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In re Azek Building Products, Inc.; Marketing and Sales Practices Litigation

United States District Court, D. New Jersey

January 30, 2015

In re: AZEK BUILDING PRODUCTS, INC.; MARKETING AND SALES PRACTICES LITIGATION MDL No. 2506

OPINION

MADELINE COX ARLEO, District Judge.

This matter comes before this Court on Defendant's Motion to Dismiss Plaintiffs' Consolidated Amended Complaint ("CAC") for failure to state a claim, pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) [Dkt. No. 95]. For the reasons set forth below, the motion is GRANTED-IN-PART and DENIED-IN-PART.

I. FACTS

In this case, sixteen named plaintiffs seek to bring a class-action lawsuit under the laws of eleven states against Defendant AZEK Building Products, Inc. ("Defendant"). This dispute centers on alleged defects in Defendant's decking products rising from the materials used therein. Specifically, Plaintiffs claim that polyvinyl chloride (PVC), from which Defendant's decking products are made, develops stains, scratches, discoloration, chalking, and streaking under normal use. Defendant, however, allegedly made written representations through "pamphlets and information sheets" which assured prospective customers that its decking had superior aesthetic durability to other decking alternatives, such as wood. (CAC ¶¶ 66, 74, 82, 92, 100, 108, 116, 131, 139, 147, 155, 162, 169).[1] Plaintiffs identify at least ten specific statements at issue which concern AZEK decking. (See id. ¶¶ 5, 6, 8, 10, 12). Among these statements are: AZEK decking would only "weather very slightly over time and will look luxurious for years to come;" "[B]y leaving out the wood fillers AZEK deck materials are engineered to resist stains and mold;" Azek decking is "Designed to last beautifully;" and "WOOD AND COMPOSITES ROT, STAIN AND FADE. AZEK DOESN'T. AZEK exterior products look so beautiful and last so long why would you ever use anything else?... AZEK deck is the embodiment of durability. At the end of the day all you have to do is enjoy it." (Id. ¶ 6(b)-(c), (e), (j)) (capitalization in original).

Plaintiffs also claim Defendant had knowledge of the disputed defects when it made these statements and covered up those defects when selling the product. Specifically, they claim that Defendant held itself out as having "over 25 years of experience in cellular PVC manufacturing, " and touted itself as an expert in the manufacture and use of PVC materials. (Id. ¶¶ 6, 10). Plaintiffs further allege that, as an expert, Defendant knew or should have known that its PVC decking would undergo various degradations, but made representations contrary to that knowledge. (Id. ¶¶ 11, 12, 17). The scientific and industrial community also knew that PVC was highly susceptible to degradation if it was exposed to sunlight and heat. (Id. ¶ 11, 19).

Each Plaintiff provides a date range-for most Plaintiffs a specific month, but for some a range of several months-within which he or she bought the AZEK decking. (Id. ¶¶ 65, 73, 81, 91, 99, 107, 115, 123, 130, 138, 146, 154, 161, 168). Each Plaintiff also alleges that, before purchasing the product, he or she reviewed and relied on the alleged misrepresentations made by Defendant, including the misrepresentations alleged in paragraphs 5, 6, 8, 10, and 12 of the CAC. (Id. ¶¶ 66, 74, 82, 92, 100, 108, 116, 124, 131, 139, 147, 155, 162, 169).

Defendant provided a Lifetime Limited Warranty which accompanied all AZEK decking. The Lifetime Limited Warranty warrants AZEK deck components

to be free from defects in material and workmanship that (1) occur as a direct result of the manufacturing process, (ii) occur under normal use and service, (iii) occur during the warranty period and (iv) result in blistering, peeling, flaking, cracking, splitting, cupping, rotting or structural defects from termites or fungal decay.

( Id., Ex. A). The Lifetime Limited Warranty also contains a disclaimer which states

THE WARRANTY STATEMENTS CONTAINED IN THIS LIFETIME LIMITED WARRANTY SET FORTH THE ONLY WARRANTIES EXTENDED BY AZEK AND ARE IN LIEU OF ALL OTHER CONDITIONS AND WARRANTIES, EITHER EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE PROVISIONS OF THIS WARRANTY SHALL CONSTITUTE THE ENTIRE LIABILITY OF AZEK AND THE PURCHASER/PROPERTY OWNER'S EXCLUSIVE REMEDY FOR BREACH OF THIS WARRANTY. IN PARTICULAR, IN NO EVENT SHALL AZEK BE LIABLE TO THE PURCHASER/PROPERTY OWNER FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING FROM THE USE OF THE AZEK PRODUCTS OR THE BREACH OF ANY EXPRESS OR IMPLIED WARRANTY.

