Reedy et al v. Phillips

Filing 21

MEMORANDUM OPINION AND ORDER granting in part and denying in part 6 MOTION to Dismiss Plaintiffs' Claims, granting in part and denying in part 7 MOTION to Dismiss or Strike Plaintiffs' Class Allegations (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

United States District Court
Southern District of Texas

ENTERED
March 20, 2018

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

CHRISTOPHER REEDY and T.C.
HOLDINGS DELAWARE, INC.,
Individually and On Behalf
of THOSE SIMILARLY SITUATED,

David J. Bradley, Clerk

§
§
§
§

§
§
§
§
§
§
§
§

Plaintiffs,

v.
PHILLIPS 66 COMPANY,
Defendant.

CIVIL ACTION NO. H-17-2914

MEMORANDUM OPINION AND ORDER

Plaintiffs
Delaware,

Inc.

Christopher
( "T. C.

Reedy

Holdings")

("Reedy")
(together,

and

T. C.

Holdings

"Plaintiffs")

bring

this action against Phillips 66 Company ("Phillips" or "Defendant")
for

strict

warranty
violation

products

of
of

liability,

merchantability,
the

Kansas

individually and on behalf

negligence,

breach

Consumer
of

all

of

breach

express

Protection
others

of

implied

warranty,
Act

and

( "KCPA")

I

similarly situated. 1

Pending before the court are Defendant Phillips 66 Company's Motion
to Dismiss Plaintiffs' Claims ("Motion to Dismiss")
No.

6)

(Docket Entry

and Defendant Phillips 66 Company's Motion to Dismiss or

Strike Plaintiffs' Class Allegations ("Motion to Strike")

1

(Docket

See Complaint
Class Action ("Plaintiffs' Complaint") ,
Docket Entry No. 1.
Plaintiffs' first four causes of action are
brought on behalf of a nationwide class. The cause of action under
the KCPA is brought on behalf of a Kansas sub-class.

Entry No. 7).

For the reasons stated below, the Motion to Dismiss

will be granted in part and denied in part,

and the Motion to

Strike will be granted in part and denied in part.
I.

Factual Allegations and Procedural History

Phillips produces, refines, markets, and distributes jet fuel
and aviation gas ( "avgas") . 2
based operators

( "FBOs")

Phillips distributes avgas to fixed-

and

aircraft owners and pilots. 3

the

FBOs

then sell

the

avgas

Plaintiff Christopher Reedy is a

trained pilot and a shareholder of plaintiff T.C. Holdings. 4
Holdings
aircraft. 5

owns

a

Beechcraft

to

Baron

aircraft

and

a

T.C.

Decathlon

Around August 23, 2017, Reedy spent $91.04 to purchase

23.95 gallons of Phillips avgas for the Decathlon aircraft at the
Miami County airport in Paola, Kansas. 6

Around August 30,

2017,

Reedy spend $390.37 to purchase 98.19 gallons of Phillips avgas for
the Baron aircraft at the same airport. 7

On September 12, 2017,

Reedy and Dave Cochran, an FAA-certified mechanic, took samples of
the

Phillips avgas

from the Baron and Decathlon aircrafts and

2

Plaintiffs' Complaint, Docket Entry No. 1, p. 3

3

Id. ~ 10.

4

Id. at 5 ~ 24.

5

Id. ~ 25.

6

Id. ~ 26.

7

Id. at 6 ~ 27.
-2-

~

8.

observed contamination in the form of solid particles. 8

Plaintiffs

allege that "[b]ecause of the serious and life-threatening risk
posed

by

contaminated

avgas,

along

with

the

serious

risk

of

property damage, Reedy and Cochran grounded the Baron and Decathlon
aircrafts until the contaminated avgas could be flushed from the
tanks

and

the

planes

could

undergo

thorough

inspections

and

maintenance." 9
In

September

("Signature"),

of

an

2017

discovered

FBO,

Signature

contaminated

Wichita and Olathe, Kansas,

Phillips

Flight

Support

avgas

at

its

locations and it halted the sale of

Phillips' avgas there. 10 By mid-September of 2017 Signature stopped
selling Phillips avgas at approximately twenty locations due to
contamination. 11 Plaintiffs allege that Reedy had no knowledge that
the avgas he purchased in August was defective or contaminated. 12
Plaintiffs

filed

their

Complaint

on

September

28,

2017,

bringing class action allegations pursuant to Federal Rules of
Civil

Procedure

Phillips'
including

23 (a)

and

distribution
the

amount

8

spent

contaminated
on

the

Id. ~~ 28-29.

9

of

23 (b) ( 3) . 13

Id. ~ 30.

lOid. at 4 ~~ 14-15.
llid. ~~ 16-17.
12Id. at 5-6 ~~ 26-27.
13

Id. at 6 ~ 32.
-3-

Plaintiffs
fuel

allege

caused

contaminated avgas

that

damages
and

the

maintenance and repair costs. 14
for

strict

products

Plaintiffs bring causes of action

liability,

negligence,

breach

of

implied

warranty, and breach of express warranty on behalf of themselves
and

all

others

similarly

situated

in

a

Nationwide

Class. 15

Plaintiffs bring a cause of action for violations of the Kansas
Consumer Protection Act ("KCPA") on behalf of themselves and all
other similarly situated members of a Kansas subclass. 16

Defendant

filed its Motion to Dismiss and Motion to Strike on November 7,
2017. 17
II.

Defendant's Motion to Dismiss

Defendant moves to dismiss Plaintiffs' Complaint under Federal
Rule

of

Civil

Procedure

12 (b) (1)

arguing

standing to assert any of their claims.
dismiss under Rule 12(b)

(6)

that

Plaintiffs

lack

Defendant also moves to

arguing that even if Plaintiffs have

standing to pursue their claims, Plaintiffs have failed to state a
claim for products liability and breach of express warranty, T.C.
Holdings has failed to state a claim under the KCPA and for breach
of implied warranty, and that Plaintiffs otherwise fail to properly
state a claim under the KCPA. 18

14

Id.

~ 31.

15

Id.

at 7

~

32.

17

See Motion to Dismiss, Docket Entry No. 6; Motion to Strike,
Docket Entry No. 7.
18

See Motion to Dismiss, Docket Entry No. 6, pp. 11, 15, 19,

20.
-4-

A.

Standing

Standing and class certification
claim-by-claim basis.
551,

563

(5th Cir.

James v.

2001).

must both be addressed on a

City of Dallas,

Texas,

254 F.3d

In a class action the general rule

remains that standing should be addressed before other matters
because

it

goes

to

the

court's

power

to

hear

a

claim,

and

Plaintiffs have not demonstrated that a different rule should apply
in this case.

See Cole v. General Motors Corp., 484 F.3d 717, 721

(5th Cir. 2007)

("Before we reach the questions regarding the class

certification, we must resolve the standing question as a threshold
matter

of

jurisdiction.");

Grant

ex

rel.

Gilbert, 324 F.3d 383, 390 (5th Cir. 2003)

Family

Eldercare

v.

("It goes without saying

that before seeking certification, representative plaintiffs still
must establish standing.") ; James, 254 F. 3d at 562-63.

"A litigant

must be a member of the class which he or she seeks to represent at
the time the class action is certified by the district court."
James, 254 F.3d at 562-63
559 (1975)).

(quoting Sosna v. Iowa,

95 S. Ct. 553,

"If the litigant fails to establish standing, he or

she may not seek relief on behalf of himself or herself or any
other

member

of

the

class."

Id.

at

563

(citing

0' Shea

v.

Littleton, 94 S. Ct. 669, 675 (1974)).
1.

Standard of Review- Fed. R. Civ. P. 12(b) (1)

Federal courts are "courts of limited jurisdiction,

having

'only the authority endowed by the Constitution and that conferred
-5-

by Congress. '"

Halmekangas v. State Farm Fire and Casualty Co. ,

603 F.3d 290, 292 (5th Cir. 2010).

"Under Rule 12 (b) (1), a claim

is 'properly dismissed for lack of subject-matter jurisdiction when
the

court

lacks

the

statutory

adjudicate' the claim."
Liability Litigation,

or

constitutional

power

to

In re FEMA Trailer Formaldehyde Products

668 F.3d 281, 286

(5th Cir. 2012)

(quoting

Home Builders Association, Inc. v. City of Madison, 143 F.3d 1006,
1010

(5th Cir.

