 2010)
(“Damages comprise an essential element of a negligence claim.”
(citation omitted)); Cho v. State, 115 Haw. 373, 379 n.11, 168
P.3d 17, 23 n.11 (Haw. 2007) (“It is well-established that, in
order for a plaintiff to prevail on a negligence claim, the
plaintiff is required to prove all four of the necessary elements
of negligence: (1) duty; (2) breach of duty; (3) causation; and
(4) damages.”); Tabieros v. Clark Equip. Co., 85 Haw. 336, 371,
944 P.2d 1279, 1314 (Haw. 1997) (“[G]enerally, a products
liability claim based on either negligence or strict liability
25
has three elements: (1) a duty to anticipate and design against
reasonably foreseeable hazards; (2) breach of that duty; and (3)
injury proximately i.e., legally caused by the breach.” (citation
omitted)).
Thus, regardless of whether future injury suffices
for jurisdictional purposes, the possibility of future physical
injury does not overcome the bar of the economic loss rule.
The Supreme Court of Florida made clear the
insufficiency of possibile future physical injury:
We also disagree with the homeowners that the
mere possibility that the exploding concrete
will cause physical injury is sufficient
reason to abrogate the economic loss rule.
This argument goes completely against the
principle that injury must occur before a
negligence action exists. Because an injury
has not occurred, its extent and the identity
of injured persons is completely speculative.
Thus, the degree of risk is indeterminate,
with no guarantee that damages will be
reasonably related to the risk of injury, and
with no possibility for the producer of a
product to structure its business behavior to
cover that risk.
620 So. 2d at 1247.
Given Plaintiffs’ clarification that they are concerned
about possible future physical injury, Plaintiffs’ tort claims
could be read as based on a present psychic injury in the form of
an existing fear of future physical injury.
But Plaintiffs may
not rely on fear of future physical injury to rescue Counts VIII,
IX, and X, because emotional distress, even if presently
existing, is not compensable based on product liability,
26
negligence, or strict liability in the absence of a diagnosed
mental illness or an accompanying physical injury.
See Haw. Rev.
Stat. § 663-8.9.
The court notes that plaintiffs without existing
injuries or damages who have been allowed to proceed with claims
arising out of defects in products are typically not proceeding
on tort theories such as those in Counts VIII, IX, and X.
See,
e.g., Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009)
(asserting a breach of warranty claim and a violation of
California’s Unfair Competition Law for allegedly defective
iPods); Cole v. General Motors Corp., 484 F.3d 717 (5th Cir.
2007) (asserting breach of express and implied warranty claims
for allegedly defective air bags); Briehl v. General Motors
Corp., 172 F.3d 623 (8th Cir. 1999) (asserting claims for fraud,
breach of warranty, and violation of state consumer protection
statutes for allegedly defective anti-lock braking systems);
Toyota, 754 F. Supp. 2d at 1155 (asserting warranty and contract
claims, as well as violations of consumer protection statutes for
allegedly defective throttle systems).
Any recovery by
Plaintiffs must be based on allegations other than those
presently asserted in Counts VIII, IX, and X.
Nor is the court persuaded by Plaintiffs’ argument that
those counts fall within an exception to the economic loss rule.
In Newtown Meadows, the Hawaii Supreme Court quoted a case in
27
which the South Carolina Supreme Court carved out three
exceptions to the economic loss rule:
A builder may be liable to a home buyer in
tort despite the fact that the buyer
suffered only “economic losses” where: (1)
the builder has violated an applicable
building code; (2) the builder has deviated
from industry standards; or (3) the builder
has constructed housing that he knows or
should know will pose serious risks of
physical harm.
115 Haw. at 295, 167 P.3d at 288 (quoting Kennedy v. Columbia
Lumber & Mfg. Co., 299 S.C. 335, 384 S.E.2d 730 (S.C. 1989)).
Plaintiffs claim to fall within all three exceptions, as they
allege that Zurn has violated the plumbing code, that Zurn’s
fittings deviate from industry standards, and that Zurn knew its
yellow brass fitting were dangerous.
However, all three
exceptions apply expressly to builders, and Plaintiffs provide no
authority extending the exceptions to manufacturers.
Indeed, in
a later case, the South Carolina Supreme Court stated that the
exceptions are “very narrow . . . , applicable only in the
residential real estate construction context,” and that they do
not apply in the product liability context.
Sapp v. Ford Motor
Co., 386 S.C. 143, 147, 149, 687 S.E.2d. 47, 51 (S.C. 2009).
Although this case concerns real estate construction, Plaintiffs’
claims against Zurn relate to allegedly defective fittings.
The
court has identified nothing in Hawaii law providing that any
28
exception to the economic loss rule applies to Counts VIII, IX,
or X.
The court dismisses Counts VIII, IX, and X on the
ground that Plaintiffs fail to allege any injury cognizable under
the legal theories asserted in those counts.
Plaintiffs are
given leave to attempt to state cognizable claims in an amended
Complaint.
C.
Count XII.
Count XII asserts that Zurn has breached the implied
warranty of merchantability.
