460 F.Supp.3d 894
N.D. Cal.2020Background:
- Plaintiffs (Cary and Terri Cooper; Fernandina Beach LLC; Simon Nguyen and Thoai Doan) own homes where Simpson Strong‑Tie connectors/fasteners were installed and allege those products prematurely corrode, weakened during a 2019 hurricane (Coopers) and pose ongoing risk and repair costs.
- Plaintiffs rely on Simpson marketing/materials but claim Simpson failed to disclose that certain products corrode prematurely even when selected/installed per Simpson’s instructions.
- FAC asserts nine causes of action: CLRA, two UCL counts (unlawful/unfair), FDUTPA, breach of express warranty, breach of implied warranties (fitness, merchantability), negligence, and fraud by omission/concealment.
- Simpson moved to dismiss under Rule 12(b)(6) and sought judicial notice of its Application Guide, website pages, and public records; the court granted judicial notice and considered those materials on the motion.
- The court dismissed the FAC: several claims dismissed with leave to amend (CLRA, UCL, FDUTPA, express warranty, fraud); others dismissed with prejudice (implied warranties, negligence), and some claims were jurisdictionally or substantively barred (Fernandina’s CLRA, California Plaintiffs’ Song‑Beverly Act claims cannot proceed). Plaintiffs were given leave and a deadline to amend.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Pleading specificity / plausibility | Plaintiffs allege Product prematurely corrodes and is defectively designed. | Simpson: plaintiffs fail to identify which models, coatings, locations, installation timing, or compliance with instructions — pleadings therefore implausible. | Court: complaint lacks sufficient factual specificity to plausibly allege a defect; dismissal for failure to state a claim. |
| Failure to warn / reliance | Simpson omitted that Product corrodes even when installed per instructions and implied it would last life of home. | Simpson: Application Guide expressly warns about corrosion risks and disclaims service life; plaintiffs admit they did not see warnings so cannot show reliance. | Court: Guide rebuts omission/misrepresentation theory and plaintiffs failed to plead plausible reliance; CLRA/UCL/FDUTPA allegations dismissed (some with leave). |
| Warranty claims / disclaimers | Plaintiffs assert express and implied warranties were breached (product not merchantable/fit). | Simpson: Limited warranty and conspicuous disclaimers exclude implied warranties and deny durability guarantees; Song‑Beverly inapplicable to used/installed products. | Court: express warranty claim dismissed (leave to amend); implied warranty claims dismissed with prejudice; California SBA claims barred. |
| Negligence and economic‑loss rule (ELR) | Plaintiffs allege negligent design, manufacture, and failure to warn causing property damage. | Simpson: damages are to integrated homes (economic loss); ELR bars tort recovery for damages to the product or integrated product. | Court: ELR applies; negligence claim dismissed with prejudice (no physical damage to other property alleged). |
| Statute of limitations / fraudulent concealment | Plaintiffs rely on fraudulent concealment/delayed discovery to toll limitations. | Simpson: plaintiffs fail to plead when/how they discovered fraud or why they were diligent; tolling not available. | Court: plaintiffs did not plead the time/manner of discovery or lack of notice; cannot invoke delayed‑discovery/fraudulent concealment to avoid limitations. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim; legal conclusions not accepted as true)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (complaint must allege facts making liability plausible, not merely possible)
- Lopez v. Smith, 203 F.3d 1122 (9th Cir.) (leave to amend generally should be granted unless amendment would be futile)
- Daniel v. Ford Motor Co., 806 F.3d 1217 (reliance requirement for omission‑based consumer claims and presumption of reliance where omission is material)
- Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979 (California economic loss rule limits tort recovery for purely economic/product defects)
- Cel‑Tech Commc’ns v. L.A. Cellular Tel. Co., 20 Cal.4th 163 (UCL borrows violations of other laws as predicates)
- In re Toyota Motor Corp., 785 F. Supp. 2d 883 (treats territorial reach of CLRA/UCL for non‑resident plaintiffs and point‑of‑dissemination considerations)
- Casa Clara Condominium Ass’n v. Charley Toppino & Sons, 620 So.2d 1244 (Fla. 1993) (component parts integrated into a finished home are not "other property" for ELR analysis)
- Tiara Condo. Ass’n v. Marsh & McLennan Cos., 110 So.3d 399 (Fla. 2013) (Florida law on economic‑loss rule and exceptions, including fraudulent inducement)
- Credit Suisse Sec. (USA) LLC v. Simmonds, 566 U.S. 221 (fraudulent concealment tolling ceases when facts are or should have been discovered)