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King County v. Viracon, Inc.

United States District Court, W.D. Washington, Seattle

December 4, 2019

KING COUNTY, Plaintiff,
v.
VIRACON, INC., QUANEX IG SYSTEMS, INC., and TRUSEAL TECHNOLOGIES, INC., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT VIRACON'S MOTION TO DISMISS FIRST AMENDED COMPLAINT

          BARBARA JACOBS ROTHSTEIN U.S. DISTRICT COURT JUDGE.

         I. INTRODUCTION

         Plaintiff King County (“King County”) instituted this action against Defendants Viracon, Inc. (“Viracon”), Quanex IG Systems, Inc. (“Quanex IG Systems”), and Truseal Technologies, Inc. (“Truseal”), alleging common law fraud and violations of Washington's Consumer Protection Act and Washington's Product Liability Act based on the construction of a building located in downtown Seattle that is own by King County. See Dkt. No. 12. King County seeks compensatory as well as punitive damages and further asserts that Defendants are jointly and severally liable for its damages. Id.

         Currently before the Court is Viracon's motion to dismiss King County's first amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b). Dkt. No. 29.[1] Viracon argues that King County's claims under the Washington Product Liability Act, for joint and several liability, and punitive damages failed to state a claim on which relief can be granted and therefore are subject to dismissal under Rule 12(b)(6). Viracon also argues that King County's common law fraud and Washington Consumer Protection Act claims are subject to dismissal under Rule 9(b) because the claims are not pled with particularity. King County opposes the motion. Dkt. No. 35. Having reviewed the motion, the opposition thereto, the record of the case, and the relevant legal authorities, the Court will grant Viracon's motion to dismiss the Washington Products Liability Act claim pursuant to Rule 12(b)(6), strike King County's request for punitive damages as premature, and deny the motion as to the common law fraud and Washington Consumer Protection Act claims. The reasoning for the Court's decision follows.

         II. BACKGROUND

         King County is a government entity and political subdivision of the State of Washington. Dkt. No. 12 at ¶ 1.1. Viracon is incorporated and headquartered in Minnesota and in the business of manufacturing insulating glass units (“IGUs”) for distribution and sale throughout the United States. Id. at ¶ 1.2. At the center of this lawsuit is an office building-“the Chinook Building”- located in Seattle, Washington that is owned by King County. Id. at ¶ 5.1. The Chinook Building has what the parties refer to as a “curtainwall” exterior-an exterior comprised of IGUs that were manufactured and sold by Viracon. Id. at 5.2. The IGUs consist of double paned windows with a hermetically sealed air space between the panes of glass that provides thermal and acoustical insulation. Id. at 5.3. Polyisobutylene-based sealant (“PIB-based sealant”) is used to seal the window panes. Id. at ¶ 5.4.

         King County alleges that the PIB-based sealant Viracon used to create the IGUs' hermetic seal is failing, causing a film to migrate “into the sightlines and glass of the [IGUs].” Id. at 5.10. The County alleges that the film impairs visibility and affects the overall appearance of the Chinook Building. Id. According to King County, the film “is present with varying degrees of severity on all of the Building's nearly 3, 000 [IGUs].” Id. at 5.9. King County further asserts that the industry standard is to use black PIB-based sealant in IGUs because the black sealant “include[s] an ingredient called carbon black that protect[s] the PIB from degrading in sunlight.” Id. at 5.12. However, King County alleges, instead of using black PIB-based sealant in the IGUs for the Chinook Building, Viracon sealed the IGUs with gray PIB-based sealant that was manufactured by Quanex I.G. Systems and Truseal. According to King County, Viracon, Quanex I.G. Systems, and Truseal knew that the gray PIB-based sealant was “defective and its performance [] inferior to that of [b]lack PIB” and, as such, the use of gray PIB-based sealant would render the IGUs “[un]suitable for their intended purpose[]” on the Chinook Building. Id. at 5.13.

         Indeed, King County claims, at the time that the IGUs with the gray PIB-based sealant were installed on the Chinook Building, each of the Defendants knew of other buildings that had Viracon-manufactured IGUs with gray PIB-based sealant that were experiencing the same issues that the Chinook Building is now experiencing. Id. at 5.14. King County alleges that Viracon was aware of these issues at least two years before the IGUs were installed on the Chinook Building. Id. at 5.13. Therefore, King County charges, Viracon “understood and knew that the types of damages King County complains of [in this lawsuit] were likely to occur, more likely to occur than if standard [b]lack PIB were [sic] used in the [IGUs], and did nothing to prevent the [g]ray PIB from reaching the marketplace, or prevent the installation on the Building of [IGUs] using the [g]ray PIB.” Id. at 5.15. Lastly, King County alleges that it could do nothing to avoid its damages, by negotiation or otherwise, because only Defendants “knew of the defect and covered it up with their misrepresentations and nondisclosure.” Id. at 5.15.

         III. STANDARD OF REVIEW

         The court construes the complaint in the light most favorable to the non-moving party when considering a motion to dismiss under Rule 12(b)(6). Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded allegations of material fact as true and draw all reasonable inferences in favor of the plaintiff. See Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). “To survive a motion to dismiss, 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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663.

         In addition, Rule 9(b) requires that, when fraud is alleged, “a party must state with particularity the circumstances constituting fraud....” Fed.R.Civ.P. 9(b). Thus, a party alleging fraud must “set forth more than the neutral facts necessary to identify the transaction.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.1994), superseded by statute on other grounds. “Averments of fraud must be accompanied by ‘the who, what, when, where, and how' of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997)). “Rule 9(b) serves three purposes: (1) to provide defendants with adequate notice to allow them to defend the charge and deter plaintiffs from the filing of complaints ‘as a pretext for the discovery of unknown wrongs'; (2) to protect those whose reputation would be harmed as a result of being subject to fraud charges; and (3) to ‘prohibit [ ] plaintiff[s] from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.'” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (quoting In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir.1996) (internal quotations omitted, brackets in original)).

         IV. DISCUSSION

         As stated above, Viracon moves to dismiss each of King County's claims against it; this order addresses each claim in turn.

         A. The Washington Product Liability Act Claim Is Barred by the ...


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