Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-14-11714/USCOURTS-ca11-14-11714-0/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liability
Cause of Action: 

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[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 14-11714

________________________

D.C. Docket No. 3:13-cv-01402-AKK

ROBERT C. LISK,

individually and on behalf of a 

class of similarly situated persons,

Plaintiff-Appellant,

versus

LUMBER ONE WOOD PRESERVING, LLC,

Defendant-Appellee.

________________________

Appeal from the United States District Court

for the Northern District of Alabama

________________________

(July 10, 2015)

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Before MARCUS and JILL PRYOR, Circuit Judges, and HINKLE,* District 

Judge.

HINKLE, District Judge:

In this proposed class action, the named plaintiff asserts that wood he bought 

for a fence at his home was not properly pressure-treated and that it prematurely 

rotted. He asserts claims against the defendant wood manufacturer under Alabama 

law, first for violating the Alabama Deceptive Trade Practices Act, and second for 

breach of express warranty. The district court dismissed the claims. 

This appeal presents two issues. The first arises from a conflict between 

Federal Rule of Civil Procedure 23, which authorizes class actions including for 

consumer claims of this kind, and the ADTPA, which creates a private right of 

action but forbids private class actions. We hold that Rule 23 controls. 

The second issue arises from the lack of privity between the plaintiff and the 

defendant. Alabama law allows a consumer to recover for breach of an express 

warranty, even in the absence of privity, in some circumstances. We hold that the 

complaint adequately alleges the required circumstances and thus states a claim on 

which relief can be granted. 

 * Honorable Robert L. Hinkle, United States District Judge for the Northern District of 

Florida, sitting by designation. 

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I

The complaint alleges these facts. The named plaintiff Robert Lisk entered a 

contract with Clean Cut Fence Company for installation of a fence at his home. 

The contract called for Clean Cut to use “treated” wood. The contract said, “All 

fencing materials shall be warranted only through their respective manufacturers.” 

Clean Cut built the fence using wood it purchased from Capitol Wholesale 

Fence Company. Capitol was a distributor for, and obtained the wood from, the 

defendant Lumber One Wood Preserving, LLC (“Lumber One”). Lumber One 

manufactured the wood. 

Lumber One warranted—and said on its website, advertising, and product 

labeling—that its wood was treated with MCA technology licensed by Osmose, 

Inc. MCA-treated wood remains free from rot, fungal decay, and termite attacks 

for at least 15 years. But Lumber One defectively manufactured and treated its 

wood—if it treated the wood at all. 

Within three years after installation, Mr. Lisk’s fence posts were rotten. 

Clean Cut informed Mr. Lisk that other customers had experienced similar 

problems with Lumber One’s wood.

II

Mr. Lisk filed a complaint seeking to represent a nationwide class of all 

purchasers of Lumber One’s defectively “treated” wood. The complaint names

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Lumber One as the only defendant. Mr. Lisk and Lumber One are citizens of 

different states—Tennessee and Alabama—but the amount of Mr. Lisk’s 

individual claim does not exceed $75,000. Mr. Lisk invoked federal jurisdiction 

under the Class Action Fairness Act. The parties assume, and for present purpose 

we accept, that Alabama law governs the substantive claims. 

Lumber One moved to dismiss, asserting that the ADTPA does not authorize 

a private class action, that the complaint does not adequately plead an express 

warranty that runs to a remote purchaser, that dismissal of the defective claims 

would leave pending only an ADTPA individual claim, and that this would leave 

no basis for federal jurisdiction. 

The district court granted the motion and dismissed the complaint. Mr. Lisk

appeals. 

III

The district court’s order is correct only if the complaint fails to state a classaction claim on which relief can be granted under the ADTPA and fails to state an 

express-warranty claim at all. To avoid dismissal for failure to state a claim, a 

complaint must include “factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint’s factual allegations, 

though not its legal conclusions, must be accepted as true. Id.; see also Bell Atl. 

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Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint must include 

“allegations plausibly suggesting (not merely consistent with)” the plaintiff’s 

entitlement to relief. Twombly, 550 U.S. at 557. The complaint must set out 

facts—not mere labels or conclusions—that “render plaintiffs’ entitlement to relief 

plausible.” Id. at 569 n.14. 

We review de novo a district court’s ruling that a complaint fails to state a 

claim. Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). 

