Opinion ID: 636
Heading Depth: 2
Heading Rank: 1

Heading: Magnuson-Moss Claims

Text: John Miller, who after the Millers' recent divorce solely holds all obligations and rights associated with the home, including those stemming from this action, now appeals. He argues, as he did before the district court, that the windows Herman and Nobilio installed in his home are consumer products that entitle him to the benefits and protections of the Magnuson-Moss Act. Before we reach that argument, however, we address a procedural hiccup that entered this case as part and parcel of Herman & Associates' first motion to dismiss. Since that motion, the consumer product debate at the heart of this case has been framed as a jurisdictional question. [2] But because Miller must show that the windows are a consumer product to prevail, and not just to get into federal court, see 15 U.S.C. § 2310(d), the Herman defendants' Rule 12(b)(1) motion was in fact an indirect attack on the merits of Miller's case. See Gentek Bldg. Prods., Inc. v. Steel Peel Litigation Trust, 491 F.3d 320, 331 (6th Cir.2007) (To establish a Magnuson-Moss claim, a plaintiff must show that the item at issue was a `consumer product.' This disputed fact therefore goes to the merits.); Miller v. Willow Creek Homes, Inc., 249 F.3d 629, 632 (7th Cir.2001) (noting that it would not reach the merits of the dispute but nonetheless commenting that it seems doubtful at best that a court would find the mobile home in question to be a consumer product covered by the Act). The conflation of jurisdictional and non-jurisdictional limitations on causes of action is not an uncommon occurrence. Indeed, the Supreme Court has taken up the issue on several occasions, as have we. See, e.g., Reed Elsevier, Inc. v. Muchnick, ___ U.S. ___, ___, ___ _ ___, 130 S.Ct. 1237, 1246, 1249-50, ___ L.Ed.2d ___ (2010) (holding that the registration requirement in 17 U.S.C. § 411(a) of the Copyright Act imposes a precondition to filing a claim and does not restrict a federal court's subject-matter jurisdiction); Arbaugh, 546 U.S. at 511, 126 S.Ct. 1235 (recognizing the subject-matter jurisdiction/ ingredient-of-claim-for-relief dichotomy and noting that [s]ubject matter jurisdiction in federal-question cases is sometimes erroneously conflated with a plaintiff's need and ability to prove the defendant bound by a federal law asserted as the predicate for reliefa merits-related determination (quotation omitted)); Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 90 L.Ed. 939 (1946) (Jurisdiction ... is not defeated ... by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover.); Williams v. Fleming, 597 F.3d 820, 822-24 (7th Cir.2010) (holding that in the context of the Federal Tort Claims Act, claims dismissed on sovereign immunity grounds are not dismissed for lack of jurisdiction, but for the existence of a defense); Doss v. Clearwater Title Co., 551 F.3d 634, 638-39 (7th Cir.2008) (discussing 15 U.S.C. § 1635(f) and concluding that there is nothing jurisdictional about it). The Supreme Court has provided a readily administrable bright line test to resolve the question of whether a provision is jurisdictional. Arbaugh, 546 U.S. at 516, 126 S.Ct. 1235. Under that test, [i]f the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character. Id. at 515-16, 126 S.Ct. 1235 (citations omitted). The Court has also explained that the location of statutory requirements can be instructive; when requirements are in provisions separate from a statute's jurisdiction-granting section, Reed Elsevier, ___ U.S. at ___, 130 S.Ct. at 1244, that is some indication that the requirements are not jurisdictional, see id. (citing Arbaugh, 546 U.S. at 514-15, 126 S.Ct. 1235). Applying these principles here confirms that Magnuson-Moss's consumer products requirement, see 15 U.S.C. §§ 2301-2305, 2308, is not jurisdictional. Neither the definition of consumer products, § 2301(1), nor the provisions that set out rules governing warranties of consumer products, §§ 2302-2305, 2308, clearly state that they are jurisdictional. We thus treat them as nonjurisdictional in character. In contrast, § 2310(d)(1) has the heading Jurisdiction and grants appropriate district court[s] of the United States the ability to hear claims. