ORDER GRANTING IN PART AND . DENYING IN PART DEFENDANTS’ MOTION TO DISMISS
This case is a products liability class action brought by owners of various rifles manufactured by Century Arms, Inc., Century International Arms Corporation, Century Arms of Vermont, Inc., and Century International Arms of Vermont, Inc, (collectively, “Century”). Plaintiffs allege that the safety mechanism in certain models is defectively designed and allows the rifles to Are when the safety lever is moved above the safety position. This cause comes before the Court upon Century’s Motion to Dismiss, which asks the Court to dismiss all counts for lack of standing or for failure to .state a claim upon which relief can be granted. The Court has reviewed the Motion, Plaintiffs’ Response and Century’s Reply. Additionally, the parties raised some of their briefed arguments at oral argument on March 3,2017,
I. BACKGROUND
The five named Plaintiffs own Century AK-47 rifles with full-auto safety selectors manufactured by Century after 1995. Each Plaintiff owns a different model with the same alleged design defect—a full-auto safety selector. Plaintiffs- allege that the full-auto safety selector allows the rifles to accidentally fire when the safety lever is moved above the safety position. Plaintiffs also allege that Century had knowledge of the design defect for years and has
The Complaint alleges ten counts against Century:
1) violation of the Florida Deceptive and Unfair Trade Practices Act;
2) negligence;
3) strict liability in tort;
4) breach of implied warranty of merchantability;
5) violation of the Magnuson-Moss Warranty Act;
6) fraudulent inducement and/or suppression;
7) negligent failure to disclose, failure to warn, concealment and misrepresentation;
8) fraudulent concealment and intentional failure to warn; t.
9) wrongful and/or unjust enrichment; and
10) declaratory relief.
The five named Plaintiffs are:
• Jeffrey Melton, a Tennessee resident who purchased a Century GP 1975 rifle from J & G Sales in Arizona;
• Ezekiel Morris, an Illinois resident who purchaséd a new Century OPAP rifle from Shooting Sports in Illinois;
• Tommy Allen Johnson, a Florida resident who purchased a Century ■ NPAP rifle from Take Aim Guns in Florida;
• Juan Valdes, a Florida resident who purchased a Century M70AB2 rifle from Miami Police Supply a/k/a Mark’s Guns Corpi in Florida; and
• Manville Smith, a Florida resident who purchased a Century M70 rifle from his father. The Complaint does not state where the purchase occurred.
II. LEGAL STANDARD
“A pleading that states a claim for relief must contain ... a short and plain statement of - the claim showing that the-pleader is entitled to .relief.” Fed, R. Civ. P, 8(a)(2). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal,
Where a cause of action sounds in fraud, the heightened standard in Federal Rule of Civil Procedure 9(b) also must be satisfied. Under -Rule 9(b), “a party must state with particularity the circumstances constituting fraud or. mistake,” although “conditions of a person’s mind,” such as rpalice, intent, and knowledge may be alleged generally. Fed. R. Civ. P, 9(b). “The ‘particularity’ requirement serves an important purpose in fraud actions by alerting defendants to the precise miscon
III. ANALYSIS
A. Standing
Century moves to dismiss all counts for lack of standing. Article III of the U.S. Constitution limits federal court jurisdiction to actual cases and controversies. See Cone Corp. v. Fla. Dep’t of Tramp.,
Because standing is jurisdictional, “a dismissal for lack of standing is essentially the same as a dismissal for want of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).” Mitchell v. Balboa Ins. Co., No. 11-cv-02580,
To have Article III standing, a plaintiff “must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.” DaimlerChrysler Corp. v. Cuno,
Century argues that Plaintiffs have no standing because the Complaint does not allege that the defect actually manifested itself in an unintentional firing or that Plaintiffs were injured by an unintentional firing. Century asserts that claims for defective design or failure to warn, without a
Plaintiffs argue that standing is sufficient where plaintiffs claim economic harm such as overpayment, loss of value,, or loss of usefulness emanating from the loss of their benefit of the bargain. Indeed, if “benefit of the bargain” damages are theoretically available for the causes of action that have been asserted, dismissal on the pleadings is premature. See Coghlan v. Wellcraft Marine Corp.,