1998)).

" [S] tanding and ripeness are essential

components of federal subject-matter jurisdiction."

In re Jillian

Morrison, L.L.C., 482 F. App'x 872, 875 (5th Cir. 2012).
When facing a challenge to subject matter jurisdiction and
other

challenges

on

the

merits,

courts

must

consider

the

Rule 12 (b) (1) jurisdictional challenge before addressing the merits
of the claim.

Alabama-Coushatta Tribe of Texas v. United States,

757 F.3d 484, 487 (5th Cir. 2014).

"[T]he party asserting federal

subject-matter jurisdiction[] has the burden of proving that this
requirement has been met.

Id.

"'Subject matter jurisdiction is

not defeated by the possibility that the complaint ultimately fails
to state a claim.'"

Energytec, Inc. v. Proctor, 516 F. Supp. 2d

660, 671 (N.D. Tex. 2007)
When

evaluating

(citations omitted).

jurisdiction,

courts

distinguish

"facial" and "factual" attacks under Rule 12(b) (1).
v.

Weinberger,

644

F.2d 521,

523

(5th Cir.

defense merely files a Rule 12(b) (1)

motion,

1981).

between

See Paterson
"[I] f

the

the trial court is

required merely to look to the sufficiency of the allegations in
-6-

the complaint because they are presumed to be true.

If those

jurisdictional allegations are sufficient the complaint stands.
a

defendant makes a

matter

'factual attack'

jurisdiction

testimony,

or

other

the
evidentiary

If

upon the court's subject

defendant

submits

affidavits,

materials."

Because

Defendant's motion relies only on the allegations in the Complaint
the motion is a facial attack and "[t]his Court must accept as true
all material allegations of the complaint, and must construe the
complaint in favor of the complaining party."

Williams v. Certain

Underwriters at Lloyd's of London, 398 F. App'x 44, 46
2010)

(quotations omitted).

(5th Cir.

Lack of standing must be determined

based on the complaint alone.

Barrera-Montenegro v. United States,

74 F.3d 657, 659 (5th Cir. 1996).
Standing requires that:
an injury in fact-an
.;"

(2)

(1) "the plaintiff must have suffered

invasion of a

legally protected interest

"there must be a causal connection between the injury

and the conduct complained of-the injury has to be fairly .
trace[able]

to the challenged action of the defendant,

and not

. th[e] result [of] the independent action of some third party
not before the court;" and (3)
merely

speculative,

favorable decision."
2130, 2136

(1992)

that

the

"it must be likely, as opposed to
injury

will

be

redressed

by

a

Lujan v. Defenders of Wildlife, 112 S. Ct.

(citations and quotations omitted).

The court

must evaluate the Plaintiffs' Article III standing on each claim.
Fontenot v. McCraw, 777 F.3d 741, 746 (5th Cir. 2015).
-7-

2.

Analysis

Plaintiffs

seek

compensation

for

"(1)

amounts

spent

on

contaminated avgas that had to be flushed from their aircrafts and
(2) costs of maintenance and repair that were necessary to account
for the presence of contaminated avgas in the aircrafts,
ensure the plane[s]

remained safe for further use." 19

and to

Defendant

argues that Plaintiffs lack standing to pursue their claims because
they

fail

Specifically,

to

satisfy

the

requirement. 20

injury-in-fact

Defendant argues that Plaintiffs have not alleged

actual harm, that their alleged future harm is too speculative to
support standing, and that costs incurred to protect against future
risk cannot confer standing. 21
a.

Actual Harm

Plaintiffs
significant

allege

risk"

aircrafts . . . and
the aircraft." 22

that

that

"avgas

"includes

purchasers

damages

to

are

the

put

at

systems

of

serious injury or death for those onboard

Plaintiffs allege that "[b]ecause of the serious

and life-threatening risk posed by contaminated avgas, along with
the serious risk of property damage, Reedy and Cochran grounded the
Baron and Decathlon aircrafts until the contaminated avgas could be

~

19

Plaintiffs' Complaint, Docket Entry No. 1, p. 6

20

See Motion to Dismiss, Docket Entry No. 6, pp. 12-15.

31.

21Id.

22

Plaintiffs' Complaint, Docket Entry No. 1, p. 5
-8-

~

22.

flushed

from

the

tanks

and

the

inspections and maintenance. " 23

planes

could undergo

thorough

Plaintiffs have not alleged any

actual harm to an aircraft, pilot, or any other person from the use
of Phillips'

contaminated avgas.

injury does not "actually exist."

Therefore,

Plaintiffs' alleged

Clapper v. Amnesty International

USA, 133 S. Ct. 1138, 1147 (2013)
b.

Economic Harm

Plaintiffs argue that they have alleged "the actual economic
harm suffered by Plaintiff Reedy when he paid for high-quality
avgas and instead received contaminated avgas. " 24

Defendant argues

that economic harm alone is not sufficient to confer standing in a
products liability case. 25
v.

The Fifth Circuit's analysis in Rivera

Wyeth-Ayerst Laboratories,

283 F.3d 315

(5th Cir.

2002),

is

applicable to this case:
The confusion arises from the plaintiffs' attempt to
recast their product liability claim in the language of
contract law. The wrongs they allege - failure to warn
and sale of a defective product - are products liability
claims.
Yet, the damages they assert-benefit of the
bargain, out of pocket expenditures - are contract law
damages. The plaintiffs apparently believe that if they
keep oscillating between tort and contract law claims,

23

Id. at 6

~

3 0.

24

Plaintiffs' Memorandum in Opposition to Defendant's Motion
to Dismiss Plaintiffs' Claims ("Opposition to Motion to Dismiss"),
Docket Entry No. 13, p. 10.
25

Defendant Phillips 66 Company's Reply Supporting its Motion
to Dismiss Plaintiffs'
Claims
("Reply Supporting Motion to
Dismiss"), Docket Entry No. 16, pp. 2-3.
-9-

they can obscure the fact that they have asserted no
concrete injury. Such artful pleading, however, is not
enough to create an injury in fact.
Rivera,

283

F.3d at

320-21

(internal citations omitted).

The

wrongs Plaintiffs allege -- strict products liability, negligence,
and breach of

express

and

implied warranties

liability claims under Kansas law.

are

products

Corvias Military Living, LLC v.

Ventamatic, Ltd., 54 Kan. App. 2d 169, 173, 397 P.3d 441, 445 (Kan.
Ct. App. 2017)

(citing K.S.A.

§

60-3302).

Because Plaintiffs seek

contractual damages, they have not alleged an injury in fact that
would provide standing for a products liability claim.
c.

Costs to Mitigate Future Harm

Defendant argues that Plaintiffs' costs incurred to flush its
gas

tanks

and

protect

against

future

airplanes also do not confer standing. 26

risk

of

to

the

Plaintiffs respond that

the cases Defendant cited are distinguishable
claims because "Plaintiffs'

damage

from Plaintiffs'

alleged harm is not reliant on the

potential criminal actions of a third party, or the actions of any
third party at all." 27
Even if the possible future harm is not reliant on a third
party,

to

have

standing based on

future

harm

Plaintiffs

must

establish that the harm is certainly impending and they have not
done so.

In Clapper the Court held that "Respondents' contention

26

Motion to Dismiss, Docket Entry No. 6, p. 13.

27

0pposition to Motion to Dismiss, Docket Entry No. 13, p. 13.
-10-

that they have standing because they incurred certain costs as a
reasonable reaction to a risk of harm is unavailing--because the
harm

respondents

Clapper,

133 S.

seek
Ct.

to

at 1151.

injury are not sufficient.
Plaintiffs

argue

avoid

"if

11

is

not

certainly

impending.

11

"Allegations of possible future
Id. at 1147

plane-engine

(quotations omitted) .

failure

is

not

an

imminent

threatened harm, it is difficult to imagine what is. 1128

Although

engine failure may be a consequence of operating aircrafts with
contaminated avgas,
establish that
consequence.

the

Plaintiffs

Phillips'
Because

avgas

fail

to present

would have

Plaintiffs'

facts

caused that

allegations

only

that

extreme

support

a

possible future injury instead of a certainly impending injury,
they cannot confer standing.
d.

