Melton v. Century Arms, Inc.

243 F.Supp.3d 1290

Jeffrey MELTON, Ezekiel Morris, Tommy Johnson, Juan Valdes, and Manville Smith, Plaintiffs,

v.CENTURY ARMS, INC., Century International Arms Corp., Century Arms of Vermont, Inc., and Century International Arms of Vermont, Inc., Defendants.

Case Number: 16–21008–CIV–MORENO

United States District Court, S.D. Florida, Miami Division.

Signed March 20, 2017

Jerrod C. Patterson, Steve W. Berman, Hagens Berman Sobol Shapiro, LLP, Seattle, WA, Angelo Marino, Jr., Fort Lauderdale, FL, for Plaintiffs.

Anthony Michael Pisciotti, Danny Charles Lallis, Ryan Lawrence Erdreich, Pisciotti, Malsch, Buckley, P.C., Florham Park, NJ, Jeffrey Martin Malsch, Pro Hac Vice, Pisciotti, Malsch, PC, White Plains, NY, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE

This case is a products liability class action brought by owners of various rifles manufactured by Century Arms, Inc., Century International Arms Corporation, Century Arms of Vermont, Inc., and Century International Arms of Vermont, Inc. (collectively, "Century"). Plaintiffs allege that the safety mechanism in certain models is defectively designed and allows the rifles to fire when the safety lever is moved above the safety position. This cause comes before the Court upon Century's Motion to Dismiss, which asks the Court to dismiss all counts for lack of standing or for failure to state a claim upon which relief can be granted. The Court has reviewed the Motion, Plaintiffs' Response and Century's Reply. Additionally, the parties raised some of their briefed arguments at oral argument on March 3, 2017.

I. BACKGROUND

The five named Plaintiffs own Century AK–47 rifles with full-auto safety selectors manufactured by Century after 1995. Each Plaintiff owns a different model with the same alleged design defect—a full-auto safety selector. Plaintiffs allege that the full-auto safety selector allows the rifles to accidentally fire when the safety lever is moved above the safety position. Plaintiffs also allege that Century had knowledge of the design defect for years and has changed the safety mechanism on its current models, but never warned the public or recalled the allegedly defective rifles. Only one named Plaintiff reports that an accidental discharge has actually occurred—the others claim only to be aware of the risk. None of the named Plaintiffs purchased their rifle directly from Century.

The Complaint alleges ten counts against Century:

1) violation of the Florida Deceptive and Unfair Trade Practices Act;

2) negligence;

3) strict liability in tort;

4) breach of implied warranty of merchantability;

5) violation of the Magnuson–Moss Warranty Act;

6) fraudulent inducement and/or suppression;

7) negligent failure to disclose, failure to warn, concealment and misrepresentation;

8) fraudulent concealment and intentional failure to warn;

9) wrongful and/or unjust enrichment; and

10) declaratory relief.

The five named Plaintiffs are:

• Jeffrey Melton, a Tennessee resident who purchased a Century GP 1975 rifle from J & G Sales in Arizona;

• Ezekiel Morris, an Illinois resident who purchased a new Century OPAP rifle from Shooting Sports in Illinois;

• Tommy Allen Johnson, a Florida resident who purchased a Century NPAP rifle from Take Aim Guns in Florida;

• Juan Valdes, a Florida resident who purchased a Century M70AB2 rifle from Miami Police Supply a/k/a Mark's Guns Corp. in Florida; and

• Manville Smith, a Florida resident who purchased a Century M70 rifle from his father. The Complaint does not state where the purchase occurred.

II. LEGAL STANDARD

"A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 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) ). Detailed factual allegations are not required, but a pleading must offer more than "labels and conclusions" or "a formulaic recitation of the elements of the cause of action." Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

Where a cause of action sounds in fraud, the heightened standard in Federal Rule of Civil Procedure 9(b) also must be satisfied. Under Rule 9(b), "a party must state with particularity the circumstances constituting fraud or mistake," although "conditions of a person's mind," such as malice, intent, and knowledge may be alleged generally. FED. R. CIV. P. 9(b). "The ‘particularity’ requirement serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." W. Coast Roofing & Waterproofing, Inc. v. Johns Manville, Inc. , 287 Fed.Appx. 81, 86 (11th Cir. 2008) (internal citations omitted).

