Case Information
1
2
3 UNITED STATES DISTRICT COURT
4 NORTHERN DISTRICT OF CALIFORNIA 5 6
7 CARY W COOPER, еt al., Case No. 19-cv-07901-TSH Plaintiffs, 8
SIMPSON STRONG-TIE COMPANY, v. ORDER RE: MOTION TO [1] DISMISS AMENDED Re: Dkt. No. 35 INC., et al.,
Defendants.
I. INTRODUCTION Plaintiffs brought this putative class action alleging that Defendants’ construction
connectors and fasteners prematurely corrode and fail, causing danger to homeowners’ properties and requiring costly repairs. Pending before the Court are Defendants’ Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and Defendants’ Request for Judicial Notice in Support of their Motion. ECF Nos. 34, 37. Plaintiffs filed an Opposition to the Motion to Dismiss and Defendants filed a Reply. ECF Nos. 41, 42. Having considered the parties’ positions, relevant legal authority, and the record in this case, the Court GRANTS Defendants’ motion for the following reasons.
II. BACKGROUND
Defendants Simpson Strong-Tie Company Inc. and Simpson Manufacturing Co., Inc. (jointly, “Simpson”) are a California corporation and Delaware corporation with a principal place of business in Pleasanton, California. First Amended Complaint (“FAC”) ¶¶ 10-11. Simpson manufactures, advertises, sells, and distributes steel, structural building products throughout the United States, including various products sold for installation in the foundations, framing, and doors of homes and other buildings to help secure the structures against high-wind events and earthquakes (the “Product”). Id. ¶¶ 1, 10-11, 23-25. The Product is made of pre-formed strips of steel that have flanges used for connecting the Product to various structures. Id. ¶ 23. It works in combination with other steel connectors to form load paths that create resistance to uplift [2] and lateral forces which can damage structures. Id. ¶ 25.
Plaintiffs Cary W. Cooper and Terri G. Cooper (the “Coopers”) are Georgia residents who own a home in Port St. Joe, Florida. Id. ¶¶ 7, 13. The Coopers purchased their home on August 17, 2019. Id. ¶ 14. The property was built in 2004 and the Product was installed on the home. Id. Plaintiffs allege that in 2019, a hurricane hit the area of Port St. Joe and caused severe damage to the Coopers’ home. Id. ¶ 15. Plaintiffs allege that the home suffered extensive damage because the Product was weakened due to premature corrosion and failed to secure the home. Id. They allege it would not have suffered from extensive damage if the Product had functioned as Simpson marketed it would. Id. Plaintiff Fernandina Beach (“Fernandina,” and together with the Coopers, the “Florida Plaintiffs”) is a Florida limited liability company (“LLC”) which owns a home in Fernandina Beach, Florida. Id. ¶¶ 8, 17. It purchased its property in September 2011. Id. ¶ 18. The home was built in 1997 and the Product was installed on it. Id. Because of premature corrosion, Plaintiffs allege, the Product is no longer caрable of protecting Fernandina’s home from high wind and seismic events. Id. ¶ 19.
Plaintiffs Simon Nguyen and Thoai Doan (jointly, the “California Plaintiffs”) are California residents who own a home in San Jacinto, California. Id. ¶¶ 9, 20. They purchased their home, which was built in or around January 2007, in August 2009. Id. ¶ 21. The Product was installed on their home also. Plaintiffs allege that “signs of corrosion on the Product continue to manifest” on this home as well, compromising the home’s foundation and structural support. Id. ¶ 22.
