Dicksonon v. Atlas Roofing Corp. (In re Atlas Roofing Corp. Chalet Shingle Prods. Liab. Litig.)

• Citation: 22 F.Supp.3d 1322
• Decision Date: 12 May 2014
• Docket Number: MDL Docket No. 2495.,No. 1:13–md–2495–TWT.,Civil Action File No. 1:13–CV–4222–TWT.,1:13–md–2495–TWT.
• Parties: In re ATLAS ROOFING CORPORATION CHALET SHINGLE PRODUCTS LIABILITY LITIGATION. David Dickson on behalf of themselves and all others similarly situated, et al., Plaintiffs, v. Atlas Roofing Corporation, Defendant.
• Court: U.S. District Court — Northern District of Georgia

22 F.Supp.3d 1322

In re ATLAS ROOFING CORPORATION CHALET SHINGLE PRODUCTS LIABILITY LITIGATION.David Dickson on behalf of themselves and all others similarly situated, et al., Plaintiffs

v.Atlas Roofing Corporation, Defendant.

MDL Docket No. 2495.

No. 1:13–md–2495–TWT.

Civil Action File No. 1:13–CV–4222–TWT.

United States District Court, N.D. Georgia, Atlanta Division.

Signed May 12, 2014.

Andrew Joseph Coomes, McConnell & Sneed, LLC, Everette L. Doffermyre, Jr., Kenneth S. Canfield, Doffermyre Shields Canfield & Knowles, LLC, David Andrew Bain, Law Offices of David A. Bain, LLC, Atlanta, GA, Christopher L. Coffin, Pendley, Baudin & Coffin, LLP, New Orleans, LA, Shawn M. Raiter, Larson King, LLP, St. Paul, MN, Daniel K. Bryson, Scott Crissman Harris, Whitfield Bryson & Mason, LLP, Raleigh, NC, John R. Climaco, John A. Peca, Climaco, Wilcox, Peca, Tarantino & Garofoli, Co., LPA, Cleveland, OH, Patrick G. Warner, Climaco, Wilcox, Peca, Tarantino & Garofoli, Co., LPA, Columbus, OH, David Randolph Smith, Dominick R. Smith, William Lyon Chadwick, Jr., David Randolph Smith & Associates, Nashville, TN, Jamie E. Weiss, Jeffrey A. Leon, Complex Litigation Group, LLC, Highland Park, IL, Jonathan Shub, Scott George, Seeger Weiss, LLP, Philadelphia, PA, Richard J. Burke, Freed & Weiss, LLC, St. Louis, MO, Dabny Lynn, Justin Lucey, Justin O'Toole Lucy Law Firm, Mt. Pleasant, SC, Jordan L. Chaikin, Parker Waichman, LLP, Bonita Springs, FL, James R. Reeves, Jr., Lumpkins, Reeves & Mestayer, PLLC, Biloxi, MS, Eric D. Hoaglund, McCallum, Hoaglund, Cook & Irby, LLP, Vestavia Hills, AL, Kenneth Edward Sexton, II, Gentle, Turner, Sexton, Debrosse & Harbison Hoover, AL, James Plummer Lukes, Wise & Donahue, PLC, Fairfax, VA, for Plaintiffs.

Conor A. McLaughlin, Kip T. Bollin, Thompson Hine, Cleveland, OH, Dana Woodrum Lang, Womble Carlyle Sandridge & Rice, Charlotte, NC, Harlan Irby Prater, IV, Lightfoot Franklin & White, LLC, Birmingham, AL, Henry B. Smythe, Jr., James E. Weatherholtz, Womble, Carlyle, Sandridge & Rice, LLP, Charleston, SC, Hugh M. Claytor, Womble Carlyle Sandridge & Rice, Greenville, SC, Joel G. Pieper, Jennifer Saffold Collins, Womble Carlyle Sandridge & Rice, LLP, Atlanta, GA, Keith Ashford Clinard, Womble Carlyle Sandridge & Rice, PLLC, Winston–Salem, NC, Paul H. Stephenson, III, Watkins & Eager, Jackson, MS, for Defendant.

OPINION AND ORDER

THOMAS W. THRASH, JR., District Judge.

This is a multi-district action arising out of the marketing and sale of allegedly defective roofing shingles. It is before the Court on the Defendant Atlas Roofing Corporation's Motion to Dismiss [Doc. 36] Counts I (in part), II (in part), III, IV, V, VII, and VIII of the Plaintiffs David and Patricia Dickson's Complaint. For the reasons set forth below, the Defendant's Motion to Dismiss [Doc. 36] is GRANTED in part and DENIED in part.

I. Background

The Plaintiffs David and Patricia Dickson are purchasers of the Atlas Chalet Shingles (“Shingles”), which are designed, manufactured, and sold by the Defendant Atlas Roofing Corporation (“Atlas”). (Compl. ¶¶ 5–6.) Atlas represented and continues to represent—in marketing material and on the Shingles packaging—that the Shingles meet applicable building codes and industry standards. (Compl. ¶¶ 36, 40.) Atlas also provides a limited thirty-year warranty against manufacturing defects. (Compl. ¶ 39.)