Zurn argues that Count XII is
barred by the applicable statute of limitations and that
Plaintiffs do not sufficiently allege an injury.
The court
disagrees.
1.
Statute of Limitations.
Zurn argues that the four-year statute of limitations
set forth in the Uniform Commercial Code (“UCC”) controls
Plaintiffs’ implied warranty of merchantability claim.
Hawaii
has codified the UCC in chapter 490 of Hawaii Revised Statutes.
The implied warranty of merchantability is “implied by
operation of law into every sale of goods by a merchant seller.”
Ontai v. Straub Clinic and Hosp., Inc., 66 Haw. 137, 250, 659
P.2d 734, 744 (Haw. 1983) (citations omitted).
codified at section 490:2-314.
The warranty is
Under that statute,
merchantability means, among other things, “that the goods ‘are
29
fit for the ordinary purpose for which such goods are used.’”
Id. (quoting Haw. Rev. Stat. § 490:2–314(2)(c)).
The implied
warranty of merchantability “extends to any person who may
reasonably be expected to use, consume or be affected by the
goods and who is injured by breach of the warranty.”
Haw. Rev.
Stat. § 490:2-318.
Hawaii has codified the UCC statute of limitations at
section 490:2-725.
Subsection (1) of section 490:2-725 states:
“An action for breach of any contract for sale must be commenced
within four years after the cause of action has accrued.”
Subsection (2) states:
“A cause of action accrues when the
breach occurs, regardless of the aggrieved party's lack of
knowledge of the breach.
A breach of warranty occurs when tender
of delivery is made, except that where a warranty explicitly
extends to future performance of the goods and discovery of the
breach must await the time of such performance the cause of
action accrues when the breach is or should have been
discovered.”3
Haw. Rev. Stat. § 490:2-725(2) (emphasis added).
3
Plaintiffs do not argue that the exception stated in
subsection (2) to the accrual upon delivery rule for warranties
that extend to future performance applies to their implied
warranty of merchantability claim. Such an argument might face
significant challenges. See Standard Alliance Indus. v. Black
Clawson Co., 587 F.2d 813, 820 (6th Cir. 1978) (explaining that
most courts have held that implied warranties do not fall within
the exception for warranties extending to future performance
because “by their very nature, they never explicitly extend to
future performance.” (quoted in Western Recreational Vehicles,
Inc. v. Swift Adhesives, Inc., 23 F.3d 1547, 1550 (9th Cir.
30
In Larsen v. Pacesetter Systems, Inc., 74 Haw. 1, 11,
837 P.2d 1273, 1280 (Haw. 1992), the Hawaii Supreme Court applied
the UCC statute of limitations to a plaintiff’s implied warranty
of merchantability claim seeking recovery for an allegedly
defective pacemaker that caused personal injuries.
The defendant
had argued that the two-year statute of limitations for personal
injury actions applied.
The Hawaii Supreme Court stated:
Id.
“Given the plain language of the UCC, as well as our decision in
Ontai v. Straub Clinic & Hosp., Inc., 66 Haw. 237, 249-52, 659
P.2d 734, 743 (Haw. 1983) . . . , it is difficult to imagine how
the UCC statute of limitations would not apply to plaintiff's
implied warranty claim.”4
Id.
The Hawaii Supreme Court
distinguished the plaintiff’s claim from other claims in which
the two-year personal injury statute of limitations applied
because those claims involved contracts for services rather than
goods.
Id. at 12, 837 P.2d at 1280.
It is not entirely clear that section 490:2-725 applies
to the claims against Zurn.
Au v. Au, 63 Haw. 210, 626 P.2d 173
(Haw. 1981), establishes that the six-year breach of contract
1994)); Holliday v. Bell Helicopters Textron, Inc., 747 F. Supp.
1396, 1397 (D. Haw. 1990) (“By its terms, the exception for
future performance does not apply to implied warranty claims.”).
4
In Ontai, 66 Haw. at 249-52, 659 P.2d at 743, the Hawaii
Supreme Court held that, under section 490:2-318, a patient could
bring an implied warranty of merchantability action as a third
party beneficiary against the manufacturer of an X-ray table sold
to a hospital.
31
statute of limitations applies to an express warranty claim
because such a claim “is an action in contact.”
Id.
Au was not
governed by the UCC because it did not involve the sale of a
good.
Au involved an express warranty that a home did not have
water leakage.
Id. at 212, 626 P.2d at 176.
The home did, in
fact, have leakage, which later caused damage to the home.
Id.
The seller argued that the two-year statute of limitations
pertaining to property damage applied, while the purchaser argued
that the six-year statute of limitations for breach of contract
applied.
Id. at 218, 626 P.2d at 180.
Concluding that a
warranty results from a contractual relationship, the Hawaii
Supreme Court applied the six-year statute of limitations.
Id.
at 219, 626 P.2d at 180.
Section 490-2 in Hawaii Revised Statutes expressly
applies to transactions in goods.
