DANIEL SLEMMER and PAULA SLEMMER, Individually, and on behalf of all others similarly situated, Plaintiffs,
McGLAUGHLIN SPRAY FOAM INSULATION, INC. and BARNHARDT MANUFACTURING CO., Defendants.
JAN E. DuBOIS, District Judge.
Plaintiffs Daniel and Paula Slemmer, on behalf of a similarly situated class, have sued two corporations, Barnhardt Manufacturing Co. ("Barnhardt"), and McGlaughlin Spray Foam Insulation, Inc. ("McGlaughlin"). Barhardt is the manufacturer of a type of home insulation known as spray polyurethane foam ("SPF") and McGlaughlin is a certified installer of SPF. Plaintiffs allege that SPF is a toxic substance that creates health hazards for those living in homes where it is used. Both defendants have filed motions to dismiss the Class Complaint, and plaintiff has filed a cross-motion for discovery. For the reasons set forth below, the Court grants in part and denies in part defendants' motions, and denies plaintiffs' cross-motion as moot.
SPF is a type of insulating foam created by spraying certain compounds into an "attic (or similar) areas of a subject property...." (Compl. at ¶ 11.) Plaintiffs allege in their Complaint that SPF is comprised of "highly toxic compounds" and that SPF "remains toxic" after installation. (Id.) Plaintiffs further state that SPF causes "property damage and health hazards to occupants of installed homes such that the only remedy is the complete removal of the SPF." (Id. at ¶ 13.)
The Slemmers are Pennsylvania residents who had SPF, manufactured by Barnhardt, installed in their home by McGlaughlin in May 2012. (Id. at ¶ 6.) According to the Complaint, the installation of SPF has resulted in "off-gassing, damaging the real and personal property of Plaintiffs and Class Members and/or caused personal injuries resulting in eye irritations, sore throats and cough, nausea, fatigue, shortness of breath, and/or neurological harm." (Id. at ¶ 22.)
In the Complaint plaintiffs assert six claims against both defendants: (1) Negligence, (2) Strict Liability, (3) Breach of Express and/or Implied Warranties, (4) Unjust Enrichment, (5) Violation of Consumer Protection Acts, and (6) Equitable and Injunctive Relief and Medical Monitoring. In addition, plaintiffs have alleged a negligent supervision claim against Barnhardt only.
III. LEGAL STANDARD
Rule 12(b) (6) of the Federal Rules of Civil Procedure provides that, in response to a pleading, a defense of "failure to state a claim upon which relief can be granted" may be raised by motion. In analyzing a motion to dismiss pursuant to Rule 12(b)(6), the Court "accept[s] all factual allegations as true, [and] construe[s] the complaint in the light most favorable to the plaintiff...." Phillips v. County of Allegheny , 515 F.3d 224, 231, 233 (3d Cir. 2008) (internal quotations omitted).
"To survive a motion to dismiss, a civil plaintiff must allege facts that raise a right to relief above the speculative level....'" Victaulic Co. v. Tieman , 499 F.3d 227, 234 (3d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)). 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 (2009) (quoting Twombly , 550 U.S. at 570). To satisfy the plausibility standard, a plaintiff's allegations must show that defendant's liability is more than "a sheer possibility." Id . "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id . (quoting Twombly , 550 U.S. at 557).
A. Subject Matter Jurisdiction
In the Complaint, plaintiffs assert claims on behalf of four putative classes against both Barnhardt and McGlaughlin. Specifically, plaintiffs propose a nationwide class and Pennsylvania subclass of owners and residents of property containing SPF manufactured, sold, distributed and/or supplied by Barnhardt. Plaintiffs also propose a nationwide subclass and Pennsylvania subclass of owners and residents of property containing SPF that was, inter alia, sold, distributed, supplied or installed by McGlaughlin. McGlaughlin first argues that the Complaint should be dismissed pursuant to Fed.R.Civ.P. 12(b)(1), on the ground that the Court lacks subject matter jurisdiction under the Class Action Fairness Act ("CAFA").
Under CAFA, district courts may hear class actions where the amount in controversy exceeds $5 million and any member of a class of plaintiffs is a citizen of a state different from any defendant. See 28 U.S.C. § 1332(d)(2). However, McGlaughlin cites the local controversy exception under CAFA, which states that district courts "shall decline to exercise jurisdiction" over a case where more than two-thirds of the members of all proposed plaintiff classes are citizens of the state in which the action was originally filed, and at least one defendant is a citizen of the state in which the action was originally filed. Id. at § 1332(d)(4)(A).
McGlaughlin avers that CAFA's local controversy exception is applicable to the case and that, as a consequence, the Court lacks subject matter jurisdiction. In support of its argument, McGlaughlin submitted declarations and other materials outside the pleadings. Specifically, McGlaughlin contends that it is incorporated in and has its principal place of business in Pennsylvania, and that over 80% of the plaintiffs in the proposed classes against it are located in Pennsylvania, citing the Declaration of Dik McGlaughlin, president of McGlaughlin.
McGlaughlin concedes that if such submissions are not excluded, the Court is required to treat the motion as one for summary judgment under Fed.R.Civ.P. 12(d). (McGlaughlin Mot. at 2 n.3.) Plaintiffs oppose McGlaughlin's motion and have also filed a cross-motion for relief under Rule 56(d), which would allow, inter alia, additional time for discovery if the Court treats the instant motion to dismiss as one for summary judgment.
The Court rejects McGlaughlin's argument on this issue. The language of the local controversy exception requires a court to decline jurisdiction only where "greater than two-thirds of the members of all proposed plaintiff classes in the aggregate, are citizens of the State in which the action was originally filed...." Id . (emphasis added); see also Smith v. Honeywell Int'l Inc., 2013 WL 2181277 (D.N.J. May 20, 2013) (aggregating different classes for purposes of exception). McGlaughlin, as the party objecting to federal jurisdiction, has the burden of showing that the local controversy exception is applicable. See Kaufman v. Allstate New Jersey Ins. Co. , 561 F.3d 144, 153 (3d Cir. 2009).
First, the parties had not conducted any discovery as of the date the motions were filed. Thus, the Court concludes that treatment of McGlaughlin's motion as one for summary judgment would be inappropriate. Because the Court does not treat McGlaughlin's motion as one for summary judgment, plaintiffs' motion for relief under Rule 56(d) is denied as moot. The Court notes that even if it considered the submitted documents, McGlaughlin has presented insufficient evidence of the citizenship of "all proposed plaintiff classes in the aggregate, " including those classes against Barnhardt, to establish the lack of subject matter jurisdiction under the local controversy exception ...