KCPA Claim29

To have standing to sue under the KCPA the plaintiff must be
a consumer.

Doe 7 v. University of Kansas, Civil Action No. 16-

2458-JTM, 2017 WL 4037704 at *2 (D. Kan. Sept. 13, 2017); Hayes v.
Find Track Locate, Inc., 60 F. Supp. 3d 1144, 1151 (D. Kan. 2014).
"In order to be a consumer under the KCPA, one must have been a

28

Id. at 13.

29

The parties did not brief Plaintiffs' standing to bring a
claim under the Kansas Consumer Protection Act. However, because
a federal court always has jurisdiction to determine its own
jurisdiction, the court will evaluate Plaintiffs' standing to bring
this claim.
Steel Co. v. Citizens for a Better Environment, 118
S. Ct. 1003, 1024 (1998).
-11-

party to the contract for purchase."
1151.

"The

KCPA' s

protection

is

directly contract with suppliers
(citation omitted) .

Moreover,

Hayes,

60 F.

limited

to

Supp.

individuals

for goods or services."

"'aggrieved'

the

overlap.
be

a

constitutional

and

statutory

who
Id.

is a constitutional

component to statutory standing under the KCPA.
words,

3d at

In other

standing

requirements

If the consumer was not aggrieved, then there would not

sufficient

standing."

injury

in

fact

to

allow

Doe 7, 2017 WL 4037704 at *3.

for

constitutional

"Under that requirement,

the named plaintiff in a class action must allege and show that he
has been personally injured."
1210, 1216 (D. Kan. 1998).

Stein v. Sprint Corp., 22 F. Supp. 2d
Consumers who allege an economic loss

qualify as "aggrieved" under the KCPA.

Gonzalez v. Pepsico, Inc.,

489 F. Supp. 2d 1233, 1248-49 (D. Kan. 2007).
Plaintiffs allege that Plaintiff Reedy purchased avgas, but
nowhere in the Complaint do Plaintiffs allege that T.C. Holdings
purchased any avgas or otherwise entered a contract with Phillips. 30
Because

T.C.

Holdings

was

not

a

"party

to

the

contract

purchase," T.C. Holdings is not a consumer under the KCPA.
60 F. Supp. 3d at 2251.

Hayes,

Therefore, T.C. Holdings lacks standing

to bring a claim under the KCPA. 31

30

for

Plaintiff Reedy has standing to

See Plaintiffs' Complaint, Docket Entry No. 1, pp. 5-6

~~

26-

27.
31

Moreover, Plaintiffs do not oppose Defendant's motion to
dismiss T.C. Holding's KCPA claim.
-12-

bring a claim under the KCPA because he is a

consumer who has

allegedly suffered a loss as a result of a violation of the KCPA.
After carefully considering the parties' arguments the court
concludes that Plaintiffs cannot establish Article III standing for
their products liability claims -- which include their claims for
strict products liability, negligence, and breach of express and
implied warranty -- because they have not demonstrated injury in
fact or a certainly impending injury.

However, the court concludes

that Plaintiff Reedy has standing to bring claims under the Kansas
Consumer Protection Act.
B.

Failure to State a Claim

In

the

alternative,

Defendant

moves

to

dismiss

four

of

Plaintiffs' five causes of action for failure to state a claim upon
which relief may be granted.

Defendant does not move to dismiss

Plaintiff Reedy's breach of

implied warranty claim. 32

Because

Plaintiffs do not oppose Defendant's motion to dismiss Plaintiffs'
express
claims

warranty claims
will

be

and T. C.

dismissed

for

Holding's

failure

to

KCPA claim, 33

state

a

claim.

those
The

remaining claims under consideration for Defendant's Motion to
Dismiss are Plaintiffs' strict products liability and negligence
claims,

T.C.

Holdings'

implied warranty claim,

and Reedy's KCPA

32

Motion to Dismiss, Docket Entry No. 6, p. 6.

33

0pposition to Motion to Dismiss, Docket Entry No. 13, p. 8

n.2.

-13-

claim.

As discussed in Part A, the court will dismiss Plaintiffs'

strict products liability, negligence, and warranty claims for lack
of standing, but the court will nevertheless analyze those claims
under Rule 12(b) (6).
1.

Standard of Review- Fed. R. Civ. P. 12(b) (6)

Under

Rule

8

of

the

Federal

Rules

of

Civil

Procedure

a

pleading must contain "a short and plain statement of the claim
showing that the pleader is entitled to relief."
8(a) (2).

Fed. R. Civ. P.

A Rule 12(b) (6) motion tests the formal sufficiency of

the pleadings and is "appropriate when a defendant attacks the
complaint because it fails to state a legally cognizable claim."
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert.
denied sub nom.

Cloud v. United States,

122 S. Ct.

2665

(2002).

The court must accept the factual allegations of the complaint as
true, view them in a light most favorable to the plaintiff,
draw all reasonable inferences in the plaintiff's favor.

and

Id.

To defeat a motion to dismiss pursuant to Rule 12(b) (6),

a

plaintiff must plead "enough facts to state a claim to relief that
is plausible on its face."

s. Ct. 19 55

I

19 7 4 ( 2 0 0 7) .

Bell Atlantic Corp. v. Twombly,

127

"A claim has facial plausibility when

the plaintiff pleads factual content that allows the court to draw
the reasonable

inference that

misconduct alleged."
(2009)

the defendant

Ashcroft v.

(citing Twombly,

127 S.

Iqbal,

129 S.

Ct. at 1965) .
-14-

is

liable for
Ct.

1937,

the
1949

"The plausibility

standard is not akin to a
for more

than a

unlawfully."
complaint

Id.

sheer possibility that

facts

liability,

that
it

are

'stops

possibility and plausibility of

defendant

'merely
short

has

of

the
to

acted

"Where a

consistent

entitlement

(quoting Twombly, 127 S. Ct. at 1966).
to dismiss,

a

(quoting Twombly, 127 S. Ct. at 1965) .

pleads

defendant's

'probability requirement,' but it asks

with'

line

a

between

relief. '"

Id.

When considering a motion

district courts are "limited to the complaint,

any

documents attached to the complaint, and any documents attached to
the motion to dismiss that are central to the claim and referenced
by the complaint."
PLC,

594

Lone Star Fund V (U.S.), L.P. v. Barclays Bank

F.3d 383,

387

(5th Cir.

2010).

"Federal

courts are

required to dismiss, pursuant to Federal Rule of Civil Procedure
12(b) (6), claims based on invalid legal theories, even though they
may be otherwise well-pleaded."

Flynn v.

State Farm Fire and

Casualty Insurance Co. (Texas), 605 F. Supp. 2d 811, 820 (W.D. Tex.
2009)

(citing Neitzke v. Williams, 109 S. Ct. 1827, 1832 (1989)).

"[W]hen the allegations in a complaint,
raise a

claim of

entitlement to relief,

however true,

could not

this basic deficiency

should . . . be exposed at the point of minimum expenditure of time
and money by the parties and the court."
F.3d 397, 401

(5th Cir. 2007)

Cuvillier v. Taylor, 503

(quoting Twombly, 550 U.S. at 558)

(quotations omitted); see also Exxon Mobil Corp. v. FX Networks,
LLC, 39 F. Supp. 3d 868, 870-71 (S.D. Tex. 2014).

-15-

2.

Analysis
a.

Strict Products Liability and Negligence Claims

Plaintiffs

allege

that

"[t]he

avgas

was

defective

and

inherently and unreasonably dangerous and unsafe for its intended
use

because

it

harmed

the

aircrafts

in

which

it

used. " 34

was

Defendant argues that "[b]ecause Plaintiffs have pleaded no facts
indicating

that

they

or

their

property

sustained

any

actual

physical harm, they have failed to state a products-liability claim
under either a negligence or strict-liability theory, and the Court
should therefore dismiss those claims." 35

Plaintiffs respond that:

Plaintiffs have alleged property damage and seek the
costs of "maintenance and repair that were necessary to
account for the presence of contaminated avgas in the
aircrafts."
(Complaint, ~ 31.)
These repair costs to
property other than the defective product are recoverable
under the Product Liability Act. 36
Defendant argues that "[o]ne mention of 'repair' in a 77-paragraph
complaint,

however,

does

not

provide

sufficient

underpinnings necessary to show property damage,

under even the

most liberal interpretation of Iqbal and Twombly. " 37
agrees.

factual

The court

For the same reasons that the court has already concluded

that Plaintiffs failed to establish an injury sufficient to support

~

34

Plaintiffs' Complaint, Docket Entry No. 1, p. 10

35

Motion to Dismiss, Docket Entry No. 6, p. 17.

