785 F.Supp.3d 161
N.D. Miss.2025Background
- The City of Starkville contracted with Volkert, Inc. to design and manage upgrades to its wastewater treatment facility, specifically the oxidation ditches.
- J&P Construction was awarded the construction contract, and Evoqua Water Technologies supplied the disc aerator assemblies for the project.
- The City alleges that after installation in July 2020, the disc aerators repeatedly failed, causing damage, including to some nearby concrete.
- The City brings claims against Evoqua for negligence, breach of express warranty, and breaches of implied warranties (merchantability and fitness for particular purpose).
- Evoqua moved to dismiss the City’s negligence claim (arguing it was barred by the economic loss doctrine) and the implied warranty claims (arguing they were validly disclaimed under contract law).
- The case is before the U.S. District Court for the Northern District of Mississippi on a Rule 12(b)(6) motion to dismiss by Evoqua.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Economic Loss Doctrine (Negligence) | Negligence not barred: claim based on design/service duties, not just product defect. | Barred: Only economic loss to integrated structure; doctrine applies. | Not barred; City’s negligence claim may proceed. |
| Damage to 'Other Property' | Damage to concrete is damage to 'other property' beyond product. | No; concrete is part of integrated structure, not other property. | Court did not resolve on this basis. |
| Implied Warranty Disclaimer | Disclaimer may be invalid; City not party to contract; possible unconscionability. | Disclaimer is clear, in writing, and permitted between merchants. | Disclaimer is valid; claims dismissed. |
| Merchant Status of J&P | J&P not a merchant under UCC. | J&P is a specialized, sophisticated contractor, thus a merchant. | J&P is a merchant. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for Rule 12(b)(6) motions: plausibility requirement)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility not probability required for Rule 12(b)(6))
- State Farm Mut. Auto. Ins. Co. v. Ford Motor Co., 736 So. 2d 384 (Miss. Ct. App. 1999) (economic loss doctrine bars recovery for economic loss to integrated product)
- Lyndon Prop. Ins. Co. v. Duke Levy & Assoc., LLC, 475 F.3d 268 (5th Cir. 2007) (economic loss doctrine not extended beyond products liability to breach of design duties)
- Sanderson Farms, Inc. v. McCullough, 212 So. 3d 69 (Miss. 2017) (negligence elements under Mississippi law)
- Peavy Electronics Corp. v. Baan U.S.A., Inc., 10 So. 3d 945 (Miss. Ct. App. 2009) (sophisticated business can be a merchant under UCC)