Haw. Rev. Stat. § 490:2-102
(“Unless the context otherwise requires, this article applies to
transactions in goods”).
A good is defined as “all things
(including specially manufactured goods) which are movable at the
time of identification to the contract for sale other than the
money in which the price is to be paid, investment securities
(Article 8) and things in action.”
Haw. Rev. Stat. § 490:2-105.
In addition, section 490:10-103.1 states, “If any other provision
of law is inconsistent with this chapter, this chapter shall
32
govern unless this chapter or such inconsistent provision of law
specifically provides otherwise.”
The parties do not discuss whether Zurn’s fittings were
“movable at the time of identification to the contract for sale.”
If fittings were already installed when John Pupuhi Baker and
Diane T. Baker signed their purchase contract, for example, the
fittings might not qualify as “goods.”
Plaintiffs notably do not
argue that Zurn’s yellow brass fittings are not goods.
John Pupuhi Baker and Diane T. Baker’s home was
completed in 2006.
The Complaint does not say exactly when
Branden H. Baker and Kim Salva Cruz Baker’s home was completed,
but it appears to have been around 2004.
The allegations in the
Complaint thus suggest that all fittings were delivered in or
before 2006.
If the four-year UCC statute of limitations
applies, this action had to have been filed in 2010.
According
to Zurn, because this action was not filed until 2011,
Plaintiffs’ claims are time-barred.
Plaintiffs argue that any statute of limitations should
be equitably tolled because Zurn “lulled” Plaintiffs into
inaction by “continuing to manufacture, market, and sell
defective Yellow Brass Fittings, including those used in Mililani
Mauka homes, without any warning of the defects and in fact
warranting the fittings through their marketing as complying with
applicable standards.”
Pls.’ Opposition to Defs. Zurn
33
Industries, LLC and Zurn PEX, Inc.’s Motion to Dismiss First Am.
Compl., or in the Alternative, Motion for a More Definite
Statement and Motion for Summ. J. 20, Jan. 23, 2012, ECF No. 34.
Zurn responds by noting that Plaintiffs fail to plead facts
indicating any lulling.
A statute of limitations may be equitably tolled based
on “lulling” when “‘it appears that [a defendant] has done
anything that would tend to lull the plaintiff into inaction, and
thereby permit the limitation prescribed by the statute to run
against him.’”
Windward Aviation, Inc. v. Rolls-Royce Corp.,
Civ. No. 10-00542 ACK-BMK, 2011 WL 2670180, at *12 (D. Haw. July
6, 2011) (quoting Mauian Hotel, Inc. v. Maui Pineapple Co.,
52 Haw. 582, 570–71, 481 P.2d 310, 315 (Haw. 1971) (citation
omitted), and citing Cunha v. Ward Foods, Inc., 501 F. Supp. 830,
836 (D. Haw. 1980)).
Plaintiffs point to the allegations in the
Complaint that Zurn failed to warn them that the yellow brass
fittings were defective and that Zurn continued business as usual
in selling the fittings.
In relying on allegations in the Complaint in the
context of the lulling issue, the parties have gotten off-track.
A statute of limitations is an affirmative defense.
defendant has the burden of proving the defense.
That is, a
See Fed. R.
Civ. Pro. 8(c); Jones v. Bock, 549 U.S. 199, 214–15 (2007)
(noting in the course of examining the requirement that prisoners
34
exhaust administrative remedies before filing suit that, even
though “the complaint is subject to dismissal for failure to
state a claim” because the “allegations . . . show that relief is
barred by the applicable statute of limitations, . . . that does
not make the statute of limitations any less an affirmative
defense”).
For a claim to be dismissed on a Rule 12(b)(6) motion
on limitations grounds, the running of the statute must be
apparent on the face of the complaint.
Von Saher v. Norton Simon
Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010)
(citations omitted).
Zurn does not show that the running of the
statute of limitations is apparent on the face of the Complaint.
Quite apart from Plaintiffs’ tolling argument, Plaintiffs are not
required to plead facts supporting any tolling argument.
Imposing such a pleading requirement would require claimants to
anticipate and respond to affirmative defenses before they are
even raised, negating the defendant’s obligation to assert
affirmative defenses if they are not to be deemed waived.
On the
present record, Zurn cannot be said to establish its affirmative
defense.
2.
Injury.
Zurn argues that, even if not time-barred, Plaintiffs
do not properly allege a breach of the implied warranty of
merchantability because they do not allege injury.
According to
Zurn, Plaintiffs’ allegation that the yellow brass fittings might
35
fail sometime in the future, not that they have already failed,
is insufficient to sustain an implied warranty claim.
Zurn
argues that Plaintiffs cannot establish the requisite causal
connection between the allegedly defective fittings and some
injury, see Larson v. Pacesetter Sys., Inc., 74 Haw. 1, 837 P.2d
1273 (Haw. 1992), because Plaintiffs have suffered no cognizable
injury.
The court disagrees.
Plaintiffs allege that the
fittings have already begun to corrode and that zinc has leached
into their water systems.
They also allege that the fittings
violate the Honolulu Plumbing Code.