Simpson provides installation instructions, design specifications, and “other representations as to the usage and qualities of the Product” in materials, including manuals and guides, which it produces and disseminates to consumers. Id. ¶¶ 38-39. The manuals and guides include corrosion warnings (the “Corrosion Warnings”). Id. ¶ 39. Nevertheless, Plaintiffs allege that Simpson never adequately disclosed that the Product was “subject to corrosion, rusting, failure, deterioration, and disintegration.” Id. They allege that few Class members ever see, and that they never saw, the corrosion warnings and that the warnings “do not adequately disclose Simpson is selling the Product into areas where it will foreseeably corrode long before its usual life, under reasonably foreseeable conditions, even if the installer reasonably follows the installation instructions.” Id. The corrosion warnings, they allege, “fail to disclose, and Simpson never discloses, that the Product is defective because, among other things, as water collects and chlorides develop (for example, after rain), the Product prematurely rusts, spalls the concrete, and gradually loses strength to secure the house.” Id. ¶ 40. “Further,” Plaintiffs assert, “gaps, crevices, and spalls at and below the Product’s embedment line form and moisture and corrosive elements accumulate and concentrate in the gaps and crevices, causing aggressive corrosion.” Id. Plaintiffs believe that installation of the Product onto their structures “complied with Simpson’s installation instructions and [that] deterioration was not due to environmental conditions but[,] rather, Defendants’ defective design of the Product.” Id. ¶ 36. They allege that they purchased their homes and then learned that the Product was beginning to prematurely corrode and deteriorate. ¶ 42. They believe that the Product installed and incorporated into the homes of Class members is also prematurely corroding and deteriorating, and creating dangerous conditions and substantial risk of serious personal injury and property damage, which will likely require repair and replacement of the Product “and will necessarily involve damage to other products.” Id. ¶ 43.
Plaintiffs allege that Simpson knew of the Product defect since before they and Class members purchased their properties, and that it failed to disclose it. Id. ¶ 45. They allege that Simpson consistently represented that the Product was durable, of good quality, and capable of securing structures while knowing that the Product would prematurely corrode and need to be replaced. Id. ¶¶ 45-46. Simpson never adequately warned consumers of this problem and intended to mislead customers into believing that the Product provides adequate corrosion resistance. Id. ¶¶ 50-51. “Simpson also failed adequately to disclose that the Product will fail even when used pursuant to Simpson’s guidelines about which type of Product to use in which installation.” Id. ¶ 52. Plaintiffs argue that Simpson created a “reasonable expectation” among consumers that the Product would have a “useful life spanning the life of the home in which [it] was installed.” Id. ¶ 68. They argue that the Product has not performed in accordance with those expectations, that it was defectively designed, tested, and manufactured, and that it has failed and will continue to fail, causing damage to Plaintiffs’ property and requiring them to spend significant amounts of money to repair and replace the Product. ¶¶ 53-55. Plaintiffs filed their original class action complaint on December 2, 2019. ECF No. 1.
Simpson filed a motion to dismiss on February 5, 2020. ECF No. 25. Rather than oppose the motion, Plaintiffs filed their FAC on February 25, 2020. ECF No. 25. In their FAC, they assert nine causes of action against Simpson: (1) unfair competition, or unfair or deceptive acts or practices, in violation of the California Consumers Legal Remedies Act (“CLRA”), California Civil Code § 1770(a)(5) and (a)(7); (2) unlawful business practices in violation of the California unfair competition law (“UCL”), California Business and Professions Code § 17200 et seq. ; (3) unfair business practices in violation of the UCL; (4) a violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), Florida Statute § 501.201 et seq. ; (5) breach of express warranty; (6) breach of implied warranty of fitness; (7) breach of implied warranty of merchantability; (8) negligence; and (9) fraud through non-disclosure or cоncealment. Simpson filed its Motion to Dismiss the FAC (the “MTD”) on March 17, 2020, asserting dismissal is warranted pursuant to Federal Rule of Civil Procedure 12(b)(6).
III. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) provides that a party may seek dismissal of a suit
for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive
a Rule 12(b)(6) motion to dismiss, a complaint must plead “sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal
,
If a Rule 12(b)(6) motion is granted, the “court should grant leave to amend even if no
request to amend the pleading was made, unless it determines that the pleading could not possibly
be сured by the allegation of other facts.”
Lopez v. Smith
,
IV. DISCUSSION
A. Simpson’s Request for Judicial Notice
Simpson requests judicial of the following items: Simpson’s High Wind-Resistant Construction Application Guide (the “Application Guide”); pages from a 2001 archive of Simpson Strong-Tie Company Inc.’s website, retrieved from the Internet Archive (the “Website”); pages from the official website for City of Fernandina Beach, Florida; a map showing the City of Fernandina Beach, located on the North East Atlantic coast of Florida; pages from the official website for Port St. Joe, Florida; a map showing the Port St. Joe, Florida located on the North West Gulf of Mexico coast of Florida; a 2019 North Atlantic hurricane tracking chart, prepared by the U.S. Department of Commerce, National Weather Service. ECF No. 37.
