Melton et al v. Century Arms Inc. et al, No. 1:2016cv21008 - Document 20 (S.D. Fla. 2017)
Court Description: ORDER granting in part and denying in part 4 Defendants' Motion to Dismiss. Defendants shall file an answer to the remaining counts no later than April 12, 2017. Signed by Judge Federico A. Moreno on 3/20/2017. (kcg)
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Melton et al v. Century Arms Inc. et al Doc. 20 Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 1 of 20 UNITED STATES DISTRICT COURT FOR THE SOU THERN D ISTRICT O F FLO RIDA M iamiDivision C ase Num ber:16-21008-C1V -M O R EN O JEFFREY M ELTON ,EZEK IEL M O RRIS, TOM M Y JOHNSON,JUAN VALDES,and M AN V ILLE SM ITH , Plaintiffs, VS. CEN TU RY A RM s.lx c ..cEx w Rv IXTERXATIONAILARkscoRP.. cExw Rv ARMSolrvEo ox'f.lxc.,and CEN TU RY IX TERN A TIO N A L A R' M soF vEa ox 'r,Ix c., Defendants. O RD ER G R AN TIN G IN PA R T AN D DEN Y ING IN PA R T D EFEN D AN TS'M O TIO N TO D ISM ISS Thiscaseisaproductsliability classaction broughtby ownersofvariousrifles m anufactured by Century Arms,Inc.,Century lntem ationalArm sCorporation,Century Armsof Vermont,Inc.,andCenturylntemationalArmsofVermont,lnc.(collectively,çscentury''). Plaintiffsallegethatthesafetym echanism in certain m odelsisdefectively designed and allows theritlesto fire when the safety leverism oved abovethesafetyposition. Thiscausecomes before the Courtupon Century's M otion to Dism iss,which asks the Courtto dism iss allcounts forlack ofstanding orforfailureto state aclaim upon which reliefcan be granted.The Court hasreview ed the M otion,Plaintiffs'R esponse and Century'sR eply. A dditionally,the parties raised som e oftheirbriefed argum entsatoralargum enton M arch 3,2017. Dockets.Justia.com Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 2 of 20 1. BA CK G R O U N D The five nmned Plaintiffsow n Century A K-47 riflesw ith full-auto safety selectors manufacturedby Century after1995. Each Plaintiffownsadifferentm odelwith thesame alleged design defect- a full-auto safety selector.Plaintiffsallegethatthefull-auto safety selectorallowstheriflesto accidentally firewhen thesafety leverismoved abovethe safety position. Plaintiffsalso allegethatCentury had knowledge ofthe design defectforyearsand has changed the safety m echanism on itscurrentmodels,butneverwarned thepublicorrecalled the allegedly defectiverifles. Only onenam ed Plaintiffreportsthatan accidentaldischarge has actually occurred- the othersclaim only to beaware oftherisk.None ofthe named Plaintiffs purchased theirritle directly from Century. The Com plaintalleges ten countsagainstCentury: violation ofthe Florida Deceptive and U nfairTrade Practices A ct; negligence; strictliability in tort; breach ofim plied warranty ofm erchantability' , violation ofthe M agnuson-M oss W arranty A ct; fraudulentinducem entand/orsuppression' , negligentfailure to disclose,failure to w m' n,concealm entand m isrepresentation' , 8) fraudulentconcealmentandintentionalfailuretowarn; wrongfuland/orunjustemichment;and 10) declaratoryrelief. The tive nam ed Plaintiffs are: @ Jeffrey M elton,a Tennessee residentw ho purchased a Century G P 1975 rifle from J& G Salesin A rizona; Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 3 of 20 @ EzekielM orris,an lllinoisresidentwho purchased a new Century OPAP rifle from Shooting Sports in Illinois; * Tom my Allen Johnson,aFloridaresidentwhopurchased a Century NPAP rifle from Take A im G uns in Florida; @ Juan Valdes,aFlorida residentwho purchased aCentury M 70AB2 ritle from M iam iPoliceSupply a/k/aM ark'sGunsCorp.in Florida;and * M anville Sm ith,a Florida residentwho purchased a Century M 70 rifle from his father. The Com plaintdoes notstate w here the purchase occurred. LEG A L STAN D AR D $tA pleadingthatstatesaclaim forreliefmustcontain...a shortand plain statem entofthe claim showingthatthepleaderisentitledtorelief.''FED.R.CIV.P.8(a)(2).6tTosurvivea motion to dism iss,a complaintmustcontain sufficientfactualmatter,accepted astrue,to tstate a claim toreliefthatisplausibleonitsface.'''Ashcroltv.Iqbal,556U.S.662,678(2009) (quotingBellAtl.Corp.v.Twombly,550U.S.544,570(2007:.Detailedfactualallegationsare notrequired,buta pleadingm ustofferm orethan tslabelsand conclusions''orç1a formulaic recitation ofthe elem ents ofthe cause ofaction.'' Twom bly,550 U .S.at555. W hereacauseofaction soundsin fraud,the heightened standard in FederalRuleofCivil Procedure9(b)alsomustbesatisfied.UnderRule9(b),Içapartymuststatewithparticularitythe circum stancesconstituting fraud ormistake,''although ûsconditionsofa person'smind,''such as malice,intent,andknowledgemaybeallegedgenerally.FED.R.CIV.P.9(b).ts-f' he fparticularity'requirem entservesan im portantpurposein fraud actionsby alerting defendantsto theprecisem isconductwith which they arecharged and protecting defendantsagainstspurious chargesofimmoralandfraudulentbehavior.'' W CoastRoo/ngtfrWaterproo/ng,Inc.v.Johns Manville,Inc.,287F.App'x81,86(11th Cir.2008)(internalcitationsomitted). Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 4 of 20 111. AN A LY SIS Standing Century movesto dismissa11countsforlack ofstanding.Article1llofthe U.S. Constitutionlimitsfederalcourtjurisdictiontoactualcasesandcontroversies.SeeConeCorp.v. Fla.Dep'tofln ransp.,921F.2d 1190,1203(11th Cir.1991)(citingU.S.CONST.art.111,j2). iç-f' he standing doctrine is an aspectofthis case orcontroversy requirem entand has itsoriginsin 1b0thconstitutionallimitationsonfederal-courtjurisdictionandprudentiallimitationsonits exercise.'''1d.(quoting Warthv.Seldin,422U.S.490,498(1975))(internalcitationsomitted). Accordingly,iistandingisathresholdjurisdictionalquestionwhich mustbeaddressedpriorto and independentofthe m erits ofa party'sclaim s.'' D iM aio v.D em ocratic Nat' 1Comm .,520 F.3d 1299,1301(11thCir.2008). Becausestandingisjurisdictional,'dadismissalforlackofstandingisessentiallythesame asadismissalforwantofsubjectmatterjurisdictionunderFederalRuleofCivilProcedure 12(b)(1).''Mitchellv.BalboaIns.Co.,No.11-cv-02580,2012U.S.Dist.LEXIS 85645,at*5 (M .D.Fla.June20,2012)(citingStalley exrel.UnitedStatesv.OrlandoReg1HealthcareSys., Inc.,524F.3d 1229,1232(11th Cir.2008)).Thepartyinvokingfederaljurisdictionhasthe burdenofproving standing.SeeLujanv.Defendersof Wildlfe,504U.S.555,561(1992).Each elem entofstanding çsm ustbe supported in the sam e w ay asany other m atteron w hich the plaintiffbearstheburden ofproof.''1d. ln amotion to dismiss,tlgeneralfactualallegationsof injuryresultingfrom thedefendant'sconduct''maybesufficientto allegestandingbecauseç'ona m otion to dism issw e presum e thatgeneralallegationsem brace those specific facts thatare necessarytosupporttheclaim.''1d.(internalquotationsomitted). TohaveArticle1l1standing,aplaintiffStmustallegepersonalinjuryfairlytraceabletothe defendant's allegedly unlawf'ulconductand likely to be redressed by the requested relief.'' Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 5 of 20 DaimlerchryslerCorp.v.Cuno,547U.S.332,342(2006)(internalquotationsomitted). Accordingly,constitutionalstandinghastllreeelements:(1)tltheplaintiffmusthavesufferedan injuryinfact aninvasionofajudiciallycognizableinterest,whichis(a)concreteand particularized,and(b)actualorimminent,notconjeduralorhypotheticali''(2)tçtheremustbea causalconnectionbetweentheinjuryandtheconductcomplainedof- theinjuryhastobefairly traceabletothechallengedadionofthedefendanti''and(3)liitmustbelikely,asopposedto merely speculative,thattheinjurywillberedressedbyafavorabledecision.''fujan,504U.S.at 560(intemalquotationsandcitationsomitted). Century argues thatPlaintiffshave no standing because the Com plaintdoes notallege thatthedefectactuallymanifesteditselfinan unintentionalfiringorthatPlaintiffswereinjured by an unintentionalfiring.Century assertsthatclaimsfordefectivedesign orfailuretownrn, withoutacorrespondinginjury,areimpermissiblefino-injury''productsliabilityclaims.ln supportofthis assertion,Century citescases in which claim s were dism issed forlack ofstanding whereplaintiffssoughtdam agesforcostsofrem edying safetyhazards. Plaintiffsarguethatstanding issufficientwhere plaintiffsclaim economicharm such as overpayment,lossofvalue,orlossofusefulnessem anating from thelossoftheirbenefitofthe bargain.lndeed,ifStbenefitofthebargain''damagesaretheoretically availableforthe causesof actionthathavebeenasserted,dismissalonthepleadingsispremature.SeeCoghlanv.Wellcrah MarineCorp.,240F.3d449,452(5thCir.2001);sccalsoAdinolfev.United Techs.Corp.,768 F.3d 1161,1172(11th Cir.2014)(economichann isawell-establishedinjury-in-factunder federalstandingjurispnldence).Here,Plaintiffsallegeintheirrequestforrelieftdcompensatol'y dam agesthatincludesthe costofrepair,replacem ent,orm odification ofthe Safety D evice defect''and requestthatiûcentury repair and orreplace''Plaintiffs'rifles. Therefore,Plaintiffs Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 6 of 20 have pleaded econom ic hann sufficientto satisfy Article lIlstanding. A ccordingly,the Court DEN IE S Century'sm otion to dism issforlack ofstanding. B. Choice ofLaw M ostoftheten countsasserted againstCenturyariseunderstate law .Generally,a federalcourthearing state law claim sappliesthe choice-of-law rulesofthe forum state. Grupo Televisa,S.A.v.TelemundoCommc' nsGrp.,Inc.,485F.3d 1233,1240(11th Cir.2007). Therefore,the Courtapplies Florida'schoice-of-law rulesto Plaintiffs'claim s. Florida'schoice-of-law rulesfortortactionsarebased on theitlm ostsignificant relationshiptest'outlinedintheRestatement(Second)ofConflictofLaws.''f#.