Regardless of the impact of
the economic loss rule on Plaintiffs’ tort claims, Zurn provides
no authority establishing that damage to the product itself
cannot constitute “injury” for the purpose of a breach of the
implied warranty of merchantability.
Other courts, including one considering a Zurn product,
have permitted plaintiffs to pursue breach of warranty claims
before allegedly defective products malfunction, so long as
products contain inherent defects.
See In re Zurn Pex Plumbing
Products Litigation (“Zurn Pex”), 644 F.3d 604, 615 (8th Cir.
2011); Hicks v. Kaufman and Broad Home Corp., 107 Cal. Rptr. 2d.
761, 767 (Cal. Ct. App. 2001) (“[W]e conclude proof of breach of
warranty does not require proof the product has malfunctioned but
only that it contains an inherent defect which is substantially
36
certain to result in malfunction during the useful life of the
product.”); but see Briehl v. General Motors Corp., 172 F.3d 623
(8th Cir. 1999) (dismissing under Rule 12(b)(6) the plaintiffs’
warranty claims, among others, on the ground that the plaintiffs
failed to plead damages when the plaintiffs alleged that their
cars were designed with a defective brake system, but the brakes
had not malfunctioned or failed).
The Eighth Circuit’s Zurn Pex decision, involving brass
fittings manufactured by Zurn, is particularly instructive.
Zurn
Pex, a putative class action against Zurn Pex, Inc., and Zurn
Industries, Inc., involved allegations that Zurn’s brass fittings
installed in homes as part of the PEX piping system were
inherently defective because they were susceptible to stress
corrosion cracking.
644 F.3d at 608-09.
The plaintiffs alleged
that the stress corrosion cracking would lead to leaks, but the
plumbing systems in some of the homes had not actually leaked.
Id.
The plaintiffs asserted consumer protection, warranty, and
negligence claims.
Id. at 608.
Addressing a motion for class certification, the United
States District Court for the District of Minnesota certified as
a class all of the homeowners asserting warranty claims,
regardless of whether their homes actually had leaks.
at 611.
Id.
With respect to the negligence claims, the district
37
court certified as a class only those homeowners whose pipes had
already leaked and caused damage to their property.
Id.
On appeal, Zurn argued that the certification of the
warranty class was improper because the class members whose pipes
had not leaked had no standing.
Id. at 616.
In the course of
addressing the standing issue, the Eighth Circuit, examining the
sufficiency of the pleadings, said, “In asserting a warranty
claim, it ‘is not enough’ for a plaintiff ‘to allege that a
product line contains a defect or that a product is at risk for
manifesting this defect; rather, the plaintiffs must allege that
their product actually exhibited the alleged defect.’”
Id.
(quoting O'Neil v. Simplicity, Inc., 574 F.3d 501, 503 (8th Cir.
2009)).
The Eighth Circuit distinguished the plaintiffs in Zurn
Pex from plaintiffs found to have no cognizable injury in cases
such as O’Neil v. Simplicity, Inc., 574 F.3d at 501.
In O’Neil,
according to the Eighth Circuit, crib owners failed to state
cognizable warranty claims because they had not alleged that
their cribs actually exhibited a dangerous defect.
(citing O’Neil, 574 F.3d at 503-04).
Id. at 616
They alleged only that the
cribs might develop a dangerous defect.
Id.
The plaintiffs in
Zurn Pex, on the other hand, alleged that stress corrosion
cracking was already evident in their PEX systems.
38
Id. at 617.
The Eighth Circuit agreed with the district court that,
“to give rise to a warranty claim a fitting must contain a
defect, but . . . [the fitting] need not have already caused
external damage.”
Id.
The homeowners had thus alleged
sufficient injury by alleging that Zurn’s brass fittings, at the
time of installation, had a defect that violated Minnesota
warranty law.
Id.
The Eighth Circuit affirmed the district
court’s conclusion that the homeowners’ warranty claims were
cognizable under Minnesota warranty law and that they could seek
damages if they succeeded in proving the existence of a universal
inherent defect in breach of their warranties.
Id.
But see id.
at 620-24 (Gruender, J., dissenting) (stating that the
homeowners’ fittings could not be said to exhibit the alleged
defect until the pipes actually leaked).
In the present case, Plaintiffs similarly allege that
the yellow brass fittings are inherently defective and that the
defect will result in damage.
See Compl. ¶¶ 36-39, 71-74.
They
also allege that the fittings violate the Honolulu Plumbing Code.
At the hearing on the present motion, Plaintiffs contended that
they have to remove and replace the yellow brass fittings, and
that the putative class members cannot refinance or sell their
homes because financial institutions will not provide mortgages
for homes with code violations.
30:10.
Transcript at 27:10-16, 29:18 -
Plaintiffs’ alleged injury can therefore be characterized
39
as the failure to receive the benefit of their bargain; that is,
Plaintiffs allegedly received a defective product that
prematurely corrodes and violates the Honolulu Plumbing Code.