B. Choice of Law
Most of the ten counts asserted against Century arise under state law. Generally, a federal court hearing- state law claims applies the choice-of-law .rules of the forum state. Grupo Televisa, S.A. v. Telemundo Commc’ns Grp., Inc.,
Florida’s choice-of-law rules for tort actions are based on the “‘most significant relationship test’ outlined in the Restatement (Second) of • Conflict of Laws.” Id. (quoting Bishop v. Fla. Specialty Paint Co.,
In any choice-of-law analysis,. a fundamental issue is “whether a conflict actually exists.” Cooper v. Meridian Yachts, Ltd.,
1. Plaintiffs Johnson and Valdes
The state of Florida is the sole jurisdiction that has contacts to Johnson
2. Plaintiff Melton
The states of Tennessee and Arizona are each jurisdictions that have potential contacts to Melton’s claims. Melton is a resident of Tennessee 'who purchased his Century rifle in Arizona—where the alleged injury occurred. The Court finds that these factors, when evaluated according to their relative importance to Melton’s claims, indicate that Arizona has a more significant relationship to Melton’s claims than Tennessee. Thus, applying Florida’s “most significant relationship” choice-of-law rule, Arizona law governs Melton’s claims. ‘
3. Plaintiff Morris
The state of Illinois is the sole jurisdiction that has contacts with Morris’ claims. Morris is a resident of Illinois who purchased his Century rifle in Illinois. Thus, applying Florida’s “most significant relationship” choice-of-law rule, Illinois law governs Morris’ claims.
4. Plaintiff Smith
The state of Florida is the sole jurisdiction that has contacts to Smith’s claims. Smith is a resident of Florida. The Complaint does not state where he purchased the rifle, but only that' he purchased it from his father. Given the alleged facts at this time, applying Florida’s “most significant relationship” choice-of-law rule, Florida law governs Smith’s claims.
C. Counts 2, 3, 6, 7 and 8: Tort Claims
Century moves to dismiss Counts 2, 3, '6, 7 and 8, which assert: (1) negligence; (2) strict liability; (3) fraudulent inducement and/or suppression; (4) negligent failure to disclose, failure to warn, concealment and misrepresentation; and (5) fraudulent concealment and intentional failure to warn. Century argues that all five tort claims are barred by the economic loss rule and that Plaintiffs’ fraud claims do not meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b).
As an initial matter, Plaintiffs’ fraud claims satisfy Rule 9(b). Plaintiffs’ assertions of reasonable and justifiable reliance on Century’s allegedly deliberate silence concerning its rifles’ safety mechanisms and on Century’s allegedly false representation in the rifles’ manuals are sufficient. Therefore, Plaintiffs’ fraud claims are not dismissed on this ground.
1. Johnson, Valdes, and Smith’s Tort Claims Under Florida Law
. The Court examined Florida’s economic loss rule in depth in In re Takata Airbag Products Liability Litigation: t
“[T]he economic loss rule is a judicially created doctrine that sets forth the circumstances under which a tort action ⅛’ prohibited if the only damages suffered are economic losses.” Tiara Condo. Ass’n v. Marsh & McLennan Cos.,110 So.3d 399 , 401 (Fla. 2013). The Florida Supreme Court has defined economic loss as “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profit—without any claim of personal injury or damage to other property.” Id. (intérnal quotation marks omitted). Florida’s Supreme'Court has explained that “[t]he rule has its roots in the products liability arena, and was primarily intended to limit actions in the products liability context.” Id. Specifically, the court explained the economic loss rule is “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages- cit- . izens to avoid causing injury physical harm to others.” Id. (internal quotation marks omitted).
In an effort to “roll back the economic loss rule” after an era of “unprincipled extension,” Florida’s Supreme Court expressly limited the application of the economic loss rule to the products liability context. Id. In doing so, the court noted several exceptions to the economic loss rule, including “fraudulent inducement, and negligent misrepresentation, or free-standing statutory causes of action.” Id. However, the fraudulent inducement and negligent misrepresentation cases to which the court cited were outside of the products liability context. See id. at nn. 7, 8. These exceptions were irrelevant to the decision reached in Tiara.
