Melton v. Century Arms, Inc.
243 F. Supp. 3d 1290
S.D. Fla.2017Background
- Five named plaintiffs own Century-manufactured AK-47–style rifles with a full-auto safety selector; plaintiffs allege the selector is defectively designed and can cause an unintended discharge when moved above "safe." Only one named plaintiff alleges an actual accidental discharge; others allege risk and diminished value.
- Plaintiffs assert ten counts (including FDUTPA, negligence, strict liability, breach of implied warranty, Magnuson-Moss, fraud/concealment, unjust enrichment, and declaratory relief) and seek repair/replacement, diminished-value and other relief.
- Plaintiffs purchased rifles from third-party dealers (four from dealers, one from his father); none purchased directly from Century.
- Century moved to dismiss for lack of Article III standing and for failure to state claims; parties briefed and argued the motion and the court considered choice-of-law issues for each plaintiff.
- Court found Article III standing based on alleged economic injury (loss of benefit of the bargain) and applied Florida choice-of-law rules to determine which state law governs each plaintiff’s substantive claims.
- Disposition: court denied dismissal of FDUTPA and unjust enrichment; dismissed implied-warranty and Magnuson-Moss counts and declaratory relief; applied economic-loss analysis to limit tort claims differing by plaintiff/state (granted in part, denied in part).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (constitutional) | Plaintiffs: alleged economic loss (diminished value/repair) suffices as injury in fact | Century: no actual injury from accidental discharge; mere risk is insufficient | Denied dismissal for lack of standing—economic-loss allegations suffice to plead Article III injury |
| Choice of law | Plaintiffs: apply Florida law | Century: choice-of-law matters per plaintiff | Court applied Florida’s most-significant-relationship test; governed by purchase/residence/injury for each plaintiff (FL for Johnson/Valdes/Smith; AZ for Melton; IL for Morris) |
| Applicability of economic-loss rule to tort claims (negligence, strict liability, fraud/concealment) | Plaintiffs: tort and fraud claims allowed; fraud exceptions apply | Century: economic-loss rule bars tort claims that only seek economic damages | Mixed result: Florida plaintiffs (Johnson, Valdes, Smith) — economic-loss rule bars Counts 2,3,6,7,8; Arizona plaintiff (Melton) — tort claims survive under case-specific Arizona approach; Illinois plaintiff (Morris) — negligence/strict liability dismissed, but fraud/negligent-misrep survive |
| Breach of implied warranty and Magnuson-Moss | Plaintiffs: assert implied warranty and federal warranty act claims | Century: privity lacking; Florida requires privity for implied warranty | Counts 4 and 5 dismissed in full (plaintiffs retreated at argument; privity requirement not met); Magnuson-Moss claim fails with state warranty claim |
| FDUTPA (Count 1) | Plaintiffs: Century concealed defect and made misrepresentations in Florida-based materials; damages alleged | Century: Melton and Morris are out-of-state purchasers; FDUTPA shouldn’t apply; alleged conduct not deceptive or aggrieved | Denied dismissal on FDUTPA; court found sufficient Florida contacts and deceptive-act allegations at pleading stage (issue may be revisited at certification) |
| Unjust enrichment & declaratory relief | Plaintiffs: alternative equitable relief for diminished value; seek declaration and recall | Century: unjust enrichment duplicates legal claims; declaratory relief redundant | Unjust enrichment claim survives dismissal; declaratory relief (Count 10) dismissed as unnecessary (court declines to exercise discretion) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard requires factual plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing burden and injury-in-fact requirements)
- DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (standing requires traceability and redressability)
- Tiara Condominium Ass’n v. Marsh & McLennan Cos., 110 So.3d 399 (Fla. 2013) (Florida Supreme Court discussion of economic-loss rule in products context)
- Salt River Project Agric. Improvement & Power Dist. v. Westinghouse Electric Corp., 143 Ariz. 368 (Arizona courts apply case-specific test to economic-loss issues)
- Moorman Manufacturing Co. v. National Tank Co., 91 Ill.2d 69 (Illinois economic-loss rule and its exceptions)
- In re Takata Airbag Products Liability Litigation, 193 F.Supp.3d 1324 (S.D. Fla. 2016) (application of Florida law on implied warranty/privity and economic-loss rule)