Keesler v. Electrolux Home Products, Inc.
Filing
43
MEMORANDUM Opinion and Order: Defendant's motion to dismiss 37 is granted in part and denied in part. Signed by the Honorable Milton I. Shadur on 7/21/2016:Mailed notice(clw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DENNIS KEESLER, individually and on behalf
of all others similarly situated,
Plaintiff,
v.
ELECTROLUX HOME PRODUCTS, INC.,
Defendant.
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Case No. 16 C 199
MEMORANDUM OPINION AND ORDER
This action and Elward v. Electrolux Home Products, Inc. ("Electrolux"), 15 C 9882,
both putative class actions filed by the same plaintiffs' counsel, have advanced virtually identical
multicount theories of recovery stemming from the same alleged defect in Electrolux-branded
dishwashers. Although the actions did not qualify for reassignment on relatedness grounds under
the conditions required for such treatment by this District Court's LR 40.4, a high degree of
coordination of the two cases was obviously called for to minimize duplicative lawyers' efforts
(particularly, though not exclusively, in the area of discovery) as well as in the interest of judicial
efficiency. This Court's colleague Honorable John Lee, to whom the Elward case was randomly
assigned, has graciously agreed to wield the laboring oar in that regard (as would have been the
case if LR 40.4 had applied, for his is the lower-numbered case).
Now Electrolux has filed motions to dismiss the First Amended Complaint ("FAC") in
each case, and when courtesy copies of those filings were delivered to this Court's chambers at
its request it found them to be substantially parallel (hardly a surprise, given the common
authorship and parallel structure of the two FACs). But comparison of the two current motions
revealed that the name plaintiff in this case is a Pennsylvania citizen while the name plaintiff in
Judge Lee's case is from Illinois, so that Illinois' choice of law rules call for the substantive law
of the two different states to be applied in deciding the motions to dismiss. That being so, this
Court concluded that to impose that double burden on Judge Lee was certainly not called for to
serve the purposes for which the coordination arrangements had been adopted, and Judge Lee
had independently reached the same view.
Hence this opinion turns to deciding Electrolux's motion in this action. As is so often the
case among Illinois practitioners, plaintiffs' counsel has splintered what really is a single "claim
for relief" (the relevant concept under federal law -- see Fed. R. Civ. P. ("Rule") 8(a)) -- into a
host of separate "counts," each of which asserts its own theory of recovery, a needless and often
misguided practice. 1 Accordingly this opinion must parse the FAC in the same fashion as it has
been presented by plaintiffs' counsel and attacked by Electrolux's counsel.
FAC's Count I asserts a breach of implied warranty on the part of Electrolux, whose
counsel have challenged that count as time-barred under Pennsylvania law. Keesler's grievance
is that some five years after his 2008 purchase of an Electrolux-branded dishwasher he observed
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1
For many years this Court has been calling the attention of lawyers (1) to the very
different function of "counts" as set out in Rule 10(b), one of only two places where that term
appears in the Rules (the other reference, in Rule 8(d)(2), is in total sync with that function), and
(2) to the distinction between the federal "claim for relief" and the state law concept of "causes
of action," which have as a necessary ingredient a theory of recovery. By sharp contrast, a
complaint that states a claim for relief will survive Rule 12(b)(6) analysis even if it does not state
a theory of recovery -- or indeed, even if it states the wrong theory of recovery. For excellent
discussions of the difference between "claim for relief" and "cause of action," see NAACP v.
Am. Family Mut. Ins. Co., 978 F. 2d 287, 292 (7th Cir. 1992) and Bartholet v. Reishauer
A.G.(Zurich), 953 F.2d 1073 (7th Cir. 1992). Regrettably this Court's efforts to stanch the flow
of wrongly conceived and wrongly asserted complaints in that respect has had much the same
degree of success as Mickey Mouse in Walt Disney's classic Fantasia, seeking to sweep back the
sea with a broom to the tune of Dukas' Sorcerer's Apprentice.
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smoke while washing dishes and discovered that a hole had melted in the dishwasher's plastic
tub, flooding his home (FAC ¶ 33). That paragraph then went on to allege:
In addition to the water damage, his house sustained smoke and fire
damage.
