Dana Gold et al v. Lumber Liquidators, Inc.

MOTION to Dismiss for Lack of Jurisdiction to Plaintiffs' Fourth Amended Class Action Complaint Pursuant to Fed.R.Civ.P. 12

N.D. Cal.July 10, 2017

DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MCGUIREWOODS LLP David S. Reidy (SBN 225904) dreidy@mcguirewoods.com Two Embarcadero Center, Suite 1300 San Francisco, CA 94111 Telephone: 415.844.9944 Facsimile: 415.844.9922 Bethany G. Lukitsch (SBN 314376) blukitsch@mcguirewoods.com Diane Flannery (Pro Hac Vice) dflannery@mcguirewoods.com 800 East Canal Street Richmond, Virginia 23219-3916 Telephone: 804.775.1000 Facsimile: 804.775.1061 Attorneys Specially Appearing for Defendant Lumber Liquidators, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA, on behalf of themselves and all others similarly situated, Plaintiffs, vs. LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES1 through 200, inclusive, Defendants. CASE NO. 3:14-cv-05373-TEH DEFENDANT LUMBER LIQUIDATOR, INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION; MEMORANDUM OF POINTS AND AUTHORITIES [Filed concurrently with Declaration of B. Lukitsch; Declaration of C. Crowe; [Proposed] Order] Date: August 14, 2017 Time: 10:00 a.m. Crtrm.: 12 Judge: Hon. Thelton E. Henderson Complaint Filed: December 8, 2014 Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 1 of 19 i DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT, on August 14, 2017, at 10:00 a.m., in Courtroom 2 of the United States District Court, Northern District of California, located at 450 Golden Gate Ave., San Francisco, CA 94102, before the Honorable Thelton E. Henderson, in Courtroom 2, 17th Floor, Defendant Lumber Liquidators, Inc. (“Lumber Liquidators”), by and through their undersigned attorneys, hereby make a special appearance in this Court for the purpose of challenging personal jurisdiction as to Plaintiffs’ Tammy Emery, Edwin Mendez, Laura Norris, Donald Fursman, and John Triana’s (“Non-California Plaintiffs”), and will and hereby does move the Court to dismiss Non-California Plaintiffs’ Fourth Amended Complaint filed against Lumber Liquidators pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction. This motion is based upon this Notion of Motion and Motion, the accompanying Memorandum of Points and Authorities in Support of this Motion, the Declaration of Christopher N. Crowe, the Declaration of Bethany G. Lukitsch and other exhibits filed in support, the pleadings and documents filed in this case, and such other written and oral argument as may be presented to the Court. Dated: July 10, 2017 Respectfully submitted, MCGUIREWOODS LLP By: /s/ Bethany G. Lukitsch Bethany G. Lukitsch Attorneys for Specially Appearing Defendant Lumber Liquidators, Inc. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 2 of 19 ii DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page NOTICE OF MOTION AND MOTION .......................................................................................... i TABLE OF AUTHORITIES ........................................................................................................... ii MEMORANDUM OF POINTS AND AUTHORITIES ................................................................. 1 I. INTRODUCTION ................................................................................................................ 1 II. BACKGROUND .................................................................................................................. 2 A. PLAINTIFFS’ COMPLAINT AGAINST LUMBER LIQUIDATORS .................. 2 B. THE NON-CALIFORNIA PLAINTIFFS’ CLAIMS DO NOT ARISE FROM ANY OF LUMBER LIQUIDATORS’ ACTIVITIES WITHIN CALIFORNIA .......................................................................................................... 3 1. Plaintiff Tammy Emery’s West Virginia-based claims do not arise out of Lumber Liquidator’s California contacts ........................................... 3 2. Plaintiff Edwin Mendez’s Illinois-based claims do not arise out of Lumber Liquidator’s California contacts ..................................................... 4 3. Plaintiff Laura Norris’s Minnesota-based claims do not arise out of Lumber Liquidator’s California contacts ..................................................... 4 4. Plaintiff Donald Fursman’s Pennsylvania-based claims do not arise out of Lumber Liquidator’s California contacts ........................................... 5 5. Plaintiff John Triana’s Florida-based claims do not arise out of Lumber Liquidator’s California contacts ..................................................... 