Court Opinion

ID: 2747927
Source: CourtListenerOpinion
Date Created: 2014-11-04 19:00:37.810074+00
Date Added: 2024-06-11T10:15:39.901624
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 14-1130

                  TIM KERIN, on behalf of himself
                and all others similarly situated,

                       Plaintiff, Appellant,

                                v.

                 TITEFLEX CORPORATION t/a GASTITE,

                       Defendant, Appellee.

           APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Michael A. Ponsor,   U.S. District Judge]

                              Before

                         Lynch, Chief Judge,
                 Ripple* and Selya, Circuit Judges.

     Kevin T. Peters, with whom Erika Todd and Arrowood Peters LLP
were on brief, for appellant.
     John G. Papianou, with whom Charles B. Casper, Montgomery,
McCracken, Walker & Rhoads, LLP, Jeffrey E. Poindexter, Jodi K.
Miller, Bulkley Richardson and Gelinas, LLP were on brief, for
appellee.

                         November 4, 2014

     *
         Of the Seventh Circuit, sitting by designation.
            LYNCH,   Chief    Judge.         This   products   liability   case

concerns the question of standing based on a theory of enhanced

risk of future injury. Tim Kerin appeals the dismissal of his case

against   Titeflex   Corporation       t/a    Gastite   ("Titeflex")   for    an

alleged product defect in Gastite corrugated stainless steel tubing

("CSST"), which causes risks of CSST being vulnerable to failure

after lightning strikes.         The District Court of Massachusetts

dismissed for lack of standing because Kerin's injury was too

speculative. Kerin v. Titeflex Corp., No. 13-cv-30141-MAP, 2014 WL
67239, at *1-2 (D. Mass. Jan. 7, 2014).

            We do not hold that increased risk of harm from product

vulnerability to lightning strikes can never give rise to standing.

But in this case, Kerin fails to allege either facts sufficient to

assess the probability of future injury or instances of actual

damage where the cause is clear, and concedes that CSST meets

applicable regulatory standards specifically addressing the risk.

            We affirm dismissal based on lack of standing.

                                       I.

                     Facts & Procedural Background

            Kerin owns a house in Florida which has Gastite CSST

installed to provide gas for his outdoor firepit.               His complaint

purported    to   bring   a    class     action      against   Titeflex,     the

manufacturer of Gastite, for an alleged product defect. He brought

                                       -2-
the claim under diversity jurisdiction in Massachusetts, where

Titeflex is located.

            Introduced in the 1980s, CSST is used in home and

commercial structures throughout the country.         It has since been

discovered that CSST may fail when exposed to electrical insult,

such as that caused by lightning. See Nat'l Fire Prot. Ass'n, NFPA

54   FAQs   ¶   6   [hereinafter    NFPA   54    FAQs],   available   at

https://www.nfpa.org/Assets/files/AboutTheCodes/54/54_FAQs.pdf

(last visited Oct. 31, 2014) (discussing a mitigation measure).

Both direct and indirect lightning strikes can cause an electrical

arc that can puncture CSST, igniting the natural gas within. Kerin

alleges that "CSST's significant risks are well-established," and

that industry "experts" recommend "several possible remedies,

including complete removal."       Kerin also alleges that, "[a]s of

August 2011, 141 fires involving lightning and CSST have been

reported throughout the United States."          Titeflex has allegedly

"been aware of the risks that its product creates . . . . since at

least 2004," and developed a new product, FlashShield, in 2012 to

address risks associated with lightning.        But despite these "known

risks," Gastite CSST continues to meet code requirements and is

still used in buildings throughout the country.              See, e.g.,

National Fuel Gas Code, ANSI Z223.1-2015 (NFPA 54-2015) § 5.6.3.4

(2015 ed.); National Fuel Gas Code, ANSI Z223.1-2012 (NFPA 54-2012)

§ 5.6.3.4 (2012 ed.); Mass. Bd. of State Exam'rs of Plumbers & Gas

                                   -3-
Fitters, Board Policy: Corrugated Stainless Steel Tubing (CSST)

(Feb. 4, 2009) [hereinafter Mass. Board Policy], available at

http://www.mass.gov/ocabr/government/oca-agencies/dpl-lp/regardin

g-corrugated-stainless-steel-tubing-csst.html (last visited Oct.

31, 2014).

