Elder v. Reliance Worldwide Corp.

• Decision Date: 27 September 2021
• Docket Number: CIVIL ACTION NO. 1:20-cv-1596-AT
• Parties: Jene B. ELDER, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. RELIANCE WORLDWIDE CORPORATION, a Delaware Corporation; and Home Depot U.S.A., Inc., a Delaware Corporation, Defendants.
• Court: U.S. District Court — Northern District of Georgia

563 F.Supp.3d 1221

Jene B. ELDER, et al., individually and on behalf of all others similarly situated, Plaintiffs,

v.RELIANCE WORLDWIDE CORPORATION, a Delaware Corporation; and Home Depot U.S.A., Inc., a Delaware Corporation, Defendants.

CIVIL ACTION NO. 1:20-cv-1596-AT

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

Signed September 27, 2021

Andrea Solomon Hirsch, The Hirsch Law Firm, Atlanta, GA, Christopher Stiner, Pro Hac Vice, Ahdoot & Wolfson, PC, Los Angeles, CA, Patrick Shanan Montoya, Pro Hac Vice, Sabrina Soraya Saieh, Stephanie Ann Casey, Pro Hac Vice, Thomas Allen Kroeger, Pro Hac Vice, Colson Hicks Eidson, Coral Gables, FL, Tina Wolfson, Ahdoot & Wolfson, PC, Burbank, CA, for Plaintiffs.

David A. Coulson, Pro Hac Vice, Eva M. Spahn, Pro Hac Vice, Greenberg Traurig PA, Miami, FL, James Foster, Steven Rosenwasser, William Evan Eye, Greenberg Traurig, LLP, Atlanta, GA, Keith E. Smith, Pro Hac Vice, Greenberg Traurig, LLP, Philadelphia, PA, for Defendant Reliance Worldwide Corporation.

James Andrew Pratt, Billie Barker Pritchard, Sidney Stewart Haskins, II, King & Spalding LLP, Atlanta, GA, for Defendant Home Depot U.S.A., Inc.

ORDER

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE

I. Introduction

This is a products liability matter brought by residents of eight states who purchased an allegedly defective water heater connector. The brand of connector at issue — the SharkBite Water Connector ("the Connector") — was manufactured by Defendant Reliance Worldwide Corporation ("RWC") and distributed by retailers across the United States, including Defendant Home Depot U.S.A., Inc. ("Home Depot"). Plaintiffs allege that at various points after purchasing the Connector, the rubber lining inside the Connector began to deteriorate during normal use, resulting in flooding, leakage, and rubber flakes contaminating their water supply and causing damage to their floors and household appliances. Plaintiffs contend that despite being aware of this issue, Defendants concealed the defect from consumers and continued to sell the Connector in violation of numerous state laws. In Defendants’ view, the rubber flakes in Plaintiffs’ water and damages to their appliances were just inconveniences associated with the Connector, and Plaintiffs merely contend that the Connector did not work as well or for as long as they had hoped.

Currently pending before the Court are two motions to dismiss filed by Defendants Home Depot [Doc. 48] and RWC [Doc. 49]. As discussed below, the Court DENIES both motions in principal part.

II. Background

The Court draws much of the relevant factual background from Plaintiffs’ Amended Complaint because the factual allegations contained therein must be accepted as true for purposes of resolving Defendants’ motions to dismiss.

Plaintiffs are residents of the States of Arizona, Florida, Iowa, Kansas, New Jersey, New Mexico, New York, and Ohio who purchased Defendants’ water heater connectors and installed them in their homes at various times since 2013. The Connector consists of a braided stainless-steel hose with a synthetic rubber lining and is designed to connect the hot and cold-water supply lines in residential and commercial water heaters. (Am. Compl., Doc. 33 ¶ 35.) Plaintiffs allege that during normal use the rubber lining inside the Connector deteriorates, which leads to low water pressure as well as "rubber flakes" and "a sludge-like substance" contaminating their water supplies, including their drinking water. This also causes damage to their dishwashers, washing machines, faucets, and shower heads. (Id. ¶¶ 4–5, 51.) In some cases, Plaintiffs experienced these issues shortly after purchasing the Connector. See, e.g. , (id. ¶¶ 72–73) (alleging that Plaintiff purchased the Connector on or around October 2018 and began experiencing issues in early 2019); (id. ¶¶ 91–92) (alleging that Plaintiff purchased the Connector in early 2019 and began experiencing issues in May or June of that year). In other cases, the problems occurred several years later. See, e.g. , (id. ¶¶ 77–78) (alleging that Plaintiff purchased the Connector in 2013 and began experiencing issues in early 2018); (id. ¶¶ 99–100) (alleging that Plaintiff purchased the Connector in 2016 or 2017 and began experiencing issues in June 2020).

