Hasley v. Ward Manufacturing, LLC

Filing 24

MEMORANDUM OPINION. Signed by Judge Richard D Bennett on 07/08/2014. (bas, Deputy Clerk)(c/s 7/8/2014 bca)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RANDALL HASLEY, SR. AND JUDITH
HASLEY, on behalf of themselves and
all others similarly situated,

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Plaintiff,

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v.

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WARD MANUFACTURING, LLC,

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Defendant.
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Civil Action No. RDB-13-1607

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MEMORANDUM OPINION
This class-action claim arises out of the presence of allegedly dangerous “Wardflex®”
piping in residential and commercial structures in the State of Maryland. The Plaintiffs,
Randall Halsey, Sr. and Judith Halsey, on behalf of themselves and the class,1 (“Plaintiffs”)
filed a three-count Class Action Complaint2 (ECF No. 7) against Ward Manufacturing, LLC
(“Defendant” or “Ward Manufacturing”) asserting strict liability pursuant to § 402A of the
Restatement (Second) of Torts (Count I), negligence for design defect (Count II), and
negligence for failure to warn (Count III). Defendant filed a Motion to Dismiss (ECF No.
15), which is now fully briefed. Both parties also filed supplemental material (ECF Nos. 19,
20, and 21). The parties’ submissions have been reviewed and no hearing is necessary. See

1 Plaintiffs define the class as “all persons or entities in the State of Maryland who purchased a house or other structure
in which Ward Manufacturing’s Wardflex® is installed after September 5, 2006, or who after, September 5, 2006,
purchased a house, or other structure, in which Ward Manufacturing’s Wardflex® was installed prior to September 5,
2006.” First Am. Class Action Compl. ¶ 63.
2 The Complaint was subsequently amended by the filing of the First Amended Complaint. 

Local Rule 105.6 (D. Md. 2011). For the reasons that follow, the Defendant’s Motion to
Dismiss is GRANTED.
BACKGROUND
This Court accepts as true the facts alleged in Plaintiffs’ First Amended Complaint.
See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). Wardflex® is a type of ultrathin,
flexible piping (corrugated stainless steel tubing (CSST)) used to transport natural gas and
was developed as an alternative to black iron pipe. First Am. Class Action Compl. ¶ 2. The
First Amended Complaint contends that the presence of Wardflex® is highly dangerous
because its walls are thin and “susceptible to perforation by an electrical arc generated by a
lightning strike, which can cause and has caused fires, damage to and destruction of
residential structures, and creates a substantial and unreasonable risk of death or personal
injury.”3 Id. ¶ 5. While CSST has now been installed in over five million homes, only 141
fires are alleged to have occurred due to problems associated with CSST. Id. ¶¶ 29 and 40.
The named Plaintiffs allege that Wardflex® was installed in their home in 2008. Id. ¶ 9.
Due to this alleged risk, Plaintiffs assert that Wardflex® is defective and that it must be
removed from structures and replaced. Id. ¶ 10.
Plaintiffs further allege that Ward Manufacturing knowingly placed this defective
product in homes and failed to warn Plaintiffs and others about this defect. Id. ¶¶ 48-49.
Finally, the First Amended Complaint contends that Defendant failed to perform adequate

