MEMORANDUM OPINION AND ORDER
Robert M. Dow, Jr., United States District Judge.
Before the Court is Defendant Fluidmaster's motion to dismiss . For the
This multi-district litigation relates to an allegedly faulty plumbing product designed and manufactured by Defendant Fluidmaster, Inc., a California company. The part in question is a called a NO-BURST water supply line, which is a short (usually 12` or 20` in length), flexible hose used to connect water piping to plumbing fixtures (e.g., toilets, faucets, etc.). Plaintiffs allege two faults in these NO-BURST water supply lines: (1) that poor material selection and a defective design cause many of the supply lines to burst, resulting in flooding, and (2) that a plastic coupling nut used on a particular type of water supply line (i.e., a toilet connector) is uniformly defective in its design and labeling, causing the coupling nut to fracture, resulting in flooding. Plaintiffs in this MDL include (1) individuals who incurred damages from fractured water supply lines, (2) individuals who have these allegedly faulty products in their homes where the product has yet to fail, and (3) subrogated insurers who paid claims to individuals who suffered damage due to supply line failures.
To streamline the adjudication of the common-liability claims in this MDL proceeding, the Court accepted Plaintiffs' proposal to file a consolidated class action complaint combining the claims as presented in six pre-existing class action lawsuits that had been transferred to this Court as part of this multi-district litigation,
II. Legal Standard
A. Rule 12(b)(1)
The standard that the Court applies to a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction depends on the purpose of the motion. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir.2009); United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir.2003) (en banc), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir.2012). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction, the Court accepts all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See Apex Digital, 572 F.3d at 443-44; United Phosphorus, 322 F.3d at 946. But "[w]here jurisdiction is in question, the party asserting a right to a federal forum has the burden of proof, regardless of who raised the jurisdictional challenge." Craig v. Ontario Corp., 543 F.3d 872, 876 (7th Cir. 2008); see also Reed v. Illinois, 2014 WL 917270, at *2 (N.D.Ill. Mar. 10, 2014).
B. Rule 12(b)(6)
In reviewing the sufficiency of a complaint, a district court must accept all
C. Rule 12(f)
Under Federal Rule of Civil Procedure 12(f) "the court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). Motions to strike are generally disfavored but may be used to expedite a case by "remov[ing] unnecessary clutter." Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir.1989).
A. Plaintiff Smith and the California Subclass
In Plaintiffs' consolidated class action complaint, in addition to consolidating the claims of the 13 named Plaintiffs in the underlying class action cases (Rensel, Kirsch, Sullivan, Rhyne, Ellefson, Eisen, Elder, Naef, Hardwick, Hungerman, Sanborn, Wyble, and Larson), Plaintiffs also brought claims on behalf of a fourteenth individual, Kevin Smith, representing a putative subclass of California residents. [127, ¶¶ 88-95.] Defendant moved to strike any mention of Plaintiff Smith and the California subclass from the complaint, arguing that Plaintiffs failed to follow the proper procedures for incorporating Mr. Smith and the subclass into this multi-district litigation.
During the parties' oral argument before the Court on December 1, 2015, Plaintiffs conceded that they did not comply with formal requirements for adding Plaintiff Smith into this case, and represented to the Court that they were in the process of determining the best methodology for doing so. Accordingly, the Court issued an order stating that, "as discussed on the record, in order to expedite the issues surrounding Plaintiffs' addition of named Plaintiff Kevin Smith into their First Consolidated Class Action Complaint , the Court hereby strikes any mention of Plaintiff Kevin Smith from that complaint without prejudice."
But the Court did not rule on Defendant's related motion to strike any mention of the California subclass as well. That motion is denied.
In the consolidated class action complaint, Plaintiffs define their putative state subclasses as "individuals and entities residing in each of the states in which a named Plaintiff resides and each of the states where the laws are similar to each of the states in which a named Plaintiff
Perhaps the bigger question here is how a California subclass can be part of this MDL when there is no such putative class mentioned in any of the underlying complaints that compose this consolidated MDL proceeding. The answer to that question lies in the fact that the consolidated class action complaint here is a superseding complaint (as opposed to an administrative one). To explain further, as one court recently put it, "[l]ike snowflakes, no two MDLs are exactly alike and, no doubt, whether to require the filing of a consolidated complaint and, if so, whether to treat such a complaint as `administrative' or `superseding' will depend on the particulars of a given MDL. Thus, it is critical that the parties and the court make clear what species of pleadings are being used." In re General Motors LLC Ignition Switch Litig., 2015 WL 3619584, at *8 (S.D.N.Y. June 10, 2015); see also Gelboim v. Bank of Am. Corp., ___ U.S. ___, 135 S.Ct. 897, 904 n. 3, 190 L.Ed.2d 789 (2015) ("Parties may elect to file a `master complaint' and a corresponding `consolidated answer,' which supersede prior individual pleadings. In such a case, the transferee court may treat the master pleadings as merging the discrete actions for the duration of the MDL pretrial proceedings. No merger occurs, however, when `the master complaint is not meant to be a pleading with legal effect but only an administrative summary of the claims brought by all the plaintiffs." (internal citations omitted)). As Judge Sutton explained:
In re Refrigerant Compressors Antitrust Litig., 731 F.3d 586, 590-91 (6th Cir.2013).