The Plaintiffs claim that there is a defect in the process that Atlas uses to manufacture the Shingles. This process—which allegedly does not conform to applicable building codes and industry standards—“permits moisture to intrude into the Shingle which creates a gas bubble that expands when the Shingles are exposed to the sun resulting in cracking and blistering of the Shingles.” (Compl. ¶ 46.) The Plaintiffs filed a class action lawsuit in the United States District Court for the District of South Carolina,¹ asserting claims for: breach of express warranty (Count I), breach of the implied warranty of merchantability and fitness for a particular purpose (Count II), negligent design and manufacturing (Count III), strict products liability (Count IV), fraudulent concealment (Count V), violation of the Magnuson–Moss Warranty Act (Count VI), and unjust enrichment (Count VII). The Plaintiffs seek both damages and equitable relief.² The Defendant moves to dismiss Counts I (in part), II (in part), III, IV, V, VII and the Plaintiffs' request for equitable relief.

II. Legal Standard

A complaint should be dismissed under Rule 12(b)(6) only where it appears that the facts alleged fail to state a “plausible” claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ; Fed. R. Civ. P. 12(b)(6). A complaint may survive a motion to dismiss for failure to state a claim, however, even if it is “improbable” that a plaintiff would be able to prove those facts; even if the possibility of recovery is extremely “remote and unlikely.” Bell Atlantic v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In ruling on a motion to dismiss, the court must accept the facts pleaded in the complaint as true and construe them in the light most favorable to the plaintiff. See Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994–95 (11th Cir.1983) ; see also Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir.1994) (noting that at the pleading stage, the plaintiff “receives the benefit of imagination”). Generally, notice pleading is all that is required for a valid complaint. See Lombard's, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th Cir.1985), cert. denied, 474 U.S. 1082, 106 S.Ct. 851, 88 L.Ed.2d 892 (1986). Under notice pleading, the plaintiff need only give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. See Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (citing Twombly, 127 S.Ct. at 1964 ).

III. Discussion

A. Negligent Design and Manufacturing (Count III) and Strict Products Liability (Count IV)

The Plaintiffs assert that the Shingles were negligently designed and manufactured, causing damage to the Shingles themselves as well as “physical injury to the underlying structures and other property of the Plaintiffs and the Class.” (Compl. ¶ 10.) Additionally, the Plaintiffs assert that the Defendant is strictly liable for any damage because the Shingles are unreasonably dangerous. (Compl. ¶ 105.) Under South Carolina law, “[a] products liability case may be brought under several theories, including negligence, strict liability, and warranty.” Bragg v. Hi–Ranger, Inc., 319 S.C. 531, 538, 462 S.E.2d 321 (Ct.App.1995). “[I]n order to find liability under any products liability theory, the plaintiff must show: (1) he was injured by the product; (2) the injury occurred because the product was in a defective condition, unreasonably dangerous to the user; and (3) that the product at the time of the accident was in essentially the same condition as when it left the hands of the defendant.” Id. at 539, 462 S.E.2d 321. And “under a negligence theory, the plaintiff bears the additional burden of demonstrating the defendant (seller or manufacturer) failed to exercise due care in some respect, and, unlike strict liability, the focus is on the conduct of the seller or manufacturer, and liability is determined according to fault.” Id. However, product liability torts are subject to the economic loss rule. Under South Carolina's economic loss rule, “there is no tort liability for a product defect if the damage suffered by the plaintiff is only to the product itself.” Sapp v. Ford Motor Co., 386 S.C. 143, 147, 687 S.E.2d 47 (2009). Thus, “tort liability only lies where there is damage done to other property or personal injury.” Id.

Here, the Plaintiffs' negligence and strict liability claims are foreclosed by the economic loss rule. The Plaintiffs only adequately allege damage to the Shingles themselves. Although they generally allege damage to “other property,” this is too ambiguous. Indeed, this is precisely the “formulaic recitation of the elements of a cause of action” held insufficient to survive a motion to dismiss. See Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (“[A] plaintiff's obligation ... requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”). Thus, these “vague and conclusory allegations [are] insufficient to state a claim for relief.”³ Barr v. Gee, 437 Fed.Appx. 865, 878 (11th Cir.2011).

In response, the Plaintiffs argue—citing Kennedy v. Columbia Lumber & Mfg. Co., Inc., 299 S.C. 335, 384 S.E.2d 730 (1989) —that the economic loss rule does not apply when a plaintiff can establish an independent legal duty that was breached. It is true that the Kennedy decision broadly stated that if a builder “acts in a way as to violate a legal duty ... [its] liability is both in contract and in tort.” Id. at 345–46, 384 S.E.2d 730. However, in Sapp, the South Carolina Supreme Court read Kennedy narrowly and concluded that it only established a narrow exception applicable only to the residential builder context. See Sapp, 386 S.C. at 148–49, 687 S.E.2d 47 (“In Kennedy ... we created [a] narrow exception to the economic loss rule to apply solely in the residential home context ... we overrule Colleton Prep. [Academy, Inc. v. Hoover Universal, Inc., 379 S.C. 181, 666 S.E.2d 247 (2008) ] to the extent it expands the narrow exception to the economic loss rule beyond the residential builder context.”). The court confirmed that the exception to the standard economic loss rule does not extend to “ordinary products liability claim[s].” Id. at 150, 687 S.E.2d 47.

This narrow exception is inapplicable here. Although the Defendant designs and manufactures a product that may be used on a residential facility, it is certainly not a residential builder.⁴ This conclusion is supported by 2000...