By way of challenge to Count I, Electrolux's memorandum of law ("Mem.") in support of
its motion points to Pennslyvania's four-year statute of limitations (13 Pa. C.S. § 2725) and to its
provision that states (id.):
A breach of warranty occurs when tender of delivery is made.
On its face, then, the Count I contention that Electrolux is liable for a breach of the implied
warranty of merchantability would fail, for five years elapsed between Keesler's purchase of the
Electrolux dishwasher and its later failure and consequent damage that gave rise to this lawsuit.
That, however, is unduly simplistic, for it fails to take into account the applicability to
this case of a principle on which the Pennsylvania Supreme Court expounded at some length in
Fine v. Checcio, 870 A.2d 850 (Pa. S.Ct. 2005): the long-established and well-known doctrine
of fraudulent concealment that operates to exclude time from the running of the statute of
limitations. As Fine, id. at 860 (citations omitted and emphasis added) explained:
The doctrine is based on a theory of estoppel, and provides that the defendant may
not invoke the statute of limitations, if through fraud or concealment, he causes
the plaintiff to relax his vigilance or deviate from his right of inquiry into the
facts. The doctrine does not require fraud in the strictest sense encompassing an
intent to deceive, but rather fraud in the broadest sense, which includes an
unintentional deception.
None of the cases cited in Electrolux's memorandum comes to grips with the concept expressed
in the final sentence of that quotation.
In that light Electrolux's position as to a claimed limitations bar is particularly outrageous
in light of the extensive allegations in Keesler's FAC. In that respect FAC ¶¶ 12-31 devote
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nearly 14 pages (many of them single-spaced) to factual allegations that expressly describe
Electrolux's extensive knowledge of the hazard of its dishwashers catching on fire, knowledge
that caused it to recall its dishwashers outside of the United States but not in this country. 2
Electrolux's Mem. 4 seeks to go on the attack by referring to the FAC's "lackluster and
thread-bare allegations of misrepresentation," but it must be remembered that Rule 12(b)(6) calls
for crediting a plaintiff's well-pleaded allegations, and pejorative name-calling cannot deflect a
principled approach to the issue.
Indeed Electrolux's position is extraordinarily ironic in light of its conduct in having been
well aware of its dishwashers' problem and in having taken that problem seriously enough to
institute recalls of its product in other countries while it continued to stock the shelves of retailers
here in the United States. In sum, although further proceedings might perhaps prove to justify
Electrolux's limitations defense, for now FAC's Count I survives.
Next come Keesler's Counts II through V, respectively labeled as sounding in "Strict
Liability - Design Defect," "Strict Liability - Failure To Warn," "Negligence" and "Negligent
Failure To Warn." All four of those contentions are targeted by Electrolux as assertedly being
barred by the "economic loss" doctrine, as to which its counsel cites Spivack v. Perks Ridge
Corp., 402 Pa. Super. 73, 78 (1990):
The general rule of law is that economic losses may not be recovered in tort
(negligence) absent physical injury or property damage.
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2
Such recalls were made in both Australia and the United Kingdom in 2007 (FAC ¶ 22),
while Keesler's purchase was made in the following year (id. ¶ 32).
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That principle has been rephrased by a federal District Court in Pennsylvania (Sarsfield v.
Citimortgage, Inc. 707 F.Supp.2d 546, 556 (M.D. Pa. 2010) as calling for "[ ]either physical
injury [ ]or damage to tangible property."
In that respect Electrolux's counsel criticize what their Mem. 6 refers to as "this
intentionally ambiguous description" set out in FAC ¶ 33:
In addition to the water damage, his house sustained smoke and fire
damage.
In an attempted response, Mem. 6 says that a photograph included in the FAC "clearly shows
any such 'fire' was in all likelihood contained entirely within the water-filled tub." Once again
that assertion, though it may prove to be accurate when the facts are in, does violence to the
operative standard that controls dismissal or nondismissal under Rule 12(b)(6). If the FAC
allegation is indeed ambiguous, as Electrolux's counsel say, the need to draw inferences in favor
of Keesler at this stage of the game calls for rejection of Electrolux's position.