Here, whether it was expressly stated or not, the consolidated complaint is a superseding complaint with its own legal effect; merger has occurred. Evidence of this comes from the fact that the parties have now fully briefed Rule 12(b) motions to dismiss portions of the consolidated complaint without any objection as to the propriety of such motions (i.e., Rule 12(b) motions are improper when dealing with an "administrative" consolidated complaint).
Shifting back to the question at hand, although the exercise of consolidation implies a gathering of existing claims, the fact that the consolidated complaint is not a perfect reflection of the underlying claims does not offend the consolidation process, nor does it unduly prejudice or benefit any party to this litigation. The complained-of additions here (i.e., the addition of one putative state subclass and, as discussed below, an expansion in the number of Plaintiffs raising claims brought under California consumer protection laws) are not bad-faith attempts to refocus the litigation or to otherwise avoid some necessary procedural framework as was the case with Plaintiffs' attempt to add Plaintiff Smith; they are minor reworkings of existing claims amongst existing parties that reflect the natural evolution of claims in an MDL proceeding, and allowing these changes will assist in the efficient litigation of this consolidated proceeding.
Thus, without prejudging the certifiability of Plaintiffs' putative California subclass (whether "headless" or not, as Defendant would say), the Court concludes that the inclusion of the California subclass is not a "redundant, immaterial, impertinent, or scandalous matter," and thus striking this subclass pursuant to Rule 12(f) is not appropriate at this time.
B. CLRA Claim
Plaintiffs' first cause of action in their consolidated class action complaint alleges a violation of the California Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., brought on behalf of the putative nationwide class and, alternatively, on behalf of the California subclass. First, Defendant argues that the CLRA claim brought on behalf of the California subclass should be dismissed because Plaintiff Smith failed to comply with the Act's notice provisions. Second, Defendant argues that the CLRA claim should be dismissed in its entirety because Plaintiffs lack statutory standing to bring such a claim as they are not "consumers" who "transacted" business with Fluidmaster. Third, Defendant argues that Plaintiffs' CLRA claim (and California Unfair Competition Law ("UCL") claim) should be stricken as to all Plaintiffs except for Rensel and Kirsch because the remaining Plaintiffs did not raise these claims in their underlying complaints. The Court addresses each argument in turn.
1. Notice under the CLRA
Defendant argues that even if the Court does not strike the California subclass, it nonetheless should dismiss Plaintiffs' CLRA claim brought on behalf of that putative subclass because Plaintiff Smith failed to comply with the CLRA's notice procedures prior to raising this claim in the consolidated class action complaint.
The CLRA — which makes unlawful various unfair methods of competition and unfair or deceptive acts or practices regarding the sale of goods to consumers — requires potential plaintiffs to provide notice to the offending party of a CLRA violation by certified or registered mail 30 days or more prior to commencing an action for damages. See Cal. Civ. Code §§ 1770(a), 1782(a). The notice requirement "exists in order to allow a defendant to avoid liability for damages if the defendant corrects the alleged wrongs within 30 days after notice, or indicates within that 30-day period that it will correct those wrongs within a reasonable time. Morgan v. AT&T Wireless Servs., 177 Cal.App.4th 1235, 99 Cal.Rptr.3d 768, 789 (2009).
The California Supreme Court has not interpreted the notice provision of the CLRA, or the question of whether failure to provide formal notice requires dismissal with prejudice.
But the tide turned in 2009 when — nearly a quarter century after Outboard Marine — the California Court of Appeal addressed the issue head-on, holding that "[a] dismissal with prejudice of a damages claim filed without the requisite notice is not required to satisfy [the purpose of the notice requirement]. Instead, the claim must simply be dismissed until 30 days or more after the plaintiff complies with the notice requirements." Morgan, 99 Cal.Rptr.3d at 789. In other words, failure to provide notice is grounds for dismissal, but such a failure is curable. See, e.g., Kanfer, 2015 WL 6742201, at *11-12; Herron v. Best Buy Stores, L.P., 2014 WL 465906, at *4-5 (E.D.Cal. Feb. 4, 2014); Trabakoolas v. Watts Water Techs., Inc., 2012 WL 2792441, at *5-8 (N.D.Cal.2012).
In its brief, Defendant attempted to sweep these on-point cases under the rug by ignoring them. At oral argument, Defendant tried to distinguish Morgan by noting that the plaintiffs only sought injunctive relief under the CLRA in their original and first amended complaints (for which the CLRA does not require pre-suit notice), and that it wasn't until their second amended complaint that plaintiffs sought monetary damages on their CLRA claim. But the plaintiffs in Morgan did not provide formal notice until four months before filing their third amended complaint, making Morgan factually comparable to the situation here. In this case, Plaintiff Smith filed his CLRA claim seeking monetary damages, then he provided formal notice (on September 15, 2015 [see 148-1, ¶ 2]), and then he was dismissed from the case. Any re-insertion of Plaintiff Smith into the consolidated class action complaint (which inevitably would involve an amendment occurring more than 30 days after formal service), would satisfy the CLRA notice requirement as explained in Morgan.