5 6. There is no causal relationship between Lumber Liquidators’ alleged activities in California and the Non-California Plaintiffs’ claimed damages in their own respective states ........................................................ 6 III. LEGAL STANDARD .......................................................................................................... 7 IV. LEGAL ARGUMENT ......................................................................................................... 8 A. LUMBER LIQUIDATORS IS NOT SUBJECT TO GENERAL JURISDICTION IN CALIFORNIA ........................................................................ 9 B. LUMBER LIQUIDATORS IS NOT SUBJECT TO SPECIFIC JURISDICTION IN CALIFORNIA ...................................................................... 10 1. There is no adequate link between California and the Non-California Plaintiffs’ claims ........................................................................................ 11 2. California has no interest in the Non-California Plaintiffs’ claims ............ 12 V. CONCLUSION .................................................................................................................. 14 Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 3 of 19 iii DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Federal Cases Brand v. Menlove Dodge, 796 F.2d 1070 (9th Cir. 1986) ......................................................................................................9 Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct. 1773 (2017) ....................................................................................................... 1, 7-13 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ...............................................................................................................8, 9 Fields v. Sedgwick Assoc. Risks, Ltd., 796 F.2d 299 (9th Cir. 1986) ........................................................................................................7 Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011) .........................................................................................................7, 8, 9 Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218 (9th Cir. 2011) ......................................................................................................7 Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) ......................................................................................................7 Stewart v. Screen Gems-EMI Music, Inc., 81 F.Supp.3d 938 (N.D. Cal. 2015) .............................................................................................7 Federal Statutes Consumer Legal Remedies Act ..........................................................................................................3 California Statutes Cal. Civ. Proc. Code § 410.10 ........................................................................................................................................8 California Business and Professions Code § 17200 et seq. ..............................................................................................................................3 Other State Statutes Florida’s Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. ...........................................................................................................3 Illinois Consumer Fraud and Deceptive Business Practices Act,. 815 Ill. Comp. Stat. 505/1 et seq. .................................................................................................3 Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 4 of 19 iv DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Minnesota Consumer Fraud Act, M.S.A. § 325F.68 et seq. ..............................................................................................................3 Pennsylvania Unfair Trade Practices & Consumer Protection Law, 73 P.S. § 201 et seq. .....................................................................................................................3 West Virginia’s Consumer Credit and Protection Act, W. Va. Code §§ 46A-6 et seq. ......................................................................................................3 Other Authorities Fed. R. Civ. P. 4(k)(1)(A) ..................................................................................................................8 Fed. R. Civ. P. 12(b)(2) ......................................................................................................................7 Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 5 of 19 1 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiffs Tammy Emery, Edwin Mendez, Laura Norris, Donald Fursman, and John Triana (“Non-California Plaintiffs”) allegedly purchased Morning Star strand bamboo flooring (the “Product”) for installation in their homes. All Plaintiffs, except Dana Gold, reside in and hail from various different states other than California.1 Notwithstanding their lack of any connection to California, Non-California Plaintiffs seek to pursue their claims against specially-appearing Defendant Lumber Liquidators, Inc. (“Lumber Liquidators”) in California and to certify numerous non-California classes. This Court lacks personal jurisdiction over Lumber Liquidators as to these non-California Plaintiffs and these purported classes they seek to represent because Lumber Liquidators is an out-of-state defendant and the Non-California Plaintiffs’ claims in this action do not arise from Defendants’ conduct within California. This Court lacks general personal jurisdiction over Lumber Liquidators because Lumber Liquidators is not “at home” in California. Absent extraordinary circumstances not present here, a company is “at home” only where it is incorporated or maintains its principal place of business. Lumber Liquidators is a Delaware corporation with its principal place of business in Toano, Virginia.2 Lumber Liquidators has never been incorporated or organized in California and has never maintained its principal place of business here. This Court also lacks specific jurisdiction over Lumber Liquidators. For a court to exercise specific jurisdiction over a claim, there must be an “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” Bristol- Meyers Squibb Co., 137 S. Ct. 1773, 1776 (2017) (holding California courts lacked specific jurisdiction to entertain nonresidents’ claims). 1 Plaintiffs Emery, Mendez, Norris, Fursman, and Triana are collectively referred to as the “Non- California Plaintiffs” because none of them are residents of California. See FAC, Lukitsch Decl., Ex. A, ¶¶ 9-14. 2 Plaintiffs’ do not contend otherwise. Plaintiffs’ Fourth Amended Class Action Complaint (“FAC”), ¶ 15. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 6 of 19 2 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Non-California Plaintiffs do not allege that they purchased the Product at issue in California, that they installed or otherwise utilized the Product in California, or that they suffered any injury in California.3 These Non-California Plaintiffs allege no causal connection between any California activity and their injury. Instead, Non-California Plaintiffs appear to believe jurisdiction is proper because Lumber Liquidators conducts business in the state of California and was generically “responsible for, or otherwise involved in, the development, manufacture, marketing, sales, warranting and distribution of the Product.” FAC, ¶ 15. But conducting business in a state without any causal connection between the in-state activities and the allegations in the lawsuit is not enough to confer jurisdiction over an out-of-state defendant. Nor may Non-California Plaintiffs create jurisdiction over Lumber Liquidators by hitching the claims of five non-California residing named Plaintiffs’ onto and with the claims of one California residing named Plaintiff. As discussed below, and pursuant to the recent United States Supreme Court ruling in Bristol-Meyers, the Complaint should be dismissed against Lumber Liquidators as to the Non- California Plaintiffs, inclusive of counts 4-8 of the Complaint, because the FAC fails to show that the claims of each Non-California Plaintiff has a causal connection with Lumber Liquidators. When the plaintiff, the defendant, the injury, and the alleged conduct giving rise to it all occur outside of California, a California court has no jurisdiction over the claim. II. BACKGROUND A. PLAINTIFFS’ COMPLAINT AGAINST LUMBER LIQUIDATORS On June 22, 2017, the Court entered an Order Granting in Part and Denying in Part Plaintiffs’ Motion for Leave to Amend Class Action Complaint. ECF No. 170. In its Order, the Court granted Plaintiffs’ Motion for Leave to Amend as to the narrowing of the product in their classes from “Morning Star Bamboo Flooring” to “Morning Star Strand Bamboo Flooring.” Id. at p. 7:1-4. The Court also denied Plaintiffs’ motion for leave to amend to include persons and/or entities, or to omit the limiting use language from its California Class definition. Id. at p. 9:11-15. The Court also 3 Instead, these Non-California Plaintiffs reside in, purchased and installed their floors in, and allegedly suffered damages in states other than California-West Virginia, Illinois, Minnesota, Pennsylvania, and Florida. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 7 of 19 3 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 permitted Plaintiffs to dismiss their nationwide class and their New York sub-class. Id. at p. 3, fn. 1. On June 26, 2017, Plaintiffs filed their FAC against Lumber Liquidators. ECF No. 171; see generally, FAC. The FAC asserts the following eight causes of action: (1) violation of the Consumer Legal Remedies Act (“CLRA”); (2) violation of California Business and Professions Code § 17200 et seq. under the unlawful business practice prong (“UCL”); (3) violation of California Business and Professions Code § 17200 et seq. under the unfair business practice prong (“UCL”); (4) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. (“CFA”); (5) violation of Pennsylvania Unfair Trade Practices & Consumer Protection Law, 73 P.S. § 201 et seq.; (6) violation of Minnesota Consumer Fraud Act, M.S.A. § 325F.68 et seq.; (7) violation of West Virginia’s Consumer Credit and Protection Act, W. Va. Code §§ 46A-6 et seq.; and (8) violation of Florida’s Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. (“FDUTPA”). Id. In addition, the FAC seeks to certify five (5) non-California subclasses, consisting of class members who reside outside of California. Id. ¶ 138. B. THE NON-CALIFORNIA PLAINTIFFS’ CLAIMS DO NOT ARISE FROM ANY OF LUMBER LIQUIDATORS’ ACTIVITIES WITHIN CALIFORNIA 1. Plaintiff Tammy Emery’s West Virginia-based claims do not arise out of Lumber Liquidator’s California contacts Plaintiff Tammy Emery (“Plaintiff Emery”) is a resident of West Virginia and owns a home located at 219 Picket Avenue in Inwood, West Virginia. See FAC, Lukitsch Decl., Ex. A, ¶ 29. Plaintiff Emery allegedly visited her “local Martinsburg [in West Virginia] Lumber Liquidators store” where she spoke with the manager about the Product. Id. ¶ 30. The manager informed Plaintiff Emery that the Product was “made from the hardest wood”, provided her with a demonstration on its durability, gave her a six-inch sample, and was told the Product had a “30 year warranty”. Id. ¶¶ 31-34. In reliance on the “demonstration, samples, and information” provided by Defendant, Plaintiff Emery “purchased 517 square feet of the Product” and installed the Product in her living room, dining room, and two hallways. Id. ¶¶ 35-36. Plaintiff Emery asserts she “noticed the Product was “delaminating, warping, splitting, shrinking, and scratching, and generally Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 8 of 19 4 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 deteriorating.” Id. ¶ 39. Plaintiff Emery contacted Defendant from West Virginia to put them on notice of the alleged defects. Id. ¶¶ 41-43. 2. Plaintiff Edwin Mendez’s Illinois-based claims do not arise out of Lumber Liquidator’s California contacts Plaintiff Edwin Mendez (“Plaintiff Mendez”) is a resident of Illinois and owns a home located at 2154 Kemmerer Lane in Bolingbrook, Illinois. See FAC, Lukitsch Decl., Ex. A, ¶ 44. Plaintiff Mendez alleges he “visited his local Lumber Liquidators store in Bollingbrook, Illinois (Store 1086)” and while at the store, he spoke with various employees who stated the Product was “much stronger than oak and most hardwoods,” that the Product “wouldn’t crack, wouldn’t bend,” and that it was the “strongest, best quality product.” Id. ¶ 47. “At his local store, Plaintiff Mendez observed a store display and demonstration”. Id. ¶ 48. Plaintiff Mendez further alleges that “in reliance of the store display, the demonstration, and the information he was given by Lumber Liquidators, Plaintiff Mendez purchased 1,434 square feet of the Product from his local Lumber Liquidators store located in Bollingbrook, Illinois (Store 1086).” Id. Plaintiff Mendez further alleges he became “sick from the smells associated with his new flooring,” saw the flooring glue provided little adhesion, and eventually noticed that the flooring was buckling and shrinking. Id. ¶¶ 51-53. 3. Plaintiff Laura Norris’s Minnesota-based claims do not arise out of Lumber Liquidator’s California contacts Plaintiff Laura Norris (“Plaintiff Norris”) is a resident of Minnesota and owns a home located at 7327 West 110th Street in Bloomington, Minnesota. See FAC, Lukitsch Decl., Ex. A, ¶ 55. Plaintiff Norris “was prompted by a local television advertisement regarding the flooring products sold at Lumber Liquidators”. Id. ¶ 56. Plaintiff Norris alleges she contacted Defendant “by telephone” and shortly thereafter visited her “local Lumber Liquidators store in Burnsville, Minnesota.” Id. ¶¶ 57-58. Plaintiff Norris further alleges a sales associate there explained that the Product was “much stronger than traditional hardwood flooring,” provided a demonstration of the durability of the Product, and noted that the Product was supported by a warranty. Id. ¶¶ 58-60. Plaintiff also alleges that “in reliance on the information she had been given by [Lumber Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 9 of 19 5 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Liquidators] over the phone and in the store, Plaintiff purchased the Product.” Id. ¶ 61. Shortly thereafter, she began experiencing problems with the Product, such as “cupping, shrinking, warping, and splitting.” Id. ¶ 63. 