The question before the Court, then, is whether Florida’s Supreme Court, by its dicta, intended to abridge the economic loss rule in the products liability setting to allow fraudulent inducement and negligent misrepresentation claims (and by implication fraudulent concealment claims), even where the action for fraud depends upon precisely the same allegations as a warranty claim—i.e., a claim the product failed to work as promised.
The Court agrees with other courts in this Circuit that have concluded that Florida’s Supreme Court did not intend to allow such products liability claims to survive. See Aprigliano v. Am. Honda Motor Co.,979 F.Supp.2d 1331 , 1337-39
(S.D. Fla. 2013); Burns v. Winnebago Indus., Inc., No. 8:13-ev-1427-T-24,2013 WL 4437246 , at *4,2013 U.S. Dist. LEXIS 116377 at *9 (M.D. Fla. Aug. 16, .2013) (holding that fraudulent inducement and negligent- misrepresentation exceptions to the economic loss rule generally arise in the context of contractual privity cases, not in products liability actions, and finding that economic loss rule barred claims of fraudulent concealment and negligent misrepresentation in the products liability context); In re Atlas Roofing Corp. Chalet Shingle Prods. Liab. Litig., No. 130md-2495,2015 WL 3796456 , at *3,2015 U.S. Dist. LEXIS 78898 , at * 17-18 (N.D. Ga. June 18, 2015) (applying Florida law and stating economic loss rule barred action for fraudulent concealment in products liability case because the alleged misrepresentation concerned the heart of the parties’ agreement and “simply applying the label of fraud, to a cause of action will not suffice to subvert the sound policy rationales underlying the economic loss rule.”).
In Aprigliano, the court found that the plaintiffs’ “cause of action for negligent misrepresentation is dependent on the same fundamental allegations contained in the breach of warranty claim—specifically, that Honda breached the terms of its Warranties - by providing Plaintiffs with defective motorcycles....”979 F.Supp.2d at 1338 . The court explained that “[ujsually claims for negligent misrepresentation are barred by the economic loss rule where, as here, there are claims for breach of warranty alongside tort claims and the allegations contained in both are similar.” Id. Accordingly, the court held the negligent misrepresentation claim was barred by the economic loss rule. In explaining its analysis, the court quoted Bums, stating that
[T]o hold otherwise would allow the economic loss rule to be manipulated such that - any time a purchaser received a defective product that did not cause any injuries or damage to other property, such a purchaser could assert claims for negligent and fraudulent concealment regarding the defect to avoid the economic loss ride.
Id. (citing Burns,2013 WL 4437246 , at *4,2013 U.S. Dist. LEXIS 116377 at *9).
Here, Plaintiffs’ five tort claims pertain only to the quality of Century’s products, i.e., the rifles are not as safe (and may at times be lethally dangerous) as advertised. Plaintiffs allege only economic harm arising from the claims, precisely what a breach of warranty claim would allege—namely that Century’s rifles did not work as promised. Because the Court holds that Florida’s economic loss rule applies to all such tort claims, the Court GRANTS Century’s motion to dismiss Counts 2, 3, 6, 7 and 8 as to Johnson, Valdes, and Smith.
2. Melton’s Tort Claims Under Arizona Law
Century argues that Arizona’s economic loss rule bars Melton’s tort claims.
The Supreme Court of Arizona has stated, “[i]n the products liability context, [this court] declined to categorically bar tort recovery of economic losses. Instead [this court] reasoned that ‘each case must be examined to determine whether the facts preponderate in favor of the application of tort law or commercial law exclusively or a combination of the two.” ’ Flagstaff Affordable Hous. L.P. v. Design Alliance, Inc.,
Here, applying Arizona’s three-factor analysis, Plaintiffs allege facts to support their tort claims under Arizona law. Although the only harm alleged is economic loss, a defect in the safety selector that permits the rifle to Are without a trigger pull could be considered unreasonably dangerous as it may cause substantial risk of death or serious injury. The claims are further supported because of Plaintiffs’ lack of privity with Century and the resulting unavailability of contractual remedies. Therefore, Plaintiffs state a claim upon which relief can be granted' as to Melton for all five tort claims.' Accordingly, the Court DENIES Century’s motion to dismiss as to Counts 2, 3, 6,; 7 and 8 as to Melton.