(quotingBishop v.Fla.SpecialtyPaintCo.,389So.2d999,1001(F1a.1980)).Courtsconsiderfourtypesof contactstodetenuinewhichstatehasthemostsignificantrelationshiptothematter:(1)the placewheretheinjuryoccurred;(2)theplacewheretheconductcausingtheinjuryoccurred;(2) the domicile,residencenationality,placeofincorporation and place ofbusinessoftheparties; and(4)theplacewheretherelationship,ifany,betweenthepartiesiscentered.1d.A court should evaluatethese contactsdfaccording to theirrelative importancewith respecttothe particularissue.'' 1d. H ow ever,the firstcontactis generally the m ostim portant,as ftabsent specialcircumstances,i(tlhestatewheretheinjuryoccurredwould...bethedecisive consideration in determ iningtheapplicable choiceoflaw.''' Pysca Panama,S.A.v.Tensar EarthTechs.,lnc.,625F.Supp.2d 1198,1220(S.D.Fla.2008)(quotingBishop,389 So.2dat 1001).TheCourtappliesFlorida'smostsignificantrelationshipchoice-of-law ruletoal1five Plaintiffsbelow . ln any choice-of-law analysis,a fundam entalissueisçswhethera contlictactually exists.'' Cooperr.M eridian Yachts,Ltd,575F.3d 1151,1171(11th Cir.2009).çççsimplystated,(afalse conflictoccursl...when thelawsofthecompetingstatesaresubstantiallysimilar.'''1d (quoting Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 7 of 20 Fiorettiv.M ass.Gen.LfeIns.Co.,53F.2d 1228,1234(11thCir.2006))(alterationsin original).$tA trueconflictexistswhentwoormorestateshavealegitimateinterestina particularsetoffactsin thelitigation andthelawsofthosestatesdifferorwould produce a differentresult.'' fJ. PlaintW sJohnson and Valdes ThestateofFloridaisthesolejurisdictionthathascontactstoJohnsonandValdes' claim s.Jolmson and Valdesareeach residentsofFloridawho each purchasedtheirCentury rifles in Florida. Thus,applying Florida'sççm ostsignificantrelationship''choice-of-law rule, Florida 1aw governsJohnson and Valdes'claims. 2. PlaintW M elton ThestatesofTennesseeandArizonaareeachjurisdictionsthathavepotentialcontactsto M elton'sclaim s. M elton is a residentofTennessee w ho purchased hisCentury ritle in Arizona- wheretheallegedinjuryoccurred.TheCourtfindsthatthesefactors,whenevaluated according to theirrelative im portance to M elton'sclaim s,indicate thatArizona has a m ore significantrelationship to M elton's claim sthan Tennessee. Thus,applying Florida's çsm ost significantrelationship''choice-of-law rule,Arizona law governsM elton's claim s. PlaintW M orris ThestateofIllinoisisthesolejurisdictionthathascontactswith Morris'claims.Monis isaresidentoflllinoiswho purchased hisCentury rifle in lllinois.Thus,applyingFlorida's Stm ostsignificantrelationship''choice-of-law rule,lllinois law governsM onis'claim s. Plaintt smith ThestateofFloridaisthesolejurisdictionthathascontactstoSmith'sclaims.Smithisa residentofFlorida. The Com plaintdoesnotstate w here he purchased the rille,butonly thathe Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 8 of 20 purchased itfrom hisfather.Given the alleged factsatthistime,applying Florida'sSçm ost significantrelationship''choice-of-law rule,Florida law governsSmith'sclaim s. Counts2,3,6,7 and 8: TortC laim s CenturymovestodismissCounts2,3,6,7and8,whichassert:(1)negligence;(2)strict liability;(3)fraudulentinducementand/orsuppression;(4)negligentfailuretodisclose,failure towam,concealmentandmisrepresentation;and(5)fraudulentconcealmentandintentional failureto warn. Century arguesthatal1fivetortclaim sarebarred by theeconom ic lossruleand thatPlaintiffs'fraud claim sdo notm eettheheightened pleading standard ofFederalRuleof CivilProcedure9(b). Asan initialmatter,Plaintiffs'fraudclaimssatisfyRule9(b).Plaintiffs'assertionsof reasonableandjustitiablerelianceonCentury'sallegedlydeliberatesilenceconcerningitsrifles' safety m echanism s and on Century's allegedly false representation in the rifles'm anualsare sufficient.Therefore,Plaintiffs'fraud claim sarenotdismissed on thisground. Johnson,Valdes,and Sm ith % TortClaim s Under Florida Law The Courtexam ined Florida's econom ic lossrule in depth in In re Takata A irbag ProductsLiability Litigation' . dtg-fqheeconomiclossrule isajudicially created doctrinethatsets forth the circum stances underwhich a tortaction is prohibited if the only dnm ages suffered are econom ic losses.'' Tiara Condo. Ass'n v.Marsh & McLennan Cos., 110 So.3d 399,401 (F1a. 2013). TheFlorida SupremeCourthasdefined economic lossas Sddam agesforinadequate value,costsofrepairand replacementof the defective product,or consequent loss of profit- without any claim ofpersonalinjuryordamagetootherproperty.''Id (internal quotation marksomitted). Florida'sSupremeCourthasexplained thatçûgtlherulehasitsrootsin theproductsliability arena,andwas prim arily intended to lim it actions in the products liability context.'' Id Specitically,the courtexplained the econom ic loss nlle is ésthe fundam entalboundary betw een contractlaw ,which is designed to enforce the expectancy interestsofthe parties,and tort law , which im poses a duty of reasonable care and thereby Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 9 of 20 encourages citizens to avoid causing injury physical hnrm to others.''Id (internalquotationmarksomitted). In an effortto 'frollback the econom ic loss rule''afler an era of tsunprincipled extensions'' Florida's Suprem e Court expressly limited the application ofthe economic loss rule to the products liability context. Id In doing so, the court noted several exceptions to the econom ic loss rule, including tsfraudulent inducem ent, and negligent m isrepresentation, or free-standing statutory causes of action.'' 