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Bhatia v. 3M Co.

United States District Court, D. Minnesota

March 1, 2018

Vikram Bhatia, D.D.S., et al. on behalf of themselves and all others similarly situated, Plaintiffs,
v.
3M Company, Defendant.

          Amanda M. Williams, Esq., Daniel E. Gustafson, Esq., Daniel C. Hedlund, Esq., David A. Goodwin, Esq., and Eric S. Taubel, Esq., Gustafson Gluek PLLC; and Korey A. Nelson, Esq., Warren T. Burns, Esq., and William B. Thompson, Esq., Burns Charest LLP, co-lead counsel for Plaintiffs.

          James J. Pizzirusso, Esq., Hausfeld LLP, Plaintiffs' Executive Committee Chairperson.

          Brian C. Gudmundson, Esq., Zimmerman Reed, PLLP; Charles D. Gabriel, Esq., Chalmers Pak & Burch, LLC; Edward Anthony Wallace, Esq., Wexler Wallace LLP; Jordan M. Lewis, Esq., Jordan Lewis, P.A.; Joseph S. Sauder, Esq., McCune Wright LLP; Paul K. Scarlato, Esq., Goldman Scarlato & Penny, P.C.; William M. Audet, Esq., Audet & Partners, LLP; and Yvonne M. Flaherty, Esq., Lockridge Grindal Nauen PLLP, Plaintiff's Executive Committee.

          Alan L. Rosca, Esq., Peiffer Rosca Wolf Abdullah Carr & Kane; Amanda M. Williams, Esq., Daniel E. Gustafson, Esq., Daniel C. Hedlund, Esq., David A. Goodwin, Esq., and Eric S. Taubel, Esq., Gustafson Gluek PLLC; Bradley A. Winters, Esq., David S. Corwin, Esq., and Vicki L. Little, Esq., Sher Corwin Winters LLC; Bryan L. Bleichner, Esq., Chestnut Cambronne PA; Bryce Daniel Riddle, Esq., Zimmerman Reed, LLP; Charles D. Gabriel, Esq., Chalmers Pak & Burch, LLC; Daniel H. Charest, Esq., Korey A. Nelson, Esq., William B. Thompson, Esq., and Warren T. Burns, Esq., Burns Charest LLP; Edward Anthony Wallace, Esq., Wexler Wallace LLP; Garrett D. Blanchfield, Jr., Esq., and Roberta A. Yard, Esq., Reinhardt Wendorf & Blanchfield; James J. Pizzirusso, Esq., and Katie Rose Beran, Esq., Hausfeld LLP; Jeffrey D. Bores, Esq., Chestnut Cambronne, PA; John R. Parker, Jr., Esq., Cutter Law, P.C.; Joseph G. Sauder, Esq., McCune Wright LLP; Katrina Carroll, Esq., and Kyle Alan Shamberg, Esq., Lite DePalma Greenberg LLC; Ling Y. Kuang, Esq., and William M. Audet, Esq., Audet & Partners, LLP; Marc H. Edelson, Esq., Edelson & Associates, LLC; Mark K. Yarnoff, Esq., The Kehoe Law Firm; and Paul K. Scarlato, Esq., Goldman Scarlato & Penny, P.C., counsel for individual Plaintiffs.

          Laura Reilly, Esq., Tyler A. Young, Esq., and Wendy J. Wildung, Esq., Faegre Baker Daniels LLP, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on a Partial Motion to Dismiss and Strike Plaintiffs' Consolidated Amended Complaint (the “Amended Complaint”) brought by Defendant 3M Company (“3M” or “Defendant”) (Doc. No. 87). For the reasons set forth below, the Court grants in part and denies in part the motion.

         BACKGROUND

         This case involves a 3M product, the Lava Ultimate CAD/CAM Dental Restorative (“Lava Ultimate”). Lava Ultimate is a product designed for dentists to use in making customized dental restorations, such as veneers, inlays, onlays, and crowns. A dental crown is a tooth-shaped cap that completely covers a tooth or a dental implant. (Am. Compl. ¶ 55.) A crown can be made from Lava Ultimate with a computer-aided design and computer-aided manufacturing machine (“CAD/CAM”). (Id. ¶ 60.) A dentist uses the CAD/CAM machine to take a digital image of the patient's tooth and mouth and then mill the Lava Ultimate dental block into a customized crown. (Id.) This process allows the procedure to take place in a single office visit.

