WESTFIELD INSURANCE COMPANY v. INTERLINE BRANDS, INC. et al

Filing 157

OPINION FILED. Signed by Chief Judge Jerome B. Simandle on 10/1/13. (js)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
WESTFIELD INSURANCE COMPANY
a/s/o Insureds,
Civil No. 12-6775 (JBS/JS)
Plaintiff,
v.
OPINION
INTERLINE BRANDS, INC., et al.,
Defendants.
APPEARANCES:
Daniel Hogan, Esq.
Stefanie G. Ebert, Esq.
Kevin P. Smith, Esq.
Cheryl Garber, Esq.
Law Offices of Robert A. Stutman, PC
500 Office Center Drive
Suite 301
Fort Washington, PA 19034
Attorneys for Plaintiff Westfield Insurance Company
Rachel Katherine Snyder von Rhine, Esq.
Marshall Dennehey Warner Coleman & Goggin
200 Lake Drive East
Suite 300
Cherry Hill, NJ 08002
Attorney for Defendant Interline Brands, Inc.
Ralph R. Smith, III, Esq.
Capehart Scatchard
8000 Midlantic Drive Suite 300S
P.O. Box 5016
Mount Laurel, NJ 08054
Attorney for Defendants Watts Water Technologies, Watts Plumbing
Technologies (Taizhou) Co., Ltd., and Watts Regulator Co.
Benjamin C. Sassé, Esq.
1

Tucker Ellis LLP
950 Main Avenue
Suite 1100
Cleveland, OH 44113
Attorney for Defendants Watts Water Technologies, Inc., Watts
Plumbing Technologies (Taizhou) Co., Ltd., and Watts Regulator
Co.
Adam Brian Kaplan, Esq.
Susan Lynn Swatski, Esq.
Hill Wallack LLP
202 Carnegie Center
Princeton, NJ 08540
Attorneys for Defendant Linx, LTD
Denise Marie Montgomery, Esq.
Sweeney & Sheehan PC
216 Haddon Avenue
Suite 500
Westmont, NJ 08108
Attorneys for Defendant Linx, LTD
SIMANDLE, Chief Judge:
I.

INTRODUCTION
This matter is before the Court on the motion of Plaintiff

Westfield Insurance Company to remand this action to New Jersey
Superior Court based on the Colorado River abstention doctrine.
[Docket Item 106.]

The Court heard oral argument on September 20,

2013 regarding nine motions pending in this action.
This Opinion only addresses Plaintiff’s second motion to remand,
which the Court will deny for the reasons discussed below.

Colorado

River abstention does not apply because this action is not parallel
to the nine pending state court actions that involve the same product
2

defect at issue in this action.

Further, exceptional circumstances

that merit abstention do not exist here.
II.

BACKGROUND
A.

Factual background

This action is an insurance subrogation action brought by
Westfield Insurance Company (“Westfield”) on behalf of four insureds
who suffered property damage due to allegedly faulty toilet supply
lines manufactured and distributed by Defendants:

Interline Brands,

Inc. (“Interline”); MTD (USA) Corporation; Watts Water Technologies;
Watts Plumbing Technologies (Taizhou) Co., LTD; Watts Regulator Co.;
Linx, LTD (“Linx”); and Everlotus Brands, Inc.1

Plaintiff asserts

claims for negligence, failure to warn, breach of warranty, strict
liability, and fraudulent concealment, as well New Jersey Product
Liability Act violations.

Specifically, Plaintiff alleges that

Defendants designed, manufactured, and distributed DuraPro brand
toilet supply lines that had defective polymeric coupling nuts, which
cracked and caused water damage to insureds’ property.
1-1.]

[Docket Item

Plaintiff contends that each insureds’ property damage was

caused by the same product defect, i.e., cracking of the polymeric
coupling nuts.

There are, however, different manufacturers and

distributors connected with the various toilet supply line products.

1

Plaintiff also named fictitious defendants John Does (1-100).
3

In the present action, the parties agree that two distinct chains
of manufacture and distribution are at issue.

One involves toilet

supply lines allegedly manufactured by Everlotus and distributed by
MTD.

The other involves toilet supply lines allegedly manufactured

by Watts Plumbing Technologies and distributed by Linx and Interline
and/or Watts Regulator.

These distinct supply chains resulted in two

distinct coupling nuts on the toilet supply lines, one winged, the
other ribbed.
Nine other insurance subrogation actions involving faulty toilet
supply lines have been filed in Atlantic County Superior Court against
these Defendants.2

Plaintiff's counsel in this action also

represents the plaintiffs, who are nine other insurance companies,
in the state actions.

Ten different insurance company plaintiffs

brought the nine state court actions and the present action on behalf
of over 150 subrogors who suffered property damage in over 20 states.
There is an application for centralized management pending before
the New Jersey Administrative Office of the Courts regarding the nine
state court actions.
B.