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (stating that subject-matter jurisdiction refers to the courts' statutory or constitutional power to adjudicate the case). Moreover, the term consumer product does not appear in the jurisdictional provision; it is used only in separate sections of the Act. We therefore conclude that whether an item is a consumer product is not a jurisdictional requirement of the Magnuson-Moss Act. Thus, the Herman defendants' filing before the district court was, despite its label, more properly considered as a motion to dismiss for failure to state a claim. Reynolds v. United States, 549 F.3d 1108, 1111-12 (7th Cir. 2008); see also Palay v. United States, 349 F.3d 418, 424-25 (7th Cir.2003); Health Cost Controls v. Skinner, 44 F.3d 535, 538 (7th Cir.1995) (This Court ordinarily may modify a dismissal for lack of jurisdiction and convert it to a dismissal on the merits if warranted.); Peckmann v. Thompson, 966 F.2d 295, 297 (7th Cir.1992) (If a defendant's Rule 12(b)(1) motion is an indirect attack on the merits of the plaintiff's claim, the court may treat the motion as if it were a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted.). Yet a Rule 12(b)(6) motion must be decided solely on the face of the complaint and any attachments that accompanied its filing. See Fed.R.Civ.P. 10(c), 12(d); Segal v. Geisha NYC LLC, 517 F.3d 501, 504-05 (7th Cir.2008). Here, matters outside the pleadings were presented to and not excluded by the court, so the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56. Fed.R.Civ.P. 12(d). There is no problem construing the motion as one for summary judgment here; [a]dequate notice is provided when the moving party frames its motion in the alternative as one for summary judgment, Tri-Gen Inc. v. Int'l Union of Operating Eng'rs, Local 150, 433 F.3d 1024, 1029 (7th Cir.2006), and not only did the Herman defendants do just that, but Pella also explicitly filed a motion requesting summary judgment on identical grounds to those asserted in the Rule 12(b)(1) motion. Moreover, Miller responded to the motions collectively and universally, and had the opportunity to present all the material that is pertinent to a summary judgment motion. Fed. R.Civ.P. 12(d); see also Malak v. Assoc. Physicians, Inc., 784 F.2d 277, 280 (7th Cir.1986). Our review is thus de novo (as it would have been under a Rule 12(b)(1) or Rule 12(b)(6) motion as well), and summary judgment is appropriate if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to summary judgment as a matter of law. Fed. R.Civ.P. 56(c); Reget v. City of La Crosse, 595 F.3d 691, 694 (7th Cir.2010). We construe all facts in the light most favorable to Miller and draw all reasonable inferences in his favor. Id. Here, the Herman defendants moved to dismiss on the theory that Miller's windows were notand could not beconsumer products giving rise to a Magnuson-Moss cause of action. Pella cited the same grounds in its motion for summary judgment. The determination of what constitutes a consumer product is thus crucial to the resolution of this case. In making that determination, we look first to the definition of consumer product provided in the Magnuson-Moss Warranty Act. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002). The definition, any tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes (including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed), 15 U.S.C. § 2301(1), is on its face expansive but the extent of its intended scope is somewhat hazy. To clarify the meaning of § 2301 and other provisions, the FTC, in connection with its authority to implement the Act, see 15 U.S.C. § 2312(c), issued interpretations in 1977 via notice-and-comment procedures, see 42 Fed.Reg. 36112, 36112 (July 13, 1977). The interpretations are codified at 16 C.F.R. § 700.1, and both Miller and the appellees direct our attention to them. In the FTC's own words, its Magnuson-Moss interpretations are advisory in nature, are not substantive rules, and lack the force or effect of statutory provisions. 42 Fed.Reg. 36112, 36112 (July 13, 1977). The FTC's interpretations consequently may not be entitled to full Chevron deference, see Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)), but an agency's interpretation may merit some deference whatever its form, given the specialized experience and broader investigations and information available to the agency, and given the value of uniformity in its administrative and judicial understandings of what a national law requires, United States v. Mead Corp., 533 U.S. 218, 234, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (citations and quotations omitted). We have looked favorably upon these very interpretations in the past, see Waypoint Aviation Servs. Inc. v. Sandel Avionics, Inc., 469 F.3d 1071, 1073 (7th Cir.2006) (citing 16 C.F.R. § 700.1(d)), and we