Harris v. Aluminum Co. of America

• Decision Date: 19 October 1982
• Docket Number: Civ. A. No. 81-0139(D).
• Citation: 550 F. Supp. 1024
• Parties: Linda HARRIS, Plaintiff, v. ALUMINUM COMPANY OF AMERICA, a/k/a Alcoa and the Coca-Cola Company, a/k/a Coca-Cola Company, U.S.A., Defendants.
• Court: U.S. District Court — Western District of Virginia

550 F. Supp. 1024

Linda HARRIS, Plaintiff, v. ALUMINUM COMPANY OF AMERICA, a/k/a Alcoa and the Coca-Cola Company, a/k/a Coca-Cola Company, U.S.A., Defendants.

Civ. A. No. 81-0139(D).

United States District Court, W.D. Virginia, Danville Division.

October 19, 1982.

Robert W. Mann, Martinsville, Va., for plaintiff.

Meade, Tate & Daniel, Danville, Va., for Aluminum Company of America.

John H. Locke, Gentry, Locke, Rakes & Moore, Roanoke, Va., for defendants.

MEMORANDUM OPINION

TURK, Chief Judge.

Plaintiff, Linda Harris, brought this products liability action against Aluminum Company of America, a/k/a Alcoa, and The Coca-Cola Company, a/k/a Coca-Cola Company, U.S.A. ("Coca-Cola") alleging negligence and breaches of the implied warranties of merchantability and fitness for a particular purpose. Jurisdiction is based on diversity of citizenship. 28 U.S.C. § 1332(a)(1). This matter is now before this court on Coca-Cola's motions to dismiss plaintiff's warranty and vicarious liability allegations for failure to state claims upon which relief can be granted under Virginia law.

Plaintiff alleges that on October 9, 1979, she was blinded in one eye when the twist-off aluminum cap on a plastic bottle of Coca-Cola soft drink blew off the bottle and struck her in the eye as she commenced to remove the cap. After first giving notice of her claim, plaintiff brought suit in the Circuit Court of Henry County, Virginia, against Coca-Cola, Alcoa, Wometco Coca-Cola Bottling Company of Roanoke, Virginia ("Wometco"), and Winn-Dixie Raleigh, Inc. ("Winn-Dixie"). However, plaintiff subsequently entered into a Covenant Not to Sue with Wometco and Winn-Dixie in consideration of the sum of $87,500, and thereafter took a voluntary nonsuit in the state court action as to these defendants. On October 7, 1980, plaintiff filed suit in this court against Coca-Cola and Alcoa. And on August 26, 1981, plaintiff also nonsuited the state court action with respect to Coca-Cola and Alcoa.

Plaintiff's theories of recovery against Coca-Cola are that the aluminum cap was defective in that it was improperly threaded, and that Coca-Cola, acting by itself and through its agents, 1) was negligent in marketing the allegedly dangerously defective soft drink package and in failing to warn the public and plaintiff of the known dangerous propensities of the aluminum closure cap, and 2) breached its implied warranties that the soft drink package, including the twist-off cap, was of merchantable quality and fit for a particular purpose. In support of her contention that Coca-Cola impliedly warranted the merchantability and fitness for a particular purpose of the soft drink package, plaintiff alleges that Coca-Cola is in the business of causing soft drink packages of cola drink to be sold pursuant to a world wide advertising program. And that in connection with its sales of coke syrup (which goes into the cola drink) to individual franchised bottlers, Coca-Cola prescribes requirements and specifications as to how the beverage will be bottled and labeled. Finally, plaintiff contends that the bottle cap in question has imprinted thereon "Bottled under the authority of The Coca-Cola Company ...."

Coca-Cola has moved to dismiss plaintiff's warranty claims against it on the ground that they do not state any claims upon which plaintiff is entitled to relief under Virginia law. Coca-Cola argues that under Virginia law, the implied warranties of merchantability and fitness for a particular purpose, (Va.Code §§ 8.2-314 and -315 (1965 Added Vol.)), are made only when a sale of goods occurs, that is, when title to goods passes from the seller to the buyer for a price. Moore v. Allied Chemical Corp., 480 F.Supp. 364, 375 (E.D.Va.1979). Because Coca-Cola sold only the coke syrup and its franchised bottler did everything else, Coca-Cola reasons that it did not sell the soft drink package to anyone, and therefore, that it could not have impliedly warranted the merchantability or fitness for a particular purpose of the soft drink package under Virginia law. Coca-Cola also contends that any claim that it is liable for causing a defective product to be placed in the stream of commerce, when there is no actual sale of such product by Coca-Cola, can only be based upon the doctrine of strict liability in tort, which is not recognized in Virginia. Finally, Coca-Cola asserts that Virginia's anti-privity statute, (Va.Code 8.2-318 (1965 Added Vol.)), abolishes only the defense of "horizontal" privity of contract, and therefore, that Coca-Cola has a "vertical" privity defense in that it did not sell the soft drink package to plaintiff.