Procedural history

This case was initially filed in Atlantic County Superior Court.
Watts Water Technologies, Watts Plumbing Technologies (Taizhou) Co.,
2

Two of the nine pending state court actions also include Zhejiang
Dingbo Plumbing Manufacturing Co., Ltd. as a defendant.
4

LTD, and Watts Regulator Co. (collectively, “Watts Defendants”)
removed pursuant to 28 U.S.C. § 1441(b) on the basis of diversity
jurisdiction.

[Docket Item 1 ¶ 4.]

Plaintiff Westfield filed its

first motion to remand, arguing that diversity jurisdiction did not
exist.

[Docket Item 10.]

Plaintiff did not make any other

jurisdictional challenges or argue that abstention was proper in this
first motion to remand.

The Court issued an opinion and order on March

25, 2013, denying Plaintiff's first motion to remand and finding that
the action was properly removed on the basis of diversity
jurisdiction.

[Docket Items 49 & 50.]

On September 20, 2013, the Court heard oral argument on nine
motions:

Plaintiff’s second motion to remand, which is the subject

of this Opinion, and eight other motions that are addressed in a
separate Order also being filed today.3

All of these motions were

opposed with the exception of the three motions relating to MTD's
cross-claims.

3

Motion to Sever by Interline Brands, Inc. [Docket Item 74]; Motion
to Dismiss for Forum Non-Conveniens or Alternatively to Compel
Jurisdiction [Docket Item 77]; Motion for Summary Judgment by Watts
Water Technologies [Docket Item 75]; Motion for Summary Judgment by
Watts Plumbing Technologies [Docket Item 76]; Motion for Summary
Judgment by Watts Regulator Co. [Docket Item 78]; Motion to Dismiss
MTD's Cross Claim by Watts Water Technologies [Docket Item 83]; Motion
to Dismiss MTD's Cross Claim by Watts Plumbing Technologies [Docket
Item 84]; and Motion for Summary Judgment Dismissing MTD's
Cross-Claims by Watts Regulator Co. [Docket Item 94].
5

C.

Parties’ Arguments Regarding Colorado River Remand

Plaintiff filed its second motion to remand based on the Colorado
River abstention doctrine.

Plaintiff argues remand is proper so this

action can be managed with the nine state court actions under the
state's centralized management procedure.

Plaintiff argues that the

state and federal actions are parallel and exceptional circumstances
exist which merit abstention.

Plaintiff emphasizes that the Court

should avoid piecemeal litigation and New Jersey state law applies
to all the underlying claims.
Interline, Linx, and the Watts Defendants oppose Plaintiff's
motion.

They maintain that the state and federal court actions are

not parallel.

These ten insurance actions (nine in state court and

the present action) are brought by ten different insurance companies
representing over 150 different insureds that suffered harm in
different places and different circumstances.

Defendants maintain

that each subrogated action arises out of a different set of facts,
including different properties, different installers of the toilet
supply lines, and different dates of loss.

Defendants argue that

installation is a critical issue to liability because it is probable
the toilet supply lines failed because they were not properly
installed, not because of manufacturing or distribution issues.
Further, Defendants argue that the property damage occurred in over
twenty different states requiring the application of over twenty
6

different states' laws.

Defendants argue that the only common thread

among these cases is that the plaintiff insurance companies have the
same counsel and that the identity of counsel does not support
abstention.
III.

Analysis
A.

The Colorado River Abstention Doctrine

The Colorado River abstention doctrine, named after the Supreme
Court case of Colorado River Conservation District v. United States,
424 U.S. 800 (1976), exists for the rare circumstance where a federal
court risks entering a judgment that could conflict or interfere with
a parallel state court judgment.

Moses H. Cone Mem. Hosp. v. Mercury

Const. Corp., 460 U.S. 1, 15-16 (1983).

However, for a district court

to abstain under this doctrine, the circumstances must be truly
exceptional because federal courts have a “virtually unflagging
obligation . . . to exercise the jurisdiction given them.”

Colorado

River, 424 U.S. at 817 (citations omitted).
Under the Colorado River doctrine, the first step in the
abstention analysis is determining whether the state and federal
actions are “parallel.”
1997).

Ryan v. Johnson, 115 F.3d 193, 196 (3d Cir.

Where the actions are not parallel, “the district court lacks

the power to abstain.”

Id.

“For judicial proceedings to be parallel,

there must be identities of parties, claims, and time.”

IFC

Interconsult, AG v. Safeguard Int'l Partners, LLC, 438 F.3d 298, 306
7

(3d Cir. 2006).

The Third Circuit has “never required complete

identity of parties for abstention,” but cases must have
“substantially identical claims, raising nearly identical
allegations and issues.”