36

0pposition to Motion to Dismiss, Docket Entry No. 13, p. 14.

37

Reply Supporting Motion to Dismiss,

p. 6.
-16-

48.

Docket Entry No.

16,

standing to bring a products liability claim, the court concludes
that Plaintiffs fail to state a claim under Rule 12(b) (6).
"For more than 35 years,

the Kansas Product Liability Act,

K.S.A. 60-3301 et seq., has governed all product liability actions,
consolidating
theory."

them

into one basis

Corvias Military,

for

54 Kan. App.

liability regardless
2d at 173.

of

The Kansas

Product Liability Act applies to actions based on "strict liability
in tort, negligence,
Id.

II

[and]

breach of express or implied warranty

(citing K.S.A. 60-3302(c)).

It applies to "any claim

or action brought for harm" and defines "harm" to include "property
damage,

personal injuries,

and death."

The definition of

"harm" "does not include 'direct or consequential economic loss'
caused by a defective product."

Id.

(quoting K.S.A. 60-3302(d)).

"Economic loss is defined as 'loss of use of the defective product,
cost of

replacing the product,

business,

I

II

and "repair"

loss of profits

to plaintiff's

costs.

(quoting Elite

See id.

Professionals, Inc. v. Carrier Corp., 16 Kan. App. 2d 625, 633, 827
P.2d 1195 (Kan. Ct. App. 1992)); Northwest Arkansas Masonry, Inc.
v. Summit Specialty Products, Inc., 29 Kan. App. 2d 735, 742, 31
P.3d 982

(Kan. Ct. App. 2001)

(" [E] conomic loss includes damages

for inadequate value, costs of repair, replacement costs, and loss
of use of the defective product.").
"applies
products."

to

both

consumer

and

The economic loss doctrine

commercial

buyers

of

defective

Northwest Arkansas Masonry, 29 Kan. App. 2d at 741.

-17-

Plaintiffs only seek damages for economic loss.
statements

that

the

avgas

"harmed

the

Plaintiffs'

aircrafts" 38

and

that

Plaintiffs "suffered property damage" 39 are conclusory allegations
but provide no
majority

of

facts

describing

Plaintiffs'

the

Complaint

damage

to property.

indicates

that

The

Plaintiffs'

property sustained no actual damage, only "threaten [ed] " damage and
"risk" of damage. 40
recoverable

and

Plaintiffs' argument that "repair" costs are

that

use

of

the

word

"repair"

indicates

an

allegation of damage fails because costs of repair are included in
economic loss.

Therefore, Plaintiffs have failed to state a claim

for products liability and negligence.
b.

T.C. Holdings' Implied Warranty Claim

Defendant argues that "T.C. Holdings' implied-warranty claim
must

be

dismissed

because

the

Complaint

fails

to

allege

the

required privity of contract between that Plaintiff and Phillips. " 41
Plaintiffs

do

not

Plaintiffs

argue

contend
instead

that
that

T. C.

Holdings

"Plaintiffs

is

have

a

consumer.

alleged

facts

supporting the reasonable inference that Defendant and Signature
are in an agency relationship and that, as a result, privity of

38

Plaintiffs' Complaint, Docket Entry No. 1, p. 10

39

Id. at 10

40

Id. at 1

41

Motion to Dismiss, Docket Entry No. 6, p. 19.

~

~

56.
1, 5

~

22, 6

~

30.

-18-

~

48.

contract exists between T.C. Holdings and Defendant to support a
valid implied-warranty claim." 42
The Kansas Product Liability Act applies to actions based on
breach of implied warranty.

K.S.A.

60-3302(c).

§

Under Kansas law

a plaintiff must allege contractual privity to bring an implied
warranty claim if the defective product only caused economic loss.
Shawnee County, Kansas v. Daimler Trucks North America LLC, Civil
Action No.
March 23,
App.

15-4006-RDR-KGS,
2015);

2d 609,

2015 WL 1299355,

Limestone Farms,

614,

29 P.3d 457,

Professional Lens Plan,

Inc.

74 2 ,

( Kan .

7 55 ,

6 7 5 P . 2d

887

Inc.

461

v.

*4-5

Ct. App.

2001)

Polaris Leasing Corp.,

19 8 4 ) ) .

(D.

Deere & Co.,

v.

(Kan.

at

Kan.

29 Kan.
(citing
234 Kan.

Courts have removed the

privity requirement for consumer transactions, but the requirement
remains for non-consumer transactions.

City of Winfield, Kansas v.

Key Equipment & Supply Co., Civil Action No. 11-1358-CM-KGS, 2012
WL 1207256 at *3

(D. Kan. April 11, 2012).

Relying on Meyers v. Garmin International, Inc., Civil Action
No. 13-2416-CM-GLR, 2014 WL 273983 at *7 (D. Kan. Jan. 24, 2014),
Plaintiffs argue that "[u]nder Kansas law, an agency relationship
can establish privity sufficient
claim. " 43
establish

to

state

an

implied warranty

Meyers recognized the general rule that plaintiffs must
privity

to

assert

an

implied

warranty

claim

in

42

0pposition to Motion to Dismiss, Docket Entry No. 13, p. 15.

43

Id. at 10.
-19-

nonconsumer transactions.

Meyers, 2014 WL 273983 at *7.

The court

held that the transaction was a consumer transaction and therefore
privity was

not

required.

In the alternative

the

court

reasoned "[e] ven if privity were required" plaintiffs alleged facts
sufficient

to

survive

a

motion

to

dismiss

because

plaintiffs

alleged an agency relationship and "[u]nder Kansas law, an agency
relationship can establish privity sufficient to state an implied
warranty claim."
Action Nos.

Id. (citing Dai tom, Inc. v. Pennwal t Corp. , Civil

80-2080,

Jan. 30, 1987)).

80-2087,

1987 WL

93958

at

*4-5

(D.

Kan.

However, the case that Meyers relied on for that

rule, Daitom, applied Pennsylvania, not Kansas, law.
1987 WL 93958 at *1

See Daitom,

("we first note that the parties agree that

Pennsylvania law governs this issue (as well as all of the other
legal issues presented .

. ) ") .

The court is

unaware of any

other Kansas case that allows an agency relationship to establish
privity.
Plaintiffs' Complaint alleges that Reedy purchased avgas for
two aircraft,

that T.C. Holdings owns the two aircraft, and that

Reedy is a shareholder of T. C. Holdings. 44

Because Plaintiffs have

alleged no facts demonstrating privity between T.C. Holdings and
Phillips, T.C. Holding's implied warranty claim will be dismissed.
Moreover, even if the court were to follow the Meyers' holding that
an agency relationship can establish privity, the court concludes

44

Plaintiffs' Complaint, Docket Entry No. 1, pp.
-20-

5-6~~

24-27.

that

Plaintiffs

between T. C.

have

Holdings

not
and

pled

facts

Phillips'

demonstrating any privity
agent,

Signature,

because

Plaintiffs do not allege that T.C. Holdings purchased any avgas.
Therefore this claim will be dismissed.
c.

Reedy's KCPA Claim

Plaintiffs allege that
74.

Phillips engaged in unconscionable and deceptive
acts and practices, by:
a.

Producing and
defective or
consumption;

distributing
contaminated

avgas that
and unfit

was
for

b.

Representing that its avgas was of high quality
when that was not the case; and

c.

Distributing avgas without properly testing it
or
applying
appropriate
quality
control
processes.

75.

The unfair and deceptive actions of Defendant were
committed in connection with consumer transactions;
namely, the distribution and sale of contaminated
avgas.