A court may take judicial noticе of facts that are “not subject to reasonable dispute” when
they “can be accurately and readily determined from sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. R. 201(b). Judicial notice may be taken at any stage of a proceeding.
Fed. R. Evid. R. 201(d). Simpson’s requests are unopposed, and Plaintiffs either rely on the
documents requested (the Application Guide and the website pages), meaning they’re not subject
to dispute, or the items are otherwise proper subjects for judicial notice.
See Mack v. South Bay
Beer Distribs.
,
Additionally, independent of judicial notice, “a court may consider material which is
properly submitted as part of the complaint on a motion to dismiss without converting the motion
[] into [one] for summary judgment. If the documents are not physically attached to the
complaint, they may be considered if the documents’ authenticity is not contested and the
plaintiff’s complaint necessarily relies on them.”
Lee v. City of Los Angeles
,
Simpson argues that “all nine of Plaintiffs’ causes of action [] lack plausibility because . . . (1) the Corrosion Warnings defeat the contention that Simpson failed to warn that the Product could corrode even if selected and installed correctly; (2) Plaintiffs do not and cannot properly allege that they or anyone else followed Simpson’s recommendations, guidelines, and warnings regarding the specification, installation, and maintenance of the Product; and (3) there is no basis for any claim of reliance since Plaintiffs admit, among other things, that they never read the Corrosion Warnings.” The Court agrees.
The foundation of Plaintiffs’ claims is their allegations that the Product prematurely
corrodes, and that Simpson failed to disclose this defect. According to the Application Guide,
Simpson produces many different models of connectors and fasteners. It produces different
models for use at different locations on a structure (ground level, between floors, roof level, etc.),
in different environments, for use with different materials, and to accommodate different loads.
The Application Guide instructs that some models offer more effective protection against
corrosion risk than others. For example, some models are better suited for “salt marine and
chloride-containing environments.” Application Guide at 9. The Guide provides “Guidelines for
Selecting Corrosion-Resistant Connectors and Fasteners.” Those guidelines instruct consumers to
evaluate the intended application of the product, evaluate the exposure to moisture and treatment
chemicals, and to use a Corrosion Classification Table.
Id
. The Application Guide also includes
information and guidance regarding the choice of galvanization based on the “level of corrosion
resistance.”
See id.
at 12. Yet Plaintiffs have not pled which of Simpson’s products are installed
in their homes, or in what application, what material the products were made of, or what coating,
if any, was used. They allege that the Product is “galvanized hurricane straps.” FAC ¶ 1. But
then they allege the Product “includes, but is not limited to, various galvanized steel hurricane
straps including, but not limited to, steel, galvanized, and hot-dipped galvanized straps.” FAC ¶
24. And they allege that the Product “includes mudsill аnchors.”
[3]
They allege that the
Product “is installed in various locations throughout homes and other structures, including the
foundation, framing, and doors.”
Id.
¶ 25. Since Plaintiffs do not allege details concerning which
fastener or connector models were installed on their homes, their allegations only permit the Court
to infer a mere possibility that the products were even designed to be used in the locations and
environments they were.
[4]
That is not enough to satisfy pleading requirements. “[B]efore
proceeding to discovery, a complaint must allege facts suggestive of illegal conduct,” not merely
consistent with it.
Twombly
,
Plaintiffs also can’t say for sure when the products were installed on their homes. They
only state that the homes were built “and the Product was installed.” (If Plaintiffs meant to say
that the Product was installed at the time their homes were built, then that would be in 1997, 2004,
and January 2007, at least 12 years before this action was filed.) They don’t say when they
discovered signs of corrosion. And they don’t say whether the products installed on their homes
were installed in accordance with Simpson’s recommendations. They allege that they are
“
informed and believe
that the Product was installed and incorporated into the construction of the
homes . . . in reasonable accordance with the information, installation instructions, design
specifications, and other representations provided, made, and disseminated by Simpson.” FAC ¶
41 (emphasis added). But information and belief are not always enough to satisfy the pleading
requirements. “Courts have read . . . Rule 8, together with Rule 11, to permit claimants to aver
facts that they believe to be true, but that lack evidentiary support at the time of pleading.