For these reasons, the Court dismisses, without prejudice, Plaintiffs' CLRA claim brought on behalf of the putative California subclass.
2. Statutory Standing under the CLRA
The CLRA proscribes various unfair acts and practices "undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer." Cal. Civ. Code § 1770(a) (emphasis added). Defendant argues that (1) Plaintiffs' CLRA claim should be dismissed because Plaintiffs never "transacted" business with Defendant as required by the statute and, alternatively, that (2) Plaintiffs' CLRA claim should be dismissed as to nine of the named Plaintiffs who do not qualify as "consumers" under the statute.
With this in mind, there are essentially two separate issues here. First, whether Plaintiffs actually purchased Defendant's product (the "consumer" inquiry) and, if so, whether they purchased the product from the correct entity (the "transaction" inquiry).
As to the "consumer" inquiry, Defendant argues that the CLRA claims of nine of the named Plaintiffs should be dismissed because those individuals did not purchase Defendant's product and thus are not consumers under the CLRA.
As an initial matter, the Court will not look to deposition testimony or other extrinsic evidence in considering whether Plaintiffs have pled statutory standing. Questions of statutory standing are reviewed under Rule 12(b)(6), not Rule 12(b)(1), and the Court's inquiry into statutory standing at the motion to dismiss stage is limited to the pleadings. Wright v. Assoc. Ins. Comps. Inc., 29 F.3d 1244, 1248 (7th Cir.1994) (Court's review is limited to the pleadings on a Rule 12(b)(6) motion); 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir.2002) (noting that the general rule is that "when additional evidence is attached [to] a motion to dismiss, `the court must either convert the 12(b)(6) motion into a motion for summary judgment under Rule 56 * * * or exclude the documents attached to the motion to dismiss and continue under Rule 12'" (citation omitted)).
Here, Defendant relies exclusively on the deposition transcripts of Plaintiffs Elder, Kirsch, Rhyne, Eisen, Hungerman, Sanborn, and Wyble in support of its argument that these individuals are not "consumers" under the CLRA. The Court will exclude Defendant's references to those Plaintiffs' depositions and consider Defendant's motion based solely on the allegations
Beginning with the plain language of the statute, in order to establish that one is a consumer, one must allege that he or she "acquire[d], by purchase or lease, any goods or services for personal, family, or household purpose." Cal. Civ. Code § 1761(d). According to the complaint, Plaintiff Hardwick "purchased a home in which a Fluidmaster NO-BURST Line was installed," and Plaintiff Sullivan "purchased a home in which a * * * Fluidmaster NO-BURST Line (B1F20) was installed." [127, ¶¶ 17, 57.] The complaint also says that Plaintiffs "are consumers who purchased Defendant's water supply lines for personal, family, or household purposes." [127, ¶ 197.] Thus, both individuals acquired their water supply lines in conjunction with purchasing their homes. These allegations satisfy the plain language of the statute.
Defendant relies primarily on Schauer v. Mandarin Gems of California, Inc., 125 Cal.App.4th 949, 23 Cal.Rptr.3d 233 (2005), where the court held that the recipient of an engagement ring was not a consumer under the CLRA. Schauer, 23 Cal.Rptr.3d at 241. The court concluded that because the "[p]laintiff's ownership of the ring was not acquired as a result of her own consumer transaction with defendant, and without an assignment of [the original purchaser's] rights, she [did] not fall within the parameters of consumer remedies under the [CLRA]." Id. Defendant likens Plaintiffs to the fiancée in Schauer, arguing that neither engaged (no pun intended) in a consumer transaction. The Court is not persuaded.
The court's conclusion in Schauer was a straightforward application of the plain language of the statute — because the plaintiff did not "purchase or lease" the engagement ring (i.e., her fiancé purchased it and gifted it to her), she lacked statutory standing. Here, Plaintiffs Hardwick and Sullivan purchased their water supply lines in conjunction with purchasing their homes.
Perhaps the bigger question is whether a subsequent purchaser of a product can be considered a consumer for purposes of establishing standing under the CLRA, or whether the claim lives and dies with the initial purchaser. For example, if the original ring purchaser in Schauer had sold that ring to his neighbor (instead of gifting it to his fiancée), would the neighbor be considered a consumer? And, relatedly, would the original purchaser then cease to be a consumer, or would both individuals retain consumer status under the statute? Neither the statute nor the cases cited by the parties address these questions. At a minimum, Schauer confirms that one can gain consumer status through assignment, which means that standing can extend beyond
As to the "transaction" inquiry, Defendant argues that because Plaintiffs did not transact any business with Fluidmaster, their CLRA claims must be dismissed. [See, e.g., 175, at 12 ("There are no allegations in the Consolidated Complaint that any of the Plaintiffs transacted business with Fluidmaster. Accordingly, lacking an essential element of their purported CLRA claim, these claims must be dismissed in their entirety.").] As a reminder, the CLRA proscribes certain acts and practices "undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer." Cal. Civ. Code § 1770(a). The CLRA defines a transaction as "an agreement between a consumer and another person." Cal. Civ. Code § 1761(e). For purposes of Defendant's motion to dismiss, the relevant question whether this `other person' must be Defendant.