76.

Reedy and others suffered damages as a result of
Defendant's actions. 45

Defendant argues that Reedy's KCPA claim fails because the pleading
does not satisfy Rule 9(b) 's particularity requirement and because
it does not allege reliance. 46

Plaintiffs respond that under the

KCPA Reedy is not required to plead his claim with particularity or

~~

45

Id.

46

See Motion to Dismiss, Docket Entry No. 6, pp. 20-22.

at 12

74-76.

-21-

to allege reliance. 47

Both parties cite various cases from Kansas

district courts to support their arguments.
The

KCPA

"protect [s]

consumers

from

deceptive and unconscionable practices."

suppliers

K.S.A.

§

who

commit

50-623(b).

KCPA provides two paths for supplier liability

The

under Section

50-626 for "any deceptive act or practice," or under Section 50-627
for

"any unconscionable

50-627(a).

or practice."

Id.

§§

50-626(a),

To bring an action under the KCPA the plaintiff must

allege plausible facts
50-634 (b) .

act

That is,

that

the party is

"aggrieved."

K.S.A.

under both Sections 50-626 and 50-627 the

plaintiff must show that there was a causal connection between the
alleged violation of the KCPA and the claimed injury.

Finstad v.

Washburn University of Topeka, 252 Kan. 465, 471-73, 845 P.2d 685
19 9 3) . 48

( Kan.

For

claims

of

misrepresentation,

"Plaintiffs

generally demonstrate this causal connection through reliance on

47

See Opposition to Motion to Dismiss, Docket Entry No.
pp. 16-18.
48

13,

Finstad painstakingly analyzed the definition of the word
"aggrieved" to require a causal connection, and other courts have
followed its reasoning. See Weckhorst v. Kansas State University,
241 F. Supp. 3d 1154, 1177-78 (D. Kan. 2017); Queen's Park Oval
Asset Holding Trust v. Belveal, 394 P.3d 901, 2017 WL 2001609 at
*4-5 (Kan. Ct. App. May 12, 2017); Schneider v. Liberty Asset
Management, 45 Kan. App. 2d 978, 985, 251 P.3d 666, 671 (Kan. Ct.
App. 2011); and Rinehart v. Saint Luke's South Hospital, Inc.,
Civil Action No. 10-2209-SAC, 2011 WL 3348234 at *7-8 (D. Kan.
Aug. 3, 2011).
Plaintiffs' cited case, Midland Pizza, LLC v.
Southwestern Bell Telephone Company, Civil Action No. 10-2219-CMGLR, 2010 WL 4622191, predates these cases. Although the court in
Midland Pizza held that Section 50-626 states that a deceptive act
may be a violation "whether or not any consumer has in fact been
misled," the plaintiff must still allege that she is "aggrieved."
-22-

defendant's misrepresentations."
Action No.
2017).
to

Rasnic

v.

17-2064-KHV, 2017 WL 6406880 at *8

FCA US
(D.

LLC,

Civil

Kan. Dec. 15,

The parties dispute whether the KCPA requires a plaintiff

plead

its

standard.
court's

claims

After a
own

with

careful

research,

the

particularity
review of
court

under

the

Rule

9(b)

the cited cases and the

concludes

that

the

pleading

requirements under Section 50-626 and Section 50-627 of the KCPA
differ.
(i)

Section 50-626: Deceptive Act or Practice

Section 50-626 of the KCPA states "[n]o supplier shall engage
in any deceptive act or practice in connection with a consumer
transaction" and provides a lengthy,

nonexclusive list of which

deceptive acts and practices are violations of the Act.
§

50-626.

Section (b) (1)

include

states "[d]eceptive acts and practices

(1) Representations made knowingly or with reason

to know that
K.S.A.

" and lists seven examples of representations.

50-626 (b) (1).

§

Sections

(b) (2)

"[d]eceptive acts and practices include .
use,

in

any

falsehood,
willful

oral

or

written

and

(b) ( 3)
( 2)

representation,

of

exaggeration,

innuendo or ambiguity as to a material fact;

failure

to

state

a

material

fact,

or

50-626 (b) (2)- (b) (3).

Section

50-626 (b) (1)

does

state

the willful

the

concealment, suppression or omission of a material fact."
§§

K.S.A.

not

(3)

willful
K.S.A.
require

intent, while Sections 50-626(b) (2) and (b) (3) require intent.
-23-

the

See

K.S.A.

§§

50-626(b)(1)-(b)(3);

Doe

7,

2017

WL

4037704

at

*4

("Kansas courts have reviewed the legislative history behind the
KCPA, and distinguish Kan. Stat. Ann.
is

not

required--and

§§

(b) (2)

§

50-626(b) (1)--where intent

and

(b) (3)--where

intent

is

required.").
Plaintiffs argue that "there is no bright-line rule requiring
KCPA claims to be pleaded with Rule 9 particularity.

Indeed, cases

applying the particularity standard tend to center on fraudulent
misrepresentations." 49

Plaintiffs rely on Tomlinson v. Ocwen Loan

Servicing, LLC, Civil Action No. 15-01105-EFM-KGG, 2017 WL 3873754
(D. Kan. Sept. 5, 2017), and Rogers v. Bank of America, N.A., Civil
Action No. 13-1333-CM, 2014 WL 3091925 (D. Kan. July 7, 2014), to
argue that KCPA claims do not need to be plead with particularity. 50
Defendant

argues

that

"all

KCPA claims

must

meet

Rule

9 (b) 's

requirements--as the vast majority of Kansas federal courts have
held time after time. " 51
The court in Tomlinson cited Rogers and Sanchez v. Bank of
America, N.A., Civil Action No. 6:14-1142-JTM-TJJ, 2014 WL 5800203
(D. Kan. Nov. 7, 2014), to support the statement "[a]lthough some
of the claims sound in fraud, KCPA claims need not be pleaded with
particularity."

Tomlinson, 2017 WL 3873754 at *2.

The courts in

49

0pposition to Motion to Dismiss, Docket Entry No. 13, p. 16.

50

Id. at 17.

51

Reply Supporting Motion to Dismiss, Docket Entry No. 16, p. 8.
-24-

Sanchez and Rogers both reasoned that the KCPA does not require
particularity because "[t]he key difference is that the KCPA does
not include an

'intent to defraud'

requirement."

Rogers,

2014

WL 3091925 at *3; Sanchez, 2014 WL 5800203 at *6 (quoting Rogers,
2014 WL 3091925 at *3).

That conclusion was later rejected in

Doe 7, which held that the plaintiff is required to plead KCPA with
particularity in accordance with Rule 9(b)

because "intent is a

requirement for some violations of the KCPA[,]

[c]ontra Sanchez."

Doe 7, 2017 WL 4037704 at *4-5 (referencing Sections 50-626 (b) (2)
and (b) ( 3 ) ) .
Although

Defendant

is

correct

that

some

Kansas

federal

district courts have applied the Rule 9(b) pleading standard to all
KCPA claims,

the majority of

courts

only apply

pleading standard to claims under Section 50-626,
under Section 50-627.
Weckhorst,
applies

241

F.

the

Rule

9 (b)

not to claims

See, e.g., Doe 7, 2017 WL 4037704 at *4-5;

Supp.

to allegations

3d at
of

1176

deceptive

("[Rule

9 (b)'s]

provision

trade practices under

the

KCPA") (internal quotation omitted); Maxwell, 2017 WL 4037732 at *4
(holding that the plaintiffs adequately pled with the requisite
particularity

"deceptive

sections of the KCPA"
analysis
Rule 9(b)
logical

of

acts

or practices

that

violate

those

but did not mention particularity in its

the allegations

under Section 50-627) .

Requiring

particularity only for claims under Section 50-626 is
because

"deceptive

acts

and

practices"

deal

with

misrepresentations, while "unconscionable acts" do not necessarily
-25-

Therefore, the court concludes that

include any representations.

Plaintiffs must plead claims under Section 50-626 of the KCPA with
particularity in accordance with Rule
"must

set

forth

the

time,

place,

9 (b)

and

--

i.e.,

contents

of

Plaintiffs
the

false

representation, the identity of the party making the false statements and the consequences thereof.