Generally, however, such averments are allowed only when the facts that would support the
allegations are solely within the defendant’s knowledge or control.” 2 Moore’s Federal Practice -
Civil § 8.04 (2020) (citations omitted);
see Park v. Thompson
,
Second, Simpson is correct that the Corrosion Warnings “defeat the contention that Simpson failed to warn that the Product could corrode even if selected and installed correctly.” Plaintiffs allege that the Corrosion Warnings “never disclose that the Product will corrode under reasonably foreseeable conditions even when the installer follows the instructions.” FAC ¶ 46. And they allege that Simpson “created a reasonable expectation” that the Product would have a “useful life spanning the life of the home.” ¶ 68. Each of Plaintiffs’ nine causes of action relies in some measure on these allegations (the omissions and misrepresentations). But neither of the allegations is tenable based on the FAC.
Plaintiffs repeatedly reference the Application Guide, but it never states or suggests that proper selection and installation of Simpson’s product will make the products perpetually corrosion-proof. In fact, the Application Guide repeatedly disclaims exactly that. It states under a section called “Understanding the Corrosion Issue”:
Many environments and materials can cause corrosion , including ocean salt air, fire retardants, fumes, fertilizers, preservative-treated wood, de-icing salts, dissimilar metals and more. Metal connectors, fasteners and anchors could corrode and lose load-carrying capacity when installed in corrosive environments or when installed in contact with corrosive materials .
The many variables present in a building environment make it impossible to accurately predict if, or when, corrosion will begin or reach a critical level . This relative uncertainty makes it crucial that specifiers and users are knowledgeable of the potential risks and select a product suitable for the intended use . It is also prudent that regular maintenance and periodic inspections are performed, especially for outdoor applications. It is common to see some corrosion in outdoor applications. Even stainless steel can corrode. The presence of some corrosion does not mean that load capacity has been affected or that failure is imminent. . . .
Application Guide at 11 (emphasis added). The Guide even advises, “
[i]f significant corrosion is
apparent or suspected
, then the framing members, fasteners and connectors should be inspected
by a qualified engineer or qualified inspector.
Replacement of affected components may be
appropriate
.” (emphasis added). The Guide makes clear how different variables, including the
degree of moisture in the environment, the type of wood being used and the wood moisture level,
and whether or not fasteners are painted, may affect the rate of corrosion.
See
Application Guide
at 9-10. It details what finishes and materials achieve what level of corrosion resistance and
should be used in different contexts.
Id.
at 12. And it аdvises that, “[d]ue to the many variables
involved,
Simpson Strong-Tie cannot provide estimates of service life of connectors and
fasteners.
”
Id.
at 9 (emphasis added). No one reading the Application Guide could reasonably
expect that Simpson’s products would never corrode even if installed exactly according to
Simpson’s recommendations, or that Simpson’s products would last the life of a house or never
need to be replaced. Thus, the Application Guide, which Plaintiffs themselves rely on, eviscerates
their allegations.
See Lawrence v. Castro
,
Since the FAC does not plausibly allege that the Product was subject to premature corrosion or defective in any way, or that Simpson represented that its products would never corrode, fail, or need to be replaced, the FAC does not plausibly allege that Simpson concealed a defect in the Product or otherwise misrepresented the quality or durability of its products. Each of Plaintiffs’ claims fail because of this. The Court turns now to the individual claims. Because Plaintiffs’ second and third causes of action, their California unfair competition law claims, are based on violations asserted in their other causes of action, the Court will discuss those claims last.
2. Plaintiffs’ CLRA Claim
Plaintiffs’ first cause of action is under the CLRA. “The CLRA makes unlawful various
‘unfair methods of competition and unfair or deceptive acts or practices undertaken by any person
in a transaction intended to result or which results in the sale or lease of goods or services to any
consumer.’”
Steroid Hormone Product Cases
,
Simpson also argues that Plaintiffs’ CLRA also fails because Plaintiffs cannot show
reliance. An essential element for a fraudulent omission or false representation claim is actual
reliance.
See Daniel v. Ford Motor Co.
,
Even though a change in behavior can be presumed if the omitted information is material, a
plaintiff alleging fraud must still be able to show she would have been aware of the information
had it been disclosed.
Sud v. Costco Wholesale Corp.
,
Lastly, Simpson argues that Fernandina cannot assert a claim under the CLRA because the
CLRA excludes LLC’s from the definition realm of “consumers” who can assert a claim under
that Act. Mem. at 23 (citing Cal. Civ. Code § 1761(c), (d)). Simpson’s interpretation of the
statute is correct.