(Id.) (capitalization in original). The Lifetime Limited Warranty requires that the manufacturer be given notice by the consumer of any defect and an opportunity to inspect defective decking. (Id.). Various Plaintiffs allege they provided notice of the alleged defects to Defendant and Defendant refused to provide coverage under the Lifetime Limited Warranty, claiming it covered only defects in "performance, " not aesthetics. (Id. ¶ 19).

Plaintiffs' claims fall in five categories: breach of express warranty, breach of the implied warranty of merchantability, violation of various state consumer fraud statutes, breach of duty of good faith and fair dealing, and a declaratory judgment claim. Defendant's moves to dismiss each claim for various general and specific deficiencies. The Court will address these in turn.

II. STANDARD OF REVIEW

In considering a Rule 12(b)(6) motion to dismiss on the pleadings, the court accepts as true all of the facts in the complaint and draws all reasonable inferences in favor of the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Moreover, dismissal is inappropriate even where "it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Id.

The facts alleged, however, must be "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id . Accordingly, a complaint will survive a motion to dismiss if it provides a sufficient factual basis such that it states a facially plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

For allegations sounding in fraud, Rule 9(b) imposes a heightened pleading standard: namely, "a party must state with particularity the circumstances constituting fraud or mistake, " but "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b). The circumstances of the fraud must be stated with sufficient particularity to put a defendant on notice of the "precise misconduct with which [it is] charged." Lum v. Bank of America, 361 F.3d 217, 224 (3d Cir. 2004). "To satisfy this standard, the plaintiff must plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation." Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007).

III. LEGAL ANALYSIS

A. Miscellaneous Dismissals

As a preliminary matter, the Court grants Plaintiff Esposito's request to dismiss his express and implied warranty claims. (See Dkt. No. 103, Pls.' Opp. at 15 n.29). The Court also dismisses Plaintiff Solo's implied warranty claim, as Plaintiffs do not contest that his allegations fail to indicate manifestation of the defect within one year.[2] See Tietsworth v. Sears, 720 F.Supp.2d 1123, 1142-43 (N.D. Cal. 2010) (dismissing implied warranty claim premised on a latent defect in a washing machine because plaintiff failed to plead that the machine "was unfit for its ordinary purpose of cleaning clothes within the one-year warranty period").

B. The Warranty Claims (Counts I-II)

1. Express Warranty

Plaintiffs present two theories under their cause of action for breach of express warranty. First, they allege that the Lifetime Limited Warranty provided by Defendant was breached by Defendant's unwillingness to provide relief for aesthetic defects. Second, they allege that Defendant made several specific, written statements concerning the aesthetic longevity of the decking which created express warranties and which were contrary to the inherent properties of PVC, the material used to make the decking.

"Under New Jersey law, in order to state a claim for breach of express warranty, Plaintiffs must properly allege: (1) that Defendant made an affirmation, promise or description about the product; (2) that this affirmation, promise or description became part of the basis of the bargain for the product; and (3) that the product ultimately did not conform to the affirmation, promise or description." Snyder v. Farnam Cos., Inc., 792 F.Supp.2d 712, 721 (D.N.J. 2011).

i. Breach of the Lifetime Limited Warranty

Defendant correctly argues that Plaintiffs have failed adequately to plead breach of the Lifetime Limited Warranty. The Lifetime Limited Warranty warranted AZEK deck components

to be free from defects in material and workmanship that (1) occur as a direct result of the manufacturing process, (ii) occur under normal use and service, (iii) occur during the warranty period and (iv) result in blistering, peeling, flaking, cracking, splitting, cupping, rotting or structural defects from termites or fungal decay.

(CAC, Ex. A). In order for the Lifetime Limited Warranty to apply, on its terms, any defect must result in structural or physical damage as listed in part (iv). Plaintiffs' CAC alleges "discoloring, fading, chalking, and degrading, " (id. ¶ 18), and "scratch[ing]" and "stain[ing]." (Id. ¶ 20). Nothing in Plaintiffs' CAC alleges that any Plaintiff's deck suffered from "blistering, peeling, flaking, cracking, splitting, cupping, rotting or structural defects from termites or fungal decay." ( Id., Ex. A). Nor do Plaintiffs anywhere allege that the aesthetic defects fall under the actual language found in part (iv) of the Lifetime Limited Warranty. Therefore, Plaintiffs have not alleged facts sufficient to form a dispute as to whether the promises contained in the Lifetime Limited Warranty were breached by alleged defects in ...


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