IV

The ADTPA prohibits a variety of deceptive practices, including 

misrepresenting the characteristics or qualities of goods and representing that 

goods are of a particular standard or quality when they are not. Ala. Code § 8-19-

5(5), (7) (1975). Misrepresenting that wood is MCA pressure-treated, when it is 

not, violates the statute. 

The ADTPA creates a private right of action in favor of a consumer against 

a person who violates the statute. The consumer may recover the greater of $100 

or actual damages or, in the court’s discretion, up to three times actual damages, 

together with attorney’s fees. Id. § 8-19-10(a). But the ADTPA provides that only 

the Alabama Attorney General or a district attorney may bring a class action; a 

private individual may not:

A consumer or other person bringing an action under this chapter 

may not bring an action on behalf of a class; provided, however, 

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that the office of the Attorney General or district attorney shall 

have the authority to bring action in a representative capacity on 

behalf of any named person or persons. In any such action brought 

by the office of the Attorney General or a district attorney the court 

shall not award minimum damages or treble damages, but recovery 

shall be limited to actual damages suffered by the person or 

persons, plus reasonable attorney’s fees and costs.

Id. § 8-19-10(f). 

If this case were pending in an Alabama state court, the statute would 

preclude presentation of the ADTPA claims in a private class action. But the case 

is in federal court. Federal Rule of Civil Procedure 23 allows class actions and 

makes no exception for cases of this kind. Instead, the rule provides that “[o]ne or 

more members of a class may sue or be sued as representative parties on behalf of 

all members,” if specified conditions are met. The complaint alleges, and for 

present purposes we assume, that the conditions are met here. 

The issue, then, is whether Rule 23 applies or is instead displaced by the 

contrary provision of the ADTPA.

The Supreme Court addressed a nearly identical issue in Shady Grove

Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010). A 

New York statute required insurers to pay valid claims within 30 days and imposed 

interest at two percent per month on late payments. A separate New York statute 

allowed class actions on conditions tracking those in Federal Rule of Civil 

Procedure 23 but prohibited class actions for claims seeking statutory penalties. 

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Under New York law, the two-percent monthly interest was a penalty within the 

meaning of the class-action statute. An individual whose claim was paid late filed 

a proposed class action against his insurer in federal court seeking to recover the 

statutory interest. The issue there, as here, was which provision controlled—Rule 

23 or the state-law prohibition on class actions for claims of this kind. 

The Supreme Court held that Rule 23 governed. The decision compels the 

same result here. 

There is room for debate only because in Shady Grove the Court split 4–1–4; 

no single rationale garnered five votes. Justice Scalia authored a plurality opinion 

for four justices. Justice Stevens concurred separately. Four justices dissented. 

In our case the parties debate with vigor whether we should follow the 

analysis of Justice Scalia (under which Rule 23 plainly controls) or that of Justice 

Stevens (under which the issue is closer). But before turning to that question, it is 

important to note that Justice Stevens joined parts of Justice Scalia’s opinion. 

Those parts, labeled sections I and II–A, thus were joined by five justices; those 

parts were the opinion of the Court. And those parts confirmed the analysis long 

followed in resolving conflicts between the Federal Rules of Civil Procedure and 

contrary provisions of state law.

The short version of that analysis is this. The federal Rules Enabling Act 

authorizes the Supreme Court to adopt rules of practice and procedure that apply 

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not only in cases arising under federal law but also in cases in which state law 

supplies the rule of decision. The Act provides: 

(a) The Supreme Court shall have the power to prescribe 

general rules of practice and procedure and rules of evidence for 

cases in the United States district courts (including proceedings 

before magistrate judges thereof) and courts of appeals.

(b) Such rules shall not abridge, enlarge or modify any 

substantive right. All laws in conflict with such rules shall be of no 

further force or effect after such rules have taken effect.

28 U.S.C. § 2072. Under the plain terms of the statute, a federal rule applies in any 

federal lawsuit, and thus displaces any conflicting state provision, so long as the 

federal rule does not “abridge, enlarge or modify any substantive right.” See, e.g., 

Hanna v. Plumer, 380 U.S. 460 (1965). A state statute precluding class actions for 

specific kinds of claims conflicts with Rule 23 and so is displaced for claims in 

federal court so long as applying Rule 23 does not “abridge, enlarge or modify any 

substantive right.” 