III. ANALYSIS

A. Standing

Century moves to dismiss all counts for lack of standing. Article III of the U.S. Constitution limits federal court jurisdiction to actual cases and controversies. See Cone Corp. v. Fla. Dep't of Transp. , 921 F.2d 1190, 1203 (11th Cir. 1991) (citing U.S. CONST. art. III, § 2). "The standing doctrine is an aspect of this case or controversy requirement and has its origins in ‘both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.’ " Id. (quoting Warth v. Seldin , 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ) (internal citations omitted). Accordingly, "standing is a threshold jurisdictional question which must be addressed prior to and independent of the merits of a party's claims." DiMaio v. Democratic Nat'l Comm. , 520 F.3d 1299, 1301 (11th Cir. 2008).

Because standing is jurisdictional, "a dismissal for lack of standing is essentially the same as a dismissal for want of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1)." Mitchell v. Balboa Ins. Co. , No. 11-cv-02580, 2012 WL 2358563, at *2, 2012 U.S. Dist. LEXIS 85645 at *5 (M.D. Fla. June 20, 2012) (citing Stalley ex rel. United States v. Orlando Reg'l Healthcare Sys., Inc. , 524 F.3d 1229, 1232 (11th Cir. 2008) ). The party invoking federal jurisdiction has the burden of proving standing. See Lujan v. Defenders of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Each element of standing "must be supported in the same way as any other matter on which the plaintiff bears the burden of proof." Id. In a motion to dismiss, "general factual allegations of injury resulting from the defendant's conduct" may be sufficient to allege standing because "on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim." Id. (internal quotations omitted).

To have Article III standing, a plaintiff "must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 342, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) (internal quotations omitted). Accordingly, constitutional standing has three elements: (1) "the plaintiff must have suffered an injury in fact—an invasion of a judicially cognizable interest, which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical;" (2) "there must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant;" and (3) "it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Lujan , 504 U.S. at 560, 112 S.Ct. 2130 (internal quotations and citations omitted).

Century argues that Plaintiffs have no standing because the Complaint does not allege that the defect actually manifested itself in an unintentional firing or that Plaintiffs were injured by an unintentional firing. Century asserts that claims for defective design or failure to warn, without a corresponding injury, are impermissible "no-injury" products liability claims. In support of this assertion, Century cites cases in which claims were dismissed for lack of standing where plaintiffs sought damages for costs of remedying safety hazards.

Plaintiffs argue that standing is sufficient where plaintiffs claim economic harm such as overpayment, loss of value, or loss of usefulness emanating from the loss of their benefit of the bargain. Indeed, if "benefit of the bargain" damages are theoretically available for the causes of action that have been asserted, dismissal on the pleadings is premature. See Coghlan v. Wellcraft Marine Corp. , 240 F.3d 449, 452 (5th Cir. 2001) ; see also Adinolfe v. United Techs. Corp. , 768 F.3d 1161, 1172 (11th Cir. 2014) (economic harm is a well-established injury-in-fact under federal standing jurisprudence). Here, Plaintiffs allege in their request for relief "compensatory damages that includes the cost of repair, replacement, or modification of the Safety Device defect" and request that "Century repair and or replace" Plaintiffs' rifles. Therefore, Plaintiffs have pleaded economic harm sufficient to satisfy Article III standing. Accordingly, the Court DENIES Century's motion to dismiss for lack of standing.

B. Choice of Law

Most of the ten counts asserted against Century arise under state law. Generally, a federal court hearing state law claims applies the choice-of-law rules of the forum state. Grupo Televisa, S.A. v. Telemundo Commc'ns Grp., Inc. , 485 F.3d 1233, 1240 (11th Cir. 2007). Therefore, the Court applies Florida's choice-of-law rules to Plaintiffs' claims.

Florida's choice-of-law rules for tort actions are based on the " ‘most significant relationship...