See Bristow v. Lycoming Engines
,
For all these reasons, Plaintiffs have not plausibly alleged a claim under the CLRA. 3. Plaintiffs’ FDUTPA Claim
Plaintiffs’ fourth cause of action is under the FDUTPA, Fla. Stat. § 501.201
et seq.
The
FDUTPA declares unlawful, “[u]nfair methods of сompetition, unconscionable acts or practices,
and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Id.
§
501.204(1). To state a claim for either injunctive relief or damages under the Act, a plaintiff must
allege that a defendant engaged in a deceptive act or practice in trade.
Kertesz v. Net
Transactions, Ltd.
,
4. Plaintiffs’ Breach of Warranty Claims
Plaintiffs’ fifth, sixth, and seventh causes of action are breach of warranty claims. Claim five alleges a breach of express warranty, claim six a breach of the implied warranty of fitness, and claim seven a breach of the implied warranty of merchantability. All three claims are premised on Plaintiffs’ assertion that “the Product does not have the quality that a buyer would reasonably expect and was therefore not merchantable.” FAC ¶¶ 105, 113, 121.
Under their express warranty claim, Plaintiffs allege that the quality a buyer would expect based on Simpson’s product descriptions was a Product that would “lаst the entire life of a home.” As discussed earlier, that allegation is plainly false. The Application Guide gives no impression that Simpson’s products would offer protection ad infinitum. See, e.g. , Application Guide at 9 (“Due to the many variables involved, Simpson Strong-Tie cannot provide estimates of service life of connectors and fasteners.”); id. at 11 (“Replacement of affected components may be appropriate.”). Furthermore, Plaintiffs do not plead any terms express warranty terms. They assert in their Opposition that they alleged the terms of Simpson’s express warranty “with reference to the limited warranty.” Opp’n at 9. But the FAC doesn’t even quote the Limited Warranty, and instead cites in a footnote to the page of the Application Guide which contained the warranty. See FAC ¶ 106, n. 8. It’s perhaps for good reason that Plaintiffs didn’t conspicuously reference the Warranty, however, as it also clearly contravenes Plaintiffs’ claims. See, e.g. , Application Guide at 6 (“This warranty does not apply to uses not in compliance with specific applications and installations set forth in this application guide, or to non-catalog or modified products, or to deterioration due to environmental conditions .”) (emphasis added); id. (“Due to the particular characteristics of potential impact events, the specific design and location of the structure, the building materials used, the quality of construction, and the condition of the soils involved, damage may nonetheless result to a structure and its contents . . . .”) (emphasis added). The Simpson Website, which Plaintiffs also cite in their FAC, contains a Limited Warranty page with essentially identical language. See RJN, Ex. B at 31, ECF No. 36-2. Plaintiffs do not even address this language in their Opposition (they cite part of it but ignore it, see Opp’n at 9-10), even though Simpson cited it in its Memorandum. They do not allege a plausible claim for breach of express warranty.
Under their implied warranty claims, Plaintiffs allege that Simpson’s “product is not fit for
the ordinary purpose for which such goods are sold.” FAC ¶¶ 114, 122. Yet Plaintiffs haven’t
plausibly alleged that any of Simpson’s products were defective or unfit for use. Furthermore, the
Application Guide expressly disclaims both implied warranties. Under Florida law, “a seller may
limit [its] liability exposure by disclaiming the implied warranty of merchantability [or implied
warranty of fitness], provided the disclaimer mentions merchantability [or fitness], and in the case
of a writing, that it be conspicuous.
McCormick Machinery, Inc. v. Julian E. Johnson & Sons, Inc.
,
This warranty is expressly in lieu of all other warranties, expressed or implied, including warranties of merchantability or fitness for a particular purpose, all such other warranties being hereby expressly excluded.
Application Guide at 6; Website at 31. Once again, Plaintiffs don’t address this language in their
Opposition. It satisfies the requirements under both Florida and California law. Plaintiffs allege
that Simpson’s attempt to disclaim these warranties is “unenforceable” because each disclaimer
“was not conspicuous as required by law, and was both procedurally and substantively
unconscionable, rendering it unenforceable.” FAC ¶¶ 115, 123. Not so. The Limited Warranty is
not tucked away somewhere at the back of the Application Guide: it’s the first item in the index at
the front of the Guide and appears on the first page of infоrmation after the company profile page.