acquiesce to the parties' requests to consult them here because they have power to persuade, Christensen, 529 U.S. at 587, 120 S.Ct. 1655 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)). An interpretation's power to persuade is measured by numerous factors, including the thoroughness evident in its consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements. Skidmore, 323 U.S. at 140, 65 S.Ct. 161; Joseph v. Holder, 579 F.3d 827, 832 (7th Cir.2009); see also Mead, 533 U.S. at 228, 121 S.Ct. 2164 (citing the degree of an agency's care, consistency, formality, and relative expertise as factors affecting the fair measure of deference due). Those factors tilt strongly in favor of deference here. The FTC was responsible for implementing the Act. 15 U.S.C. § 2312(c); see also Carcieri v. Salazar, ___ U.S. ___, ___ n. 5, 129 S.Ct. 1058, 1065 n. 5, 172 L.Ed.2d 791 (2009) (noting that a commissioner's responsibilities relating to the implementation of the Indian Reorganization Act of 1934 rendered his interpretations of the statute unusually persuasive but not deferring because the statute was unambiguous); Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 414, 113 S.Ct. 2151, 124 L.Ed.2d 368 (1993) ([W]e generally defer to a permissible interpretation espoused by the agency entrusted with its implementation.). The FTC promulgated the interpretations using notice-and-comment procedures even though it was not required to do so. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 173, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007); White v. Scibana, 390 F.3d 997, 1000-01 (7th Cir.2004). It has adhered to its interpretative positions consistently since the 1970s, even after soliciting comments on them repeatedly in the late 1990s. 64 Fed.Reg. 19700, 19700 (Apr. 22, 1999); see also Good Samaritan Hosp., 508 U.S. at 417, 113 S.Ct. 2151 ([T]he consistency of an agency's position is a factor in assessing the weight that position is due.). And it grounded its reasoning in Magnuson-Moss's legislative history. See 64 Fed. Reg. 19700, 19702-03 (Apr. 22, 1999). These considerations lead us to give the interpretations a reasonably high degree of deference. See Skidmore, 323 U.S. at 140, 65 S.Ct. 161. Miller asserts that 16 C.F.R. § 700.1(e) is the interpretation most pertinent to this case. It provides: The coverage of building materials which are not separate items of equipment is based on the nature of the purchase transaction. An analysis of the transaction will determine whether the goods are real or personal property. The numerous products which go into the construction of a consumer dwelling are all consumer products when sold over the counter, as by hardware and building supply retailers. This is also true where a consumer contracts for the purchase of such materials in connection with the improvement, repair, or modification of a home (for example, paneling, dropped ceilings, siding, roofing, storm windows, remodeling). However, where such products are at the time of sale integrated into the structure of a dwelling they are not consumer products as they cannot be practically distinguished from realty. Thus, for example, the beams, wallboard, wiring, plumbing, windows, roofing, and other structural components of a dwelling are not consumer products when they are sold as part of real estate covered by a written warranty. In Miller's view, the fact that the windows were purchased to be installed into the house at a later time renders the transaction here an over the counter transaction like that contemplated in 16 C.F.R. § 700.1(e). He likens his situation to that of the plaintiffs in Wilson v. Semling-Menke Co., 277 Neb. 928, 766 N.W.2d 128 (2009), one of whom, Linda, served as the general contractor of the house they were having built for themselves. Linda went to a building supply store and purchased twenty-two windows, which were later installed into the house and, like those at issue here, allegedly allowed water into the structure. See id. at 130. The Wilsons brought suit under Magnuson-Moss, alleging the windows were consumer goods, and the Nebraska Supreme Court ultimately ruled in their favor. Citing 16 C.F.R. § 700.1(e), that court concluded that the Wilsons' purchase of the windows rendered them consumer products because it resembled a purchase `over the counter' more than it resembled a purchase by a contractor. Id. at 133. The court specifically noted that the Wilsons did not have a contract with a builder for the house as a whole, but instead purchased the windows separately. Id. at 