             Kerin's July 2013 complaint asserted four causes of

action under Massachusetts law, each based on allegations of

Gastite   CSST's         vulnerability    to   lightning    strikes:      "strict

liability for design and manufacturing defects, negligence in

design[ing] and failing to test the product, negligence in failure

to warn, and strict liability in failure to warn."                Kerin does not

allege that this vulnerability of his home's CSST to lightning

strikes has manifested in any actual harm.                  Rather, he seeks

damages "that may be measured as his overpayment or as the cost of

remedying the safety issue."

             The    district    court    dismissed   for   lack    of   standing,

stating that "it is obvious that Plaintiff cannot clear the 'injury

in fact' hurdle."         Kerin, 2014 WL 67239, at *1.     The court reasoned

that the "strand of conjecture . . . is simply too attenuated,"

requiring both a lightning strike and one that effects a puncture

in the CSST.       Id.   The court also concluded that, even if Kerin had

standing, Kerin failed to state a claim because he failed to allege

"an applicable standard against which [Titeflex's] due care could

be measured" as required to claim economic injury from a defective

                                         -4-
product under Massachusetts law.           Id. (citing Iannacchino v. Ford

Motor Co., 888 N.E.2d 879, 888 (Mass. 2008)).

                                         II.

                                    Analysis

               We do not adopt the district court's reasoning to the

extent it relies on the proposition that lightning strikes present

a textbook example of speculative risk and remote possibilities

which are simply insufficient for injury in fact.                     Cf. Mountain

States Legal Found. v. Glickman, 92 F.3d 1228, 1234 (D.C. Cir.

1996)       (finding    standing   for   increased        risk   of   wildfire,   a

"probabilistic         event").    Although      "[t]he    capriciousness    of   a

lightning strike is the stuff of folklore," Kerin, 2014 WL 67239,

at *1, the law of probabilistic standing is evolving,1 and it is

conceivable that product vulnerability to lightning might, in some

circumstances, constitute injury.              But where, as here, the alleged

present harm depends solely on the risk of some future injury, we

        1
         A survey of the case law reveals that the treatment of
enhanced risk claims is in a state of flux. Compare cases denying
standing, see, e.g. Clapper v. Amnesty Int'l USA, 133 S. Ct. 1138,
1155 (2013); Blum v. Holder, 744 F.3d 790, 803 (1st Cir. 2014),
with those finding standing, see, e.g., Friends of the Earth, Inc.
v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 184-85 (2000);
Baur v. Veneman, 352 F.3d 625, 633-36 (2d Cir. 2003) (collecting
cases) (discussing developments and finding enhanced risk
sufficient for injury in fact "[i]n the specific context of food
and drug safety suits"); Mountain States, 92 F.3d at 1234
(discussing "probabilistic injuries" and finding standing for
"increased risk of catastrophic wildfire").     See also Katz v.
Pershing, LLC, 672 F.3d 64, 80 (1st Cir. 2012) (noting disarray
among circuits over standing for enhanced risk of harm from data
breach).

                                         -5-
must proceed cautiously.    See Ctr. for Law & Educ. v. Dep't of

Educ., 396 F.3d 1152, 1161 (D.C. Cir. 2005) (Sentelle, J.) ("[W]ere

all purely speculative 'increased risks' deemed injurious, the

entire requirement of 'actual or imminent injury' would be rendered

moot.").   Because Kerin fails to allege risk sufficient to find

injury, we affirm the district court's dismissal.

A.         Standard of Review

           The existence of standing is a legal question, which we

review de novo.   See Katz v. Pershing, LLC, 672 F.3d 64, 70 (1st

Cir. 2012).   When reviewing a pre-discovery grant of a motion to

dismiss for lack of standing, "we accept as true all well-pleaded

fact[s] . . . and indulge all reasonable inferences" in the

plaintiff's favor.    See id. at 70-71 (quoting Deniz v. Mun'y of

Guaynabo, 285 F.3d 142, 144 (1st Cir. 2002)) (internal quotation

marks omitted).      We may affirm dismissal "on any ground made

manifest by the record."    See id. at 71 (quoting Román-Cancel v.

United States, 613 F.3d 37, 41 (1st Cir. 2010)) (internal quotation

marks omitted).   Because no class was certified below, our review

is limited to whether Kerin himself has standing.   See id.

B.         Standing Based on Enhanced Risk of Injury

           Our judicial power is limited by Article III of the

Constitution to actual cases and controversies.        See Warth v.