Despite the alleged risks, the Complaint also recognizes that CSST has many advantages. First Am. Class Action
Compl. ¶ 26-28.
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safety tests on Wardflex®. Id. ¶ 55. Based on these assertions, Plaintiffs claim they have
suffered damages.
STANDARD OF REVIEW
I. Rule 12(b)(1)
When a defendant moves to dismiss a plaintiff’s claim for lack of standing, courts
commonly address the motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure.
See Payne v. Chapel Hill North Properties, LLC, 947 F. Supp. 2d 567 (M.D.N.C. 2013). A
motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction challenges a
court’s authority to hear the matter brought by a complaint. See Davis v. Thompson, 367 F.
Supp. 2d 792, 799 (D. Md. 2005). This challenge under Rule 12(b)(1) may proceed either as
a facial challenge, asserting that the allegations in the complaint are insufficient to establish
subject matter jurisdiction, or a factual challenge, asserting “that the jurisdictional allegations
of the complaint [are] not true.” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)
(citation omitted). With respect to a facial challenge, a court will grant a motion to dismiss
for lack of subject matter jurisdiction “where a claim fails to allege facts upon which the
court may base jurisdiction.” Davis, 367 F. Supp. 2d at 799. When addressing such a facial
challenge, “the plaintiff, in effect, is afforded the same procedural protection as he would
receive under a Rule 12(b)(6) consideration.” Kerns v. United States, 585 F.3d 187, 192 (4th
Cir. 2009) (quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). Where the challenge
is factual, the district court may look beyond the pleadings and “decide disputed issues of
fact with respect to subject matter jurisdiction.” Kerns, 585 F.3d at 192; see also Khoury v.
Meserve, 268 F. Supp. 2d 600, 606 (D. Md. 2003).
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In this case, Defendant challenges Plaintiffs’ standing in a Motion to Dismiss
pursuant to Rule 12(b)(1). However, Defendant has not challenged the veracity of Plaintiffs’
allegations with respect to standing, but instead argues only that his allegations are
inadequate to establish the jurisdiction of this Court. As such, Defendant’s Motion raises a
facial challenge, and this Court will determine whether the allegations in the Complaint,
when taken as true, are sufficient to establish standing under the plausibility standard of Rule
12(b)(6), Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662
(2009). See Zander v. U.S., 786 F. Supp. 2d 880, 883 (D. Md. 2011) (applying Iqbal/Twombly
standard to motion to dismiss for lack of subject matter jurisdiction pursuant to Rule
12(b)(1)); see also Kerns, 585 F.3d at 192.
II. Rule 12(b)(6)
Where, as here, a party makes a facial challenge to the district court’s jurisdiction
pursuant to Rule 12(b)(1), the district court evaluates the jurisdictional allegations under the
standard set forth in Rule 12(b)(6) of the Federal Rules of Civil Procedure. Rule 12(b)(6)
authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be
granted. The purpose of Rule 12(b)(6) is “to test the sufficiency of a complaint and not to
resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”
Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).
The Supreme Court’s recent opinions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544
(2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), “require that complaints in civil actions be
alleged with greater specificity than previously was required.” Walters v. McMahen, 684 F.3d
435, 439 (4th Cir. 2012) (citation omitted). The Supreme Court’s decision in Twombly
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articulated “[t]wo working principles” that courts must employ when ruling on Rule 12(b)(6)
motions to dismiss. Iqbal, 556 U.S. at 678. First, while a court must accept as true all the
factual allegations contained in the complaint, legal conclusions drawn from those facts are
not afforded such deference. Id. Second, a complaint must be dismissed if it does not allege
“a plausible claim for relief.” Id. at 679. Under the plausibility standard, a complaint must
contain “more than labels and conclusions” or a “formulaic recitation of the elements of a
cause of action.” Twombly, 550 U.S. at 555. Although the plausibility requirement does not
impose a “probability requirement,” id. at 556, “[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.” Iqbal, 556 U.S. at 678; see also Robertson v.
Sea Pines Real Estate Cos., 679 F.3d 278, 291 (4th Cir. 2012).
ANALYSIS
Ward Manufacturing asserts several arguments in support of its Motion to Dismiss.
See Def. Mot. Dismiss 2, ECF No. 15. Ward Manufacturing first contends that the Plaintiffs
lack standing to bring this claim, which would leave this Court without jurisdiction to hear
the action. Id. In the alternative, Ward Manufacturing argues that Plaintiffs fail to state a
claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6)
because Maryland’s economic loss rule bars their claim.4 Id.