134. We do not find Miller's situation analogous to that faced by the Wilsons, or, more fundamentally, within the purview of 16 C.F.R. § 700.1(e). Miller did not go to the store and engage in a transaction for windows. Instead, he specifically alleged that  Herman purchased, on behalf of the Millers, fixed and casement windows and several hinged doors and a slider patio door manufactured by Pella. Compl. ¶ 12 (emphasis added). This allegation is supported by the record: the invoice for the windows lists Herman, Jim and Associat [sic], not Miller, as the customer. The only contract alleged here is one between Herman and the Millers, for a home. Herman's separate purchase of the windows was incidental to that transactionit did not stand alone. Although Miller technically paid for the windows by supplying Herman with the funds, and may have influenced (or dictated, as Miller asserted at oral argument) Herman's decision to purchase Pella-manufactured windows, when he received the windows they were integrated into the structure of a dwelling and could not be practically distinguished from realty. 16 C.F.R. § 700.1(e). Miller contracted for the windows in connection with the construction of a new home, not in connection with the improvement, repair, or modification of an existing home as contemplated by subsection 700.1(e). See Muchisky v. Frederic Roofing Co., 838 S.W.2d 74, 78 (Mo.Ct. App.1992) (holding that the shingles used to re-roof an existing home were consumer products and noting that [i]t appears that as to products which are becoming a part of realty the distinction drawn is whether the product is being added to an already existing structure or whether it is being utilized to create the structure). Indeed, we agree with the appellees that 16 C.F.R. § 700.1(f), which addresses the situation in which consumers contract for the construction of a new home, is more applicable here. Subsection 700.1(f) provides: In the case where a consumer contracts with a builder to construct a home, ... the building materials to be used are not consumer products. Although the materials are separately identifiable at the time the contract is made, it is the intention of the parties to contract for the construction of realty which will integrate the component materials. Of course, as noted above, any separate items of equipment to be attached to such realty are consumer products under the Act. (emphasis added). This interpretation is a much closer fit to the facts alleged in Miller's complaint. Miller contracted with Herman for a home. He agreed to pay Herman roughly $500,000 for the home under a single contract, not $(500,000-X) for the home under one contract and $X for the windows under another. He expected to (and did) receive a fully, if allegedly poorly, completed home, not an incomplete home accompanied by a stack of uninstalled, nonintegrated windows. Miller nonetheless asserts that Pella's recognition that the windows are severable from the houserecall that its representatives removed and reinstalled one of the windowsprecludes the conclusion that they were integrated into the home. Not only does this argument ignore the crucial distinction embodied in subsection 700.1(f), that a contract for a home supersedes any incidental purchases of individual materials for that home, if taken to its logical conclusion it would obviate the need for many of the FTC's interpretations. For under Miller's logic, every part of every home, preexisting or newly constructed, would be a consumer product, because even elements of homes such as the wiring, walls, or plumbing can be removed and replaced if necessary. Cf. 16 C.F.R § 700.1(d) (The coverage of separate items of equipment attached to real property includes, but is not limited to, appliances and other thermal, mechanical, and electrical equipment. ( It does not extend to the wiring, plumbing, ducts, and other items which are integral component parts of the structure. ) (emphasis added)). We are similarly unpersuaded by Miller's claim that applying subsection 700.1(f) here would undermine subsection 700.1(e). His theory is that subsection (f), taken alone, proves too much because it ignores the terms of the contract between the builder and the buyer. He advocates instead for a concurrent reading of subsections (e) and (f), which he asserts was the approach taken by the Nebraska Supreme Court in Wilson. The Wilson court did indeed take both subsections (e) and (f) into account, but it did not read the provisions concurrently, nor did it elevate one above the other: it simply