Id. (citations and internal quotations

omitted).
If the Court determines the cases are parallel, then in the second
step, the Court must analyze whether exceptional circumstances exist.
Ryan, 115 F.3d at 196.

The Court must consider six factors: (1) which

court first assumed jurisdiction over property; (2) the inconvenience
of the federal forum; (3) the desirability of avoiding piecemeal
litigation; (4) the order in which jurisdiction was obtained; (5)
whether federal or state law controls; and (6) whether the state court
will adequately protect the interests of the parties.

Spring City

Corp. v. American Bldgs. Co., 193 F.3d 165, 171 (3d Cir. 1999).

“No

one factor is necessarily determinative; a carefully considered
judgment taking into account both the obligation to exercise
jurisdiction and the combination of factors counselling against that
exercise is required.”

Colorado River, 424 U.S. at 818-19.

rarely apply this doctrine because “[o]nly the clearest of
justifications will warrant dismissal.”

8

Id.

Courts

B.

The Federal and State Court Actions Are Not Parallel

The federal and state court actions are not parallel.

These ten

subrogation actions involve ten different subrogee insurance
companies and over 150 different subrogors, who suffered property
loss in different states under different circumstances.

Plaintiff

argues that each action will require depositions of the same people
regarding design and supply, as well as the same expert testimony.
While there may be some common testimony, each action will involve
discovery specific to the location of installation and property
damage.

Defendants note that, at minimum, discovery must analyze

installation of the toilet supply lines to determine whether the
product or the installation caused the water leaks.

Undoubtedly,

because installation occurred in over 20 states, unique issues and
witnesses will arise in each case.
In addition, the parties agreed at oral argument that the
property damage in the present action involves two different types
of coupling nuts implicating different manufacturers and
distributors.

As such, even the present action prevents uniform

discovery because there are two distinct supply chains.

Viewed

together with the unique discovery required by installation and
property damage across 20 states, it is clear the ten subrogation
actions involve different factual scenarios, are not substantially
similar, do not raise nearly identical issues, and, therefore, are
9

not parallel.4
C.

Exceptional Circumstances Do Not Warrant Abstention

Even if this action were parallel to the state court actions,
exceptional circumstances warranting abstention do not exist.
Plaintiff argues that the six factors warrant abstention,
particularly the avoidance of piecemeal litigation and the presence
of state law claims.5
The “avoidance of piecemeal litigation” factor does not warrant
abstention because there must be a congressional policy against
piecemeal litigation in the specific context to warrant abstention.
Plaintiff relies on Trent v. Dial Med. of Florida, Inc., 33 F.3d 217
(3d Cir. 1994), to argue that state law tort claims absent a
congressional policy can be sufficient to remand an action to state
court for consolidation.

In Trent, a dialysis patient brought a class

action in federal court alleging negligence against a dialysis center
and a seller of acid concentrate used in dialysis treatment.
219.

Id. at

Another patient had previously filed a similar class action

against the dialysis center and two of its directors in state court.
4

While Plaintiff emphasizes the efficiencies of centralized
management in state court, this Court can prevent duplicate discovery.
To the extent this case overlaps with the state court actions, the
parties agreed at oral argument that discovery could be streamlined
through cross-captioning of depositions and other devices.
5
Plaintiff’s moving papers only addressed two of the six factors:
avoidance of piecemeal litigation and the presence of state law
claims. However, at oral argument, Plaintiff argued that all six
factors support abstention.
10

Id. After finding the cases parallel, the Trent court found that
abstention was proper to avoid piecemeal litigation where state, not
federal law governed.

Id. at 225.

The Trent court reasoned that the

class certified in the state court case was broader, and it made “more
sense to resolve common issues in a setting which will dispose of
the most claims.”

Id.

Trent is not dispositive here, however, because the Third Circuit
subsequently limited the Trent holding in Ryan v. Johnson, 115 F.3d
193 (3d Cir. 1997), and Spring City Corp. v. Am. Bldgs. Co., 193 F.3d
165 (3d Cir. 1999).

In Ryan, the plaintiff filed a diversity action

in federal district court alleging negligence claims.

Ryan was among

over 30 people injured when a deck collapsed at a house owned and
rented by the defendants.

Id.

Sixteen other plaintiffs brought

negligence actions in New Jersey Superior Court for claims arising
from the same incident.

Id.

The Third Circuit found the actions were

parallel, but refined its previous analysis of the “avoidance of
piecemeal litigation” factor.

Id.

The Ryan court concluded: “We

cannot reconcile Trent with either the caselaw of this circuit, or
Colorado River . . .

[N]either we nor the Supreme Court had ever held,

until our decision in Trent, that the mere possibility of piecemeal
litigation justifies Colorado River abstention; rather, there must
be a strongly articulated congressional policy against piecemeal
litigation in the specific context of the case under review.”
11

Id.

at 198 (emphasis in original).

