Court Opinion

ID: 4766013
Source: CourtListenerOpinion
Date Created: 2021-08-16 15:01:33.648923+00
Date Added: 2024-06-11T08:09:13.903791
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 20-2518
                         ___________________________

    In re: Polaris Marketing, Sales Practices, and Products Liability Litigation

                              ------------------------------

   Bryan Forrest; Richard Berens; Michael Jacks; Robert Lenz; James Bruner;
Michael Zeeck; Ed Beattie, individually and on behalf of all others similarly situated,

                       lllllllllllllllllllllPlaintiffs - Appellants,

                                            v.

                     Polaris Industries, Inc.; Polaris Sales Inc.,

                       lllllllllllllllllllllDefendants - Appellees.
                                        ____________

                     Appeal from United States District Court
                          for the District of Minnesota
                                  ____________

                              Submitted: May 11, 2021
                               Filed: August 16, 2021
                                   ____________

Before COLLOTON, WOLLMAN, and KOBES, Circuit Judges.
                       ____________
COLLOTON, Circuit Judge.

        Fourteen purchasers of off-road vehicles brought a putative class action against
Polaris Industries, Inc. and Polaris Sales Inc. (collectively, “Polaris”). The Polaris
entities designed and manufactured the vehicles. The purchasers allege that a design
defect caused the vehicles, all of which contain “ProStar” engines, to produce
excessive heat. And they claim that the heat degrades vehicle parts, reduces service
life, and creates a risk of catastrophic fires. Seven of the purchasers allege that their
vehicles caught fire and were destroyed; the other seven have not experienced fires.
The district court1 granted Polaris’s motion to dismiss the claims of the “no-fire”
purchasers, because they failed to allege an injury in fact as required to establish an
Article III case or controversy. The no-fire purchasers appeal, and we affirm.

                                           I.

       The allegations in the complaint concern Polaris off-road vehicles
manufactured between 2011 and 2018 that contain ProStar engines. The plaintiffs
allege that these vehicles “suffer from a common design defect (the ‘Excessive Heat
Defect’).” The vehicles’ high-powered engines and exhaust design allegedly cause
hot air to build up inside the engine and passenger compartments. Coupled with
“inadequate cooling and heat shielding,” the heat allegedly causes “degradation and
melting” of vehicle components “immediately,” which in turn allegedly shortens the
service lives of the vehicles, and renders them “vulnerable to catastrophic fires”
during normal use.

       As evidence of the alleged heat defect, the purchasers point to the availability
of aftermarket products to dissipate or protect against heat, and to alternative exhaust

      1
       The Honorable Wilhelmina M. Wright, United States District Judge for the
District of Minnesota.

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designs in competitor vehicles. They cite Polaris’s recalls, at various times, of “all
of the Class Vehicles.” And they rely on results of their own testing. That testing
compared three putative class vehicles against one competitor vehicle and one older
Polaris model. According to the complaint, the class vehicles “consistently exhibited
temperatures that were substantially higher” than the other two vehicles. The
purchasers also cite academic literature on the thermal degradation of plastic. These
writings explain that heat degradation is “inevitable” in “excessive heat conditions,”
and “often occurs microscopically.” Two of the no-fire purchasers allege that they
can “feel[] excessive heat come through” the passenger compartments, but none
claims that microscopic thermal degradation was present in any of their vehicles.

       The no-fire purchasers claim that they have suffered economic damages
because they “would have not purchased the vehicles at all or would have paid
significantly less” if they had known of the alleged defect. Although the purchasers
allege that vehicle owners “are unable to operate their Class Vehicles without putting
themselves at risk of injury and property damage,” none of the purchasers alleges that
he stopped using his vehicle because of the alleged defect.

       The purchasers sought to certify classes of class vehicle owners. Under federal
law, they alleged that Polaris violated the Magnuson-Moss Warranty Act. See 15
U.S.C. § 2310(d)(1). They raised various state law claims, including breach of
warranty, fraudulent omission, and violations of consumer fraud laws, under the law
of the States in which they purchased their vehicles. Polaris moved to dismiss the
complaint as to the no-fire purchasers on the ground that because they did not allege
any manifest defect in their vehicles, they failed to allege an injury in fact that would
establish Article III standing to sue.

       The district court concluded that the no-fire purchasers alleged no facts “as to
how [the] defect manifests in their respective” vehicles, and therefore failed to “allege
a particularized and actual injury.” The court dismissed the claims of the no-fire

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purchasers, and after the remaining plaintiffs voluntarily dismissed their claims
without prejudice, see Fed. R. Civ. P. 41(a)(1)(A)(i), the no-fire purchasers appealed.
We review de novo the grant of a motion to dismiss for lack of standing. Wieland v.
U.S. Dep’t of Health & Hum. Servs., 793 F.3d 949, 953 (8th Cir. 2015).

                                           II.

       The doctrine of Article III standing requires a plaintiff to establish that he has
“suffered an ‘injury in fact’—an invasion of a legally protected interest” that is both
“concrete and particularized” and “actual or imminent, not conjectural or
hypothetical.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (internal
quotation omitted). We accept as true the factual allegations in the complaint, but
give “no effect to conclusory allegations of law.” Stalley ex rel. United States v.
Cath. Health Initiatives, 509 F.3d 517, 521 (8th Cir. 2007). “The plaintiff must assert
facts that affirmatively and plausibly suggest that the pleader has the right he claims
(here, the right to jurisdiction), rather than facts that are merely consistent with such
a right.” Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-56 (2007)).