II

Weckhorst, 241 F. Supp. 3d at

1176 (citation omitted).
In addition

to

Rule

9 (b), s

particularity

requirement,

to

adequately plead a violation of Section 50-626(b) (2) or (b) (3) the
plaintiff
WL

4037732

must

allege

at

*5;

"willful

11

CitiMortgage,

misconduct.
Inc.

v.

White,

No. 112,098, 2016 WL 199059 at *2-3, 364 P.3d 579
Jan.

15,

2016).

Plaintiffs

do

not

identify

Maxwell,
Civil

2017
Action

(Kan. Ct. App.
the

particular

subsection of Section 50-626 under which they bring claims, fail to
meet the particularity requirements of Rule 9(b), and do not allege
that Defendant acted willfully.

Plaintiffs thus fail to state a

claim under Section 50-626 of the KCPA.

Because it is possible

that Plaintiffs could plead facts that might cure this deficiency,
the court will grant Plaintiffs leave to amend their Complaint as
to this claim.
(ii) Section 50-627: Unconscionable Act or Practice

Section 50-627 of the KCPA states that "[n]o supplier shall
engage in any unconscionable act or practice in connection with a
consumer transaction.,,

K. S .A.

§

50-627 (a) .

Sections 50-627 (b) (1)-

(b) (6) provide a list of nonexclusive examples of unconscionable
-26-

acts.

K.S.A.

50-627,

plaintiffs

§

50-627 (b).
must

To state a claim under Section

allege

deceptive bargaining conduct.

unequal
Rasnic,

bargaining

power

and

2017 WL 6406880 at

*8;

Tomlinson, 2017 WL 3873754 at *4; Louisburg Building & Development
Co., L.L.C. v. Albright, 45 Kan. App. 2d 618,
616

(Kan. Ct. App. 2011).

646,

252 P.3d 597,

Plaintiffs are bound by this pleading

requirement even if they allege one of the listed violations under
subsections of 50-627 (b) (1)- (b) (6).
Because Plaintiffs fail

Rasnic, 2017 WL 6406880 at *8.

to allege unequal bargaining power and

deceptive bargaining conduct, and the requisite causal connection,
they have failed to state a claim under Section 50-627 of the KCPA.
The

court

will

allow

Plaintiffs

to

amend

their

Complaint

to

properly allege a violation of this section of the KCPA.
III.

Defendant's Motion to Strike

Defendant argues that:

(1)

the Complaint demonstrates that

Plaintiffs cannot maintain nationwide class claims for products
liability and breach of warranty claims because a

class would

require the court to apply the laws of all fifty states;

(2)

the

Kansas class allegations under the KCPA should be stricken because
individual

questions

of

law

and

fact

will

predominate

common

questions; and (3) Plaintiffs lack standing "to pursue representative claims for putative class members who allegedly were injured
in [states outside Kansas]". 52

52

See Motion to Strike, Docket Entry No. 7, pp. 11, 12-13, 20.
-27-

A.

Standard of Review

Federal

Rule

of

Civil

"determine by order whether
action."

Procedure
to

23

requires

certify the

Fed. R. Civ. P. 23(c) (1) (A).

courts

action as

a

to

class

Courts have wide discretion

in determining whether to certify a class, but they must exercise
that discretion within the bounds of Rule 23.

Castano v. American

Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996)

(citing Gulf Oil Co.

v. Bernard, 101 S. Ct. 2193, 2200 (1981)).

"[T]he question is not

whether the plaintiff or plaintiffs have stated a cause of action
or will prevail on the merits, but rather whether the requirements
of Rule 23 are met."
2140, 2153

(1974)

Eisen v. Carlisle and Jacquelin,

94 S. Ct.

(quoting Miller v. Mackey International,

Inc.,

452 F.2d 424, 427 (5th Cir. 1971)).

"An action may proceed only if

the

demonstrates

party

seeking

certification

that

all

four

requirements of Rule 23(a) are met, and that at least one of three
requirements of Rule 23 (b)

are met."

Vizena v.

Railroad Co., 360 F. 3d 496, 503 (5th Cir. 2004)

Union Pacific

(per curiam); see

also Gene and Gene LLC v. BioPay LLC, 541 F.3d 318, 325 (5th Cir.
2008)

(party seeking certification bears the burden of proof).

Under Rule 23{a) the party seeking certification must demonstrate,
first, that:
(1) the class is so numerous that joinder of all members
is impracticable;
(2) there are questions of law or fact common to the
class;

-28-

(3) the claims or defenses of the representative parties
are typical of the claims or defenses of the class; and
( 4) the representative parties will fairly and adequately
protect the interests of the class.
Rule

23(b)

states

in

relevant

part

that

a

class

action

is

appropriate if the moving party establishes the prerequisites set
forth in Rule 23(a) and if:
the court finds that the questions of law or fact common
to class members predominate over any questions affecting
only individual members [(predominance)] , and that a
class action is superior to other available methods for
fairly and efficiently adjudicating the controversy
[ (superiority)] .
Fed R. Civ. P. 23 (b) (3).
The

party

seeking

class

certification

must

affirmatively

demonstrate compliance with Rule 23 and "be prepared to prove that
there are in fact sufficiently numerous parties, common questions
of law or fact, etc."
2541,

2551

court

is

(2011) .

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.
Certification is proper only if "'the trial

satisfied,

prerequisites

of

after

Rule

23(a)

a

rigorous
have

been

analysis,

that

the

satisfied.'"

"Frequently that 'rigorous analysis' will entail some overlap with
the merits of the plaintiff's underlying claim."
Defendant

cites

Federal

Rules

of

Civil

Id.
Procedure

12 (f) ,

12 (b) ( 6) , and 23 (d) ( 1) (D) as the bases for its Motion to Strike. 53
The court concludes the appropriate standard is Rule 12(b) (6), and
the court will treat Defendants' Motion to Strike as a motion to

53

Id. at 1.
-29-

dismiss.
attacks

A Rule 12(b) (6) motion is "appropriate when a defendant
the

complaint

because

it

fails

to

state

a

legally

cognizable claim."

See Ramming v. United States, 281 F.3d 158, 161

(5th Cir.

"The existence of an ascertainable class of

2001) .

persons to be represented by the proposed class representative is
an implied prerequisite of Federal Rule of Civil Procedure 23.
Where it is facially apparent from the pleadings that there is no
ascertainable

class,

a

district

allegation on the pleadings."

court

may

dismiss

the

class

John v. National Security Fire and

Casualty Co., 501 F.3d 443, 445

(5th Cir. 2007)

The court must

"evaluate carefully the legitimacy of the named plaintiff's plea
that

he

is

a

proper

class

representative

under

Rule

23 (a)."

General Telephone Co. of the Southwest v. Falcon, 102 S. Ct. 2364,
2372

(1982) .

"Sometimes the issues are plain enough from the

pleadings to determine whether the interests of the absent parties
are fairly encompassed within the named plaintiff's claim,

and

sometimes it may be necessary for the court to probe behind the
pleadings before coming to rest on the certification question."
Id.; Castano, 84 F. 3d at 744 ("A district court certainly may look
past the pleadings to determine whether the requirements of rule 23
have been met."); see also Myart v. Glosson, Civil Action No. SA14-831-XR,

20,

2014)

("Courts have cited Falcon and John to strike or dismiss

[under

Rule

12 (f)

2014

or

WL

Rule

6612008,

12 (b) (6)]

at

*5

(W.D.

class-action
-30-

Tex.

Nov.

allegations

from

a

complaint

when

the

pleadings

clearly

fail

to

support the minimum requirements of Rule 23.")
B.

allege

facts

to

(citations omitted).

Analysis

1.

Plaintiffs' Nationwide Class Claims
"All persons

The Complaint defines a "Nationwide Class" as:

and/or entities who purchased Phillips' contaminated avgas in the
United States and all owners of aircrafts that were filled with
Phillips'
argues

contaminated avgas in the United States ." 54

that

Nationwide

Plaintiffs'

Class

claims

should be

on

behalf

of

stricken because

their

Defendant
proposed

Plaintiffs

cannot

satisfy Federal Rule of Civil Procedure 23(b) (3), which requires
that the court find "that 'questions of law or fact common to the
class

members

[must]

predominate

over

any

questions

individual members'" before certifying a class. 55

affecting

Defendant argues

that resolving Plaintiffs' claims would "require the Court to apply
the products-liability and warranty laws of all fifty states--which
means individual questions of law and fact will predominate over
common ones. " 56
54

55

Plaintiffs respond that "Defendant's motion should

See Plaintiffs' Complaint, Docket Entry No. 1, p. 7

~

32.