3. Morris’ Tort Claims Under Illinois Law
Century argues Morris’ tort claims are barred because in Illinois, a claim that presents an economic loss is not recoverable in tort without injury to a plaintiffs person or property.
Here, Plaintiffs do not allege there is any accompanying injury or property damage. Therefore, Morris’ claims for negligence and strict liability are barred by Illinois’ economic loss rule. However, Counts 6, 7 and 8 all involve either fraud or- negligent misrepresentation, which fall within Illinois’ exceptions. Thus, these claims cannot be dismissed at this stage of litigation. Accordingly, the Court GRANTS Century’s motion.to dismiss as to Counts 2 and 3 as to Morris, and DENIES Century’s motion to dismiss as to Counts 6, 7 and 8 as to Morris.
D. Counts 4 and 5: Breach of the Implied Warranty of Merchantability and Violation of the Magnuson-Moss Warranty Act
Century moves to dismiss Counts 4 and 5, which assert breach of the implied warranty of merchantability and violation of the Magnuson-Moss Warranty Act. At oral argument, Plaintiffs’ counsel stated that.Plaintiffs retreat on Counts 4 and 5 in light of Takata, in which the Court held that Florida law requires privity to sustain a breach of implied warranty claim.
Like Florida, Arizona and Illinois also require privity for implied warranty claims. See Flory v. Silvercrest Indus.,
The Magnuson-Moss Warranty Act gives consumers a private right of action against warrantors for a breach of warranty, as defined by state law. See 15 U.S.C. § 2301(7). However, a Magnuson-Moss Warranty Act claim only exists if a valid breach of warranty claim is also stated. Bailey v. Monaco Coach Corp.,
E. Count 1: Violation of the Florida Deceptive and Unfair Trade Practices Act
Century moves to dismiss Count 1, which asserts violation of the Florida Deceptive and Unfair Trade Practices Act. Plaintiffs, assert, that Century employed fraud, deception, false promises, misrepresentation and the knowing concealment, suppression, or omission of a material fact in its distribution, sale, marketing, and/or advertisement of its rifles by making false representations about the performance of the rifles—particularly the safety mechanism—and by failing to disclose the alleged defect.
Century first argues that Melton and Morris cannot bring a claim under the Florida Deceptive and Unfair Trade Practices Act because neither Melton nor Morris purchased their rifles in Florida or live in Florida. Plaintiffs respond that the Act applies to non-resident consumers. Florida courts are split on whether the Act extends to out-of-state consumers, and the Florida Supreme Court has not addressed the issue. Some Florida case law holds that the Act should be applied only to in-state consumers. See e.g., Hutson v. Rexall Sundown, Inc.,
Most federal courts in the Southern District of Florida that have considered the issue have followed Millennium. See Bank of Am., N.A. v. Zaskey, No. 9:15-cv-81325,
Here, Melton’s and Morris’ injuries occurred where the rifles were purchased— outside of Florida. Following the reasoning in Hutson or Stein, this could preclude Melton and Morris, from bringing a claim under the Florida Deceptive and Unfair Trade Practices Act. However, Plaintiffs have alleged many facts connecting Florida to Century’s alleged misconduct giving rise to the claim. For example, the Complaint states that Century designed, manufactured, marketed and distributed the rifles in Florida; that Century willfully, knowingly, and/or recklessly committed acts in Florida for the express purpose-of concealing safety defects; that all Century entities are citizens of Florida; and that Century misrepresented or concealed material facts in its manuals and on its website, both in Florida. Even under Hutson or Stein, sufficient connections -with Florida could justify application of the Florida Deceptive and Unfair Trade Practices Act. Therefore, the court will not dismiss the Florida Deceptive and Unfair Trade Practices Act claim as to Melton or Morris for failure to state a claim. However, the Court likely will readdress the issue after further fact development at class certification. See, e.g., Cohen v. Implant Innovations, Inc.,
Next, Century argues that Plaintiffs fail to allege deceptive or unfair acts or practices. However, the Complaint expressly alleges numerous discrete acts that, if true, are deceptive, especially considering the broad concept of “unfair or deceptive” conduct under the Act. See TemPay, Inc. v. Biltres Staffing of Tampa Bay, LLC,
Third, Century argues that Plaintiffs fail to show how they have been aggrieved by the alleged unfair acts. But as explained supra, in the standing analysis, Plaintiffs sufficiently allege harm related to the diminished benefit of the bargain based on ownership of defective rifles. Finally, Century argues that the Complaint makes no allegations about the difference in market value of the rifles at the time of sale. However, the Complaint seeks diminished-value damages and it is well settled that such damages are recoverable under the Florida Deceptive and Unfair Trade Practices Act. See Collins,
Given the deference afforded to plaintiffs on a motion to dismiss, Plaintiffs have alleged sufficient facts to state a claim under the Florida Deceptive and Unfair Trade Practices Act. Accordingly, the Court DENIES Century’s motion to dismiss Count 1.
