Thunander v. Uponor, Inc.

Decision Date14 August 2012
Docket NumberCivil No. 11–2322 (SRN/SER).
Citation887 F.Supp.2d 850
PartiesSteven and Cecilia THUNANDER, on behalf of themselves and all others similarly situated, Plaintiffs, v. UPONOR, INC., a successor to Uponor North America, Inc. and Uponor Wirsbo, Inc., and Weil–McLain, a Division of the Marley Wylain Company, Defendants.
CourtU.S. District Court — District of Minnesota

OPINION TEXT STARTS HERE

Robert K. Shelquist, Lockridge, Grindal, Nauen, PLLP, Minneapolis, MN; Shawn M. Raiter, Larson King, LLP, Saint Paul, MN, for Plaintiffs.

Daniel W. Berglund, Grotefeld, Hoffman, Schleiter, Gordon & Ochoa, LLP, Minneapolis, MN; Howard L. Lieber and Kathleen A. Reid, Grotefeld, Hoffman, Schleiter, Gordon & Ochoa, LLP, Chicago, IL; Jonathan J. Tofilon, Grotefeld, Hoffman, Schleiter, Gordon & Ochoa, LLP, Geneva, IL, for Defendant Uponor, Inc.

Gary M. Hansen, Meghan M. Anzelc, Patrick M. Fenlon and Heidi A.O. Fisher, Oppenheimer, Wolff & Donnelly, LLP, Minneapolis, MN, for Defendant Weil–McLain.

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, District Judge.

This matter is before the Court on the Motion to Dismiss filed by Defendant Weil–McLain [Doc. No. 13] and the Motion to Dismiss filed by Defendant Uponor, Inc. [Doc. No. 16]. For the reasons stated below, the Court grants the Motions to Dismiss and dismisses the Complaint [Doc. No. 1] with prejudice.

I. BACKGROUND

In this putative class action, Plaintiffs, who are Indiana residents, allege that they purchased a home in Michigan City, Indiana that contained a defective potable water plumbing system. (Compl. ¶ 80 [Doc. No. 1].) The house was built in 2002 and Plaintiffs purchased it in 2007. (Building Permit, Uponor's Ex. B [Doc. No. 21–1]; Warranty Deed, Ex. A to Aff. of Heidi A.O. Fisher [Doc. No. 27].) Plaintiffs contend that Defendant Uponor, a Minnesota corporation, manufactured defective pipe used in their home's plumbing system. ( Id. ¶ 9.) Plaintiffs claim that the pipe was manufactured at Uponor's factory in Zella–Mehlis, Germany for Defendant Weil–McLain, which sold the pipe under the AlumiPex brand. ( Id. ¶¶ 9; 39.) Uponor also sold the pipe in the United States under the trade name Multicor. ( Id. ¶ 38.) Plaintiffs contend that “pex” is the acronym for cross-linked polyethylene, a component in the pipe in question. ( Id. ¶ 32.) The pipe is commonly referred to as “pex-al-pex” pipe, which refers to an inner layer of pex, a layer of aluminum, and an outer layer of pex. ( Id. ¶ 34.) Plaintiffs contend that Defendants marketed, distributed and sold the AlumiPex and Multicor plumbing systems in the United States. ( Id. ¶ 14.)

According to the Complaint, plumbing components that are to be used for potable water systems in the United States must be approved and listed for such use by the National Sanitation Foundation (“NSF”). ( Id. ¶ 10.) Plaintiffs allege that while pex-al-pex was primarily used in the past for radiant heating applications, Uponor obtained a dual NSF listing for both potable water and radiant heating applications for its pipe, allowing it to be used for both purposes. ( Id. ¶¶ 35; 36.) Plaintiffs also allege that while Uponor's plumbing systems, including pipe, were manufactured and marketed by Uponor as being in compliance with NSF standards, for use in potable water systems, the pipe did not actually meet NSF standards. ( Id. ¶ 11.) Rather, Plaintiffs allege, Uponor fraudulently obtained NSF approval by submitting different, specially produced samples of pipe to NSF for testing. ( Id.) In actual production, however, Plaintiffs allege that “Uponor used a different pipe formulation which did not and could not have met the toxicity requirements for NSF approval.” ( Id.) The Thunanders describe Uponor's actions as a “classic bait and switch” scheme by which Uponor falsely obtained the NSF approval for the use of their pipes in potable water plumbing systems. ( Id.)

Plaintiffs allege that this bait and switch scheme was discovered in early 2003 when NSF representatives made an unannounced visit to Uponor's German manufacturing facility. ( Id. ¶ 12.) Testing pipe from Uponor's actual production line, the NSF representatives found that the pipe failed NSF 61 toxicity requirements for potable water use. ( Id.) The Thunanders contend that Uponor's management concealed this scheme from the NSF. ( Id. ¶ 15.) In addition, the Thunanders contend that Uponor failed to inform homeowners, plumbers and consumers that it had been selling pipe that failed to meet NSF toxicity requirements at the time of sale and installation. ( Id. ¶ 16.) Plaintiffs contend that NSF requested a second set of pipe samples in August 2003, which, Uponor internally conceded, would also not meet the NSF 61 standard. ( Id. ¶¶ 46; 52.)