According to the complaint, Plaintiffs purchased their supply lines from home improvement stores (Rensel, Rhyne), from a plumber (Wyble), or in conjunction with purchasing a home (Kirsch, Sullivan, Hardwick). For certain Plaintiffs (Ellefson, Eisen, Elder, Naef, Smith, Larson), the complaint says generally that they purchased a water supply line or had the water supply line installed in their home without providing any further details about the underlying transaction. Nonetheless, each Plaintiff alleged that he or she made an agreement with a "person"
Defendant relies heavily on Green v. Canidae Corp., 2009 WL 9421226 (C.D.Cal. June 9, 2009), where the court held that the plaintiff, who purchased dog food from a specialty supplier, could not sue the dog food manufacturer because "[t]he CLRA does not provide a cause of action for consumers against the supplier of goods and services to a retailer from whom the consumer purchased." Green, 2009 WL 9421226, at *4. But a more-recent California case rejected the so-called direct-transaction requirement set forth in Green, criticizing that opinion as "cursory," "unpersuasive," and contrary to "the weight of the persuasive authority." Philips v. Ford Motor Co., 2015 WL 4111448, at *15 (N.D.Cal. July 7, 2015). The Philips court emphasized the CLRA's command that the statute be interpreted liberally, noting that "[i]t comes as no surprise, then, that the vast majority of courts to address the issue have rejected [the direct-transaction] argument, holding instead that a plaintiff need not allege a direct transaction with the manufacturer" to state a CLRA claim. Id.; see also Falco v. Nissan N. Am., Inc., 96 F.Supp.3d 1053, 1062-63 (C.D.Cal.2015) ("The Court concludes that a manufacturer that is not the direct seller may be held liable for failure to disclose material defects under the
But while the Court confidently can reject Defendant's "direct-transaction" argument, there still remains a question regarding which indirect transactions are sufficient to establish statutory standing under the CLRA. Insight into this question can be gleaned from Chamberlan v. Ford Motor Co., 2003 WL 25751413 (N.D.Cal. Aug. 6, 2003), where the court concluded that consumers who purchased vehicles from authorized dealerships had statutory standing to sue Ford Motor Company (the manufacturer) under the CLRA, relying on an loose theory of agency to bridge the gap between the manufacturer and the dealership. Id.; see also Philips v. Ford Motor Co., 2015 WL 4111448, at *14 (N.D.Cal. July 7, 2015) (statutory standing where plaintiffs alleged that they purchased vehicles from an authorized Ford dealership).
Defendant interprets Chamberlan narrowly, arguing that it only extends statutory standing to instances where the transaction in question occurs with an authorized agent, and there is no allegation that retailers and plumbing companies are authorized agents of Fluidmaster. In other words, under Defendant's reading of the statute, only the direct purchasers of Fluidmaster's products (e.g., retailers, plumbing supply companies, etc.), not individual consumers, would have standing to sue Defendant under the CLRA.
The Court is not convinced. Despite the fact that Chamberlan involved a transaction with the manufacturer's authorized dealership, the court clearly stated that the relevant inquiry is whether the manufacturer intended its products to be sold at the consumer level. Chamberlan, 2003 WL 25751413, at *8 ("Among the sales of goods to consumers, that resulted from the transactions in which Defendant engaged, were the subsequent resales of Subject Automobiles to Plaintiffs."). As the Chamberlan court put it, "the [California] legislature expanded the range of illegal acts and practices to include those `undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.' Nothing in the language of the CLRA states that only a defendant who directly engaged in a completed transaction with a plaintiff may be liable to that plaintiff." Id. at *7.
Perhaps the strongest language on the issue comes from Rossi v. Whirlpool Corp., 2013 WL 5781673 (E.D.Cal.2013), where the court went beyond the plain language of the statute in holding that "where a manufacturer ha[s] exclusive knowledge of a defect and the consumer relied upon that defect, the CLRA's protection extends to the manufacturer as well, regardless of whether the consumer dealt directly with the manufacturer." Rossi, 2013 WL 5781673, at *10 (citing Tietsworth, 720 F.Supp.2d at 1140; Chamberlan v. Ford Motor Co., 369 F.Supp.2d 1138,
Here, despite conceding that they did not purchase their water supply lines directly from Defendant Fluidmaster (which does not sell directly to consumers anyway), Plaintiffs do allege that they purchased Defendant's products from a "person," and that Defendant "possessed exclusive knowledge of the defects and quality control issues" that rendered the supply lines faulty, but nonetheless distributed their products with the intention that they would be sold to consumers. [127, ¶¶ 196-203, 269-70.] Defendant has not cited any authority where a similar claim was dismissed at the pleading stage. While Plaintiffs will need to prove much more than this to succeed on their CLRA claim, Defendant has not convinced the Court that dismissal is appropriate at this time. Defendant's motion to dismiss Plaintiffs' CLRA claim is denied.