F. Count 9: Unjust Enrichment
Century moves to dismiss Count 9, which asserts unjust enrichment as an alternative theory. The same analysis applies to all five named Plaintiffs as there is no conflict of laws because the laws of Arizona, Illinois and Florida all “produce the same result.” See Cooper,
Century first argues that although a plaintiff may plead unjust enrichment as
Century next argues that there is no direct benefit under Florida law because no named Plaintiff purchased a rifle directly from Century. But Century’s argument is contrary to Florida law, which provides that no direct contact is required for a direct benefit to be conferred. See, e.g., Romano v. Motorola, Inc., No. 07-CIV-60517,
G. Count 10: Declaratory Relief
Century moves to dismiss Count 10, which asserts a residual claim for declaratory relief. Plaintiffs seek a declaration that: (1) all guns with the full-auto safety selector device have a common design defect that causes the guns to fire unexpectedly without a trigger pull when the safety lever is above the “safe” position; (2) Century knew of the safety selector defect in .the guns; and (3) Century shall issue a recall of all guns with the safety selector defect and compensate Plaintiffs.
In a diversity case, federal courts apply federal law to procedural matters and apply the law of the forum state to substantive matters. See Coccaro v. GEICO Gen. Ins. Co.,
The federal Act grants federal courts discretion to decide whether to -issue a • declaratory judgment. 28 U.S.C. § 2201(a) (“In an actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration.”) (emphasis added). Generally, the Act allows prospective defendants to sue to establish non-liability, or affords a party threatened with liability an opportunity for adjudication before its adversary commences litigation. Neither scenario exists here; Here; the rights and legal relations of Plaintiffs and Century are being adjudicated through the other claims; therefore, declaratory relief is unlikely to serve a useful purpose. Accordingly, the Court declines to exercise its discretion to grant declaratory relief and DISMISSES Count 10.
■ IV. conclusion’
Based on the foregoing, it is hereby
ORDERED AND ADJUDGED that Century’s Motion- to Dismiss is GRANTED IN PART and DENIED IN PART as follows:
• Counts 4, 5 and 10 are DISMISSED in full;
• Counts 2 and 3 are DISMISSED as to all Plaintiffs except Melton;
• Counts 6, 7 and 8 are DISMISSED as to Plaintiffs Johnson, Valdes and Smith only; and
• Century’s motion to dismiss Counts 1 and 9 is DENIED.
Century shall file an answer to the remaining counts no later than April 12, 2017.
DONE AND ORDERED in Chambers at Miami, Florida, this 20th of March 2017.
Notes
. In support of its argument, Century cites Evans v. Singer,
. In East River S.S. Corp. v. Transamerica Delaval, Inc.,
. In support of its argument, Century cites Donovan v. County of Lake,
. Illinois law seems to sometimes permit a Magnuson-Moss . Warranty Act claim even without a, valid state claim for breach of implied warranty due to lack of privity, Despite disagreement from many federal courts, Illinois relaxes the privity requirement when a consumer sues the manufacturer under the Magnuson-Moss Warranty Act and shows that the manufacturer has issued a written .war- , ranty on the, product. See Mydlach v. DaimlerChrysler Corp., 226. Ill.2d 307,
. Arizona enforces a claim of unjust enrichment when five elements are satisfied: "(1) an enrichment, (2) an impoverishment, (3) a connection between the enrichment and impoverishment, (4) the absence of justification for the enrichment and impoverishment, and (5) the absence of a remedy provided by law.” Freeman v. Sorchych,
. In support of its argument, Century cites Licul v. Volkswagen Grp. of Am., No. 13-61686-CIV,