Ajose v. Interline Brands, Inc.

• Decision Date: 17 May 2016
• Docket Number: No. 3:14-cv-1707,3:14-cv-1707
• Parties: Jacqueline D. Ajose, Kathy Smith, Sharon Kurtz, Patricia Everett, James L. Boyland, and Kathy Dutton, on Behalf of Themselves and Those Similarly Situated, Plaintiffs, v. Interline Brands, Inc., Defendant.
• Court: U.S. District Court — Middle District of Tennessee

187 F.Supp.3d 899

Jacqueline D. Ajose, Kathy Smith, Sharon Kurtz, Patricia Everett, James L. Boyland, and Kathy Dutton, on Behalf of Themselves and Those Similarly Situated, Plaintiffs,

v.Interline Brands, Inc., Defendant.

No. 3:14-cv-1707

United States District Court, M.D. Tennessee, Nashville Division.

Filed May 17, 2016

Anthony D. Shapiro, Jeniphr Breckenridge, Hagens, Berman, Sobol, Shapiro, LLP, Seattle, WA, Charles J. Kocher, Patrick Howard, Simon B. Paris, Saltz, Mongeluzzi, Barrett & Bendesky, P.C., Donald L. Perelman, Gerard A. Dever, Fine, Kaplan & Black, P.C., Glen L. Abramson, Jeffrey L. Osterwise, Shanon J. Carson, Berger & Montague, P.C., Philadelphia, PA, Daniel E. Gustafson, Raina Borrelli, Gustafson Gluek, PLLC, Minneapolis, MN, Gregory F. Coleman, Greg Coleman Law PC, Knoxville, TN, James Gerard Stranch, IV, Seamus T. Kelly, Branstetter, Stranch & Jennings, PLLC, Nashville, TN, Joseph J. Tabacco, Jr., Todd A. Seaver, Berman DeValerio, San Francisco, CA, Amy E. Keller, Edward A. Wallace, Wexler Wallace LLP, Chicago, IL, Joseph G. Sauder, Chimicles & Tikellis LLP, Haverford, PA, for Plaintiffs.

Joseph B. Kenney, pro hac vice.

Matthew D. Schelkopf, pro hac vice.

David O. Batista, Greenberg Traurig LLP, Ft. Lauderdale, FL, Hilarie Bass, Mark A. Salky, Timothy A. Kolaya, Greenberg Traurig LLP, Miami, FL, John Roy Tarpley, Lewis, Thomason, King, Krieg & Waldrop, P.C., Nashville, TN, for Defendant.

MEMORANDUM

KEVIN H. SHARP, UNITED STATES DISTRICT JUDGE

Pending before the Court is Defendant Interline Brand, Inc.'s Motion to Dismiss Plaintiffs' First Amended Complaint, (Docket No. 93) ("Motion to Dismiss"), to which Plaintiffs have responded in opposition, (Docket No. 123) ("Opposition"), and Interline has replied, (Docket No. 126). For the reasons set forth below, Interline's Motion will be granted in part and denied in part.

I. Factual & Procedural Background¹

In this class action lawsuit, six Named Plaintiffs seek to represent themselves and a class of others who are similarly situated. The Named Plaintiffs are Jaclyn Ajose of Pennsylvania, Kathy Smith of Colorado, Sharon Kurtz of Texas, Patricia Evett and Kathy Dutton of Arizona, and James L. Boyland of Florida. Interline is a direct marketer and distributor of a broad line of products, including plumbing supplies. Interline does not manufacture the products it sells but instead uses third-party manufacturers to provide it with the products it distributes in the United States. Among the products distributed by Interline is a DuraPro brand toilet connector ("Toilet Connector"), which is manufactured in China and which is the subject of this litigation. Prior to 2002, Interline sourced their toilet connectors from manufacturers in the United States. Interline thereafter purchased the Toilet Connectors from China, first via third-party supplier Lynx, Ltd. and later, after 2005, via third-party supplier MTD (USA) Corp. ("MTD"). MTD manufactured the Toilet Connectors based on Interline's design specifications. (FAC at ¶ 39; Docket No. 81-2, Ex. B to FAC, at 1).

Plaintiffs allege that Interline distributed "Toilet Connectors with uniformly defective plastic coupling nuts." (FAC at ¶ 3). Plaintiffs also allege that Interline knew of the defects in the Toilet Connectors yet failed to publicly disclose that the connectors carried a significant risk of causing "catastrophic water damage to property." (Id. at ¶ 31). According to Plaintiffs, the defective nuts caused leaks that allowed substantial water flow throughout Plaintiffs' homes. Because of this water flow, Plaintiffs experienced varying degrees of property damage that required them to tear down walls, (id. at ¶ 20), remove and replace flooring, (id. at ¶¶ 20, 24), and discard furniture, (id.). For example, Plaintiff Boyland had to vacate the premises, remove molding, drill holes in the walls, and use fans and dehumidifiers to dry the walls and carpets throughout his home. (Id. at ¶ 22). Similarly, Plaintiff Kurtz suffered damage to her hardwood floors, baseboards, and beds. (Id. at ¶ 18). Each Named Plaintiff experienced water damage and had to pay for repairs, either in the form of out-of-pocket expenses or insurance deductibles. The monetary cost of the Named Plaintiffs' damages ranges from $1,152 to upward of $7,600. (Id. at ¶¶ 14, 16, 18, 20, 22, 24).