evaluated both and applied the one that most closely fit the facts before it. The Wilson court noted that there was no contract between a buyer and a builder, and explained that the purchase of the windows resembled a purchase `over the counter' more than it resembled a purchase by a contractor, as is required under 16 C.F.R. § 700.1(e) for building materials to be considered `consumer products.' Wilson, 766 N.W.2d at 133. The Wilson court mentioned another FTC interpretation, subsection 700.1(a), which Miller invites us to apply notwithstanding any potential undermining effect it might have on subsections (e) and (f). Subsection 700.1(a) provides that [w]here it is unclear whether a particular product is covered under the definition of consumer product, any ambiguity will be resolved in favor of coverage. We can envision some situations in which that interpretation would carry the day, but this is not one of them. Subsections 700.1(e) and (f) expressly provide a framework under which to analyze the consumer product status of building materials. The facts pleaded in the complaint in this case are in line with those contemplated by subsection 700.1(f), which resolves any potential ambiguity without the aid of subsection (a). Moreover, even though there is arguably some ambiguity in the case law interpreting subsections (e) and (f), both predominant tests lead to the same result in this case. Compare Weiss, 315 Ill.Dec. 690, 877 N.E.2d at 445 ([T]he distinction drawn is whether the product is being added to an already existing structure or whether it is being utilized to create the structure.), Atkinson v. Elk Corp. of Tex., 142 Cal.App.4th 212, 48 Cal.Rptr.3d 247, 255 (2006) ([W]e find that the crucial distinction is the time of sale. If the products are purchased in order to add them to an existing dwelling, then the products are consumer products. If, on the other hand, the products are purchased as part of a larger real estate sales contract, or contract for a substantial addition to a home, they are not.), and Muchisky, 838 S.W.2d at 78 (It appears that as to products which are becoming a part of realty the distinction drawn is whether the product is being added to an already existing structure or whether it is being utilized to create the structure.... The presence of subsection (f) indicates that the Commission was utilizing `time of sale' as the entry into a commitment not the completion of the obligation.), with Illinois ex rel. Mota v. Cent. Sprinkler Corp., 174 F.Supp.2d 824, 831 (C.D.Ill.2001) (Whether non-separate items of equipment (integral component parts of the structure, such as wiring, plumbing, ducts, and other items) are consumer products depends upon how they are purchased.), and Wilson, 766 N.W.2d at 133 (examining the nature of the transaction for the windows). Miller's final argument is that the district court's interpretation of the Act is problematic from a policy standpoint. He claims that under the district court's reasoning, Magnuson-Moss only offers the public the improper result that a consumer who purchases a component for a home, such as roofing, windows, or a major kitchen appliance, is protected, whereas a consumer who allows any of those items to be actually installed in a new home loses all protection. Appellant's Br. 17. While we agree that the FTC interpretations draw a fine line between building materials that are considered consumer products and those that aren't, we do not move that line merely because we might have drawn it differently. Cf. Chevron, 467 U.S. at 866, 104 S.Ct. 2778 ([F]ederal judgeswho have no constituencyhave a duty to respect legitimate policy choices made by those who do.). Miller contracted with Herman for the construction of a new home. The home was not existing; the windows at issue here were purchased by Herman, a contractor, to install into the home. Miller has not produced any evidence showing a separate contract for the windows, or a separate transaction for them in which he was personally engaged. Under 16 C.F.R. § 700.1(f) and the existing tests articulated by lower courts who have examined similar issues, the windows are not consumer products within the meaning of Magnuson-Moss. Thus Miller's claims fail as a matter of law and the district court's summary disposal of them, although erroneously phrased as a dismissal for lack of subject matter jurisdiction, was proper. We modify the district court's order to reflect the correct procedural posture and affirm its dismissal of the Magnuson-Moss claims, Counts V, VI, and VII of Miller's complaint.