Plaintiffs allege that Uponor's “scheme of fraud and deceit” was documented in a September 4, 2003 memorandum from Uponor employee Jens Schuell to Uponor corporate management, including current Executive Vice President and Executive Committee Member Heiko Folgmann. ( Id. ¶ 17; Schuell Memo, Ex. B to Aff. of Shawn Raiter in Opp'n to Uponor Mot. [Doc. No. 26–1].) In the memo, Mr. Schuell notes that NSF withdrew its approval for Uponor's pipe fittings a few months earlier, after finding excessive lead content in the fitting material when NSF tested fittings from the production line. (Schuell Memo ¶ 1, Ex. B to Raiter Uponor Aff. [Doc. No. 26–1].) Mr. Schuell indicates that the fittings could not be corrected, “because ultimately current productionprocesses do not allow for production of products/fittings that conform to NSF standards.” ( Id. ¶ 2.) Mr. Schuell states that a quality management employee at the production facility traced the problem to the use of a particular catalyst, noting

that the CONSTAB catalyst had been used in the 1st quarter, which was identified as the source of error. New pipe samples were produced using the Micropol catalyst. However, these samples were taken from the actual production and not produced with the “special Tox–PEX” material.

( Id. ¶ 5.)

The memo acknowledges Uponor's past practice of providing separate pipe samples to NSF, produced with a different, special catalyst. ( Id. ¶ 3.) Mr. Schuell further indicates that following the unannounced NSF visit, Uponor intended to inform NSF that the non-conforming material in question would be changed. However, until that time, NSF approval for the pipes' use in potable water systems would be withdrawn. ( Id. ¶ 8.) The pipes would still be sold for heating applications, without the NSF imprint, as any toxicity levels would not affect the use of the pipes for that purpose. ( Id.) The memo also notes that personnel in Uponor's purchasing department directed that no more of the products be shipped to North America until further notice. ( Id. ¶ 9.) Mr. Schuell further describes several internal quality control steps, including retrieving containers of shipped pipe, storing the pipes bearing the NSF imprint, and providing a detailed inventory of pipes. ( Id. ¶ 10.) Finally, Mr. Schuell notes that “current production processes” at the German manufacturing facility allow for the production of NSF-conforming pipes “only in a limited way.” ( Id. ¶ 11.)

Plaintiffs contend that Uponor knew “from other testing and litigation” that its pipe emitted toxic chemicals, based on a 2002 Arizona lawsuit involving claims that Uponor's pex pipe emitted high levels of Methyl–tert–Butyl ether, tert-Butyl alcohol and other benzene compounds. (Compl. ¶ 55.) “Uponor's own test documents produced in that case confirmed the presence of these chemicals in drinking water passed through Uponor pipes.” ( Id.)

Plaintiffs allege that they have been damaged by owning a home with a plumbing system that does not comply with NSF 61. (Compl. ¶ 86.) The Thunanders further contend that their damages include the cost to replace the system and “damage to other parts of the structure caused by the defective plumbing system.” ( Id.)

Plaintiffs seek to assert a class action involving persons who own structures containing Multicor or AlumiPex pipe used for the delivery of potable water. ( Id. ¶¶ 88–89.) Plaintiffs plead twelve causes of action. They assert six statutory claims under Indiana and Minnesota law, including the Indiana Consumer Product Liability Act (“IPLA”), Ind.Code Ann. §§ 34–20, et seq. (Count I); the Indiana Deceptive Sales Act (“IDSA”), Ind.Code Ann. § 24–5–0.5–3 (Count IV); the Minnesota Consumer Fraud Act (“MCFA”), Minn.Stat. § 325F.69 (Count V); the Minnesota Unlawful Trade Practices Act (“MUTPA”), Minn.Stat. § 325D.13 (Count VI); the Minnesota Deceptive Trade Practices Act (“MDTPA”), Minn.Stat. 325D.44 (Count VII); and the Minnesota False Statement in Advertisement Act (“MFSAA”), Minn.Stat. § 325F.67 (Count VIII). Plaintiffs allege two claims grounded in contract law, i.e., breach of express warranties (Count II) and breach of the implied warranty of merchantability (Count III), and two tort claims, i.e., negligence (Count IX) and negligent failure to warn (Count X). Plaintiff also assert a claim for fraudulent concealment/equitable tolling (Count XII), alleging that to the extent that any applicable statutes of limitation preclude their claims, Defendants' conduct requires the tolling of such statutes. Finally, Plaintiffs seek declaratory and injunctive relief (Count XI). While most of the claims are asserted against both Defendants, Plaintiffs assert their Minnesota statutory claims (Counts V–VIII) against Uponor alone.

II. DISCUSSION

Defendants move for dismissal pursuant to Fed.R.Civ.P. 12(b)(6) on several grounds. First, Defendant Uponor argues that Plaintiffs have failed to demonstrate the requisite “injury in fact” necessary to confer standing. In addition, Uponor contends that the expiration of the respective statutes of limitation applicable to Counts II–VIII mandates dismissal of those claims. Furthermore, Uponor argues that pursuant to the economic loss doctrine, Counts I, IX and X should be dismissed. As to Plaint...

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