See Motion to Strike
Docket Entry No. 7
pp. 11-16.
Plaintiffs do not dispute that this is the applicable subsection of
Fed. R. Civ. P. 23(b).
I

I

56

See id. at 11.
Defendant argues that this court, as a
federal court sitting in diversity, must apply Texas's choice of
law rule. See id. at 11-12 (citing Cole, 484 F.3d at 724; Danner
v. Staggs, 680 F.2d 427, 429 (5th Cir. 1982). Under Texas law, in
the absence of a choice of law clause, the Texas Supreme Court
(continued ... )
-31-

be denied as premature" because

uplaintiffs have not moved for

class certification," uDefendant has yet to file an Answer," and
u [n] o

discovery

uDefendant' s
premise:

has

motion

taken
fails

because

it

Plaintiffs
is

argue

centered on a

that
flawed

that the Court will necessarily be forced to apply the

laws of all 50 states." 58
reveal

place." 57

that

Defendant

Plaintiffs reason that u[d]iscovery may
distributed

locations in less than all 50 states.

its

contaminated
[and]

avgas

to

information on the

geographic scope of Defendant's contaminated avgas remains within
Defendant's exclusive control. " 59
Defendant responds that
Plaintiffs do not deny that the nationwide class
they have alleged (and now try to shy away from) fails to

56

( • • • continued)
applies
the
umost-significant
relationship
test"
from
the
Restatement (Second) of Conflict of Laws to determine which state's
laws apply.
Danner, 680 F. 2d at 429 (The test urequires a
determination of what state has the 'most significant relationship'
to the occurrence and the parties under general principles set
forth in s 6 of the Restatement (Second).").
T.C. Holdings is a
Delaware corporation with its principal place of business in
Kansas, Reedy is a Kansas resident who bought avgas in Kansas, and
Phillips is a Delaware corporation with its principal place of
business in Texas. See Complaint, Docket Entry No. 1, p. 2 ~~ 2-4.
Plaintiffs allege that contaminated avgas was found or purchased in
various states and bring products liability and warranty claims on
behalf of avgas purchasers nationwide. See Complaint, Docket Entry
No. 1, p. 7 ~ 32.
Thus it is unlikely, and Plaintiffs do not
argue, that Texas law would apply to every transaction.
57

Plaintiffs' Memorandum in Opposition to Defendant's Motion
to Dismiss or Strike Plaintiffs' Class Allegations (uopposition to
Motion to Strike"), Docket Entry No. 12, p. 4.
58

Id.

at 5.

59Id.

-32-

meet Rule 23's predominance requirement. They likewise
do not dispute that Texas's choice-of -law rules mean that
various other states' product-liability and warranty laws
will apply to resolve the proposed nationwide class's
claims. Neither do Plaintiffs refute that the productsliability and warranty laws indeed vary from state-tostate, as Phillips has described. Instead, they ask the
Court to defer ruling on the class issues until
later--even though it is clear from the face of their
Complaint that common questions of law and fact will not
predominate. 60
Plaintiffs'

argument that the court may not engage in the

class certification analysis at the pleading stage lacks merit
because,

as

discussed above,

district

courts may evaluate

sufficiency of class allegations at the pleading stage.
the predominance requirement of Rule
establish that issues
generalized proof,

23 (b) (3),

the

To satisfy

Plaintiffs must

in the class action that are subject to

and thus applicable to the class as a whole,

predominate over issues that are subject only to individualized
proof.
Corp.,

See Castano,

84 F.3d at 741; Allison v.

151 F.3d at 419,

predominance

425

requirement

is

(5th Cir.
"more

1998).

stringent"

Citgo Petroleum
Rule 23 (b) (3) 's
and

"far

demanding than" the commonality requirement of Rule 23(a).
Products,
"[C]ommon

Inc.

v.

issues

individual cases."

Windsor,
must

117 S.

constitute

Ct.
a

2231,

2243,

significant

2250
part

more

Amchem
(1997).
of

the

Jenkins v. Raymark Industries, Inc., 782 F.2d

468, 472 (5th Cir. 1986).

60

Defendant Phillips 66 Company's Reply Supporting its Motion
to Dismiss or Strike Plaintiffs'
Class Allegations
("Reply
Supporting Motion to Strike") , Docket Entry No. 17, p. 10 (internal
citations omitted) .
-33-

The Fifth Circuit recognizes that "in a class action governed
. variations in state law may

by the laws of multiple states .

swamp any common issues and defeat predominance."
at 724

(internal quotations omitted)
In

741) .

Cole

GM

argued

that

Cole, 484 F.3d

(citing Castano, 84 F.3d at

the

district

court

erred

in

certifying a nationwide class of owners of vehicles with defective
airbags because of variations in state substantive express and
implied warranty law.

Id.

at 718,

724-25.

The Fifth Circuit

agreed:
We conclude that plaintiffs did not sufficiently
demonstrate the predominance requirement because they
failed both to undertake the required "extensive
analysis" of variations in state law concerning their
claims and to consider how those variations impact
predominance.
Plaintiffs' assertion of predominance
relied primarily on the textual similarities of each
jurisdiction's applicable law and on the general
availability of legal protection in each jurisdiction for
express and implied warranties. Plaintiffs' largely
textual presentation of legal authority oversimplified
the required analysis and glossed over the glaring
substantive legal conflicts among the applicable laws of
each jurisdiction.
As we explain below, there are numerous variations in the
substantive laws of express and implied warranty among
the fifty-one jurisdictions that the plaintiffs failed to
"extensively analyze" for their impact on predominance. 61
Id. at 725-26 (citations omitted) .

Other courts have also rejected

class certification when the laws of different states will apply to

1\\Specifically, the laws of the jurisdictions vary with
regards to (1) whether plaintiffs must demonstrate reliance,
(2) whether plaintiffs must provide notice of breach, (3) whether
there must be privity of contract, ( 4) whether plaintiffs may
recover
for
unmanifested
vehicle
defects,
(5)
whether
merchantability may be presumed and
(6)
whether warranty
protections extend to used vehicles." Cole, 484 F.3d at 726.
6

-34-

individual class members.

See, e.g., In re Bridgestone/Firestone,

Inc., 288 F.3d 1012, 1018 (7th Cir. 2002).
In this action different state products liability laws will
apply to the class members' strict liability and negligence claims.
Castano, 84 F.3d at 742 n.15 ("Products liability law also differs
among states.
Among

the

Some states do not

states

variations.").

Lapray,

strict

liability.

that have adopted the Restatement,

there are

Different warranty laws will also apply to class

members' claims.
v.

Cole, 484 F.3d at 724-26; Compaq Computer Corp.

135 S.W.3d 657,

681

members are domiciled in the
Columbia.
be

recognize

(Tex.

2004)

("The putative class

fifty states and the District of

All these fifty-one relevant jurisdictions are likely to

interested in ensuring that

their

consumers

compensated for a breach of warranty.") .

are

adequately

Plaintiffs have failed to

"extensively analyze" these variations in state substantive law for
their impact on predominance.

Cole, 484 F.3d at 725-26.

Instead,

Plaintiffs argue that discovery may reveal a class of plaintiffs
that reside
states

at

in less
issue

may

than fifty states and that
have

overlapping

laws

therefore

with

only

"the
minor

distinctions. " 62
The court concludes that the burden of applying the products
liability and warranty laws of each class member's state defeats
predominance and, thus, nationwide class certification.

62

See Cole,

0pposition to Motion to Strike, Docket Entry No. 12, p. 5.
-35-

484 F.3d at 724-25; Castano at 752; Spence v. Gloack, Ges.m.b.H.,
227 F.3d 308, 316 (5th Cir. 2000).

Because Plaintiffs have failed

to satisfy Rule 23(b) (3) 's predominance requirement, the court will
grant Defendant's Motion to Dismiss as to all claims asserted by
Plaintiffs on behalf of a putative Nationwide Class for strict
products

liability,

negligence,

express

and

and

implied

warranties. 63
2.