Seldin, 422 U.S. 490, 498 (1975).     "One element of the case-or-

controversy requirement is that plaintiffs must establish that they

                                -6-
have standing to sue."         See Blum v. Holder, 744 F.3d 790, 795 (1st

Cir. 2014) (quoting Clapper v. Amnesty Int'l USA, 133 S. Ct. 1138,

1146 (2013)) (internal quotation marks omitted). "This requirement

'is founded in concern about the proper -- and properly limited --

role of the courts in a democratic society.'"                    Id. at 795-96

(quoting Summers v. Earth Island Inst., 555 U.S. 488, 492-93

(2009)).

             To satisfy this standing requirement, a plaintiff must

sufficiently plead three elements: injury in fact, traceability,

and redressability.      See Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992).           An "injury in fact" is "an invasion of a

legally    protected      interest       which     is     (a)    concrete    and

particularized, and (b) 'actual or imminent, not conjectural or

hypothetical.'"       See id. at 560 (internal citations omitted)

(quoting   Whitmore      v.    Arkansas,     495 U.S. 149,    155   (1990)).

Imminence, which plays a central role in cases of probabilistic

standing, "is concededly a somewhat elastic concept." See Clapper,
133 S. Ct. at 1147 (quoting Lujan, 504 U.S. at 565 n.2) (internal

quotation marks omitted).         "[I]ts purpose . . . is to ensure that

the   alleged   injury    is     not   too   speculative    for    Article   III

purposes."    See id. (quoting Lujan, 504 U.S. at 565 n.2) (internal

quotation marks omitted).

             Cases claiming standing based on risk, such as this,

potentially involve two injuries: (1) a possible future injury that

                                       -7-
may or may not happen (i.e., the harm threatened); and (2) a

present injury that is the cost or inconvenience created by the

increased risk of the first, future injury (e.g., the cost of

mitigation). See Blum, 744 F.3d at 796 (quoting Mangual v. Rotger-

Sabat, 317 F.3d 45, 56-57 (1st Cir. 2003)) (identifying two

injuries in context of First Amendment challenge: the present

injury, a chilling effect, caused by the threat of future injury,

criminal prosecution); see also Monsanto Co. v. Geertson Seed

Farms, 561 U.S. 139, 155 (2010) (recognizing that present costs to

mitigate risk of crop infection would occur even if crops were

never actually infected).       These cases require caution, because

although   one   of   the   alleged   injuries   is   present,   satisfying

imminence, that injury may still be speculative.          This is because

the alleged present injury depends on the plaintiff's response to

an increased risk, and whether his or her response constitutes a

reaction for which compensation is owed or constitutes a mere

attempt to "manufacture standing."          Compare Friends of the Earth,

Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 184-85

(2000) (finding standing where plaintiffs responded to increased

risk of health hazards from pollution by "refraining from use of

the North Tyger River"), with Clapper, 133 S. Ct. at 1151 (denying

standing for "incurr[ing] . . . costs as a reasonable reaction to

a risk" where risked harm was not "certainly impending"). For this

                                      -8-
reason, cases claiming standing based on risk fall into at least

two categories.

            In the first, where standing is more frequently found,

the present injury is linked to a statute or regulation or standard

of conduct that allegedly has been or will soon be violated.        See,

e.g., Laidlaw, 528 U.S. at 181-84; Baur v. Veneman, 352 F.3d 625,

634-35 (2d Cir. 2003). Cases in this first category are easier, in

part because the legislature and executive agencies -- the branches

tasked with evaluating risks and developing safety standards --

have already identified the risk as injurious. See, e.g., Laidlaw,
528 U.S. at 181-84 (finding that refraining from using a polluted

river constituted injury in fact even though the district court

found that the "permit violations at issue . . . did not result in

any health risk or environmental harm"); Baur, 352 F.3d at 634-35

(noting the "tight connection between the type of injury . . .

allege[d] and the fundamental goals of the statutes . . . sue[d]

under"); Cent. Delta Water Agency v. United States, 306 F.3d 938,

948 (9th Cir. 2002) (explaining that "to require actual evidence of

environmental harm, rather than an increased risk based on a

violation    of   the   statute,    misunderstands   the   nature     of

environmental harm" (emphasis added) (internal quotation marks and

citation omitted)).