3. CLRA and UCL Claims by Plaintiffs other than Kirsch and Rensel
Defendant moves under Rule 12(f) to strike from Plaintiffs' consolidated complaint all references to the CLRA and California's Unfair Competition Law ("UCL") brought by named Plaintiffs other than Rensel and Kirsch (specifically, [127, ¶¶ 196, 211-12]), arguing that the other Plaintiffs did not include such claims in their pre-MDL complaints, thus making it inappropriate to include such claims in the consolidated class action complaint. Defendant's motion is denied.
Plaintiffs bring Counts One (CLRA) and Two (UCL) on behalf of (1) a nationwide class and, alternatively, (2) a California subclass. Plaintiffs Rensel and Kirsch are the only Plaintiffs who raised CLRA and UCL claims in their underlying complaint. In other words, if Plaintiffs' consolidated complaint were a fully accurate reflection of the claims in the underlying complaints, the CLRA and UCL claims would still be present, but only Plaintiffs Rensel and Kirsch would bring those claims on behalf of the putative nationwide class.
As explained above, Plaintiffs' consolidated complaint supersedes the underlying complaints for purposes of this MDL. Plaintiffs' discretion in adjusting pre-existing claims in formulating its "consolidated" complaint is not as restricted as Defendant insists, especially considering that these minor changes do not alter the scope of the issues to be decided in this MDL proceeding or unduly benefit or prejudice any parties. Had Plaintiffs wished to add an entirely new claim, such an addition would require leave of Court under Federal Rule of Civil Procedure 15(a). But for efficiency reasons, the Court concludes that such formal procedures are not necessary here, and Defendant's motion to strike is therefore denied.
C. Injunctive Relief
Defendant has also moved under Rule 12(b)(1) to dismiss all of Plaintiffs' claims for injunctive relief, arguing that Plaintiffs have not pled (nor could they plead, based on facts alleged in the complaint and in Plaintiffs' depositions) any threat of injury sufficient to establish Article III standing for such claims. A plaintiff "bears the burden of showing that he has standing for each type of relief sought." Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). To establish standing, a plaintiff must show that he or she suffered an injury in fact, that the injury is traceable to the defendant's conduct, and that the injury is likely to be redressed by a favorable decision in the plaintiff's lawsuit. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Regarding claims for prospective injunctive relief, plaintiffs must allege a threat of future injury that must be "actual and imminent, not conjectural or hypothetical." Summers, 555 U.S. at 493, 129 S.Ct. 1142. "Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief * * * if unaccompanied by any continuing, present adverse effects." O'Shea v. Littleton, 414 U.S. 488, 495-96, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974).
Defendant objects to the following six requests for injunctive relief in Plaintiffs' consolidated class action complaint:
The Court will address each request in turn.
1. Plaintiffs' General Request That Defendant Modify Its Practices
At the outset of the consolidated complaint, Plaintiffs provide an overview of their various claims, wherein they state their request for "injunctive relief requiring Fluidmaster to modify its unfair and fraudulent practices so as to uniformly provide relief in accordance with its obligations under the law." [127, ¶ 12.] Because this statement is part of the introduction to the complaint and not a part of any of the 19 causes of action, the Court does not interpret it as a separate claim for relief. Defendant's request to dismiss this "claim" is denied as moot.
2. Injunctive Relief Under the CLRA
Under the CLRA, any consumer who suffers damage as a result of a violation of that Act can sue to obtain, among other things, "[a]n order enjoining the methods, acts, or practices" in question. Cal. Civ. Code § 1780(a)(2). From a statutory standing perspective, one need only "suffer any damage" in order to bring a claim for prospective injunctive relief. But Defendant argues that because Plaintiffs have already replaced their allegedly faulty water supply lines and because they have not alleged any desire to purchase Defendant's products again in the future, Plaintiffs have not pled a sufficient likelihood of future harm to justify Article III standing for the requested injunctive relief.
There is a split among district courts as to whether plaintiffs can pursue injunctive relief on consumer protection claims where the plaintiffs face no threat of future harm (e.g., where the consumer is already aware of the allegedly deceptive advertising, where the consumer has already replaced the allegedly faulty product, etc.). Compare Koehler v. Litehouse, Inc., 2012 WL 6217635, at *6 (N.D.Cal. Dec. 13, 2013) ("If the Court were to construe Article III standing as narrowly as Defendant Advocates, federal courts would be precluded from enjoining false advertising under California consumer laws * * *." (quoting Henderson v. Gruma Corp., 2011 WL 1362188, at *7-8 (C.D.Cal. Apr. 11, 2011))), with Mason v. Nature's Innovation, Inc., 2013 WL 1969957, at *5 (S.D.Cal. May 13, 2013) (dismissing injunctive claim because it was "apparent that Plaintiff ha[d] no intention of buying Defendant's * * * product again in the future"). Other courts have debated whether plaintiffs raising consumer protection claims even need to
The Court agrees with the Mason and Richardson cases, which say that plaintiffs in federal court must establish Article III standing in order to pursue injunctive relief, regardless of whether the plaintiffs are raising consumer protection claims. But to be clear, as Judge Bates noted in Richardson, "finding that plaintiffs who will never purchase the product in the future do not have standing to obtain injunctive relief [does] not thwart consumer fraud statutes" because plaintiffs may be able to bring such claims in state court, and there are also various state and federal regulatory agencies that can be solicited to take action on consumers' behalf to police such wrongdoings. Richardson, 991 F.Supp.2d at 192 n. 10 (citing Bohn v. Boiron, Inc., 2013 WL 3975126, at *4 (N.D.Ill. Aug. 1, 2013); Lee v. Am. Nat'l Ins. Co., 260 F.3d 997, 1001-02 (9th Cir. 2001)).