See id.
at 4-6. The Simpson website contains the language in bold on the Limited Warranty page.
Website at 31. And Plaintiffs’ assertion is undercut by the fact that they themselves cite to and
rely on other portions of the Limited Warranty and don’t assert that those portions were
inconspicuous. Lastly, Plaintiffs’ allegations that the disclaimer was procedurally and
substantively unconscionable is conclusory and is entitled to no weight.
See Tietsworth v. Sears,
Roebuck and Co.
,
5. Plaintiffs’ Negligence Claim
Plaintiffs’ negligence claim alleges the following:
Defendants breached their duty to Plaintiffs and Class Members by
not exercising reasonable care to avoid causing foreseeable risk of
harm to Plaintiffs and Class Members. Defendants carelessly
designed and manufactured a product thаt prematurely corrodes when
installed in homes even when selected and installed pursuant to
Simpson’s recommendations and instructions. Simpson did not take
sufficient action to reasonably provide notification to Plaintiffs and
Class Members of the Product’s propensity to prematurely corrode
and deteriorate.
FAC ¶ 128. Plaintiffs also allege that Simpson “failed to use reasonable care to warn about the
Product’s dangerous condition or about facts that made the Product likely to be dangerous and a
substantial safety risk.” ¶ 130. This claim is, again, premised on Plaintiffs’ allegation that
Simpson’s products were defective. But they have not plausibly alleged that. Thus, they have not
plausibly alleged negligence.
Additionally, Simpson argues that Plaintiffs’ tort claims are barred by the economic loss
rule (“ELR”). “Simply stated, the economic loss rule provides: Where a purchaser’s expectations
in a sale are frustrated because the product he bought is not working properly, his remedy is said
to be in contract alone, for he has suffered only ‘economic’ losses.”
Robinson Helicopter Co., Inc.
v. Dana Corp.
,
Simpson argues that Plaintiffs do not allege that the Products have caused bodily injury or
physical damage to “other property,” that they only “allege potential damage that may occur to
their home[s] as a result of replacing the allegedly defective Product, that they may have paid less
for the Product, and that they may have not purchased their homes at all.” Mem. at 23 (citing
FAC ¶¶ 134, 141). Plaintiffs do not attempt to argue otherwise. With regard to the Fernandina
and California Plaintiffs’ homes, Simpsоn is correct that Plaintiffs have not even alleged damage
to anything other than the Product. They allege only speculative damage to their homes.
See
FAC
¶¶ 19, 22. “The breach of a duty causing only speculative harm or the threat of future harm does
not normally suffice to create a cause of action.”
Aas v. Superior Court
,
Generally, house buyers have little or no interest in how or where the individual components of a house are obtained. They are content to let the builder produce the finished product, i.e., a house. These homeowners bought finished products--dwellings--not the individual components of those dwellings. They bargained for the finished products, not their various components. The concrete became an integral part of the finished product and, thus, did not injure “other” property. Thus, the court held that the ELR applied to the purchase of the housеs. [9] See also City of St.
Petersburg v. Total Containment, Inc.
,
2
6. Plaintiffs’ Fraud Claim
Plaintiffs’ ninth cause of action is one for fraud or concealment. They allege that Simpson concealed and suppressed material facts concerning the Product, namely “the inability of the Prоduct, even when selected and installed pursuant to Simpson’s guidelines and instructions, to withstand environmental factors that cause premature corrosion.” Once again, Plaintiffs have not plausibly alleged that any of Simpson’s products were defective or that Simpson concealed any information from consumers. Thus, they have not plausibly alleged fraud or unlawful concealment.
Simpson presumably intends its ELR argument to encompass Plaintiffs’ fraud claim as
well. However, the Florida Supreme Court in
Tiara
noted its past refusal to extend the application
of the ELR to actions based on fraudulent inducement,
WL 4623539, at *10 (S.D. Fla. Sept. 26, 2018) (a claim for fraudulent inducement is excepted 20
from the ELR and should not be barrеd as a matter of course); In re MyFord Touch Consumer 21
Litig.