See Toyota, 754 F. Supp. at 1165 (holding that the plaintiffs
pled a cognizable loss under a benefit of the bargain theory when
they alleged that they contracted for safe cars but received
defective vehicles subject to a dangerous condition).
Plaintiffs
sufficiently allege a claim for breach of an implied warranty of
merchantability.
D.
Count XIII.
Count XIII asserts that Zurn violated section 480-2 of
Hawaii Revised Statutes.
Section 480–2(a) states, “Unfair
methods of competition and unfair or deceptive acts or practices
in the conduct of any trade or commerce are unlawful.”
Plaintiffs allege that Zurn “engaged in unfair and deceptive acts
or practices when [it] designed, manufactured and sold Yellow
Brass Fittings.”
Zurn argues that Plaintiffs fail to state a
claim under section 480-2(a) because their claims are barred by
the statute of limitations and they do not adequately allege
reliance or a cognizable injury.
1.
The court disagrees.
Statute of Limitations.
Zurn argues that Plaintiffs’ section 480-2 claim is
barred by the four-year statute of limitations set forth in
section 480-24(a):
40
Any action to enforce a cause of action
arising under this chapter shall be barred
unless commenced within four years after the
cause of action accrues . . . .
A claim begins to accrue when the alleged violated occurred.
McDevitt v. Guenther, 522 F. Supp. 2d 1272, 1289 (D. Haw. 2007).
As this action was filed on July 20, 2011, under section
480-24(a), Zurn’s alleged violation must have occurred on or
after July 20, 2007.
Plaintiffs allege that Zurn violated section 480-2 by,
among other things, representing that its PEX systems were
corrosion resistant, selling products that did not comply with
industry standards, and concealing from Plaintiffs the prior
failure of yellow brass fittings.
Compl. ¶ 169.
homes were completed in or around 2003 and 2006.
Plaintiffs’
Thus, Zurn
says, Plaintiffs are complaining about conduct occurring before
the yellow brass fittings were installed in their homes, and
those claims are time-barred.
Plaintiffs, however, are not referring only to such
conduct.
They allege in the Complaint and argue in their
opposition that Zurn fraudulently concealed the defect in its
fittings.
Concealment stops the running of a limitations period.
See Rundgren v. Bank of New York Mellon, 777 F. Supp. 2d 1222,
1232 (D. Haw. 2011) (holding that “the statute of limitations in
[Hawaii Revised Statutes] § 480–24 may be tolled for fraudulent
concealment”).
“The active concealment requirement for the
41
fraudulent concealment doctrine ‘necessarily requires active
conduct by a defendant, above and beyond the wrongdoing upon
which the plaintiff's claim is filed, to prevent the plaintiff
from suing in time.’”
O. Thronas, Inc. v. Blake, 09-00353 DAE-
LEK, 2010 WL 1371390, at *7 (D. Haw. April 7, 2010) (quoting
Santa Maria v. Pacific Bell, 202 F.3d 1170, 1177 (9th Cir.
2000)).
Admittedly, the Complaint only vaguely asserts that Zurn
has engaged in “acts of concealment as set forth herein.”
¶ 172.
Compl.
However, as noted in the implied warranty portion of this
order, a plaintiff need not, in a Complaint, allege facts
relevant to an affirmative defense.
As Zurn fails to show that
Count XIII is time-barred on the face of the Complaint, the court
denies the portion of Zurn’s Rule 12(b)(6) motion that seeks
dismissal of Count XIII on timeliness grounds.
2.
Reliance and Injury.
A deceptive act or practice under section 480-2 of
Hawaii Revised Statutes is “(1) a representation, omission, or
practice that (2) is likely to mislead consumers acting
reasonably under the circumstances where (3) the representation,
omission, or practice is material.”
Courbat v. Dahana Ranch,
Inc., 111 Haw. 254, 262, 141 P.3d 427, 435 (Haw. 2006) (citations
omitted).
“A representation, omission, or practice is considered
‘material’ if it involves information that is important to
consumers and, hence, likely to affect their choice of, or
42
conduct regarding, a product.”
marks omitted).
Id. (citations and quotation
This test is “an objective one, turning on
whether the act or omission is likely to mislead consumers as to
information important to consumers in making a decision regarding
the product or service.”
Id. (citations omitted).
Because section 480-2 is based on fraudulent acts,
claims brought under that chapter are subject to the heightened
pleading requirements under Rule 9(b) of the Federal Rules of
Civil Procedure.
Rule 9(b) requires that, when fraud or mistake
is alleged, “a party must state with particularity the
circumstances constituting fraud or mistake.”
9(b).
Fed. R. Civ. P.
“Averments of fraud must be accompanied by the who, what,
when, where, and how of the misconduct charged.”
Kearns v. Ford
Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting Vess v.
Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)
(internal quotation marks omitted)).
That is, to sufficiently
identify the circumstances that constitute fraud, a plaintiff
must identify such facts as the times, dates, places, or other
details of the alleged fraudulent activity.
Milken, 6 F.3d 666, 672 (9th Cir. 1993).
Neubronner v.