            In the second category, the present injury has not been

identified and so is entirely dependent on the alleged risk of

                                   -9-
future injury.     See, e.g., Blum, 744 F.3d at 796 (discussing case

where present chilling effect dependent on threat of specific

future harm).      Cases falling in this second category require

greater caution and scrutiny because the assessment of risk is both

less certain, and whether the risk constitutes injury is likely to

be more controversial.     See, e.g., Katz, 672 F.3d at 80 (noting

split over whether victims of mere data breach have suffered injury

in fact).2

             Indeed, not all risks constitute injury.   As the D.C.

Circuit has noted, "were all purely speculative 'increased risks'

deemed injurious, the entire requirement of 'actual or imminent

injury' would be rendered moot, because all hypothesized, non-

imminent 'injuries' could be dressed up as 'increased risk of

future injury.'"    Ctr. for Law & Educ., 396 F.3d at 1161; see also

Baur, 352 F.3d at 637 (noting the "potentially expansive and

nebulous nature of enhanced risk claims").    For these reasons, the

plaintiff, who always carries the burden of establishing standing,

faces a more difficult task when alleging enhanced risk without

alleging a statutory or regulatory violation (actual or imminent).

See Blum, 744 F.3d at 795 (quoting Clapper, 133 S. Ct. at 1148)

     2
        Compare Krottner v. Starbucks Corp., 628 F.3d 1139 (9th
Cir. 2010), and Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629 (7th
Cir. 2007) (finding standing), with Reilly v. Ceridian Corp., 664
F.3d 38 (3d Cir. 2011) (denying standing).

                                 -10-
("The party invoking federal jurisdiction bears the burden of

establishing standing." (internal quotation marks omitted)).

             Kerin's   complaint     falls      into    the    latter   category.

Although     he   argues    that   his    injury   is   one    recognized   under

Massachusetts law governing "dangerously defective product[s]," he

"concedes that the CSST in question does not violate any applicable

regulatory standard," Kerin, 2014 WL 67239, at *1 (emphasis added),

as is required to state a claim for a dangerously defective product

in the absence of actual damage, see Iannacchino, 888 N.E.2d at

888.   His purported present injury, "overpayment" for a defective

product and the cost of replacement, is thus entirely dependent on

an unsupported conclusion that the CSST is defective, coupled with

a speculative risk of future injury (fire in the event of a

lightning strike).          We evaluate his claim in light of these

distinctions.

C.           Enhanced Risk from Lightning Strikes

             We agree with Kerin that the risked harm, if actualized,

could be severe. But whether a risk is speculative also depends on

the chances that the risked harm will occur.              See Mountain States,
92 F.3d at 1234-35.        Although a small probability of a great harm

may be sufficient, see Vill. of Elk Grove Vill. v. Evans, 997 F.2d
328,   329    (7th   Cir.    1993)   (recognizing       that    "even   a   small

probability . . . is sufficient . . . [provided] the relief sought

would, if granted, reduce the probability"), Kerin has failed to

                                         -11-
meet his burden of pleading that the risk of CSST causing a

lightning fire in his home is anything but remote.

            First, Kerin fails to allege facts sufficient to even

calculate or estimate the risk.         For example, Kerin alleges that,

as of August 2011, there were 141 reported fires that "involv[ed]

lightning and CSST."        See Compl. at ¶ 39.    But he does not state in

his allegations information that would help us make sense of this

figure, like the frequency of lightning strikes, the proportion of

homes    struck    by   lightning,   the    relevant   time   frame,   or   the

likelihood of lightning fires in homes without CSST.              And to the

extent that he does cite numbers, they suggest an exceedingly low

probability.      See Compl. at ¶ 28 (alleging that CSST is present in

"over 5 million homes across the United States").

            Second, even in the instances where Kerin alleges there

has been "actual damage," it is unclear that CSST was the source.

This distinguishes Kerin's case from others in which courts found

enhanced risk from product defects sufficient for standing.                 For

example, in Cole v. General Motors Corp., 484 F.3d 717 (5th Cir.