Here, several named Plaintiffs allege a threat of future injury. [See 127, § 333 ("Plaintiffs Rensel and Wyble and the Arizona Subclass members * * * paid for water supply lines that pose an immediate safety risk and will have to be repaired or replaced); id. § 363 ("Plaintiff Sullivan and the Illinois Subclass members * * * paid for water supply lines that pose immediate safety risks and will have to be repaired or replaced); id. § 386 (referencing the "extremely high likelihood" that "Plaintiff Sullivan and the Illinois Subclass members * * * may personally suffer future harm"); id. § 423 ("Plaintiff Hardwick and the New Hampshire Subclass members * * * paid for water supply lines that pose an immediate safety risk and will have to be repaired or replaced.").] In addition, Plaintiff Larson alleges that he has two Fluidmaster water supply lines installed in his home and that those supply lines suffer from inherent defects (i.e., a threat of future harm from product failure). [127, ¶ 87.]
Generally speaking, "even a small probability of injury is sufficient to create a case or controversy." Vill. of Elk Grove Vill. v. Evans, 997 F.2d 328, 329 (7th Cir.1993). And here, Defendant acknowledges Plaintiffs' allegations of future harm in their consolidated complaint. But Defendant points to Plaintiffs' deposition transcripts as evidence that all Plaintiffs (except Larson) already replaced their allegedly faulty water lines, thereby nullifying Plaintiffs' allegations that they face any threats of future harm. Because Article III standing is a jurisdictional issue, the Court is entitled to look beyond the four corners of the complaint to assess the issue. See, e.g., Perry v. Vill. of Arlington Heights, 186 F.3d 826, 829 (7th Cir.1999) ("[W]here standing is challenged as a factual matter, the plaintiff bears the burden of supporting the allegations necessary for standing with `competent proof.'").
Plaintiffs do not dispute that they all (except for Plaintiff Larson) have mitigated their damages by replacing the allegedly faulty water lines, but instead argue that "the vast majority" of the class members "presumably do not know that their Fluidmaster NO-BURST lines and toilet connectors are defective." [148, at 26.] However, Plaintiffs in a class action cannot rely on unnamed plaintiffs to satisfy
Plaintiffs also point to Plaintiff Larson, who has not mitigated his potential damages (i.e., he still has the allegedly faulty water lines installed in his home), and argue that "[i]n a class action, standing is satisfied if at least one of the named plaintiff[s] meets the requirements." [148, at 24 n.15 (quoting Ries v. Az. Beverages USA LLC, 287 F.R.D. 523 (N.D.Cal.2012))]; see also Kohen v. Pacific Inv. Mgmt. Co. LLC, 571 F.3d 672, 676-77 (7th Cir.2009) (noting that it is sufficient in a class action to have only "one named plaintiff with standing, [because] one is all that is necessary"). But even if Plaintiff Larson has alleged a sufficient threat of future harm (i.e., the potential rupture of his water supply lines),
3. Injunctive Relief Under the UCL
As part of Plaintiffs' second cause of action under the California UCL, Plaintiffs request "declaratory, equitable, and/or injunctive relief requiring Fluidmaster to stop their unlawful, deceptive, and unfair conduct, prohibiting Fluidmaster from continuing to sell the defective water supply lines; requiring notice to the public at-large of the design defects associated with these water supply lines and of the availability of a remediated product, and all other relief the Court deems just and equitable." [127, ¶ 222.]
For the same reasons discussed above in relation to Plaintiffs' request for injunctive relief under their CLRA claim, Plaintiffs (including Plaintiff Larson) have failed to allege a threat of future harm that could be remedied by the requested relief. Thus, Defendant's request to dismiss this claim
4. Injunctive Relief Under the IUDTPA
As part of Plaintiffs' fifteenth cause of action under the Illinois Uniform Deceptive Trade Practices Act (which allows private suits for injunctive relief), "Plaintiff Sullivan and the Illinois Subclass members seek injunctive relief against Defendant Fluidmaster based upon the vast market share which Fluidmaster claims to have for replacement plumbing parts and the extremely high likelihood that the Plaintiff Sullivan and the Illinois Subclass members may personally suffer future harm to their real and personal property from the failure of Fluidmaster water supply lines in their homes, business, and rental properties." [127, ¶ 386.] Plaintiff Sullivan does not dispute that he has replaced the allegedly faulty water lines in his home, and he offers no other explanation of why he faces an "extremely high likelihood" of future harm. At this time, Sullivan's allegation of future harm is both conclusory and implausible. Moreover, absent any credible allegation of a threat of future harm, the Court is unable to determine whether the requested relief would remedy Plaintiff Sullivan's complaint. For these reasons, Defendant's request to dismiss this claim is granted, and the claim is dismissed without prejudice.
