In re Rust-Oleum Restore Marketing, Sales Practices & Products Liability Litigation
155 F. Supp. 3d 772
N.D. Ill.2016Background
- Plaintiffs (40 individuals from 27 states) purchased Rust‑Oleum’s "Restore" deck and concrete resurfacer and allege it prematurely degrades (chips, peels, bubbles, delaminates) despite Rust‑Oleum’s labeling, marketing, and a "Limited Lifetime Warranty."
- Rust‑Oleum acquired Synta (the original maker of Restore) in September 2012; plaintiffs allege Rust‑Oleum knew or should have known of defects via testing, audits, and consumer complaints.
- Complaint asserts ten counts: declaratory/injunctive relief; MMWA and state warranty claims (express and implied); consumer‑fraud and false‑advertising claims under many states’ statutes; California CLRA; negligent misrepresentation; fraudulent concealment.
- Rust‑Oleum moved to dismiss under Rule 12(b)(6), arguing (inter alia) that: Count I is impermissible as a standalone claim; warranty remedies are limited by express exclusive‑remedy and consequential‑damages exclusions; many fraud/warranty claims lack particularity, reliance, notice, privity, or are preempted by state product‑liability statutes; and conduct pre‑dating its manufacture of Restore cannot be alleged.
- The court applied Twombly/Iqbal pleading standards and Rule 9(b) for fraud, and evaluated multiple state‑law defenses, often finding factual disputes inappropriate for dismissal at pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Count I (declaratory/injunctive relief) — permissible as class claim | Plaintiffs seek classwide injunctive/declaratory relief under Rule 23(b)(2) to address uniform misrepresentations and warranty terms | Rust‑Oleum: relief is a remedy, not a standalone cause, and duplicative | Denied as premature — not dismissed; scope to be examined at class certification |
| 2. Effect of written warranty limits (exclusive‑remedy & consequential‑damages exclusions) | Plaintiffs: limitations fail of essential purpose, may be unconscionable; damages may be direct; factual issues require discovery | Rust‑Oleum: limitations are valid and bar plaintiffs from extra warranty remedies and consequential damages | Denied — court finds factual disputes (latent defects, remedy failure, unconscionability, direct vs consequential) preclude dismissal at pleading stage |
| 3. Pre‑suit notice and privity for warranty claims | Plaintiffs: gave notice or allege Rust‑Oleum had actual knowledge; plaintiffs relied on labels/ads (direct‑dealing) so privity exception applies | Rust‑Oleum: many plaintiffs failed to give required UCC/MMWA notice; many lack privity with manufacturer | Denied — allegations of notice, actual knowledge, and direct‑marketing/privity exceptions suffice at pleading stage |
| 4. Fraud‑based claims (Rule 9(b)) — particularity, reliance, knowledge, omissions | Plaintiffs: plead who/what/when/where/how; reliance and causation adequately alleged; knowledge alleged via tests, audits, complaints | Rust‑Oleum: allegations are generic puffery/future promises; many state claims lack statutory elements or pre‑suit prerequisites; omissions/duty issues | Mostly denied — court finds Rule 9(b) satisfied for statutory and common‑law fraud claims generally; certain omission‑based negligent‑misrepresentation and fraudulent‑concealment claims dismissed for specific plaintiffs/states where duty or timing lacking (limited, without prejudice) |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plaintiff must plead facts plausibly showing entitlement to relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim; legal conclusions not entitled to pleading weight)
- Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014) (Rule 12(b)(6) standards and pleading requirements)
- Lemon v. Int’l Union of Operating Eng’rs, Local No. 139, AFL‑CIO, 216 F.3d 577 (7th Cir. 2000) (Rule 23(b)(2) injunctive class considerations)
- Schimmer v. Jaguar Cars, Inc., 384 F.3d 402 (7th Cir. 2004) (MMWA allows federal enforcement of state warranty claims)
- Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69, 435 N.E.2d 443 (Ill. 1982) (economic‑loss rule and "other property" exception)