575 F.Supp.3d 995
N.D. Ill.2021Background
- Rust-Oleum manufactures “Restore” wood-finishing products (Deck Start Wood Primer, Restore 2X One Coat Solid Stain, Restore 4X Deck Coat) marketed for superior coverage, water repellency, mildew resistance, and ease of prep.
- Plaintiff Allen Garrard (Missouri resident) purchased Restore products in June 2017, applied them in Sept. 2017, and alleges peeling, bubbling, plant growth, and detachment by 2018–2019.
- Garrard sued Rust-Oleum on behalf of himself and a putative nationwide class, alleging defective products and misrepresentations; claims included (1) violation of Missouri Merchandising Practices Act (MMPA), (2) unjust enrichment, (3) breach of implied warranty of merchantability (810 ILCS 5/2-314), and (4) declaratory judgment. He voluntarily dismissed negligent misrepresentation.
- Rust-Oleum moved to dismiss and to strike class allegations. The court evaluated pleading standards (Twombly/Iqbal; Rule 9(b)) and whether factual development was needed for class issues.
- The court dismissed without prejudice the MMPA claim (for failure to plead causation and, as to omissions, scienter), the Illinois implied warranty claim (statute does not apply extraterritorially to Garrard’s Missouri purchase), and the standalone declaratory-judgment count; it denied dismissal as to unjust enrichment and declined to strike class allegations at the pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| MMPA liability based on misrepresentations (causation) | Garrard alleges Rust-Oleum misrepresented product characteristics and that those misrepresentations caused his loss. | Rust-Oleum: complaint fails to plead that any misrepresentation caused Garrard’s purchase or loss; no allegation he knew of misrepresentations pre-purchase. | Dismissed as to misrepresentation theory for failure to plead causation. |
| MMPA liability based on omissions (knowledge/scienter) | Garrard alleges Rust-Oleum knew or should have known of defects (MDL, consumer complaints) and omitted them, causing purchases. | Rust-Oleum: complaint does not plead when defendant knew or that it reasonably should have known of defects; cited evidence post-dates purchase. | Omission theory adequately pleads causation but fails for lack of pleaded scienter; MMPA claim dismissed without prejudice. |
| Breach of implied warranty (810 ILCS 5/2-314) | Garrard asserts implied warranty claim against Rust-Oleum. | Rust-Oleum: Illinois statute should not be applied extraterritorially to a Missouri purchase/incident. | Dismissed without prejudice: 810 ILCS 5/2-314 does not apply extraterritorially to Garrard’s Missouri-based claim. |
| Unjust enrichment / economic-loss doctrine & choice of law | Garrard seeks restitution for overpayment or for products he would not have bought if aware of defects. | Rust-Oleum: economic-loss doctrine bars unjust enrichment under Missouri law; also urges Illinois choice-of-law favoring Missouri law. | Denied: court finds no outcome-determinative conflict between Illinois and Missouri law and Rust-Oleum hasn’t shown economic-loss doctrine bars claim. Unjust enrichment survives. |
| Declaratory judgment as independent claim | Garrard seeks declaration that products are defective and disclosure is required. | Rust-Oleum: Declaratory Judgment Act provides a remedy, not a standalone cause of action. | Standalone declaratory-judgment count dismissed without prejudice, but class-wide declaratory relief remains a possible form of relief at certification/merits stage. |
| Strike class allegations now | Garrard’s class definition is appropriate; class-wide relief sought. | Rust-Oleum: class is overbroad, contains time-barred claims, predominance problems, and multistate-law conflicts. | Denied as premature: factual development required; statute-of-limitations and choice-of-law issues can be addressed at certification. |
Key Cases Cited
- Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d 362 (7th Cir.) (pleading standard and drawing inferences on a Rule 12(b)(6) motion)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for federal pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (further clarifying Twombly pleading standard)
- Menzies v. Seyfarth Shaw LLP, 943 F.3d 328 (7th Cir.) (Rule 9(b) requires who, what, when, where, how for fraud allegations)
- Owen v. Gen. Motors Corp., 533 F.3d 913 (8th Cir.) (MMPA requires causal connection between deceptive practice and ascertainable loss)
- Faltermeier v. FCA US LLC, 899 F.3d 617 (8th Cir.) (evidence of plaintiff’s awareness of misrepresentation necessary for causation in some contexts)
- Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100 (Ill.) (Illinois statutes are not extraterritorial absent express legislative intent)
- Dunne v. Res. Converting, LLC, 991 F.3d 931 (8th Cir.) (Missouri economic-loss doctrine limited to warranty and negligence/strict liability claims)
- Pella Corp. v. Saltzman, 606 F.3d 391 (7th Cir.) (affirming class-wide declaratory relief under Rule 23(b)(2))