When ruling on a motion to dismiss for failure to state a claim upon which relief can be granted, the court must take all allegations in the challenged complaint as admitted, and the pleading should be dismissed "only where it is clear and apparent to the court that the plaintiff would not be entitled to relief under any set of facts which could be proved in support of the specific claim." Tahir Erk v. Glenn L. Martin Co., 116 F.2d 865, 870 (4th Cir.1941). In addition, because this is a diversity action, the motion at bar must be decided by applying the law of the forum. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1937). The Supreme Court of Virginia has not, however, addressed the question whether principles of implied warranty extend to a franchisor who is involved with the marketing of an allegedly defective soft drink package but does not actually manufacture or sell the product. As this is a question of first impression in Virginia, this court must attempt to predict how the Supreme Court of Virginia would resolve this issue. GAF Corp. v. County School Board of Washington County, Virginia, 629 F.2d 981 (4th Cir.1980); Perdue v. Sears, Roebuck & Co., 523 F.Supp. 203, 205 (W.D. Va.1981).

Initially, the court notes that Coca-Cola's contention that it may assert the defense of vertical privity against plaintiff is clearly not the law in Virginia. See Brockett v. Harrell Bros. Inc., 206 Va. 457, 143 S.E.2d 897 (1965). Coca-Cola's other arguments in support of this motion do, however, seem to have merit as it is difficult to fit plaintiff's allegations within a literal reading of Va.Code §§ 8.2-314 and -315. Nevertheless, Comment 2 to Code § 8.2-313 notes that "the warranty sections of Article 2 are not designed in any way to disturb those lines of case law growth which have recognized that warranties need not be confined ... to sales contracts." Thus, even if plaintiff's allegations do not state a claim upon which relief can be granted under Va.Code §§ 8.2-314 and -315, this court must also consider whether plaintiff's allegations are sufficient to state a common law implied warranty claim under Virginia law before ruling on Coca-Cola's Rule 12(b)(6) motion.

Although research indicates that the Supreme Court of Virginia has never addressed this question, there is authority holding that implied warranty principles do extend to franchisors who promote the sale of soft drink products but do not actually manufacture or sell the product. In Kosters v. Seven-Up Company, 595 F.2d 347 (6th Cir.1979), the plaintiff was blinded in one eye when a bottle of 7-Up slipped out of an allegedly defective carton, fell to the floor and exploded, causing glass to strike the plaintiff's eye. The carton was designed and manufactured by a third company who sold it to a franchisee of Seven-Up, but Seven-Up retained the right to approve the design used by the bottler, including cartons. And "with knowledge of its design, Seven-Up consented to the entry in commerce of the carton from which the bottle fell, causing the injury." Id. at 353. The plaintiff settled her claims against the bottler, the carton manufacturer and the retailer, but sued Seven-Up alleging, among other things, "breach of implied warranty of fitness" in that the 7-Up carton was defective.

Seven-Up denied liability and argued that its approval of the cartons was only ... for the purpose of assuring that its trademark was properly displayed, and that it does not carry the liabilities of a supplier when it did not supply the product .... Liability may not be laid on the basis of implied warranty, it says, when the franchisor did not manufacture, handle, design or require the use of the particular product.

Id. at 351-352. Nevertheless, the Sixth Circuit Court of Appeals ruled that a franchisor is obligated to compensate the injured consumer for breach of implied warranty when a franchisor consents to the distribution of a defective product bearing its name. Id. at 353. The court of appeals stated that this obligation

arises from several factors in combination: 1) the risk created by approving for distribution an unsafe product likely to cause injury, 2) the franchisor's ability and opportunity to eliminate the unsafe character of the product and prevent the loss, 3) the consumer's lack of knowledge of the danger, and 4) the consumer's reliance on the trade name which gives the intended impression that the franchisor is responsible and stands behind the product. Liability is based on the franchisor's control and the public's assumption, induced by the franchisor's conduct, that it does in fact control and vouch for the product.

Id.

This court, of course, is not bound by the Sixth Circuit's interpretation of Michigan law in Kosters, but must instead attempt to ascertain whether Virginia courts would extend such warranty principles to Coca-Cola in this case. Fortunately, the court is aided in its endeavor to predict developing Virginia law by the decision of the Supreme Court of Virginia in Swift & Co. v. Wells, 201 Va. 213, 110 S.E.2d 203 (1959).

Swift & Co. was decided before Virginia enacted the Uniform Commercial Code. Prior to this decision, Virginia had followed the common law doctrine that a seller of foodstuff for human consumption could be liable on an implied warranty...