Plaintiffs' Kansas Class Claim

Section 50-634(d) of the KCPA states that "[a]

consumer who

suffers loss as a result of a violation of this act may bring a
class

action

for

the

damages

caused

by

an

act

or

practice:

(1) Violating any of the acts of practices specifically proscribed
in K.S.A.

50-626,

50-627

Complaint

defines

a

Kansas

II

K.S.A.

subclass

as:

§

50-634 (d) (1)
"All

persons

The
and/or

entities who purchased Phillips' contaminated avgas in Kansas and
all

owners

of

aircrafts

that

contaminated avgas in Kansas." 64

were

filled

with

Phillips'

Defendant argues that Plaintiffs'

KCPA claims based on misrepresentation should be dismissed because
each class member must establish an individual causal connection

63

In the last section of its Motion to Strike, Defendant argues
that Plaintiffs lack standing to bring claims on behalf of a class
under the laws of states other than Kansas. See Motion to Strike,
Docket Entry No. 7, pp. 18-20.
Because the court will dismiss
Plaintiffs' nationwide class for failure to satisfy Rule 23(b) (3),
the court will not address these arguments.
64

Plaintiffs' Complaint, Docket Entry No. 1, p. 7
-36-

~

32.

and

therefore

predominate

u[c]ommon

in

these

questions

of

circumstances. " 65

law

and

fact

Defendant

cannot

argues

that

Plaintiffs' KCPA claims based on unconscionable acts also require
individualized inquiries of each class member, rendering the claim
uinappropriate for class treatment under Rule 23 (b) (3) ." 66
a.

Section 50-626: Deceptive Act or Practice

Each class member must be aggrieved to have a cause of action
under the KCPA.

Johnson v. MKA Enterprises,

No. 112,049, 2015 WL 4487037 at *5,
2015) .
Inc.,

Inc.,

353 P.3d 470

Civil Action

(Kan. Ct. App.

The court in Johnson relied on Benedict v. Altria Group,
241 F.R.D.

668

(D.

Kan.

2007),

to conclude that because

u[t]he evidence to establish this causal connection will vary from
class member to class member .
element under

the

KCPA will

. the causal connection/reliance
destroy most

because of the individualized fact issues."
241 F.R.D. at 677-80).

class
Id.

certifications

(citing Benedict,

Nieberding v. Barrette Outdoor Living, Inc.

limited the holding of Benedict:
The Court believes that the holding in Benedict is
limited to misrepresentation cases and that suits
alleging omission of a material fact present questions
suited to class actions.
. the Court believes that
proving causation on an individual basis is not required
in every case under § 50-626. Specifically, the Court
believes that an individualized showing is not required
in an omission case, such as the one alleged here. To
prevail on an omission claim, a plaintiff must show that
the defendant had a duty to disclose a umaterial" fact.

65

Motion to Strike, Docket Entry No. 7, p. 17.

66

Id. at 18.
-37-

302 F.R.D. 600, 615 (D. Kan. 2014).
above,

different

subsections

of

As discussed in Part B.2.c. (i)
Section

50-626

have

different

pleading requirements but Plaintiffs have not specified under which
subsections of Section 50-626 they bring their causes of action.
Individualized allegations are necessary for some,
subsections

of

Section 50-626.

Because

the

but not all,

court

will

allow

Plaintiffs to amend their Complaint as to the KCPA claims,

the

court will allow Plaintiffs to reallege the Kansas subclass in an
amended complaint.
b.

Section 50-627: Unconscionable Act or Practice

Section 50-627 of the KCPA provides a nonexclusive list of
acts or practices that are considered unconscionable.
627(b) (1)-(b) (7).

K.S.A. 50-

Defendant argues that "only one could possibly

apply to Plaintiffs'

namely,

assertions

that

Phillips's

alleged conduct deprived Plaintiffs of a 'material benefit from the
subject of the transaction. '" 67 Defendant cites Nieberding to argue
that

this

"material

benefit"

subsection

necessarily

requires

individualized inquiries of each class member and therefore is not
suitable for class certification as a matter of law. 68
In Nieberding the court held:
Defendants argue that the issue of whether each
plaintiff was able to receive a "material benefit" from

67

Id.

68

Id.; Reply Supporting Motion to Strike, Docket Entry No. 17,

(citing K.S.A.

§

50-627 (b) (3)).

p. 16.
-38-

purchasing the railing product is not suitable for class
certification
because
it
requires
individualized
inquiries into each class member's subjective belief.
The Court agrees . . . . As a result, the Court concludes
that a showing of unconscionability through the material
benefit factor is not suitable for Rule 23(b) (3)
certification.
However, plaintiff also argues that the alleged
defect means that the price for the [product] grossly
exceeded what
was
readily obtainable
in similar
transactions. This factor for unconscionability can be
shown objectively, with common proof. Defendants do not
argue
otherwise.
Furthermore,
causation
under
§ 50-634(d) presents no problems-should plaintiff prove
that defendants acted unconscionably in selling the class
a product that "grossly" exceeded its worth, that will
necessarily have caused harm to the class.
Thus, the
Court
concludes
that
common
issues
predominate
plaintiff's unconscionability claim under the KCPA.
Nieberding, 302 F.R.D. at 616.

As with Section 50-626, different

pleading requirements to bring a class action apply to different
subsections of Section 50-627.

Again Plaintiffs have not specified

under which subsection of Section 50-627 they seek to bring a cause
of action.

Because the court will allow Plaintiffs to amend their

Complaint for the KCPA claims, the court will allow Plaintiffs to
reallege the Kansas class claims for this section of the KCPA as
well.
IV.

Conclusion and Order

For the reasons stated above, Defendant Phillips 66 Company's
Motion to

Dismiss

Plaintiffs'

Claims

GRANTED IN PART and DENIED IN PART.

products

liability

and

negligence

-39-

(Docket

Entry No.

6)

is

Plaintiffs' claims for strict
are

DISMISSED

for

lack

of

standing pursuant to Federal Rule of Civil Procedure 12(b) (1) and
for failure to state a claim under Rule 12 (b) ( 6) .

Plaintiffs'

claim for breach of express warranty is DISMISSED for

lack of

standing pursuant to Rule 12(b) (1) and because Plaintiffs do not
oppose Defendant's motion to dismiss that claim.

Plaintiffs' claim

for breach of implied warranty is DISMISSED as to Reedy for lack of
standing pursuant to Rule 12 (b) ( 1)

and is DISMISSED as to T. C.

Holdings for lack of standing pursuant to Rule 12(b) (1)
failure to state a claim under Rule 12(b) (6).
under

the

KCPA

Rule 12 (b) (1)
motion

to

is

DISMISSED

for

lack of

and for

T.C. Holding's claim
standing pursuant

to

and because Plaintiffs do not oppose Defendant's

dismiss

that

claim.

Defendant's

motion

to

dismiss

Reedy's KCPA claim is DENIED, and Plaintiffs' request to amend as
to that claim is GRANTED.
to Strike Plaintiffs'

Defendant Phillips 66 Company's Motion

Class Allegations

GRANTED IN PART and DENIED IN PART.

liability,

negligence,

and

(Docket Entry No.

7)

is

Plaintiffs' strict products

warranty

claims

on

behalf

of

a

Nationwide Class are DISMISSED because Plaintiffs cannot establish
predominance,

a necessary prerequisite for class certification.

Although the court is skeptical that Plaintiff Reedy can maintain
a KCPA claim on behalf of himself and putative Kansas subclass
members, the court will allow Reedy twenty days from the entry of
this Memorandum Opinion and Order in which to amend his Complaint
to properly allege a claim under Sections 50-626 and 50-627 of the
-40-

KCPA

and

to

properly

define

a

Kansas

subclass

and

move

for

certification demonstrating that he can meet the requirements of
Federal Rule of Civil Procedure 23(a) and (b).
SIGNED at Houston, Texas, on this the 20th day of March, 2018.

SIM LAKE
UNITED STATES DISTRICT JUDGE

-41-