4 Ward Manufacturing also argues: (1) Plaintiffs fail to plead the required elements of a claim for strict liability; (2)
Plaintiffs have not alleged facts necessary to support a claim for negligent design defect; and (3) Plaintiffs have failed to
plead a claim for failure to warn. Because this Court finds that Plaintiffs do not have standing and Maryland’s economic
loss rule bars this action, this Court need not address the other arguments in the Motion to Dismiss. See Richardson v.
Mayor and City Council of Baltimore, No. 13-RDB-1924, 2014 WL 60211 (D. Md. Jan. 7, 2011).

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I. Standing
“Article III of the Constitution limits federal courts’ jurisdiction to certain ‘Cases’ and
‘Controversies.’” Clapper v. Amnesty Int’l., 133 S.Ct. 1138, 1146 (2013). In order for plaintiffs
to meet the case-or-controversy requirement they “must establish that they have standing to
sue.” Id. (quoting Raines v. Byrd, 521 U.S. 811, 818 (1997). The party invoking standing must
establish the following three elements to meet the constitutional minimum of standing: (1)
an injury-in-fact; (2) causation; and (3) redressability. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992).
Ward Manufacturing’s main argument is that Plaintiffs fail to establish an injury-infact. For the purpose of standing, an injury-in-fact must be “concrete, particularized, and
actual or imminent.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010).5 The
United States Court of Appeals for the Fourth Circuit has made clear that a threat of injury
is only enough to establish injury-in-fact if the injury is “certainly impending.” Id. On the
other hand, “allegations of possible future injury” are not enough to constitute injury-in-fact.
Clapper, 133 S. Ct. at 1147 (emphasis in original).
Plaintiffs maintain that their alleged threatened injury satisfies the injury-in-fact
requirement, citing Fourth Circuit authority to support such a contention. However, the
facts of the cited cases are wholly distinguishable from the case at hand. In S.C. Wildlife
Federation v. Limehouse, 549 F.3d 324, 329 (4th Cir. 2010), the threat of harm from the
construction of a bridge was enough to satisfy the injury-in-fact standard because it was
alleged that the construction of the bridge would harm the members of the environmental

Plaintiffs have not alleged any actual injury, but only a threat of injury based on the presence of Wardflex® in their
homes.  
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group and their ability to use and enjoy the relevant area for a variety of recreational
purposes. Thus, the threat of harm was considered imminent and certain. Id. In Friends of
the Earth, Inc. v. Gaston Copper Recycling Corporation, 204 F.3d 149, 160 (4th Cir. 2000), the
threat of harm was enough to satisfy the injury-in-fact element because the defendant was
discharging pollutants upstream from plaintiff’s property, which adversely impacted
plaintiff’s use of his lake. This created cognizable harm. Id.
In this case, however, the threat of harm is not imminent, and the harm is not
cognizable. Plaintiffs set forth an extensive chain of unlikely events before establishing any
potential injury. First Am. Class Action Compl. ¶¶ 30, 32. In order for Plaintiffs’ alleged
injury to occur, lightening must first strike near the Plaintiffs’ property and it must cause a
small puncture in the tubing wall of the Wardflex® installed in their homes. Id. ¶ 30. Then
this puncture must ignite the natural gas inside the tubing, and then the surrounding
materials must ignite and create an extensive fire. Id. ¶ 32. Only then would Plaintiffs’
alleged threatened injury arise. Id. In fact, Plaintiffs disclose the unlikeliness of this chain of
events by revealing that only 141 fires have been reported from lightning strikes on any
CSST piping (not specifically Wardflex®), while admitting that over five million homes
contain Wardflex®. Id. ¶¶ 29, 40. Furthermore, Plaintiffs contend that thousands of homes
in Maryland contain Wardflex®, but fail to explain whether any home in Maryland has
experienced a fire due to the installation of Wardflex®. Id. ¶ 13. This threat of injury is far
too speculative to reach the threshold of imminence. Accordingly, even when all inferences
are drawn in favor of Plaintiffs, they have failed to make factual allegations demonstrating an
injury-in-fact, and as such, they have no standing under Article III to pursue this action.
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II. Economic Loss Rule
In addition to its assertions about standing, Ward Manufacturing asserts the
alternative argument that this Court should not permit Plaintiff’s claims based on Maryland’s
economic loss rule. The Court of Appeals of Maryland has delineated three possible types
of losses related to products liability: “(1) personal injuries, (2) physical harm to tangible
things, and (3) intangible economic loss resulting from the inferior quality or unfitness of the
product to serve adequately the purpose for which it was purchased.” A.J. Decoster Co. v.
Westinghouse Elec. Corp., 634 A.2d 1330, 1332 (Md. 1994). A plaintiff alleging only the third
type, economic loss, is generally barred from bringing their claim under a products liability or
any other type of tort theory.6 See Nat’l Labor College, Inc. v. Hillier Group Architecture N.J., Inc.,
739 F. Supp. 2d 821, 832 (D. Md 2010) (“Under the economic loss rule, courts generally will
not permit negligence claims that allege only economic loss.”). In this case, Plaintiffs have
asserted that the product, Wardflex®, is defective, Compl. ¶ 10, and that they will have to
pay to absorb the cost of replacing or repairing the product, id. ¶ 38. Plaintiffs have not
alleged any damage to their persons or property. As these allegations assert solely economic
loss, the claims are barred by Maryland law. See A.J. Decoster Co., 634 A.2d at 1332. (Pure
economic losses are not recoverable under tort law).
Plaintiffs argue this Court should nevertheless permit their claims to proceed based
on the public safety exception to the economic loss rule. Maryland courts apply a two-part
test to determine if the public safety exception is applicable. See Morris v. Osmose Wood

