Cooper v. Simpson Strong-Tie Co., Case No. 19-cv-07901-TSH

460 F.Supp.3d 894

Cary W. COOPER, et al., Plaintiffs,

v.SIMPSON STRONG-TIE COMPANY, INC., et al., Defendants.

Case No. 19-cv-07901-TSH

United States District Court, N.D. California.

Signed May 19, 2020

Marie Noel Appel, Michael Francis Ram, Robins Kaplan LLP, Mountain View, CA, Adam Lewis Hoipkemier, Pro Hac Vice, Kevin Epps, Pro Hac Vice, Epps, Holloway, DeLoach and Hoipkemier, LLC, Watkinsville, GA, Celene Chan Andrews, Graham Bruce LippSmith, Kasdan LippSmith Weber Turner LLP, Los Angeles, CA, Juvian Hernandez, Pro Hac Vice, Robins Kaplan LLP, Minneapolis, MN, for Plaintiffs Cary W. Cooper, Terri G. Cooper.

Marie Noel Appel, Michael Francis Ram, Robins Kaplan LLP, Mountain View, CA, Adam Lewis Hoipkemier, Kevin Epps, Epps, Holloway, DeLoach and Hoipkemier, LLC, Watkinsville, GA, Celene Chan Andrews, Graham Bruce LippSmith, Kasdan LippSmith Weber Turner LLP, Los Angeles, CA, Juvian Hernandez, Pro Hac Vice, Robins Kaplan LLP, Minneapolis, MN, for Plaintiff Fernandina Beach, LLC.

Michael Francis Ram, Robins Kaplan LLP, Mountain View, CA, Celene Chan Andrews, Graham Bruce LippSmith, Kasdan LippSmith Weber Turner LLP, Los Angeles, CA, for Plaintiffs Simon Nguyen, Doan Thoai.

Joseph Vincent Mauch, Erick Charles Howard, Felicia Ann Draper, Shartsis Friese LLP, San Francisco, CA, for Defendants.

AMENDED¹ ORDER RE: MOTION TO DISMISS

Re: Dkt. No. 35

THOMAS S. HIXSON, United States Magistrate Judge

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 uplift² 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 capable 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. Id. 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. Id. ¶ 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. Id. ¶¶ 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 concealment. 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 , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Plausibility does not mean probability, but it requires "more than a sheer possibility that a...