Electrolux fares better as to FAC Count VI, which seeks declaratory or injunctive relief.
Its counsel are entirely correct in contending that the federal Declaratory Judgment Act
(28 U.S.C. § 2201) provides only a form of relief, not an independent claim for relief. Nor is
Keesler entitled to injunctive relief, given the adequacy of his remedy at law if he prevails. In
summary, then, FAC Count VI is stricken.
As for FAC Count VII and its claim of unjust enrichment, it is really not a stand-alone
claim -- if Keesler proves successful in establishing liability on Electrolux's part under any
appropriate theory of recovery, the damages that he recovers will subsume whatever Electrolux
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would have gained through its sale of a defective unit to Keesler. 3 Hence FAC Count VII is also
stricken.
Next comes FAC Count VIII, labeled "Violation of the Pennsylvania Unfair Trade
Practices and Consumer Protection Law." There Electrolux's counsel lean heavily on the
Pennsylvania caselaw that requires such a claimant to show justifiable reliance on a defendant's
part and on the Third Circuit's opinion applying Pennsylvania law in Hunt v. U.S. Tobacco Co.,
538 F.3d 217 (3d Cir. 2008), which sets out the same requirement of justifiable reliance. That is
extraordinarily puzzling, for Electrolux's Mem. 12 quotes this from Hunt, id. at 222 n.4:
A justifiable-reliance requirement, by contrast, requires the plaintiff to go
further -- he must show that he justifiably bought the product in the first place (or
engaged in some other detrimental activity) because of the misrepresentation.
But FAC ¶ 35 expressly alleges:
Mr. Keesler would not have purchased the dishwasher had Electrolux disclosed
that the dishwasher's electrical system contains a defective electrical system at the
point of sale, causing it to overheat and catch fire.
For present purposes that allegation must be credited, and because the deliberate
withholding of a highly relevant adverse risk should stand on no different footing than a direct
misrepresentation, Electrolux's position does not withstand scrutiny. So FAC Count VIII also
survives dismissal, although once again it should be stressed that this Court neither makes nor
implies any findings as to the ultimately viability or nonviability of Keesler's claim. 4
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3
It seems likely that Keesler's counsel included the unjust enrichment "count" primarily
in conjunction with his attempt at class treatment. But if so, what has been stated in the text
would appear to apply there as well.
4
Mem. 12-13 also attacks Count VIII under the economic loss doctrine, but this
opinion's earlier discussion on that score applies here as well.
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Finally, FAC Count IX is labeled "Fraudulent Concealment" and is challenged for an
asserted lack of the specificity called for by Rule 9(b). But once more Electrolux's counsel seek
to rely on name-calling rather than analysis, characterizing the FAC's first 15 pages as "dedicated
to salacious and unverified statements that he found on line."
This Court is tempted to remind counsel of the timeworn children's doggerel that begins
with "sticks and stones . . . ." Counsel's pejorative characterization ignores the link between such
reports that demonstrate Electrolux's unquestionable awareness of the risk at issue in this lawsuit
and the earlier-referred-to FAC ¶ 22 that sets out Electrolux's consequent recall of dishwashers -in the year before Keesler bought his unit -- in both Australia and the United Kingdom, but not in
the United States. Again, just as has been said as to Count I, and with all reasonable inferences
drawn in Keesler's favor, as is required on Electrolux's current motion to dismiss, FAC Count IX
also survives potential dismissal at this time.
Conclusion
Because this opinion will be a matter of record, a minute entry stating that Electrolux's
motion to dismiss [Dkt. No. 37] is granted in part and denied in part will suffice. Electrolux's
counsel are ordered to file its answer to the several counts that have withstood dismissal here on
or before August 11, 2016. Meanwhile Judge Lee will continue, as before, to oversee discovery
in this case as well as his own, and perhaps to deal in the first instance as to other matters that
may be common to the two lawsuits.
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Milton I. Shadur
Senior United States District Judge
Date: July 21, 2016
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