       The no-fire purchasers argue that they have suffered particularized and actual
injury because they overpaid for vehicles with a manifest defect at the time of
purchase. They argue that their allegations are comparable to those of the so-called
“dry plaintiffs” who had standing in In re Zurn Pex Plumbing Products Liability
Litigation. 644 F.3d 604, 616-17 & n.6 (8th Cir. 2011). The dry plaintiffs were
homeowners who installed plumbing systems that allegedly were “doomed to leak
within warranty” because of “stress corrosion cracking” that began at the time of
installation. Id. at 609. Although the pipes had not yet leaked, this court concluded
that the plaintiffs had standing because they alleged, with the support of expert
testimony, that the cracking was “already manifest in all systems.” Id. at 617. The
court distinguished that claim from hypothetical assertions that the pipes “merely
‘risk[ed]’ developing” cracking. Id.

                                          -4-
       Polaris counters that the no-fire purchasers’ claims are like allegations that this
court has deemed insufficient because they assert only a risk that a product will
develop a defect in the future. In O’Neil v. Simplicity, Inc., 574 F.3d 501 (8th Cir.
2009), for example, a manufacturer recalled cribs with sides that could be lowered,
making it easier to place children into the cribs. Id. at 502. A manufacturing defect,
however, allegedly could cause the crib’s “drop-side” to detach and create a
dangerous gap in the crib. Id. Purchasers of the crib sued the manufacturer on the
theory that they had “not received the benefit of the bargain: they paid for a drop-side
crib,” but could not use the crib “because the drop-side is not safe.” Id. at 504. This
court concluded that the plaintiffs suffered no injury in fact because their crib had not
“exhibited the alleged defect,” and they had “necessarily received the benefit of their
bargain.” Id. at 504-05.

       O’Neil followed Briehl v. General Motors Corp., 172 F.3d 623 (8th Cir. 1999),
where plaintiffs alleged that anti-lock brakes in their vehicles were defective because
they performed in a counterintuitive way that could cause drivers to react
inappropriately during emergencies. Id. at 626. The plaintiffs alleged economic
injury on the theory that the brakes “diminished the vehicles’ resale value,” but they
did not allege that the brakes “malfunctioned or failed.” Id. at 628. This court
concluded that the plaintiffs’ “conclusory assertions” that they suffered injuries, and
that the brakes were defective, were “insufficient as a matter of law to plead a claim”
for economic injury. Id. at 629.

       O’Neil and Briehl both held that plaintiffs failed to state a claim, without
discussing standing and the requirement of injury in fact, but our later decision in
Wallace v. ConAgra Foods, Inc., 747 F.3d 1025 (8th Cir. 2014), viewed the matter
through the lens of Article III. Wallace recited that Article III “standing must be
particularized,” and that an injury is particularized only if it affects a plaintiff “in a
personal and individual way.” Id. at 1030 (quoting Lujan, 504 U.S. at 560 n.1). “In
the context of defective products,” Wallace explained, “‘it “is not enough” for a

                                           -5-
plaintiff “to allege that a product line contains a defect or that a product is at risk for
manifesting this defect; rather, the plaintiffs must allege that their product actually
exhibited the alleged defect.”’” Id. (quoting Zurn Pex, 644 F.3d at 616 (quoting
O’Neil, 574 F.3d at 503)).

       Here, the no-fire purchasers contend that they “would not have purchased” or
“would have paid significantly less” for their Polaris vehicles if they had known of
the alleged heat defect. But unlike the homeowners in Zurn Pex, the purchasers do
not allege that any manifest defect is present in their vehicles. They allege that
excessive heat can cause microscopic degradation in plastic and metal, like the
invisible stress cracking in the Zurn Pex fittings. But they do not allege that their
vehicles exhibit any manifest-but-invisible degradation. Two of the purchasers allege
that they can feel excessive heat when operating their vehicles, but they acknowledge
that “engines and exhaust systems in all [off-road vehicles] typically generate high
temperatures,” and they do not allege how the production of heat by itself results in
an injury.

       The no-fire purchasers’ allegations are closer to those in O’Neil and Briehl.
Like the potentially defective cribs and brakes in those cases, the Polaris vehicles
have not exhibited the alleged defect—the accelerated degradation of parts caused by
allegedly excessive heat. No purchaser alleges that his vehicle has exhibited any
damage or degradation, that replacement parts or additional servicing have been
required, or that the vehicles failed to perform as intended. The purchasers have
alleged nothing more than the existence of a defect in a product line or ownership of
a product that is at risk for manifesting a defect. And in one respect their claims are
weaker than those in O’Neil, where the plaintiffs went further and alleged that they
stopped using the product because of the perceived risk. The district court correctly
applied our precedent in determining that the no-fire purchasers failed to allege an
injury sufficient to confer standing.

                                           -6-
The judgment of the district court is affirmed.
               ______________________________

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