A plaintiff must also
explain why the alleged conduct or statements are fraudulent.
re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 n.7 (9th Cir.
1994) (en banc), superseded by statute on other grounds by 15
U.S.C. § 78u-4.
43
In
Zurn argues that Plaintiffs fail to even allege that
“the ‘unfair and deceptive acts or practices’ they claim Zurn
engaged in actually induced any action of their part.”
Defs.
Zurn Industries, LLC and Zurn Pex, Inc.’s Mot. to Dismiss First
Am. Compl., or in the Alternative, Mot. for a More Definite
Statement and Mot. for Summ. J. at 18, Nov. 3, 2011, ECF No. 10.
Zurn is unpersuasive on this point.
To assert a claim under
section 480-2, “actual reliance need not be established.”
Yokoyama v. Midland Nat. Life Ins. Co., 594 F.3d 1087 (9th Cir.
2010); see also State v. U.S. Steel Corp., 82 Haw. at 51, 919
P.2d at 313 (“[A]ctual deception need not be shown; the capacity
to deceive is sufficient.”).
Even if reliance is required,
Plaintiffs assert that they have been damaged by Zurn’s
violations of the Honolulu Plumbing Code and warranties.
Assuming for purposes of this order that only one warranty was
violated, a consumer, absent a waiver, disclaimer, or the like,
is entitled to expect compliance with an applicable warranty.
Plaintiffs’ allegations are reasonably read as asserting that, in
purchasing brand new homes, they relied on Zurn’s satisfaction of
its legal obligations, as Zurn’s provision of products came with
the express or implied assertion of such satisfaction.
Zurn also complains that the damage allegations are
insufficient.
Under section 480-13, a plaintiff may seek damages
for a violation of chapter 480.
There are three necessary
44
elements to recover under section 480–13: “(1) a violation of HRS
chapter 480; (2) injury to the plaintiff's business or property
resulting from such violation; and (3) proof of the amount of
damages.”
Hawaii Medical Ass’n v. Hawaii Medical Serv. Ass’n,
Inc., 113 Haw. 77, 114, 148 P.3d 1179, 1216 (Haw. 2006)
(citations omitted).
plead injury.
Zurn argues that Plaintiffs do not properly
Like the argument it makes with respect to
Plaintiffs’ implied warranty claim, Zurn argues that the only
injury Plaintiffs allege is speculative.
Plaintiffs, however, contend that they have suffered an
economic injury.
This injury is sufficient.
Following the
guidance of the United States Supreme Court in Reiter v. Sonotone
Corp., 442 U.S. 330 (1979), the Hawaii Supreme Court, analyzing
the prong of section 480-2 that addresses unfair competition,
held that “it is unnecessary for plaintiffs to allege commercial
or competitive injury in order for plaintiffs to have standing
under [Hawaii Revised Statutes] § 480-13; it is sufficient that
plaintiffs allege that injury occurred to personal property
through a payment of money wrongfully induced.”
Ai v. Frank Huff
Agency, Ltd., 61 Haw. 607, 614, 607 P.2d 1304, 1310 (Haw. 1980),
overruled on other grounds by Roberts Hawaii Sch. Bus, Inc. v.
Laupahoehoe Transp. Co., Inc., 91 Haw. 224, 254, P.2d 853, 883
(Haw. 1992).
45
There is no reason that any greater injury must be pled
under the unfair and deceptive trade practices prong of section
480-2.
In Reiter, the United States Supreme Court stated, “A
consumer whose money has been diminished . . . has been injured
in his property.”
442 U.S. at 339 (quotation marks and
modifications omitted).
See also Rosa v. Johnston, 3 Haw. App.
420, 427, 651 P.2d 1228, 1234 (Haw. Ct. App. 1982) (quoting
Reiter, 442 U.S. at 339, and citing Ai, 61 Haw. at 614, 607 P.2d
at 1304).
Plaintiffs argue that, because the PEX pipes are
defective, they have not received the benefit of their bargain,
as they bargained for homes containing systems that comply with
the Honolulu Plumbing Code and that are corrosion resistant.
They contend that the PEX systems must be entirely replaced.
Even in light of Rule 9(b)’s heightened pleading standard,
Plaintiffs therefore sufficiently plead that they paid for more
than they got.
See Rosa, 3 Haw. App. at 428, 651 P.2d at 1235
(Haw. Ct. App. 1982) (holding that the plaintiffs’ money had been
diminished for purposes of establishing injury under section
480-13 when the solar water heating system they purchased failed
to provide hot water, they had not been refunded the purchase
price in full, and they had sustained other losses).
In sum, Plaintiffs’ tort claims against Zurn, Counts
VIII, IX, and X, are dismissed, but without prejudice.
46
Plaintiffs are given leave to amend those claims.
With respect
to Counts XII and XIII, Zurn’s motion to dismiss is denied.2
Count XI was not in issue in the portion of Zurn’s motion brought
under Rule 12(b)(6).
V.
ZURN’S SUMMARY JUDGMENT MOTION.
