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Rust-Oleum’s Motion to Dismiss “Kitchen Sink” Consumer Fraud Complaint Results in Mixed Bag Ruling

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By: Reena R. Bajowala

On January 7, 2016, the Northern District of Illinois ruled on a motion to dismiss a 10-count complaint applying the law of all 50 states and the District of Columbia in a suit against manufacturer Rust-Oleum.  The 40 putative class plaintiffs hail from 27 states in this multi-district, consolidated litigation.  The suit alleges that a Rust-Oleum product – Deck & Concrete Restore – contains latent defects that result in bubbling, chipping or other premature failure.  Rust-Oleum moved to dismiss, asserting what appears to be every conceivable pleading defect, jurisdictional issue and structural claim problem.  The 91-page opinion painstakingly trudged through the arguments.  On balance the majority of the rulings favor the plaintiffs, finding arguments premature or fact-driven.  Among the debris, however, Rust-Oleum prevailed on a few fronts.  First, plaintiffs alleged that Restore’s limited warranty was unenforceable because the limitations were not conspicuous.  Rust-Oleum argued that damage limitations need not appear conspicuously on a limited (as opposed to a full) warranty.  The court agreed, finding that the warranty was clearly labeled “limited,” precluding application of the Magnuson-Moss Warranty Act.

The court also adopted Rust-Oleum’s arguments that the plaintiffs conflated the meaning of “ordinary” (i.e. the normal use of a product) and “particular” (i.e. a special purpose plaintiffs may have desired the product to fill) purposes, which gutted their fitness-for-a-particular-purpose claim.  The court rejected plaintiffs’ attempt to claim resurfacing the deck was the ordinary purpose while protecting it was its particular purpose, calling it “a distinction without a meaningful difference.”  Also dismissed were a subset of fraudulent concealment claims as plaintiffs failed to sufficiently allege a duty to disclose.  Lastly, the court dismissed several claims because the plaintiffs simply failed to respond.  Thus, Rust-Oleum is left holding a mixed bag.  After what appears to be extensive briefing – and certainly hundreds of hours of work – the suit will proceed to the class certification stage.  One must ask:  is peeling off a few claims worth the effort?

In re Rust-Oleum Restore Marketing, Sales Practices and Products Liability Litigation, MDL No. 2602, Case No. 15 C 1364 (N.D. Ill.)