To this point in the analysis, the five justices in the Shady Grove majority 

agreed. Justice Stevens parted company with the other four only on the proper 

approach for deciding whether a federal rule abridges, enlarges, or modifies a 

substantive right. But of critical importance here, all five justices agreed that 

applying Rule 23 to allow a class action for a statutory penalty created by New 

York law did not abridge, enlarge, or modify a substantive right; Rule 23 

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controlled. Regardless of which Shady Grove opinion is binding, the holding is 

binding. On this there can be no dispute.

The holding controls our case. There is no relevant, meaningful distinction 

between a statutorily created penalty of the kind at issue in Shady Grove, on the 

one hand, and a statutorily created claim for deceptive practices of the kind at issue 

here, on the other hand. Each is a creature of state law. For each, state law allows 

an injured person to seek redress in an individual action but precludes the person 

from maintaining a class action. The state’s purpose in precluding class actions, 

while perhaps not completely clear, is essentially the same—to allow individual 

redress but to prelude class recoveries that, in the legislature’s view, may go too 

far. 

Indeed, on one view ours is a stronger case than Shady Grove for applying 

Rule 23. The New York statute at issue there precluded statutory-penalty class 

actions altogether. The Alabama statute at issue here, in contrast, allows class 

actions so long as they are brought by the Attorney General or a district attorney. 

If Rule 23 did not abridge, enlarge, or modify a substantive right under the New 

York statute, even though the statute precluded class actions altogether, it is 

difficult to conclude that Rule 23 abridges, enlarges, or modifies a substantive right

in Alabama, when all the statute does is prescribe who can bring a class claim 

based on the very same substantive conduct.

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To be sure, the New York prohibition on statutory-penalty class actions was 

included in a procedural statute addressing class actions generally; the prohibition 

was not part of the statute that created the statutory penalty. The Alabama classaction prohibition, in contrast, is part of the ADTPA itself. Some district courts 

have said this is controlling. See Lisk v. Lumber One Wood Preserving, LLC, 993 

F. Supp. 2d 1376, 1383-84 (N.D. Ala. 2014) (collecting cases). But how a state 

chooses to organize its statutes affects the analysis not at all. Surely the New York 

legislature could not change the Shady Grove holding simply by reenacting the 

same provision as part of the statutory-interest statute. Surely an identical ban on 

statutory-interest class actions adopted by another state would not override Rule 23

just because it was placed in a different part of the state’s code. The goal of 

national uniformity that underlies the federal rules ought not be sacrificed on so 

insubstantial a ground. And more importantly, the question whether a federal rule 

abridges, enlarges, or modifies a substantive right turns on matters of substance—

not on the placement of a statute within a state code.

It is true, as well, that the New York class-action statute at issue in Shady 

Grove, at least on its face, applied to claims arising not only under New York 

substantive law, but under the laws of other jurisdictions. This weakened the 

argument that the New York class-action statute created substantive rights. Still, 

the claim at issue in Shady Grove arose under New York substantive law. The 

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Supreme Court held that Rule 23 controlled over the New York class-action statute 

even as applied to a claim arising under New York substantive law. And again, the 

New York legislature or courts surely could not have changed the result simply by 

amending or construing the New York class-action statute so that it applied only to 

claims arising under New York substantive law. The Shady Grove holding cannot 

fairly be limited to state class-action provisions that, on their face, seem to apply to 

claims arising under the laws of other jurisdictions.

The bottom line is this. The Alabama statute restricting class actions, like 

the New York statute at issue in Shady Grove, does not apply in federal court. 

Rule 23 controls.

What we have said to this point squares with the views set out not only in 

Justice Scalia’s majority opinion in Shady Grove (the portion of his opinion joined 

by five justices and thus constituting the opinion of the Court) but also with the 

views set out in both Justice Scalia’s plurality opinion and in Justice Stevens’s 

concurrence. This makes it unnecessary to decide whether the further binding 

opinion is that of the plurality or Justice Stevens. 