         In January 2011, the Food and Drug Administration (“FDA”) approved Lava Ultimate as a Class II medical device for indicated uses of “inlays, onlays, veneers, and full crown restorations, including crowns on implants.” (Id. ¶¶ 69, 71-72.) 3M then released Lava Ultimate into the market. (Id. ¶ 73.) Plaintiffs allege that 3M marketed Lava Ultimate as, for example, especially suitable for crowns, fracture-resistant, durable, aesthetically pleasing, convenient, and more economical. (Id. ¶¶ 73-85.) In addition, 3M represented that Lava Ultimate could be used for permanent, adhesive, single-tooth restorations, including crowns. (Id. ¶ 91.)

         In this action, Plaintiffs, who are all dentists or dental practices, allege that crowns made using Lava Ultimate material suffer from an inherent defect, namely that they have a propensity to “debond” from teeth at higher rates than other crown material. Plaintiffs contend that Lava Ultimate loses its adhesive properties after being exposed to conditions normally present in patients' mouths. (Id. ¶ 88.) Plaintiffs also argue that they have shouldered the costs associated with the defective crowns.

         3M ultimately removed Lava Ultimate from the market for use in crowns (id. ¶ 96), but it denies any inherent defect in the product. Instead, 3M contends that the product worked well for all but a small percentage of dentists. On June 12, 2015, 3M sent a letter to dentists stating: “[3M] is removing the crown indication for Lava Ultimate CAD/CAM Restorative Product because crowns are debonding at a higher-than anticipated rate.” (Id.) 3M sent the following warning: “IMPORTANT: Do not use Lava Ultimate restorative for any type of crown because there exists a potential for debonding.” (Id. (emphasis in original).) The FDA classified 3M's letter as a Class II recall, which is defined as: “a situation in which use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.” (Id. ¶ 97.)

         Plaintiffs filed their Amended Complaint, seeking a putative nationwide class action or, in the alternative, thirteen putative statewide subclasses of dentists and dental practices who purchased Lava Ultimate and used it to apply dental crowns between January 1, 2011 and June 12, 2015. In the Amended Complaint, Plaintiffs bring roughly 70 separate claims for statutory fraud, breach of express and implied warranties, unjust enrichment, and common-law fraud under 13 states' statutory schemes, as well as a claim under the federal Magnuson-Moss Warranty Act.

         In general, Plaintiffs allege that they: purchased Lava Ultimate blocks and seated them for dental crowns (id. ¶¶ 11-49); purchased Lava Ultimate after having received and reviewed various marketing materials touting Lava Ultimate's use in crowns (id. & ¶ 86); relied on 3M's representations about Lava Ultimate's suitability for crowns (id. ¶¶ 11-49); reported crowns that debonded to either 3M or a 3M sales representative (id.); and suffered injury by repairing or replacing the crowns (id. ¶¶ 99-102). Plaintiffs seek compensatory damages for the repair or replacement costs of Lava Ultimate-based crowns and for the alleged loss to business reputation and practice, disgorgement of profits, statutory penalties, an injunction from “continuing to sell, market, or distribute Lava products for use in crowns, ” punitive damages, and attorney fees and costs. (See generally Am. Compl. and Prayer for Relief.)

         Plaintiffs allege, among other things, that 3M breached an express warranty. 3M acknowledges that Lava Ultimate products came with an express warranty. Specifically, 3M points to a ten-year express warranty that covers Lava Ultimate-based restorations, including crowns, and that disclaims other express or implied warranties. 3M insists that any dispute between dentists and 3M over the performance of Lava Ultimate is governed by the express warranty and that Plaintiffs' other remaining legal theories are red herrings.[1] In support, 3M points to the following “10 Year Limited Warranty”:

Limited Warranty and Limited Remedy 3M ESPE warrants for 10 years from date of placement that restorations made from Lava™ Ultimate CAD/CAM Restorative will not fracture if fabricated using a 3M ESPE recommended milling machine in strict compliance with approved indications and instructions for use. 3M ESPE makes no other warranties including, but not limited to, any implied warranty of merchantability or fitness for a particular purpose.