Zurn seeks summary judgment on Count XI (breach of
express warranty), and, if Count XII (breach of the implied
warranty of merchantability) is not dismissed, summary judgment
on that count too.
The court denies the motion for summary
judgment with respect to Counts XI and XII.
A.
Legal Standard.
Summary judgment shall be granted when “the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
R. Civ. P. 56(a).
Fed.
A moving party has both the initial burden of
production and the ultimate burden of persuasion on a motion for
summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
210 F.3d 1099, 1102 (9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court “the portions of the materials on file
2
As the alternative to dismissal under Rule 12(b)(6), Zurn
requests a more definite statement with respect to Counts XII and
XIII, pursuant to Rule 12(e). Zurn, however, makes no arguments
and cites no authority addressing Rule 12(e). Zurn has not
properly briefed the court on this issue, and the court denies
the request.
47
that it believes demonstrate the absence of any genuine issue of
material fact.”
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors
Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.
Catrett, 477 U.S. 317, 323 (1986)); accord Miller v. Glenn Miller
Prods., Inc., 454 F.3d 975, 987 (9th Cir. 2006).
“A fact is
material if it could affect the outcome of the suit under the
governing substantive law.”
Miller, 454 F.3d at 987.
When the
nonmoving party bears the burden of proof on one or more issues
at trial, the party moving for summary judgment may satisfy its
burden with respect to those issues by pointing out to the court
an absence of evidence from the nonmoving party.
Miller, 454
F.3d at 987.
When the moving party meets its initial burden on a
summary judgment motion, “[t]he burden then shifts to the
nonmoving party to establish, beyond the pleadings, that there is
a genuine issue for trial.”
Id.
The court must not weigh the
evidence or determine the truth of the matter but only determine
whether there is a genuine issue for trial.
See Balint v. Carson
City, Nev., 180 F.3d 1047, 1054 (9th Cir. 1999).
On a summary
judgment motion, “the nonmoving party’s evidence is to be
believed, and all justifiable inferences are to be drawn in that
party’s favor.”
Miller, 454 F.3d at 988 (brackets omitted)
(quoting Hunt v. Cromartie, 526 U.S. 541, 552 (1999)).
48
B.
There are Triable Issues of Fact on the Warranty
Claims.
It is undisputed that Zurn’s yellow brass fittings are
expressly warranted for 25 years.
See Compl. ¶ 66.
Zurn argues,
however, that the defect Plaintiffs are complaining about is
outside the scope of their express warranties, as they provide
for reimbursement only if there is a “failure or a leak” and do
not cover design defects.
With respect to Plaintiffs’ implied
warranty claim, Zurn argues that summary judgment is warranted
because the express warranty explicitly excludes any implied
warranties.
Zurn submits thirty-two different warranties that it
claims were issued for its products at different times.
For
example, Exhibit A to the affidavit of Barbara Cass purportedly
applies to all Zurn products manufactured after August 1, 1995.
Aff. of Barbara Cass ¶ 3, ECF No. 11-3.
Exhibits G and H are
“examples” of Zurn’s warranty as revised on or around October 15,
1996.
Id.
Zurn does not identify which warranties cover the
brass fittings installed in Plaintiffs’ homes.
The court agrees with Plaintiffs that Zurn does not
meet its burden of showing an absence of genuine issues of
material fact.
First, it is unclear which warranties, if any,
apply to the yellow brass fittings in issue.
In Cartwright v.
Viking Industries, Inc., 249 F.R.D. 351, 356 (E.D. Cal. 2008),
the district court refused to decide that an express warranty
49
disclaimed any implied warranties when it could not determine
which, if any, of the three warranties submitted by the plaintiff
was applicable to the case.
The court said, “Until a specific
warranty is factually established as pertaining to this action,
the court cannot dismiss all implied warranty claims as a matter
of law.”
Id.
Zurn argues that it need not specify which warranties
are in issue because none of the warranties covers design
defects.
Zurn appears to be asking this court to study thirty-
two warranties, even though possibly none applies.
Before the
court will undertake such a task, Zurn needs to make a
considerably better record as to why that is necessary.
Plaintiffs say that they do not have sufficient information to
determine whether any of the warranties submitted by Zurn applies
to the yellow brass fittings in issue and whether any applicable
warranty was in fact limited to failures, leaks, and
manufacturing defects, as Zurn contends.
Zurn does not meet its
burden of persuasion on a summary judgment motion by simply
submitting numerous warranties.
VI.
Summary judgment is denied.
CASTLE & COOKE’S MOTION TO DISMISS.
Castle & Cooke seeks to dismiss Plaintiffs’ claims
against it under section 672E-2 of Hawaii Revised Statutes, which
provides for dismissal when claimants fail to comply with chapter
672E.
50
A.
Statutory Framework.
Chapter 672E of Hawaii Revised Statutes requires a
claimant alleging construction defects to serve a contractor from
which it is seeking recovery with written notice of the claim at
least ninety days before filing an action against that
contractor.
Haw. Rev. Stat. §§ 672E-2, 672E-3.