Leaving this issue unresolved comports with the general preference for 

avoiding unnecessary rulings and is especially appropriate for two additional 

reasons. First, the Supreme Court has said, “When a fragmented Court decides a 

case and no single rationale explaining the result enjoys the assent of five Justices, 

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the holding of the Court may be viewed as that position taken by those Members 

who concurred in the judgments on the narrowest grounds.” Marks v. United 

States, 430 U.S. 188, 193 (1977) (quotation omitted). As the Supreme Court has 

itself acknowledged, applying this test is difficult. See Nichols v. United States, 

511 U.S. 738, 745-46 (1994). For some issues, asking which of two opinions is 

narrower is akin to asking, “Which is taller, left or right?” The Supreme Court can 

avoid the dilemma by simply reconsidering the issue that fragmented the Court 

originally. See id. at 746-47 (overruling an earlier, fragmented decision). But that 

of course is not an option for a circuit court. An issue that presents this level of 

uncertainty is best reserved for a case in which it matters.

Second, we apparently have taken as many as three different approaches—or

we at least have articulated our approach three different ways—when confronting 

other fragmented Supreme Court decisions. See, e.g., Wellons v. Comm’r, Ga. 

Dep’t of Corrs., 754 F.3d 1268, 1269 n.2 (11th Cir. 2014) (“Justice O’Connor was 

the fifth and decisive vote for the plurality opinion. Thus, her concurrence set 

binding precedent.”); Swisher Int’l, Inc. v. Schaefer, 550 F.3d 1046, 1053-58 (11th

Cir. 2008) (assuming that neither the four-person plurality nor a single justice’s 

concurrence was narrower, independently analyzing the underlying issue, and 

siding with the single justice, partly on the ground that the dissenters agreed); 

United States v. Robison, 505 F.3d 1208, 1221 (11th Cir. 2007) (following an

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opinion deemed narrowest and explicitly disregarding the view of the dissenters

because Marks says to follow the opinion of the justices “who concurred in the 

judgments on the narrowest grounds” (emphasis by the court in Robison) (quoting 

Marks, 430 U.S. at 193)). Again, these decisions can be sorted out or reconciled 

when it makes a difference to the outcome. 

In sum, Rule 23 applies in this case. The ADTPA prohibition on class 

actions does not. 

This result makes sense. On any view, the only issue is whether, as applied 

here, Rule 23 abridges, enlarges, or modifies a “substantive right.” 28 U.S.C. 

§ 2072(b). A “substantive right” is one that inheres in “the rules of decision by 

which [the] court will adjudicate [the petitioner’s] rights.” Royalty Network, Inc. 

v. Harris, 756 F.3d 1351, 1361 (11th Cir. 2014) (quoting Hanna v. Plumer, 380 

U.S. 460, 465 (1965)). Lumber One’s substantive obligation was to comply with 

the ADTPA—to make only accurate representations about its product. The 

substantive right of Mr. Lisk and other buyers was to obtain wood that complied 

with Lumber One’s representations. These are the “rules of decision” that will 

govern the ADTPA claim. Under Alabama law, Mr. Lisk and other buyers were 

and are entitled to seek redress. Rule 23 alters these substantive rights and 

obligations not a whit; with or without Rule 23, the parties have the same 

substantive rights and responsibilities. The disputed issue is not whether Mr. Lisk 

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and other buyers are entitled to redress for any misrepresentation; they are. The 

disputed issue is only whether they may seek redress in one action or must instead 

bring separate actions—whether any representative action may be brought by a 

consumer or must be brought by the Attorney General or a district attorney. 

Because Rule 23 does not “abridge, enlarge or modify any substantive right,” Rule 

23 is valid and applies in this action.

V

Under Alabama law, “Any affirmation of fact or promise made by the seller 

to the buyer which relates to the goods and becomes part of the basis of the bargain 

creates an express warranty . . . .” Ala. Code § 7-2-313(1)(a) (1975). The 

complaint alleges that “Lumber One’s website, advertising, and product labeling 

represented that its treated lumber was pressure treated using MCA technology 

licensed by Osmose, Inc.” As the district court correctly ruled, the complaint 

adequately alleges an express warranty to Lumber One’s buyer, Capitol Wholesale. 

Lumber One does not dispute this conclusion on this appeal.