Accordingly, “[t]he presence of

garden-variety state law issues has not, in this circuit, been
considered sufficient evidence of a congressional policy to
consolidate multiple lawsuits for unified resolution in the state
courts.”

Id.

The Court emphasized that Trent’s broad interpretation

of the “avoidance of piecemeal litigation” factor would “swallow[]
up the century-old principle” that “pendency of an action in state
court is no bar to proceedings concerning the same matter in the
Federal court having jurisdiction . . . .”

Id. at 198 (quoting

Colorado River, 424 U.S. at 817).
Subsequently, in Spring City, the Third Circuit made clear that
Ryan provides the controlling application of the “avoidance of
piecemeal litigation” factor.

Spring City involved tort claims

against various contractors and suppliers arising out of the partial
collapse of the plaintiff’s building.

Spring City, 193 F.3d at 167.

Ultimately, the incident spawned two cases in federal district court
and one case in state court.

Id.

After finding the cases parallel,

the Third Circuit noted that Trent was inconsistent with earlier
decisions, as well as Supreme Court precedent.

Id. at 172.

The

Spring City court held that “Ryan represents the applicable law under
Third Circuit and Supreme Court precedent.”

Id.

Importantly,

“Colorado River abstention must be grounded on more than just the
interest in avoiding duplicative litigation.”
12

Id. at 171-72.

The

Spring City court emphasized that abstention, even for
“considerations of wise judicial administration . . . can be justified
. . . only in the exceptional circumstances where the order to the
parties to repair to the state court would clearly serve an important
countervailing interest.”

Id. at 173 (quoting Colorado River, 424

U.S. at 195–96).
The Court finds the Third Circuit's analysis in Ryan and Spring
City applicable to the instant action and rejects Plaintiff’s
contention that those cases represent a “split in authority in the
Third Circuit.”

(Pl. Reply at 6.)

Here, the Plaintiff's claims arise

under state product liability tort law.

There is no congressional

policy indicating that product liability cases should be consolidated
in state court and federal courts should abstain from hearing these
types of cases when parallel state proceedings are present.

Indeed,

federal courts handle state product liability cases on a frequent
basis and are capable of applying the appropriate state law.

“The

presence of garden-variety state law issues has not, in this circuit,
been considered sufficient evidence of a congressional policy to
consolidate multiple lawsuits for unified resolution in the state
courts.”

Ryan, 115 F.3d at 199.

Therefore, Plaintiff's argument

that duplicative litigation warrants abstention lacks merit.
Although state law controls, the “applicable law” factor also
does not warrant abstention.

Plaintiff emphasizes that all claims
13

arise under New Jersey state law, but that argument does not warrant
abstention.

Property damage from the leaking toilet supply lines

occurred in over twenty states.

It is unclear whether New Jersey law

will even govern these ten actions.

Indeed, in the instant action,

the four insureds suffered property damage in three states - Ohio,
Tennessee, and Indiana.

The water supply lines were manufactured and

distributed by various different companies, not just by the same
manufacturer and distributor.

While state tort law will govern these

claims, it is unclear whether New Jersey's law will ultimately apply.
New Jersey's expertise in its own product liability law is not a
sufficient basis for abstention because New Jersey state courts may
have to apply different states' laws.

Even if New Jersey law were

to apply, abstention still would not be warranted because “abstention
cannot be justified merely because a case arises entirely under state
law.”

Id. (citing Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp.,

460 U.S. 1, 26 (1983)).

The “straightforward state negligence law

issues” involved in these actions do not present the “rare
circumstances” in which abstention is warranted based on the presence
of state law claims.

Id. at 199-200.

Therefore, this factor does

not favor abstention.
The remaining Colorado River factors also do not support
abstention.

Exmaining which court first assumed jurisdiction,

“priority should not be measured exclusively by which complaint was
14

filed first, but rather in terms of how much progress has been made
in the two actions.”

Moses H. Cone Mem'l Hosp., 460 U.S. at 21.

The

nine state court cases are awaiting the outcome of a request for
centralized management, while the parties in the instant action have
engaged in extensive motions practice.

In addition, geographical

convenience clearly does not apply here because the federal and state
forums are both in New Jersey.

Further, Plaintiff concedes that

administrative convenience can be achieved in federal court by
coordinating discovery with the state court actions, avoiding at least
some duplication.

Finally, Plaintiff offers no argument to show that

federal and state courts will not equally and adequately protect the
parties’ interests.

Therefore, the court finds no exceptional

circumstances favoring abstention.
IV.

Conclusion
Plaintiff's motion for remand will be denied because the state

and federal proceedings are not parallel and exceptional
circumstances favoring abstention do not exist.

The accompanying

Order will be entered.

October 1, 2013
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
15