1d. However, the fraudulent inducem ent and negligent m isrepresentation cases to which the courtcited wereoutside oftheproductsliability context. See id.at = .7,8. These exceptions were irrelevantto the decision reached in Tiara. The question before the Court,then,is w hether Florida's Suprem e Court,by its dicta,intended to abridge the economic loss rule in the products liability setting to allow fraudulent inducementand negligentmisrepresentation claims(and by implication fraudulent concealment claims),even where the action for fraud depends upon precisely the sam e allegations as a warranty claim - ï.c.,a claim theproductfailed towork asprom ised. The Court agrees w ith other courts in this Circuit that have concluded that Florida's Supreme Courtdid not intend to allow such products liability claim s to survive. See Aprigliano v.Am. Honda M otor Co.,979 F.Supp.2d 1331, 1337-39 (S.D.Fla. 2013);Burns v.Winnebago Indus.,Inc.,No.8:13-cv-1427--1--24, 2013 U.S.Dist.LEXIS 116377,at*9 (M .D.Fla.Aug.16,2013) (holding that fraudulent inducement and negligent m isrepresentation exceptions to the econom ic loss rule generally arise in the context of contractual privity cases, not in products liability actions,and finding that econom ic loss rule barred claim s of fraudulent concealm ent and negligent m isrepresentation in the products liability context); In re Atlas Roohng Corp. Chalet Shingle Prods. Liab. Litig.,N o. 130m d-2495, 2015 U.S. Dist. LEXIS 78898,at *17-18 (N.D.Ga.Jtme 18,2015) (applying Florida law and stating econom ic loss rule barred action for fraudulent concealment in products liability case because the alleged m isrepresentation concenw d the heart of the parties' agreem ent and tssim ply applying the label of fraud to a cause of action will not suffice to subvert the sound policy rationales underlyingtheeconomiclossru1e.''). In Aprigliano,the courtfound thatthe plaintiffs'tdcause ofaction for negligent m isrepresentation is dependent on the sam e fundamental allegations contained in the breach of warranty Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 10 of 20 claim- specifically, that Honda breached the terms of its W arrantiesby providing Plaintiffsw ith defective m otorcycles....'' 979 F.Supp.2d at 1338. The courtexplained that tllulsually claim s fornegligentm isrepresentation are barred by the econom ic loss rule where, as here, there are claim s for breach of w arranty alongside tort claim s and the allegations contained in both are similar.'' 1d. Accordingly, the court held the negligent misrepresentation claim wasbarred by the econom ic loss rule.ln explaining itsanalysis,the courtquoted Burns,stating that (Tjo holdotherwisewouldallow theeconomicloss rule to be m anipulated such that any tim e a purchaser received a defective product that did not causeanyinjuriesordamageto otherproperty,such a purchaser could assertclaims for negligent and fraudulent concealm ent regarding the defect to avoidtheeconom iclossrule. 1d.(citingBurns,2013U.S.Dist.LEXIS 116377,at*9). 193F.Supp.3d 1324,1338-39(S.D.Fla.2017). H ere,Plaintiffs'tive tortclaim spertain only to the quality ofCentury'sproducts,i.e.,the riflesarenotassafe(andmayattimesbelethally dangerous)asadvertised.Plaintiffsallege only economicharm arising from the claim s,precisely whatabreach ofwarranty claim would allege- nnm ely thatCentury'sritlesdid notwork asprom ised.Becausethe Courtholdsthat Florida's econom ic loss rule appliesto a1lsuch tortclaim s,the CourtG R ANT S Century's motion to dismissCounts2,3,6,7 and 8asto Jolmson,Valdes,and Smith 2. M elton 'J TortClaim s UnderA rizona Law Century arguesthatA rizona's econom ic lossrule barsM elton's tortclaim s.l H owever, furtherresearch revealsthatA rizona doesnotapply the econom ic loss rule in al1circum stances, and instead takes a case-by-case approach. 'In supportofitsargument, Cent ' urycitesEvansv.Singer,518F.Supp.2d l134,l141-42(D.Ariz.2007). In theirresponsebrief,Plaintiffsdo notaddressArizonalaw. - 10- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 11 of 20 TheSupremeCourtofArizonahasstated,ifgilntheproductsliabilitycontext,gthiscourtl declinedtocategoricallybartortrecoveryofeconomiclosses.lnstead (thiscourtlreasonedthat Seach casemustbeexaminedto determ inewhetherthe factspreponderate in favorofthe applicationoftort1aw orcommerciallaw exclusivelyoracombinationofthetwo.'''Flagstaff AyordableHous.L.P.v.DesignAlliance,Inc.,223P.3d664,668(Ariz.2010)(quotingSalt RiverProjectAgric.Improvement& PowerDist.J( WestinghouseElec.Corp.,694P.2d 198, 210(Ariz.1984)).