5. Injunctive Relief Under GUDTPA
As part of Plaintiffs' sixteenth cause of action under the Georgia Uniform Deceptive Trade Practices Act, "Plaintiff Eisen and the Georgia Subclass members * * * seek appropriate injunctive relief to remedy [Defendant's] misconduct, along with other remedies or damages available under O.C.G.A. § 10-1-371, et seq." [127, ¶ 391.] Plaintiff Eisen does not allege any threat of future harm, plausible or otherwise, and thus lacks Article III standing to pursue a claim for injunctive relief. Defendant's request to dismiss this claim is granted, and the claim is dismissed without prejudice.
6. Injunctive Relief Under AEMLD
As part of Plaintiffs' seventeenth cause of action under the Alabama Extended Manufacturer's Liability Doctrine, "Plaintiff Naef and the Alabama Subclass members * * * seek appropriate injunctive relief to remedy [Defendant's] misconduct, along with all other remedies or damages available." [127, ¶ 403.] Plaintiff Naef does not allege any threat of future harm, plausible or otherwise, and thus lacks Article III standing to pursue a claim for injunctive relief. Defendant's request to dismiss this claim is granted, and the claim is dismissed without prejudice.
D. Arizona Consumer Fraud Act
Defendant moves to dismiss Plaintiffs' twelfth claim — brought by Plaintiffs Rensel and Wyble on behalf of the Arizona subclass — arguing that there was no sale or transaction between Fluidmaster and Rensel or Wyble. The ACFA proscribes certain acts or practices made by any person "in connection with the sale or advertisement of any merchandise." Ariz. Rev. Stat. Ann. § 44-1522. Plaintiff Rensel purchased his water supply line from a home improvement store, and Plaintiff Wyble purchased his as part of a service performed by a plumber. [127, ¶¶ 14, 81.]
Defendant relies on Sullivan v. Pulte Home Corp., 231 Ariz. 53, 290 P.3d 446 (Ariz.Ct.App.2013), where the court held that a subsequent purchaser of a home could not sue the builder under the ACFA because there was no sale or transaction between the two. Sullivan, 290 P.3d at 454, vacated in part on other grounds, Sullivan v. Pulte Home Corp., 232 Ariz. 344, 306 P.3d 1 (2013). But that case is not directly on point here. In Sullivan, there was a clearly definable transaction that
Absent any on-point authority, the Court is not inclined to dismiss Plaintiffs' claim under the ACFA. Defendant's motion to dismiss this claim is therefore denied.
E. Illinois Uniform Deceptive Trade Practices Act
Defendant argues that Plaintiffs' fifteenth claim, brought by Plaintiff Sullivan on behalf of the Illinois subclass, should be dismissed because Sullivan has not alleged that he is likely to be damaged in the future, as required by the IUDTPA. The Court already dismissed (without prejudice) Plaintiffs' claim for injunctive relief under the IUDTPA pursuant to Rule 12(b)(1), and since the IUDTPA only allows individuals to sue for injunctive relief, any further analysis of statutory standing under Rule 12(b)(6) is not necessary. However, for the sake of completion, the Court will address the parties' arguments.
The IUDTPA only allows consumers to sue for injunctive relief, and to state a claim under that Act, plaintiffs must allege a likelihood of future harm — i.e., the Act applies only to persons "likely to be damaged by a deceptive trade practice of another." 815 ILCS 510/3; Brennan v. AT & T Corp., 2006 WL 306755, at *4 (S.D.Ill. Feb. 8, 2006) ("Injunctive relief is obtainable by an individual consumer where that consumer can allege facts that he likely would be damaged by the defendant's conduct in the future."); Howard v. Chi. Transit Auth., 402 Ill.App.3d 455, 341 Ill.Dec. 684, 931 N.E.2d 292, 298-99 (2010) (affirming dismissal of IUDTPA claim where plaintiff could not demonstrate that he would likely be damaged by the defendant's practices in the future).
Plaintiffs do not dispute their need to plead a likelihood of future harm. Instead, they argue that they accomplished that feat by raising their claim "based upon the
F. Georgia Unfair and Deceptive Trade Practices Act
Defendant also seeks dismissal under Rule 12(b)(6) of Plaintiffs' sixteenth cause of action under the GUDTPA, brought by Plaintiff Eisen on behalf of the Georgia subclass, on the grounds that Plaintiff Eisen has not alleged a harm that is likely to cause him damage in the future. This is another instance where the Court already dismissed pursuant to Rule 12(b)(1) Plaintiffs' claim for injunctive relief under the GUDTPA, and because the GUDTPA only allows claims for injunctive relief, see Iler Grp., Inc. v. Discrete Wireless, Inc., 90 F.Supp.3d 1329, 1342 (N.D.Ga.2015), further analysis under Rule 12(b)(6) is not necessary. But again, for the sake of completion, the Court will address the parties' arguments.