The notice must
“describe the claim in detail and include the results of any
testing done.”
Id. § 672E-3.
“After serving the notice of
claim, a claimant shall give to the contractor reasonable prior
notice and an opportunity to observe if any testing is done.”
Id.
A contractor may then reject the claim by serving the
claimant with a written rejection or failing to respond within
thirty days.
Id. § 672E-4(a).
Alternatively, the contractor may
offer to settle, or request an inspection of the premises.
Id.
§ 672-E-4(b).
Under section 672E-13, a court must dismiss, without
prejudice, an action that does not comply with chapter 672E.
However, when an “applicable statute of limitations on actions
would prevent the refiling of an action,”
a court must
“immediately stay[]” the action “to provide the claimant with an
opportunity to comply with this chapter, but for no longer than
six months.”
Haw. Rev. Stat. § 672E-13(3).
51
B.
Castle & Cooke Does Not Establish Noncompliance
With Chapter 672E.
There is no dispute that chapter 672E applies to this
case.
Moreover, Plaintiffs concede that they did not provide
Castle & Cooke with notice of their claim before filing the
Complaint.
The issue here is whether Plaintiffs have since
complied with the requirements of that chapter.
Obviously,
having been sued, Castle & Cooke has had belated notice of
Plaintiffs’ claims.
But Castle & Cooke argues that Plaintiffs
have not provided Castle & Cooke with the results of any testing
conducted on the fittings in issue.
Castle & Cooke construes
correspondence between Castle & Cooke’s counsel and Plaintiffs’
counsel as referring to tests of the fittings in issue.
Castle &
Cooke maintains that, under section 672E-3, it is entitled to the
test results.
See Agena Dec. Ex. 3 (letter from Plaintiffs’
counsel to Castle & Cooke’s counsel), ECF No. 33-3 (“Plaintiffs
have extracted brass fittings from the PEX plumbing systems
installed in Plaintiffs’ homes and such fittings were
examined.”).
According to Plaintiffs, they created no “reports,”
but Castle & Cooke argues that, at the very least, it should be
given any results of the examination, even if there are no
reports.
Id.
At the hearing on this motion, Plaintiffs maintained
that they do not have reports, results, or other information to
turn over or to describe, as no tests were performed in this
52
case.
They apparently determined that the fittings in their
homes are defective based on testing done on Zurn’s yellow brass
fittings in a different case.
In response to questions posed by
the court, Plaintiffs said that they would turn over the results
of those tests, provided they were not subject to a
confidentiality agreement.
The court has received no supplemental information from
either party about whether any test results from another case
have been turned over or whether those materials are subject to a
confidentiality agreement.
The record at this point does not
establish noncompliance with the requirement in chapter 672E to
provide such information.
The court therefore denies the motion
to dismiss.
However, within two weeks of the date of this order,
Plaintiffs must either file a certificate of compliance with
section 672E-3(c), or file an explanation as to why they have not
yet complied, given that it has been nearly two months since the
date of the hearing.
If Plaintiffs do not meet this deadline,
the court will vacate the denial of Castle & Cooke’s motion and
either grant it or stay the claims against Castle & Cooke if the
applicable statute of limitations might bar the refiling of the
Complaint by any affected homeowner.
If Plaintiffs comply with this order but Castle & Cooke
still asserts a violation of chapter 672E, Castle & Cooke must
53
submit a written statement of its position no later than two
weeks from the filing of Plaintiffs’ certificate of compliance or
explanation.
The court will then review the submissions and
indicate any further action to be taken.
Each party is limited
to 1000 words.
VII.
CONCLUSION.
Zurn’s motion to dismiss is granted as to Count VIII,
Count IX, and Count X.
Zurn’s motion to dismiss is denied with
respect to Plaintiffs’ other claims.
Zurn’s request for a more
definite statement and its summary judgment motion are denied.
Plaintiffs are given leave to file an amended Complaint no later
than May 21, 2012.
The court denies Castle & Cooke’s motion, but directs
Plaintiffs to file, within two weeks, either a certificate of
compliance with section 672E-3(c), or an explanation as to why
they have not complied.
Castle & Cooke may submit a response
within two weeks of Plaintiffs’ submission.
submission is limited to 1000 words.
54
Each party’s
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, April 25, 2012.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Baker et al. v. Castle & Cooke Homes Hawaii, Inc. et al.; Civil No. 11-00616 SOM-RLP;
ORDER (1) GRANTING IN PART DEFENDANT ZURN INDUSTRIES, LLC, AND ZURN PEX, INC.S’ MOTION
TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT, OR, IN THE ALTERNATIVE, MOTION FOR
A MORE DEFINITE STATEMENT, AND DENYING DEFENDANT ZURN INDUSTRIES, LLC, AND ZURN PEX,
INC.S’ MOTION FOR SUMMARY JUDGMENT, AND (2) DENYING CASTLE & COOKE’S MOTION TO DISMISS
THE FIRST AMENDED COMPLAINT AND DIRECTING PLAINTIFFS TO SUBMIT MATERIALS.
55
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