çslfthecourtdeterminesthattortprinciplesareappropriateinthe circum stances,the plaintiffm ay rely on strictliability...,negligence,orany otherapplicable tort theory.'' SaltRiver,694 P.2d at210. The SaltRivercourtoutlined a three-factortestfor detennining,on a case-specific basis,w hetherto apply the econom ic loss rule to defective productclaims.SeeFlagstaffi223P.3dat670;seealsoSaltRiver,694P.2dat209CsRather than adoptingthemajoritynzleasablanketdisallowanceoftortrecoveryforeconomiclosses, w e think the betterrule isone which exam inesthe lossin lightofthe nature ofthe defectthat caused it,the marmerin which itoccurred,and thenatureofany othercontemporaneous losses.'').Althoughthisçsminorityview''hasbeencriticized,includingbytheSupremeCourtof theUnited States,2itcontinuesto bethe1aw ofArizona SeeFlagstafji223P.3dat670.Further, . theFlagstaffzouA impliedthattheeconomiclossruledoes(tnotapplytonegligenceclaimsbya plaintiffwhohasnocontractualrelationship withthedefendant''(likeM eltonandCentury) because the policy concem s underlying the econom ic loss doctrine are notim plicated w hen the plaintifflacksprivity and cnnnotpursue contractualrem edies. See /J at671. H ere,applying A rizona's three-factoranalysis,Plaintiffsallege facts to supporttheirtort claim sunder Arizona law . A lthough the only hann alleged iseconom ic loss,a defectin the 2In EastRiverS.S.Corp.v.TransamericaDelaval ,fna,476U.S.858,869-70,(1986),theSupremeCourt refusedto apply aSaltRiverapproach to aproductsliability claim underadm iralty law . Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 12 of 20 safety selectorthatperm itstherifleto firewithoutatriggerpullcould be considered unreasonablydangerousasitmaycausesubstantialrisk ofdeath orseriousinjury.Theclaims arefurthersupported becauseofPlaintiffs'lack ofprivitywith Century and theresulting unavailability ofcontractualrem edies.Therefore,Plaintiffsstatea claim upon which reliefcan begranted asto M elton foral1fivetortclaims.Accordingly,theCourtDENIES Century's m otion to dism iss as to Counts 2,3,6,7 and 8 as to M elton. 3. M orris'TortC' lfszltç Under IllinoisLaw Century arguesM orris'tortclaimsarebarred becausein Illinois,aclaim thatpresentsan economiclossisnotrecoverableintortwithoutinjuryto aplaintiffspersonorproperty.3 But, thisgeneralIllinoisprincipleisnotwithoutexception.lllinoisappliesû'tllreeexceptionsto the economiclossrule:(1)wheretheplaintiffsustaineddamage,i.e.,personalinjuryorproperty damage,resultingfrom asuddenordangerousoccurrence;(2)wheretheplaintiffsdamagesare proximatelycausedbyadefendant'sintentional,falserepresentation,i.e.,fraud' ,and(3)where theplaintiff sdam agesareproxim ately caused by anegligentmisrepresentation by adefendant in the business ofsupplying infonnation forthe guidance ofothers in their business transactions.''InreChi.FloodLitig.,680N.E.2d265,275(111.1997)(citingM oormanMfg.Co. v.Nat'1TankCo.,435N.E.2d443,452(111.1982))(internalcitationsomitted)(emphasisin original). Here,Plaintiffsdonotallegethereisanyaccompanyinginjury orpropertydnmage. Therefore,M orris'claim sfornegligenceand strictliability are barredby Illinois'econom ic loss rule. H ow ever,Counts 6,7 and 8 allinvolve eitherfraud ornegligentm isrepresentation,w hich fallw ithin Illinois'exceptions.Thus,these claim scalm otbe dism issed atthis stage oflitigation. 3Insupportofits argum ent, Cent urycitesDonovanv.Count y ofLake,951N.E.2d1256,1262-63(111.Ct. App.2011). - 12- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 13 of 20 Accordingly,theCourtGR ANTS Century'sm otion to dism issasto Cotmts2 and 3asto M orris, and DENIES Century'sm otion to dismissasto Counts6,7 and 8 asto M onis. D. C ounts4 and 5: Breach ofthe lm plied W arranty of M erchantability and Violation ofthe M agnuson-M oss W arranty A ct Century m ovesto dism iss Counts 4 and 5,which assertbreach ofthe im plied warranty of merchantability and violation oftheM agnuson-M ossW arranty Act.Atoralargum ent, Plaintiffs'counselstated thatPlaintiffsretreaton Counts4 and 5 in lightofTakata,in whichthe Courtheld thatFlorida 1aw requiresprivityto sustain abreach ofimplied warranty claim . 