,
22
the economic loss doctrine include where there is fraudulent inducement and where there is a free- 23 standing statutory cause of action). [11] In California also, “‘[t]he economic loss rule poses no 24
barrier to a properly pled fraudulent inducement claim: [I]t has long been the rule that where a 25
26
[11]
The Court notes Simpson’s point that “[a]t least four courts interpreting
Tiara
have rejected the
fraud exception to the ELR and held that it bars claims for fraudulent concealment in products
27
liability cases.” Mem. at 14 (citing
Koski v. Carrier Corp.
,
7. Plaintiffs’ UCL Claims
For Plaintiffs’ second and third causes of action, they allege that Defendants engaged in
unlawful (claim two) and unfair (claim three) business practices in violation of the California
unfair competition law.
[12]
The unfair competition law “definеs ‘unfair competition’ to include ‘any
unlawful, unfair or fraudulent business act or practice.’”
Cel-Tech Communications, Inc. v. Los
Angeles Cellular Telephone Co.
,
8. Simpson’s Statutes of Limitation Argument
Simpson alleges that all of Plaintiffs’ claims are barred by statutes of limitations. “Under
Florida law, a cause of action accrues when the last element of the cause of action occurred or, in
the case of fraud-based claims, when the plaintiff either knows or should know that the last
element of the cause of action occurred.”
Z-Rock Communs. Corp. v. William A. Exline, Inc.
,
merchantability), and eighth (negligence) claims are dismissed with prejudice. Additionally, Fernandina’s CLRA claim and the California Plaintiffs’ SBA claims are dismissed with prejudice. These claims cannot be cured by amendment.
Plaintiffs shall file any amended complaint by June 16, 2020.
IT IS SO ORDERED.
Dated: May 19, 2020
THOMAS S. HIXSON United States Magistrate Judge
Notes
[1] This Amended Order supersedes the Court’s May 15, 2020 Order re: Motion to Dismiss, ECF 27 No. 56. The Amended Order clarifies whether Plaintiffs’ breach of express warranty claim is dismissed with or without prejudice and specifies the date when an amended complaint is due, but is otherwise identical to the original order.
[2] Uplift is force that is generated when high winds blow over the top of the structure, creating 28 suction that can lift the roof from the home. FAC ¶ 27.
[3] From the Application Guide, it appears that mudsill anchors are not even a type of hurricane tie. 25 See Application Guide at 15, 21, 51.
[4] In their Opposition, Plaintiffs assert that, “[i]n reality, Plaintiffs define the Product at 26 the very beginning of the FAC, providing details as to its use, manufacture, marketing, and defect throughout the Complaint.” Opp’n at 2. They then cite a range of 22 paragraphs (¶¶ 23-44) in the 27 FAC. Those paragraphs cover topics like “The Need for High Wind and Seismic Protection” and Simpson’s allegedly unlawful marketing practices, but do not identify Simpson’s products with 28 any more specificity than just discussed.
[5] If, for example, a low-corrosion-resistance fastener were used in an environment with high moisture exposure and were painted—which Simpson advises can “facilitate corrosion,” Application Guide at 9—then one would expect that fastener to corrode faster.
[6] The Court does not suggest that because Simpson attributed the problems to mis-installations, that was indeed the reason for the problems. It only passes on what can reasonably be inferred from the letter, and Simpson having discovered a defect with its products is not part of that.
[7] The omissions analysis differs for affirmative misrepresentation principles, where reliance
requires the consumer to have seen or read the misrepresentation.
Baranco
, 294 F. Supp. 3d at
967 (citing
In re Tobacco II Cases
,
[8] Simpson also argues that, “[e]ven if California law did apply to the Coopers’ and Fernandina’s 27 warranty claims, those claims would still fail for a number of reasons that Simpson raised in [its first motion to dismiss].” Mem. at 19. However, the Court reads the FAC to assert those 28 Plaintiffs’ claims under Florida warranty statues. See FAC ¶¶ 103-05.
[9] To the extent
Tiara
receded from
Casa Clara
, it did not do so with regard to this portion of the
opinion.
See Saft Am., Inc. v. Jabil Circuit (Guangzhou), Ltd.
,
[10] While the court there didn’t apply the ELR on a motion to dismiss, it also didn’t rule out the
24
application of the ELR to that case.
See
[12] For the second cause of action, they also cite California Civil Code § 1770(a)(5) and (a)(7), but 28 that is apparently a typo.