The GUDTPA only allows a cause of action for those "likely to be damaged by a deceptive trade practice." Tri-State Consumer Ins. Co. v. LexisNexis Risk Solutions Inc., 823 F.Supp.2d 1306, 1326 (N.D.Ga.2011) (quoting Ga. Code Ann. § 10-1-373(a)); see also Silverstein v. Procter & Gamble Mfg. Co., 2008 WL 4889677, at *4 (S.D.Ga. Nov. 12, 2008) ("A plaintiff who demonstrates past harm, but does not allege ongoing or future harm, has not shown that he is likely to be damaged."); Bolinger v. First Multiple Listing Serv., Inc., 838 F.Supp.2d 1340, 1364 (N.D.Ga. 2012) (a plaintiff must show that he or she is "likely to be damaged in the future" to have standing to seek injunctive relief under the GUDTPA).
Here, Plaintiff Eisen alleges only past harm. [127, ¶ 390 ("Plaintiff Eisen and the Georgia Subclass members have suffered harm as a result of purchasing unsafe and defective water supply lines that were not merchantable.").] Plaintiffs argue that their allegation is based on "Fluidmaster's claim of a vast market share of replacement plumbing parts and the high likelihood that Plaintiff Eisen and other consumers will suffer future harm as a result of this company's deceptive and unfair practices." [148, at 23.] This argument is not persuasive. Even if Fluidmaster does have a vast market share of replacement plumbing parts, that in no way indicates a likelihood that Plaintiff Eisen is somehow going to be harmed by that market share. In order to state a claim under the GUDTPA, Plaintiff Eisen must allege that, at some point in the future, he is likely to be damaged by Defendant's deceptive trade practices. Plaintiff has failed to do so, and thus Plaintiffs' GUDTPA claim is dismissed without prejudice.
G. Pennsylvania Unfair Trade Practices and Consumer Protection Law
In Plaintiffs' nineteenth cause of action, they allege that Defendant violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1 et seq. [See 127, ¶¶ 428-40.] In response, Plaintiffs have voluntarily dismissed this cause of action. [148, at 21 n.17.] Accordingly, Plaintiffs' nineteenth cause of action is dismissed.
H. Unjust Enrichment under California Law
Defendant moves to dismiss Plaintiffs' unjust enrichment claim brought under California law, arguing that California does not recognize a cause of action for unjust enrichment.
In California, "there is not a standalone cause of action for `unjust enrichment'" — instead, that term "is synonymous with `restitution.'" Astiana v. Hain Celestial Group, Inc., 783 F.3d 753, 762 (9th Cir.2015) (citing Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 108 Cal.Rptr.3d 682, 699 (2010); Jogani v. Superior Ct., 165 Cal.App.4th 901, 81 Cal.Rptr.3d 503, 511 (2008)). That being said, "[w]hen a plaintiff alleges unjust enrichment, a court may `construe the cause of action as a quasi-contract claim seeking restitution.'" Id. (quoting Rutherford Holdings, LLC v. Plaza Del Rey, 223 Cal.App.4th 221, 166 Cal.Rptr.3d 864, 872 (2014)). A quasi-contract claim is an equitable claim alleging that the "defendant has been unjustly conferred a benefit `through mistake, fraud, coercion, or request.'" Id. (quoting 55 Cal. Jur. 3d Restitution § 2); see also McBride v. Boughton, 123 Cal.App.4th 379, 20 Cal.Rptr.3d 115, 122 n. 6 (2004) ("`Quasi-contract' is simply another way of describing the basis for the equitable remedy of restitution when an unjust enrichment has occurred."). The Court is inclined to follow Astiana and interpret Plaintiffs' unjust enrichment claim under California law as a quasi-contract claim seeking restitution.
One could argue that Plaintiffs' equitable claim of unjust enrichment should be dismissed as duplicative of Plaintiff's breach of contract and fraud claims. But "there's no rule against inconsistent pleadings in * * * a single suit." Peterson v. McGladrey & Pullen, LLP, 676 F.3d 594, 597 (7th Cir.2012) (quoting Fed. R. Civ. P. 8(d)(3) ("A party may state as many separate claims or defenses as it has, regardless of consistency.")); see also Astiana, 783 F.3d at 762-63 ("To the extent the district court concluded that the cause of action was nonsensical because it was duplicative of or superfluous to Astiana's other claims, this is not grounds for dismissal (citing Fed. R. Civ. P. 8(d)(2) ("A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones."))); Loop AI Labs Inc. v. Gatti, 2015 WL 5158639, at *6-7 (N.D.Cal. Sept. 2, 2015) (same). While Plaintiffs' unjust enrichment claim may eventually give way to Plaintiffs' breach of contract and fraud claims, Plaintiffs may plead in the alternative at this stage in the litigation.
Defendant's motion to dismiss Plaintiffs' claim of unjust enrichment under California based on its argument that California law does not recognize a cause of action for unjust enrichment is denied.
For the foregoing reasons, Defendant Fluidmaster's motion to dismiss  is granted in part and denied in part.