A Failure of Leakage Linkage: The District of New Jersey Sinks a Proposed Class Action under Tennessee and California Laws over Leaky Water Heaters
A New Jersey federal judge recently applied Tennessee and California law in dismissing a proposed class action concerning allegedly leaky water heater sensors/valves (valves) made by Honeywell International Inc. The decision provides a point-by-point explanation of how superficial allegations of product defect fail to satisfy federal pleading standards under the substantive product liability laws of both states.
In Butera v. Honeywell International, Inc., Civil Action No. 18-13417, the named plaintiffs were a resident of Tennessee and a resident of California whose water heaters began leaking six years after purchase. The plaintiffs filed a putative class action claiming that Honeywell’s hot water heater valves were defective. The plaintiffs alleged that the valves featured a plastic (thermowell) casing that “prematurely erodes” and deteriorates, allowing water leakage. They asserted claims under Tennessee’s Products Liability Act (TPLA) and causes of action under California common law, the California Commercial Code, and California’s Unfair Competition Law statute (UCL), sounding in breach of express and implied warranty, negligence, strict product liability and consumer fraud. Honeywell moved to dismiss for failure to state a claim. The court applied the laws of each plaintiff’s home state to their respective claims.
Tennessee Product Liability Act Claims
The Tennessee plaintiff alleged that the water heaters were defectively designed and that Honeywell failed to provide adequate warnings, in violation of the TPLA. The district court held that the plaintiff failed to allege sufficient facts to generate an inference that the product was defective or unreasonably dangerous. The court held that the allegation that the thermowell casing prematurely erodes did not show that the product was defective. The plaintiff’s failure to allege facts showing that use of the plastic made the product “per se defective or unreasonably dangerous” required dismissal of this claim.
The California plaintiff’s multiple claims fared no better. The plaintiff alleged that Honeywell breached its express warranty that the valves were free from defects and “it would replace all defective parts,” and breached the implied warranty that the valves were fit for their ordinary use. The court dismissed both. The plaintiff did not provide Honeywell an opportunity to repair the water heater, as required for breach of an express warranty, and the plaintiff’s excuses that such an opportunity would be futile were speculative, unsupported by any facts. The plaintiff only alleged that “his water heater began leaking,” failing to raise an inference that it leaked due to the defect – deterioration of the thermowell – thereby failing to sufficiently allege proximate causation. Moreover, that the plaintiff’s water heater began leaking six years after purchase did not state a claim for breach of warranty. In addition, the express warranty had expired, and the plaintiff failed to support the bare allegation that the warranty period was “unconscionably short.”
The court also found both warranty claims failed for lack of alleged privity between the plaintiff, a retail purchaser, and Honeywell, a component part manufacturer. The court rejected the plaintiff’s claim that he fell within a third-party beneficiary exception to the privity requirement. The express warranty claim also failed for lack of reliance, as the plaintiff failed to allege he had read and relied on the warranty.
The plaintiff’s negligence and strict liability claims also failed for lack of any inference of defect and causation. The court noted that the failure of a product with an alleged 6- to 10-year useful life after 6 years did not support a claim of defect, and again, the failure to tie the leak to the allegedly defective valve resulted in a failure to adequately allege proximate causation. And there was no claim stated for failure to warn due to the absence of actual or constructive knowledge the valve would prematurely deteriorate; the allegations that Honeywell was “a member of the water heater component industry and eventually replaced its plastic thermowells with metal thermowells” were insufficient. Moreover, the plaintiff failed to allege facts showing that Honeywell had a duty to warn that a six-year-old water heater might leak.
Finally, the court turned to the plaintiff’s consumer fraud claim under the UCL. Because this was a fraud-based claim, the plaintiff had to meet the heightened pleading standard under Federal Rule of Civil Procedure 9(b). The UCL required the plaintiff to allege that Honeywell knew of the defect at the time of sale, and as discussed above, that allegation was lacking. The plaintiff’s effort to overcome this gap with an allegation that Honeywell insufficiently tested the valve failed, as the allegation was conclusory.
Butera demonstrates the need in a component part defect case for allegations that tie the failure of the product to the alleged defect in the component. Here, defense counsel was able to exploit the failure to sufficiently allege that water heater leakage after six years of use was due to the degradation of the materials in the valve to put an early end to a would-be class action under both Tennessee and California law.