The contested issue is whether Mr. Lisk has adequately stated a claim for 

relief as a third-party beneficiary of the express warranty. Under Alabama law, a

manufacturer’s express warranty, like any contractual obligation, may run in favor 

of a third-party beneficiary. See Harris Moran Seed Co. v. Phillips, 949 So. 2d 

916, 922-25 (Ala. Civ. App. 2006). The general standard governing third-partyUSCA11 Case: 14-11714 Date Filed: 07/10/2015 Page: 14 of 18
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beneficiary claims is this: “To recover under a third-party beneficiary theory, the 

complainant must show: 1) that the contracting parties intended, at the time the 

contract was created, to bestow a direct benefit upon a third party; 2) that the 

complainant was the intended beneficiary of the contract; and 3) that the contract 

was breached.” Sheetz, Aiken & Aiken, Inc. v. Spann, Hall, Ritchie, Inc., 512 So.

2d 99, 101-02 (Ala. 1987). 

Mr. Lisk has explicitly alleged each of these three elements of a third-partybeneficiary claim. The complaint alleges that Lumber One breached its warranty 

by selling wood that was not pressure-treated at all or was treated improperly. And 

the complaint alleges that when Lumber One warranted that its wood was pressuretreated, Lumber One intended to benefit remote purchasers like Mr. Lisk and the 

proposed class members: “Lumber One intended to protect future customers of 

Capitol Wholesale Fence Company, other wholesalers, and subsequent purchasers, 

including end-users like Plaintiff and Class Members, when it warranted the 

quality of its products . . . .” 

Under Federal Rule of Civil Procedure 9(b), “intent . . . and other conditions 

of a person’s mind may be alleged generally.” Mr. Lisk’s allegation of intent 

easily meets this standard. To be sure, a complaint must include “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 678, and must include “allegations 

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plausibly suggesting (not merely consistent with)” the plaintiff’s entitlement to 

relief. Twombly, 550 U.S. at 557. But there is nothing implausible about the 

allegation that a lumber manufacturer intends to warrant its product to end users. 

Quite the contrary. It is entirely plausible that a manufacturer would so warrant its 

product, lest end users choose to buy wood manufactured by someone else—

someone willing to stand behind its product. 

This conclusion draws support from the leading Alabama decision on this 

issue. In Harris Moran Seed Co. v. Phillips, 949 So. 2d 916 (Ala. Civ. App. 2006), 

a tomato-seed manufacturer warranted that its seeds conformed to the label, but 

otherwise the manufacturer sold the seeds “as is.” Remote purchasers—farmers

who bought from a seller who bought from a distributor who bought from the seed 

manufacturer—asserted third-party-beneficiary claims under the true-to-label 

warranty. The court upheld a jury verdict for the farmers, ruling that the farmers 

were indeed third-party beneficiaries. 

Our case is like Harris Moran in most respects. In each case the product was 

distributed through the same number of layers. Wood, like seeds, may appear 

sound but be defective. A defect in wood, like a defect in seeds, may become 

evident only after substantial work is done and substantial expense is incurred, 

whether in installing a fence or growing a crop. Manufacturers of wood, like those 

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of seeds, might well choose to extend a warranty to end users to increase the 

market for the product. 

Harris Moran said that a “court [may] look at the surrounding 

circumstances” in determining whether an end user is a third-party beneficiary. Id.

at 920-21. One of the circumstances a court may consider is the foreseeability of 

harm to end users. Id. at 923. Lumber One knew its wood was bound for end 

users and that they would suffer substantial harm if the wood did not conform to 

the warranty. Here, as in Harris Moran, the circumstances provide substantial 

support for the third-party-beneficiary claim.

To be sure, there may also be differences in our case and Harris Moran. 

There the court found support in the manufacturer’s sales agreement, which did not 

explicitly designate end users as third-party beneficiaries but did include references 

to end users and required them to be notified of warranty limitations. Here the 

complaint does not make similar allegations about the agreement between Lumber 

One and its distributor, perhaps because the agreement is not yet available to Mr. 

Lisk. If the agreement disclaims any warranty to end users, that will support 

Lumber One and may even entitle Lumber One to prevail. See Bay Lines, Inc. v. 

Stoughton Trailers, Inc., 838 So. 2d 1013, 1016, 1018-19 (Ala. 2002) (rejecting a 

third-party-beneficiary claim because the manufacturer’s warranty was explicitly 

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“limited to the original equipment purchaser”). It will be time enough to address 

the effect of the agreement when its terms are known.

The complaint adequately states an express-warranty claim on which relief 

can be granted.

VI

For these reasons, the judgment is reversed, and the case is remanded to the 

district court.

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