193 F. Supp.3dat1346;seealsoMesav.BM W OJ' NLAm.,904So.2d450,458(Fla.Dist.Ct.App. 2005)(ssunderFloridalaw,aplaintiffcarmotrecovereconomiclossesforbreachofimplied warrantyintheabsenceofprivity.''l;Davidv.Am.SuzukiMotorCorp',629F.Supp.2d 1309, 1321(S.D.Fla.2009)(tsFloridalaw requiresprivityofcontracttosustainabreach ofimplied warrantyclaim.''). Like Florida,Arizonaand lllinoisalso requireprivity forim plied warranty claim s.See Floryv.SilvercrestIndus.,633P.2d383,388(1981)Cdeconomiclossesarenotrecoverablefor breachofimpliedwarrantyin theabsenceofprivity ofcontract.');Szajnav.Gen.MotorsCorp., 503N.E.2d760,767(111.1986)($ûW e...declinedtoabolishtheprivityrequirementinimplied warrantyeconomiclosscases.').Here,fourofthenamedPlaintiffspurchasedtheirriflesfrom non-party sellersand the fifth nam ed Plaintiffpurchased hisritlefrom hisfather.Thus, Plaintiffsdo notestablish theprivityrequired to sustain thebreach ofimplied warranty claim s. The M agnuson-M oss W arranty A ctgives consum ersa private rightofaction against warrantorsforabreachofwarranty,asdefinedbystatelaw.See15U.S.C.j2301(7).However, a M agnuson-M ossW arranty A ctclaim only exists ifa valid breach ofw arranty claim isalso stated.Baileyv.MonacoCoachCorp.,168Fed.App'x 893,894n.1(11thCir.2006).Because - 13- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 14 of 20 Plaintiffsdo notstate acognizableclaim forbreach ofimplied warranty,they also haveno claim underthe M agnuson-M oss W arranty A ct.4 A ccordingly, the CourtG R AN TS Century's m otion to dism iss Counts4 and 5. C ount 1: V iolation ofthe Florida D eceptive and U nfair Trade Practices A ct Century movestodismissCount1,which assertsviolation oftheFloridaDeceptive and UnfairTradePracticesAct.PlaintiffsassertthatCentury employed fraud,deception,false prom ises,m isrepresentation and the know ing concealm ent,suppression,orom ission ofa m aterialfactin itsdistribution,sale,marketing,and/oradvertisem entofitsriflesby making false representationsaboutthe perform ance ofthe ritles- particularly the safety m echanism - and by failing to disclose the alleged defect. Century firstarguesthatM elton and M oniscnnnotbring a claim underthe Florida DeceptiveandUnfairTradePracticesActbecauseneitherM elton norM onispurchasedtheir ritlesin Florida orlive in Florida.Plaintiffsrespond thatthe Actappliesto non-resident consumers. Florida courtsarespliton whethertheActextendsto out-of-stateconsum ers,and the FloridaSuprem eCourthasnotaddressed the issue. SomeFloridacase1aw holdsthattheAct should beapplied onlyto in-state consumers.Seee.g.,Hutson v.RexallSundown,Inc.,837 So.2d 1090,1093-94 (F1a.Dist.Ct.App.2003)(affirmingrefusaltocertifynationwideclassin Florida Deceptive and UnfairTrade PracticesA ctsuitagainstm anufacturerofcalcium supplementswhereinjuryoccurredatpointsofsaleoutsideFlorida);OCE PrintingSys.USA, Inc.v.MailersDataServs.,lnc.,760So.2d 1037,1042(F1a.Dist.Ct.App.2000)(reversing 4Illinoislaw seem sto som etim cspennitaM agnuson-M ossW arranty Actclaim even withoutavalidstate claim forbreachofimpliedwarrantyducto lack ofprivity.Despitedisagreementfrom many federalcourts,lllinois relaxestheprivity requirem entwhen aconsum ersucsthem anufacturerundertheM agnuson-M ossW arrantyA ct andshowsthatthemanufacturerhasissuedawrittenwarranty on theproduct.SeeMydlach v.Daimlerchrysler Corp.,875N.E.2d 1047,1064(111.2007);Szajna,503N.E.2dat769.lnanyevent,becausePlaintiffsretreatedfrom Counts4 and 5atoralargumentandneitherpartybriefedthe issue,theCourtdeclinestoanalyzeM orris' M agnuson-M ossW arrantyActclaim underlllinoislaw. Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 15 of 20 ordercertifying nationwide classunderFloridaDeceptiveand UnfairTrade PracticesAct becauset'onlyin-stateconsumerscanpursueavalidc1aim''), 'CoastalPhysicianServs.of BrowardCnly.,Inc.v.Ortiz,764 So.2d7,8(F1a.Dist.Ct.App.1999)(inclassactionbasedon debtcollection activity by Floridaphysician'soffice,lim iting discovery to debtcollection m aterials sentto in-state consum ers and concluding thatFlorida D eceptive and U nfairTrade PracticesActwasenactedtoprotectin-stateconsumers).However,otherFloridacaselaw has permittedclaimsby out-of-stateconsumers.SeeMillennium Commc' nsttFusllment,Inc.v. OfhceofAttorneyGen.,761So.2d 1256,1262 (F1a.Dist.Ct.App.2000)(FloridaDeceptiveand UnfairTrade PracticesActclaim could bebased on comm unicationsto out-of-stateconsum ers dtwherethe allegationsin thiscaseretlectthatthe offending conductoccurred entirely within this state.''l' ,RenaissanceCruises,Inc.v.Glassman,738So.2d436,439(F1a.Dist.Ct.App.1999) (affirmingcertificationofnationwideclassinFloridaDeceptiveandUnfairTradePracticesAct suitrelatedto portchargesforcruiseswheredefendant'soperationswere controlled and carried outfrom Floridaand anyoverageswerekeptbydefendantinFlorida). M ostfederalcourtsin the Southern DistrictofFlorida thathave considered the issue have followedM illennium.SeeBankofAm.,N A.v.Zaskey No.9:15-cv-81325,2016U.S.Dist. LEXIS65515,at*29(S.D.Fla.May 18,2016).ButseeSteinv.MarquisYachts,LLC,No.1424756-C1V,2015U.S.Dist.LEXIS 35088,at*17-18(S.D.Fla.M ar.20,2015)(Florida Deceptive and UnfairTrade PracticesActclaimsdismissed whereplaintiffpurchased goodsin Canadaandtherewerenoallegationsaboutanypre-salerepresentationsmadeinFlorida). Here,M