The FAC does not say much about how the Named Plaintiffs came to possess the allegedly defective toilet connectors. Indeed, there are absolutely no allegations regarding how Plaintiffs Dutton, Boyland, and Ajose acquired the Toilet Connectors. In 2007, Plaintiff Evett "moved into a new construction home that contained a DuraPro Toilet Connector." (Id. at ¶ 20). The FAC notes that Toilet Connectors were "installed" in Plaintiff Smith's and Plaintiff Kurtz's homes in 2009 and 2004, respectively, but is silent as to who purchased or installed the connectors. (Id. at ¶¶ 16, 18).

The FAC does, however, allege in detail the precise design flaws that caused the Toilet Connectors to fail: "material selection (acetal, POM) combined with the use of a dense, rubber cone washer that does not relax under load, internal sharp transition

points cut into the plastic material, and inadequate wall thickness." (Id. at ¶ 56). These flaws rendered the Toilet Connectors vulnerable to creep, the continued deformation or extension of a plastic component that is under a continuous load, (id. at ¶ 57), and crazing, the formation of thin cracks in plastic caused by notches at stress concentration points, (id. at ¶ 60). More specifically, the material selection, cone washer, and sharp transition points resulted in significant localized stress, which caused crazing in the Toilet Connectors' plastic coupling nuts. (Id. at ¶ 63). The crazing ultimately gave way to circumferential cracks in the walls of the coupling nuts, which, in turn, resulted in fracturing (i.e., failure). Plaintiffs also allege that Interline failed to warn users about the risks of applying too much torque to the Toilet Connectors' coupling nuts. Although the Toilet Connectors have a label, the label neither includes installation instructions nor warns of "the specific nature of the risks (i.e., spontaneous fracture ), gravity of the risks (i.e., flooding) and how to avoid those risks (i.e., replacement after a reasonable useful life)." (Id. at ¶ 69).

Plaintiffs bring seven causes of action: a Strict Liability-Design Defect and Failure to Warn claim (Count I); a Declaratory Judgment Act claim (Count II); a Florida Deceptive and Unfair Trade Practices Act claim (Count III); a Colorado Consumer Protection Act claim (Count IV); an Unjust Enrichment claim (Count V); a Magnuson-Moss Consumer Products Warranties Act claim (Count VI); and a Breach of Implied Warranty of Merchantability claim (Count VII). They filed suit in August 2014 and amended their complaint in August of the following year. This Court denied Interline's request to transfer the case to the Middle District of Florida. (Docket No. 83). Interline now seeks to dismiss the bulk of Plaintiffs' claims. According to Interline, the FAC only meets the pleading standard with respect to portions of Count I. Otherwise, Interline asserts, the rest of Count I and all of Counts II through VII must be dismissed for failure to state a claim.

II. Choice of Law Issues

As a threshold matter, the Court will address the choice-of-law issues raised by Interline. Interline argues that for several of Plaintiffs' claims—namely, Counts I, V, VI, and VII—conflicts of law exist between the various states involved in this dispute (Arizona, Colorado, Florida, Pennsylvania, Tennessee, and Texas). For example, Interline contends that Texas disallows an independent claim for unjust enrichment while Tennessee permits such claims. Similarly, Interline notes that Texas, Colorado, and Pennsylvania allow implied warranty claims even in the absence of privity of contract while Tennessee does not. Because of the state law distinctions, Interline asks the Court to apply the law of the state of injury. Specifically, Interline ask the Court to "apply Pennsylvania law to Ajose's claims, Colorado law to Smith's claims, Texas law to Kurtz's claims, Arizona law to Evett's and Dutton's claims and Florida law to Boyland's claims." (Docket No. 94 at 8).

Plaintiffs respond by accusing Interline of improperly raising challenges to class certification at the motion to dismiss phase. They also contend that it is premature to conduct a choice-of-law analysis. They do not, however, address how the Court should address the fact that many of their claims rest on various state laws, some of which involve outcome-determinative distinctions even at the motion to dismiss stage. The Court agrees that the effect of state law distinctions on Plaintiffs' ability to certify a class is a question for another day. Still, the Court must determine the governing law for each claim before it may determine the adequacy of Plaintiffs' pleadings. Accordingly, a choice-of-law analysis is necessary here.

This Court's jurisdiction is based upon diversity of citizenship pursuant to 28 U.S.C. § 1332, meaning that the Court applies the procedural law of the forum state, including its choice of law rules, to determine the governing substantive law. See e.g., Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ; Westfield Ins. Co. v. Tech Dry, Inc., 336 F.3d 503, 506 (6th Cir.2003) ; AutoZone, Inc. v. Glidden Co., 737 F.Supp.2d 936, 941 (W.D.Tenn.2010). Tennessee has adopted the Second Restatement approach with respect to tort actions, which requires a court to apply the "law of the state where the injury occurred ... unless, with respect to the particular issue, some other state has a more significant relationship ... to the occurrence and the parties." Hataway v. McKinley, 830 S.W.2d 53, 59 (Tenn.1992) (quoting RESTATEMENT (SECOND) OF CONFLICT OF LAWS §§ 146 & 175 (1971) ). Plaintiffs, who reside in five different...