6 Plaintiffs make a vague assertion that the economic loss rule is only applicable to claims that assert damage to the
product itself, but this argument is improper. See Llyod v. General Motors Corp., 916 A.2d 257, 265 (Md. 2007)
(determining economic loss as “the loss of value or use of product” and the “cost to repair or replace the product” (emphasis
added) (citations omitted)); A.J. Decoster Co., 634 A.2d at 1332 (economic loss results from “the inferior quality or
unfitness of the product to serve adequately the purpose for which it was purchased”).

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Preserving, 667, A.2d 624, 631-32 (Md. 1995). A court must examine “the nature of the
damage threatened and the probability of damage occurring to determine whether the two,
viewed together, exhibit a clear, serious, and unreasonable risk of death or personal injury.”
Id. The “mere possibility[y]” of injuries is not “legally sufficient” to sustain an action in tort,
and the doctrine creates a limited exception meant to apply only in extraordinary
circumstances. See id.
In the present case, the probability of damage occurring is extremely remote. As the
Plaintiffs have admitted in their First Amended Complaint, only 141 fires have been
catalogued out of over five million homes containing Wardflex®. In the face of a small
probability of damages, Plaintiffs must allege a “substantial risk of death or serious physical
injury” in order for the public safety exception to apply. Id. (emphasis added). Plaintiffs
attempt to compare their case to Council of Co-Owners Atlantis Condo., Inc. v. Whiting-Turner
Contracting Co, but that case is distinguishable. 517 A.2d 336 (Md. 1986). The defendant in
Whiting-Turner created a substantial risk of death to multiple residents in a twenty-one story
residential building it had constructed because it did not adhere to fire codes. Id. at 338-39.
In the instant case, Defendant’s product has been approved by numerous codes and
standards, Compl. ¶ 21-22, 33, and any risk of fire is predicated upon the occurrence of
unlikely events.7 Plaintiffs have not pled facts upon which this Court can reasonably infer
that the presence of Wardflex® creates a substantial risk of death or serious physical injury.
As such, the public safety exception is inapplicable.

Notably, in Whiting-Turner, any fire—irrespective of the cause—could have given rise to the threatened harm; whereas
here, the risk only arises from a lightening strike in a specific location.
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CONCLUSION
For the reasons stated above, Defendant, Ward Manufacturing, LLC’s Motion to
Dismiss (ECF No. 15) is GRANTED, and this case is DISMISSED WITH PREJUDICE.
A separate Order follows.

Dated:

July 8, 2014

/s/
Richard D. Bennett
United States District Judge

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