2007), the Fifth Circuit found standing where there was an enhanced

risk that the side airbags of cars might deploy unexpectedly.               Id.

at 722-23.        Because there were instances where the airbags had

deployed unexpectedly, without a crash, there was no doubt that the

airbags were defective and had caused actual damage.              See id. at

718-20   (noting     that   car   manufacturer    issued   voluntary   recall

                                     -12-
because it "ha[d] decided that a defect . . . exists").        This

differs from Kerin's allegations.      His three direct allegations

that a "lightning strike punctured the CSST in a house, instigating

a natural gas-fueled fire," fall short: two are speculative, Compl.

at ¶¶ 4, 58, leaving only a single instance where a jury found

against one of Titeflex's competitors, Compl. at ¶ 57.      This is

markedly different from Cole, where the defect was essentially

conceded.    And while he cites to 141 cases of actual fires, Kerin

only alleges that both lightning and CSST were "involv[ed]," not

that CSST was the cause of the damage or should not have itself

failed under the circumstances.3   Compl. at ¶ 39.

            Finally, another consideration suggests that the risk

carried by this product is not sufficient to give rise to a case or

controversy.     This is not a case of regulatory silence, but of

regulatory approval of the "defective" product, after a study of

the risks.     Although not dispositive, this consideration carries

particular weight because the political branches have, after study

of the particular risk in question, concluded that such risk is

both permissible and manageable.    Here, it is not merely the case

     3
        The other case relied on by Kerin, Mazza v. Am. Honda Motor
Co., 666 F.3d 581 (9th Cir. 2012), is inapposite. Mazza involved
claims of false advertising about the limitations of Honda's
automated braking system. Id. at 585-86, 595 (explaining that the
system purportedly would alert the driver to brake and, if
necessary, automatically brake). The Ninth Circuit held that class
members had only suffered injury in fact to the extent that they
had relied upon the misleading advertisements in being "relieved of
their money." See id. at 595.

                                -13-
that CSST does not violate a regulatory standard. To the contrary,

Massachusetts regulations specifically permit the use of CSST, even

with the known attendant risk of fire from lightning strikes. See,

e.g., 248 Mass. Code Regs. 5.03, 5.04 (2014); see also Mass. Board

Policy, supra.4   The National Fuel Gas Code, a model code co-

sponsored by the American Gas Association and the National Fire

Protection Association, also permits the installation of CSST with

bonding and grounding to mitigate lightning risk.     See National

Fuel Gas Code, ANSI Z223.1-2015 (NFPA 54-2015) §§ 5.6.3.4, 7.2.6,

7.3.2, 7.13.2, passim (2015 ed.); National Fuel Gas Code, ANSI

Z223.1-2012 (NFPA 54-2012) §§ 5.6.3.4, 7.2.7, 7.3.2, 7.13.2, passim

(2012 ed.); see also NFPA 54 FAQs, supra, ¶ 6 (explaining that a

new requirement for bonding of CSST was added to reduce the risk

that nearby lightning strikes will cause small holes in CSST, and

that further research into the problem is ongoing). Kerin does not

     4
        The Massachusetts Board of State Examiners of Plumbers and
Gas Fitters has directly considered this problem. It temporarily
rescinded product approval for CSST from November 2008 through
February    2009    to    "allow     for   resolution    of    the
enforcement/requirement of extra bonding by the relevant
authorities having jurisdiction." Mass. Board Policy, supra. The
Board also continues to monitor the risk. Upon reinstating product
approval, the Board specified measures for mitigating damages from
indirect lightning strikes and reserved the right to "reconsider
th[e] policy as well as past and future product approvals" in the
event it receives evidence that manufacturers' efforts to mitigate
indirect lightning strikes are not effective, or in the event a
new national standard is adopted that the manufacturers fail to
meet. Id.

                               -14-
contest these regulations, conceding that the required bonding

"might address this issue." Compl. at ¶ 32 (emphasis in original).

          Although we accept as true "'all well-pleaded fact[s]

. . . and indulge all reasonable inferences'" in Kerin's favor, see

Katz, 672 F.3d at 70 (citation omitted), "this tenet does not apply

to statements in the complaint that merely offer legal conclusions

couched as facts or are threadbare or conclusory," see Blum, 744
F.3d at 795 (quoting Air Sunshine, Inc. v. Carl, 663 F.3d 27, 33

(1st Cir. 2011)) (internal quotation marks omitted).            That is, we

are not required to accept Kerin's conclusory and subjective

allegations   that   the   product    is    "defective"   and   presents   an

"unreasonable risk."       Cf. Iannacchino, 888 N.E.2d at 888.        Given

this, and in light of Kerin's failure adequately to allege either

facts sufficient to assess the likelihood of future injury or

instances of actual damage where the cause is clear, we find that

the alleged risk of harm is too speculative to give rise to a case

or controversy.

          We affirm the dismissal of the action.

                                     -15-