To fix these issues, Plaintiffs had to replace their Connectors and fix or replace their other property that had been damaged. (Id. ¶ 55); see, e.g. , (id. ¶ 71) (stating that Plaintiff "had to replace the connector, and all of the filters and screens for his sinks, dishwasher and washing machine"); (id. ¶ 76) (stating that Plaintiff "had to replace five faucets, two shower heads, one dishwasher, one washing machine, and one water heater"); (id. ¶ 80) (stating that Plaintiff "had to clean and repair the screens for all of the faucets serving his home (including the kitchen faucet which supplied his drinking water) due to the buildup of rubber flakes and residue"); (id. ¶ 94) (stating that Plaintiff "had to replace the filter, connector, and coffee machine, as well as his wood flooring, due to the water damage.").

Plaintiffs represent that Defendants have been receiving complaints about the Connector since at least 2016. (Id. ¶ 57.) In response to one of these complaints, RWC attributed the issues with the Connector to water conditions "in coastal areas or areas with poor water quality, hard water, or high chlorine content." (Id. ¶ 61.) Plaintiffs also allege that at some point Defendants began selling an alternative design of the Connector that remedies these issues. In March or April of 2018, one Plaintiff, Warren Kuiper of Florida, called RWC to complain about his issues with the Connector and "[a] RWC representative told Mr. Kuiper to purchase the new, alternative water connector hoses from RWC." (Id. ¶ 79.) In addition, "[s]o as not to confuse Mr. Kuiper into purchasing the defective [Connector] again, the RWC representative provided Mr. Kuiper with the product's SKU number so that he could find a non-defective replacement." (Id. ¶ 79.)

Plaintiffs filed the initial complaint in this action on April 14, 2020, (Compl., Doc. 1.), and amended the complaint on August 3, 2020, (Doc. 33, Am. Compl.) In the Amended Complaint, Plaintiffs seek to represent a nationwide consumer class consisting of "[a]ll persons and entities that own a structure in which SharkBite Flexible Water Heater Connector connections were present within the applicable limitations period." (Id. ¶ 116.) Plaintiffs separately seek to represent subclasses of consumers who purchased the Connector from Home Depot; consumers located in Arizona, Florida, Iowa, Kansas, New Jersey, New Mexico, New York, and Ohio; and consumers who purchased the Connector from Home Depot in each of those states. (Id. ¶¶ 117–20.) They raise 28 counts in the Amended Complaint, including unjust enrichment, negligence, breach of implied warranties, and various products liability and state consumer protection claims. (Id. ¶¶ 135–523.) Defendants moved to dismiss the Amended Complaint on September 4, 2020. (Home Depot's Mot., Doc. 48-1); (RWC's Mot., Doc. 49.)

III. Legal Standard

A complaint should be dismissed under Rule 12(b)(6) only when it appears that the facts alleged fail to state a "plausible" claim for relief. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Fed. R. Civ. P. 12(b)(6). 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 , 550 U.S. at 555, 127 S.Ct. 1955 ); Fed. R. Civ. P. 8(a). In ruling on a motion to dismiss, the court must accept the facts alleged in the complaint as true and construe them in the light most favorable to the plaintiff. See Hill v. White , 321 F.3d 1334, 1335 (11th Cir. 2003).

A claim is plausible when the plaintiff alleges factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A plaintiff is not required to provide "detailed factual allegations" to survive dismissal, but the "obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The plausibility standard requires that a plaintiff allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence" that supports the plaintiff's claim. Id. at 556, 127 S.Ct. 1955. A complaint may survive a motion to dismiss for failure to state a claim even if it is "improbable" that a plaintiff would be able to prove those facts and even if the possibility of recovery is extremely "remote and unlikely." Id.

IV. Discussion

A. Choice of Law

The Court begins by addressing which state's law should apply to each of Plaintiffs’ claims. As the Court's jurisdiction in this matter is based on diversity of citizenship, the Court must apply the choice of law rules of the forum state — Georgia. U.S. Fid. & Guar. Co. v. Liberty Surplus Ins. Corp. , 550 F.3d 1031, 1033 (11th Cir. 2008) (citing Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ). Under Georgia's choice of law principles, the application of another jurisdiction's laws is limited to its statutes and decisions construing those statutes. When no statute is involved, Georgia courts apply the common law as developed in Georgia rather than foreign case law. Frank Briscoe Co., Inc. v. Ga. Sprinkler Co., Inc. , 713 F.2d 1500, 1503 (11th Cir. 1983) (citing White v. Borders , 104 Ga.App. 746, 123 S.E.2d 170 (1961), and Budget Rent-A-Car Corp. v. Fein , 342 F.2d 509 (5th Cir. 1965) ).

Applying these principles to the case at hand, the Court first observes...