(Doc. No. 91 (“Wildung Decl.”) ¶ 2, Ex. A (at Doc. No. 93); see also Am. Compl. ¶ 78 (referencing a “10-year warranty”).) 3M's webpages, which are cited in the Amended Complaint, also reference a warranty. (See Am. Compl. ¶ 76 n.3; ¶ 80 n.8; and ¶ 85 n.12; Doc. No. 114 (“2d Wildung Decl.”) ¶¶ 4, 5, 6 & Exs. C, D, E.) In addition, 3M submits that the following text was contained in the original Instruction for Use for 3M's Lava Ultimate:

10 Year Limited Warranty
3M ESPE Lava Ultimate CAD/CAM Restorative
Limited Warranty and Limited Remedy:
3M ESPE warrants for 10 years from date of placement that restorations made from Lava Ultimate CAD/CAM restorative will not break if fabricated using a 3M ESPE recommended milling machine in strict compliance with approved indications and instructions for use. 3M ESPE makes no other warranties including, but not limited to, any implied warranty of merchantability or fitness for a particular purpose.
3M ESPE's sole obligation and the customers' sole remedy in the event of any breakage of the restoration shall be limited to the replacement of the Lava Ultimate block used to fabricate the milled restoration, or at 3M ESPE's option, reimbursement of Lava Ultimate block purchase price. This warranty does not cover breakage resulting from accident or misuse.
Limitation of Liability
Except where prohibited by law, 3M ESPE will not be liable for any loss or damages arising from this product, whether direct, indirect, incidental or consequential, regardless of the theory asserted, including warranty, contract, negligence or strict liability.

(2d Wildung Decl. ¶ 3, Ex. B.)

         3M now moves to dismiss Plaintiffs' implied-warranty, unjust enrichment, fraud and related statutory claims under Federal Rule of Civil Procedure 12(b)(6) and to strike Plaintiffs' punitive-damages allegations under Federal Rule of Civil Procedure 12(f).[2]

         DISCUSSION

         I. Legal Standard

         In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6). Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the United States Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         In addition to the pleading standard explained by the Supreme Court in Twombly and Iqbal, Federal Rule of Civil Procedure 9(b) requires “particularity” when pleading “fraud or mistake.” Fed.R.Civ.P. 9(b). “Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Id. The purpose of Rule 9(b) is to provide defendants with sufficient notice of the allegations so that they may be able to respond specifically “to potentially damaging allegations of immoral or criminal conduct.” Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001). The rule must be read in harmony with the principles of notice pleading. BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908, 917 (8th Cir. 2007) (citation omitted).

         To satisfy Rule 9(b)'s requirement that the circumstances constituting alleged fraud be stated with particularity, “the complaint must plead the ‘who, what, where, when, and how' of the alleged fraud.” Drobnak v. Andersen Corp., 561 F.3d 778, 783 (8th Cir. 2009) (citation omitted); see also Parnes v. Gateway 2000, Inc., 122 F.3d 539, 549-50 (8th Cir. 1997). The level of particularity depends upon the nature of the case and the relationship between the parties. BJC Health Sys., 478 F.3d at 917. Where, for example, a plaintiff alleges a systematic practice of fraudulent activities or representations over an extended period of time, the plaintiff need not allege the specific details of every fraudulent act, but must still plead some representative examples of the allegedly fraudulent conduct with sufficient particularity. See Allstate Ins. Co. v. Linea Latina De Accidentes, Inc., 781 F.Supp.2d 837, 846 (D. Minn. 2011) (finding allegations regarding fraudulently-submitted insurance claims sufficiently particular where plaintiffs identified each claim that was allegedly fraudulent, the claim number, and the date of the claim). “Conclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule.” Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, 746 (8th Cir. 2002) (citation omitted).

         Rule 9(b) pleading requirements apply to all claims premised on fraud, including “claims of false advertising, deceptive trade practices, unlawful trade practices, and consumer fraud.” Select Comfort Corp. v. Sleep Better Store, LLC, 796 F.Supp.2d 981, 983 (D. Minn. 2011); see also 5A Charles Alan Wright et al., Federal Practice & Procedure § 1297 (3d ed. April 2017 update) (“Even when a plaintiff is not making a fraud claim, courts will require particularity in the pleading if the cause of action is premised on fraudulent conduct.”).[3]

         Further, the Court may strike from a pleading any “impertinent” matter. Fed. R. Civ. P 12(f). This includes an improperly pleaded claim for punitive damages. See Engele v. ...


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