In re Fluidmaster, Inc., Water Connector Components Prods. Liab. Litig.

149 F.Supp.3d 940

In re: Fluidmaster, Inc., Water Connector Components Products Liability Litigation.

Case No. 1:14-cv-05696

MDL No. 2575

United States District Court, N.D. Illinois, Eastern Division.

Signed February 03, 2016

MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

Before the Court is Defendant Fluidmaster's motion to dismiss [136]. For the reasons set forth below, Defendant's motion [136] is granted in part and denied in part.

I. Background¹

This multi-district litigation relates to an allegedly faulty plumbing product designed and manufactured by Defendant Fluidmaster, Inc., a California company. The part in question is a called a NO-BURST water supply line, which is a short (usually 12‘ or 20‘ in length), flexible hose used to connect water piping to plumbing fixtures (e.g. , toilets, faucets, etc.). Plaintiffs allege two faults in these NO-BURST water supply lines: (1) that poor material selection and a defective design cause many of the supply lines to burst, resulting in flooding, and (2) that a plastic coupling nut used on a particular type of water supply line (i.e. , a toilet connector) is uniformly defective in its design and labeling, causing the coupling nut to fracture, resulting in flooding. Plaintiffs in this MDL include (1) individuals who incurred damages from fractured water supply lines, (2) individuals who have these allegedly faulty products in their homes where the product has yet to fail, and (3) subrogated insurers who paid claims to individuals who suffered damage due to supply line failures.

To streamline the adjudication of the common-liability claims in this MDL proceeding, the Court accepted Plaintiffs' proposal to file a consolidated class action complaint combining the claims as presented in six pre-existing class action lawsuits that had been transferred to this Court as part of this multi-district litigation,² [see 124, at 2], which Plaintiffs then filed on July 27, 2015. [See 127.] To be clear, the consolidated complaint does not include (at least expressly) the subrogation plaintiffs or their claims.

II. Legal Standard

A. Rule 12(b)(1)

The standard that the Court applies to a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction depends on the purpose of the motion. See Apex Digital, Inc. v. Sears, Roebuck & Co. , 572 F.3d 440, 443–44 (7th Cir.2009) ; United Phosphorus, Ltd. v. Angus Chem. Co. , 322 F.3d 942, 946 (7th Cir.2003) (en banc), overruled on other grounds by Minn–Chem, Inc. v. Agrium, Inc. , 683 F.3d 845 (7th Cir.2012). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction, the Court accepts all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See Apex Digital, 572 F.3d at 443–44 ; United Phosphorus , 322 F.3d at 946. But “[w]here jurisdiction is in question, the party asserting a right to a federal forum has the burden of proof, regardless of who raised the jurisdictional challenge.” Craig v. Ontario Corp. , 543 F.3d 872, 876 (7th Cir.2008) ; see also Reed v. Illinois , 2014 WL 917270, at *2 (N.D.Ill. Mar. 10, 2014).

B. Rule 12(b)(6)

In reviewing the sufficiency of a complaint, a district court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. Agnew v. Nat'l Collegiate Athletic Ass'n , 683 F.3d 328, 334 (7th Cir.2012). The Federal Rules of Civil Procedure require only that a complaint provide the defendant with “fair notice of what the * * * claim is and the grounds upon which it rests.” Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The Supreme Court has described this notice-pleading standard as requiring a complaint to “contain 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 Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). While factual allegations must be accepted as true, legal conclusions may not be considered. Id.

C. Rule 12(f)

Under Federal Rule of Civil Procedure 12(f) “the court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Motions to strike are generally disfavored but may be used to expedite a case by “remov[ing] unnecessary clutter.” Heller Fin., Inc. v. Midwhey Powder Co., Inc. , 883 F.2d 1286, 1294 (7th Cir.1989).

III. Analysis

A. Plaintiff Smith and the California Subclass

In Plaintiffs' consolidated class action complaint, in addition to consolidating the claims of the 13 named Plaintiffs in the underlying class action cases (Rensel, Kirsch, Sullivan, Rhyne, Ellefson, Eisen, Elder, Naef, Hardwick, Hungerman, Sanborn, Wyble, and Larson), Plaintiffs also brought claims on behalf of a fourteenth individual, Kevin Smith, representing a putative subclass of California residents. [127, ¶¶ 88–95.] Defendant moved to strike any mention of Plaintiff Smith and the California subclass from the complaint, arguing that Plaintiffs failed to follow the proper procedures for incorporating Mr. Smith and the subclass into this multi-district litigation.