elton'sandM orris'injuriesoccurredwheretherifleswerepurchased--outsideof Florida. Following thereasoning in Hutson orStein,thiscould precludeM elton and M orrisfrom bringinga claim undertheFloridaDeceptiveand UnfairTradePracticesAct.However, Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 16 of 20 Plaintiffshavealleged m any factsconnecting Florida to Century'salleged misconductgiving rise to the claim . Forexam ple,the Com plaintstatesthatCentury designed,m anufactlzred, marketed and distributed theritlesin Florida;thatCenturywillfully,knowingly,and/or recklessly committed actsin Florida fortheexpresspurposeofconcealing safety defects' ,thata1l Century entitiesare citizensofFlorida;andthatCenturym isrepresented orconcealed material factsin itsmanualsand on itswebsite,both in Florida.Even underHutson orStein,sufticient cormectionswithFloridacouldjustifyapplicationoftheFloridaDeceptiveandUnfairTrade PracticesAct.Therefore,the courtwillnotdism isstheFlorida Deceptive and UnfairTrade PracticesActclaim asto M elton orM orrisforfailureto stateaclaim . However,theCourtlikely willreaddressthe issue afler furtherfactdevelopm entatclasscertitication. See,e.g.,Cohen v. lmplantInnovations,Inc.,259F.R.D.617,626-27(S.D.Fla.2008)(denyingclasscertification; applying Florida'sS'm ostsignitscantrelationship''choice-of-law l'uleand determ ining that M issourilaw wasm oreappropriatethan Florida 1aw regarding plaintiffsunfairand deceptive tradepracticesclaim whereplaintiffreceived offending marketing materialsin M issouri,wasa M issouricitizen,purchased,received,andusedtheproductsinM issouri,andwasSûinjured''in M issouri). N ext,Century arguesthatPlaintiffs failto allege deceptive orunfairacts orpractices. However,the Complaintexpressly allegesnum erousdiscreteactsthat,iftrue,aredeceptive, especially considering the broad conceptofçsunfairor deceptive''conductunderthe A ct. See Tempay,Inc.v.BiltresStam ng ofTampaBay,LLC,945F.Supp.2d 1331,1344(M .D.Fla. 2013).Indeed,courtshavedeniedmotionsto dismissFloridaDeceptiveandUnfairTrade PracticesA ctclaim sarising from allegations offalse representationsabouta product'ssafety or effectiveness.See,e.g.,Collinsv.DaimlerchryslerCorp.,894 So.2d988,990(F1a.Dist.Ct. - 16- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 17 of 20 App.2004)(reversingdismissalwhereplaintiffallegedthatcarmanufacturerviolatedFlorida Deceptive and U nfair Trade PracticesA ctby advertising thata carhad effective seatbeltsw hen infactitdidnot);Davisv.Powertel,Inc.,776So.2d 971,975(Fla.Dist.Ct.App.2000) (reversingdismissalofFloridaDeceptiveandUnfairTradePracticesActclaim alleging defendant'snondisclosureofcertainfunctionality causeddiminishedvalueofcellphones). Third,Century arguesthatPlaintiffsfailto show how they havebeen aggrieved by the alleged unfairacts. Butasexplained supra,in thestanding analysis,Plaintiffssufficiently allege harm related to thedim inished benefitofthe bargain based on ownership ofdefective ritles. Finally,Century argues thatthe Com plaintm akesno allegations aboutthe difference in m arket valueoftheriflesatthetim eofsale. However,the Complaintseeksdim inished-valuedam ages and itiswellsettled thatsuch damagesarerecoverableundertheFloridaDeceptiveand Unfair TradePracticesAct.See Collins,894 So.2d at990;Davis,776 So.2d at975. G iven the deference afforded to plaintiffson a m otion to dism iss,Plaintiffshave alleged sufticientfactsto state a claim underthe Florida Deceptive and UnfairTrade Practices Act. A ccordingly,the CourtD EN IES Century'sm otion to dism iss Count 1. F. Count9:UnjustEnrichment CenturymovestodismissCount9,whichassertsunjustenrichmentasa!lalternative theory. The sam eanalysisappliesto al1fivenamed Plaintiffsasthere isno contlictoflaws becausethelawsofArizona,Illinoisand Floridaa1lSlproducethesnm eresult.''SeeCoopers575 F.3dat1171.InFlorida,theelementsofaclaim forunjustemichmentare:(1)abenefit conferreduponthedefendantbytheplaintiff;(2)appreciationbythedefendantofsuchbenefh; and(3)acceptanceandretentionofsuchbenefitbythedefendantundersuch circumstancesthat itw ould be inequitable forhim to retain itwithoutpaying the value thereof. Aceto Corp.v. Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 18 of 20 TherapeuticsMD,Inc.,953F.Supp.2d 1269,1287(S.D.Fla.2013).lnArizonaandlllinois,the elem entsare sim ilar.5 Centuryfirstarguesthatalthough aplaintiffmaypleadunjustenrichmentasan alternativeequitabletheorytoitslegalcausesofaction,Plaintiffs'claim forunjustemichment failsbecause itrelieson thesam efactualpredicatesasthelegalcausesofaction and istherefore notatruealtem ativetheory.6 Buthere,theComplaintincludesa11elementsofunjustemichment by claim ing thatthe Century ritleshave a dim inished value,and thus Century hasreaped profits in excess ofw hatshould have been eam ed forthe sale of its allegedly defective ritles. Century nextarguesthatthereisno directbenefitunderFloridalaw becauseno named Plaintiffpurchased a rifle directly from Century. ButCentury'sargum entiscontrary to Florida law,which providesthatno directcontactisrequired fora directbenefitto beconferred.See, e.g.,Romano v.M otorola,Inc.,No.07-C1V-60517,2007U.S.Dist.LEXIS 86472,at*5-6(S.D. Fla.Nov.26,2007)CiDefendantiscorrectinstatingthatçFloridalaw doesnotsupportacauseof actionforunjusterlrichmentunlesstheplaintiffcanallegethatheconferredadirectbenefiton thedefendant.'