During the parties' oral argument before the Court on December 1, 2015, Plaintiffs conceded that they did not comply with formal requirements for adding Plaintiff Smith into this case, and represented to the Court that they were in the process of determining the best methodology for doing so. Accordingly, the Court issued an order stating that, “as discussed on the record, in order to expedite the issues surrounding Plaintiffs' addition of named Plaintiff Kevin Smith into their First Consolidated Class Action Complaint [127], the Court hereby strikes any mention of Plaintiff Kevin Smith from that complaint without prejudice.”³ [201, at 1.]

But the Court did not rule on Defendant's related motion to strike any mention of the California subclass as well. That motion is denied.

In the consolidated class action complaint, Plaintiffs define their putative state subclasses as “individuals and entities residing in each of the states in which a named Plaintiff resides and each of the states where the laws are similar to each of the states in which a named Plaintiff resides.” [127, ¶ 180.] Defendant argues that because none of the named Plaintiffs is a California resident, the California subclass is now without a representative. But this ignores the fact that Plaintiffs defined their putative subclasses broadly to include states other than those in which a named Plaintiff resides. Defendant makes no argument as to why the California subclass does not fit into this definition. And to the contrary, “courts have permitted named plaintiffs to represent class members from other states in which the representatives did not reside or make purchases.” Saltzman v. Pella Corp. , 257 F.R.D. 471, 480 (N.D.Ill.2009).

Perhaps the bigger question here is how a California subclass can be part of this MDL when there is no such putative class mentioned in any of the underlying complaints that compose this consolidated MDL proceeding. The answer to that question lies in the fact that the consolidated class action complaint here is a superseding complaint (as opposed to an administrative one). To explain further, as one court recently put it, “[l]ike snowflakes, no two MDLs are exactly alike and, no doubt, whether to require the filing of a consolidated complaint and, if so, whether to treat such a complaint as ‘administrative’ or ‘superseding’ will depend on the particulars of a given MDL. Thus, it is critical that the parties and the court make clear what species of pleadings are being used.” In re General Motors LLC Ignition Switch Litig. , 2015 WL 3619584, at *8 (S.D.N.Y. June 10, 2015) ; see also Gelboim v. Bank of Am. Corp. , ––– U.S. ––––, 135 S.Ct. 897, 904 n. 3, 190 L.Ed.2d 789 (2015) (“Parties may elect to file a ‘master complaint’ and a corresponding ‘consolidated answer,’ which supersede prior individual pleadings. In such a case, the transferee court may treat the master pleadings as merging the discrete actions for the duration of the MDL pretrial proceedings. No merger occurs, however, when ‘the master complaint is not meant to be a pleading with legal effect but only an administrative summary of the claims brought by all the plaintiffs.” (internal citations omitted)). As Judge Sutton explained:

Because each transferred case [in an MDL] comes with its own pleadings, a multidistrict transfer threatens to submerge the transferee district court in paper. A common solution to this difficulty, one adopted in this case, is for the plaintiffs to assemble a “master complaint” that reflects all of their allegations. In many cases, the master complaint is not meant to be a pleading with legal effect but only an administrative summary of the claims brought by all the plaintiffs. When plaintiffs file a master complaint of this variety, each individual complaint retains its separate legal existence. See, e.g., In re Nuvaring Prods. Liab. Litig. , 2009 WL 2425391, at *2 (E.D.Mo. Aug. 6, 2009) (“[T]he filing of the master consolidated complaint in this action was simply meant to be an administrative tool to place in one document all of the claims at issue in this litigation. Neither Plaintiffs * * * nor I * * * contemplated that Rule 12(b) motion practice would be pursued * * * against the master complaint.”); In re Propulsid Prods. Liab. Litig. , 208 F.R.D. 133, 142 (E.D.La.2002) (“[T]he master complaint [filed in this case] should not be given the same effect as an ordinary complaint. Instead, it should be considered as only an administrative device to aid efficiency and economy.”).

But, in other cases, the court and the parties go further. They treat the master complaint as an

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