...l-lowever,Defendanterroneouslyequatesdirectcontactwith directbene/tin arguingthattgbjecauseplaintiffheredidnotpurchaseeitherhisphoneorhisbatteriesfrom Motorola,plaintiffconferrednodirectbenefitonMotorola.''')(intemalcitationsomitted) (emphasisinoriginal);ZakiKulaibeeEstablishmentv.M cFlicker,788F.Supp.2d 1363,1377 5Arizonaenforcesaclaim ofunjustenrichmentwhenfiveelementsaresatistied:H(l)anemichment,(2) animpoverishment,(3)aconnectionbetweenthcemichmentandimpoverishment,(4)theabsenceofjustitkation fortheenrichmentand impoverishment,and (5)theabsenceofaremedyprovided by1aw.9'Freeman v.Sorchych, 245P.3d927,936(Ariz.Ct.App.2011).lnIllinois,ççtostateacauseofactionbasedonatheoryofunjust enrichment,aplaintiffmustallegethatthedefendanthasunjustlyretainedabenefittotheplaintitrsdetriment,and thatdefendant'sretentionofthebenefitviolatesthefundamentalprinciplesofjustice,equity,andgoodconscience.'' HP1HeaIthCareSenw,Inc.v.Mt.VernonHosp.,Inc.,545N.E.2d672,679(111.1989). 6Insupportofitsargum ent, Centt zrycitesLiculv.VolkawagenGrp.ofAm.,No.13-61686-C1V,2013U.S. Dist.LEXIS 171627,at*19-22(S.D,Fla.Dec.5,2013)(whentçgpllaintiffs'unjustenrichmentclaim merelyrestates theirothercausesofaction,itfailsasamatteroflaw.''). - 18- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 19 of 20 (S.D.Fla.2011)(nodirectcontactintheform ofcontractualrelationshiprequiredto show direct benefit).Here,Plaintiffs'Complaintadequatelyallegesfactstosatisfytheelementsofunjust enriclunentas an altem ative theory ofreliefunderthe law sofFlorida,A rizona,or Illinois. A ccordingly,the CourtD EN IE S Cenm ry'sm otion to dism issC ount9. G. C ount 10: D eclaratory R elief Century m ovesto dism iss Count10,w hich asserts a residualclaim fordeclaratory relief. Plaintiffsseekadeclarationthat:(1)allgunswiththefull-auto safetyselectordevicehavea common design defectthatcausesthegunsto fireunexpectedly withoutatriggerpullwhen the safetyleverisabovethel'safe''position;(2)Centuryknew ofthesafety selectordefectinthe guns;and(3)Centuryshallissuearecallofa11gunswiththesafety selectordefectand compensatePlaintiffs. ln adiversity case,federalcourtsapplyfederallaw to proceduralm attersand apply the 1aw oftheforum stateto substantivem atters.See Coccaro v.GEICO Gen.Ins.Co.,648 Fed. App'x876,880(11thCir.2016)(citingErieR.R.Co.v.Tompkins,304U.S.64,78(1938:. Florida'sDeclaratoryJudgmentActisaproceduralmechanism thatconferssubjectmatter jurisdictiononFlorida'scircuitandcountycourts;itdoesnotconferanysubstantiverights.1d. Because declaratory reliefpresentsa proceduralissue,the CourtconstruesPlaintiffs'claim for declaratoryandinjunctivereliefunderthefederalDeclaratoryJudgmentAct,28U.S.C.52201. ThefederalActgrantsfederalcourtsdiscretion to decide whetherto issuea declaratory judgment.28U.S.C.,j2201(a)($tlnanactualcontroversywithinitsjurisdiction...anycourtof theUnited States,upon thefiling ofan appropriatepleading,may declaretherightsand other legalrelationsofanyinterestedpartyseeking such declaration.'')(emphasisadded).Generally, theActallowsprospectivedefendantsto sue to establish non-liability,oraffordsaparty threatenedwith liabilityan opportunityforadjudicationbeforeitsadversarycommences - 19- Case 1:16-cv-21008-FAM Document 20 Entered on FLSD Docket 03/20/2017 Page 20 of 20 litigation.Neitherscenario existshere. Here,the rightsand legalrelationsofPlaintiffsand Centuryarebeingadjudicatedthroughtheotherclaims;therefore,declaratoryreliefisunlikelyto serve a usefulpup ose. A ccordingly,the Courtdeclines to exercise itsdiscretion to grant declaratory reliefand DISM ISSE S Count 10. lV . C O N CLU SIO N Based on the foregoing,itis hereby O R D ERED A ND A DJUD G ED that Century's M otion to D ism iss is G R AN TED IN PA R T and D ENIED IN PA R T asfollow s: @ Counts4,5 and 10 are D ISM ISSED in full; @ Counts 2 and 3 are D ISM ISSED as to a11Plaintiffs exceptM elton; @ Counts 6,7 and 8 are D ISM ISSED as to Plaintiffs Jolm son,V aldesand Smith only;and * Century'smotionto dism issCounts 1and 9 isDENIED. Century shallfile an answ erto the rem aining countsno laterthan A ril12 2017 . DONE AND ORDERED in ChambersatM iam i,Flor ,this Z' K '-'N W ofM arch 2017. F RICO O REN O UN ITED ATES D ISTRICT JU D GE Copiesftzrnished to: CounselofRecord - 20-
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