4. Plaintiff Donald Fursman’s Pennsylvania-based claims do not arise out of Lumber Liquidator’s California contacts Plaintiff Donald Fursman (“Plaintiff Fursman”) is a resident of Pennsylvania and owns a home located at 626 Trimble Blvd. in Brookhaven, Pennsylvania. See FAC, Lukitsch Decl., Ex. A, ¶ 65. Plaintiff Fursman “visited his local Lumber Liquidators store in Claymont, Delaware on two occasions.” Id. ¶ 66. Plaintiff Fursman’s first and second visits to his local Lumber Liquidators stores were largely the same. Id. ¶¶ 68-77. He alleges he was told by a Lumber Liquidators sales products that the Product was “high quality,” “harder and more durable than real wood,” “more water resistant than normal hardwood floors,” “superior and better quality than other hardwoods,” and “came with a thirty year warranty.” Id. ¶¶ 67-68. Plaintiff Fursman also alleges he was provided a demonstration, had read product brochures, and was given an “eight to ten inch sample of the Product to take home.” Id. ¶¶ 68-77. Plaintiff further alleges “based on the samples, demonstration, and information provided by [Lumber Liquidators] . . . Plaintiff Fursman purchased 597.30 square feet of the Product.” Id. ¶ 79. After installation of the Product, the Product was “excessively shrinking throughout his home.” Id. ¶ 82. 5. Plaintiff John Triana’s Florida-based claims do not arise out of Lumber Liquidator’s California contacts Plaintiff John Triana (“Plaintiff Triana”) is a resident of Florida and owns a home located at 24 Captiva Drive in Ponte Vedra Beach, Florida. See FAC, Lukitsch Decl., Ex. A, ¶ 88. Plaintiff Triana alleges that Lumber Liquidators’ representatives spoke with him “at his home and later at the Jacksonville, Florida store” regarding the Product. Id. ¶ 92. He alleges Lumber Liquidators represented that the Product was “very stable and very hard,” “carbonized,” and “much harder than traditional bamboo flooring.” Id.¶ 93. Plaintiff Triana further alleges he was provided a demonstration and told that the Product was protected by a 30 year warranty. Id. ¶¶ 95-96. Plaintiff alleges that in reliance on Lumber Liquidators’ representations, Plaintiff Triana “purchased Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 10 of 19 6 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 approximately 820 square feet of the Product from the Jacksonville Lumber Liquidators store.” Id. ¶ 97. “Not long after the Product was installed, Plaintiff Triana began noticing that the Product was cracking, splitting, peeling, and cupping, making the floor increasingly unattractive and unsafe.” Id. ¶ 99. 6. There is no causal relationship between Lumber Liquidators’ alleged activities in California and the Non-California Plaintiffs’ claimed damages in their own respective states Plaintiff alleges that Lumber Liquidators is a Delaware corporation with its principal place of business in Toano, Virginia. Lukitsch Decl., Ex. A., ¶ 15; Declaration of Christopher N. Crowe (“Crowe Decl.”), ¶ 4. Plaintiff further allege they are “informed and believe that Defendant conducts business within the United States, and more specifically within the state of California. Also on information and belief, Plaintiffs allege that Defendant was responsible for, or otherwise involved in, the development, manufacture, marketing, sales, warranting, and distribution of the Product.” Id. Plaintiffs acknowledge and allege “Defendant has sold the Product to thousands of consumers throughout the United States, including California. The Product was and is marketed and sold for use in homes and other structures.” Id. ¶ 103. Plaintiffs advance this action on behalf of classes separated by the state they reside-California, Illinois, West Virginia, Minnesota, Pennsylvania, and Florida. Id. ¶ 138. These allegations, alone, are insufficient to allege a causal relationship between these alleged activities of Lumber Liquidators in California and each Plaintiffs’ claimed damages that occurred in various different states. While Lumber Liquidators currently operates 378 stores across the United States, only 42 of these 378 stores along with one single, additional distribution center are located in California. Crowe Decl., ¶ 5. All 42 California-based stores, in addition to its one single distribution center, are leased and none of these facilities are owned by any Lumber Liquidators entity. Id. The one single California-based distribution along with one store (of the 42 total) located on the distribution center are leased by Lumber Liquidators Services LLC. Id. The remaining 41 California-based stores are leased by Lumber Liquidators. Crowe Decl., ¶ 6. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 11 of 19 7 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Morning Star Strand Bamboo flooring (the “Product”), which is the product that is the subject of this litigation, is not designed or manufactured in California by Lumber Liquidators. Crowe Decl., ¶ 7. Lumber Liquidators purchased the product from seven different independent manufacturers located in China and one sourcing agent located outside the United States during the relevant time period. Id. Furthermore, Lumber Liquidators’ corporate offices, customer call centers are located entirely in Virginia. Crowe Decl., ¶ 8. Compliance and quality control functions for the Product are in either Virginia or at the Lumber Liquidators Representative Office in Shanghai, China. Crowe Decl., ¶ 9. Finally, Lumber Liquidators employees or representatives do not install the Product at any time, or in any state, including California. Crowe Decl., ¶ 10. Third party independent contractors install the Product. Id. Lumber Liquidators does engage in some advertising to consumers in California, but all advertising content originates from Virginia. Crowe Decl., ¶ 11. III. LEGAL STANDARD Personal jurisdiction is necessary for any judgment that imposes a personal obligation, such as a judgment for money damages. Bristol-Myers, 137 S. Ct. at 1789 (2017) (citing to Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2850, 2853 (2011)). A “lack of personal jurisdiction” is, thus, a defense to any claim for relief. Fed. R. Civ. P. 12(b)(2). “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006) (emph. added). A trial court may rule on the issue of personal jurisdiction by “relying on affidavits and discovery materials without holding an evidentiary hearing,” though “dismissal is appropriate only if the plaintiff has not made a prima facie showing of personal jurisdiction.” Stewart v. Screen Gems-EMI Music, Inc., 81 F.Supp.3d 938, 949 (N.D. Cal. 2015) (citing to Fields v. Sedgwick Assoc. Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986)). IV. LEGAL ARGUMENT The Fourteenth Amendment provides that “[n]o state shall . . . deprive any person of life, liberty, or property, without due process of law.” U.S. Const. amend. XIV. “A state court’s Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 12 of 19 8 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 assertion of jurisdiction exposes defendants to the State’s coercive power, and is therefore subject to review for compatibility with the Due Process Clause,” which “sets the outer boundaries of a state tribunal’s authority to proceed against a defendant.” Goodyear Dunlop Tires Operations, S.A., 131 S. Ct. at 2853. When there is no applicable federal statute governing personal jurisdiction, as here, the district court applies the law of the state in which the district court sits. See Fed. R. Civ. P. 4(k)(1)(A); Mavrix Photo, Inc. v. Brand Techs., Inc. 647 F.3d 1218, 1223 (9th Cir. 2011). The California long-arm statute “permits the exercise of personal jurisdiction to the full extent permitted by due process.” Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014); see Cal. Civ. Proc. Code § 410.10 (“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.”) A court may exercise either “general or all-purpose jurisdiction” or “specific or conduct- linked jurisdiction” over a nonresident defendant. Daimler AG, 134 S. Ct. at 751. “General jurisdiction exists when the “paradigm forum” is an “individual’s domicile,” or, for corporations, “an equivalent place, one in which the corporation is fairly regarded as at home.” Bristol-Myers Squibb Co., 137 S. Ct. at 1776 (citing to Daimler AG, 134 S. Ct. 746 (2014)). A corporation is generally “at home” where it is incorporated or has its principal place of business. Daimler AG, 134 S. Ct. 762-62. If general jurisdiction ultimately fails, the court may determine whether it has specific jurisdiction over the defendant. For a court to exercise specific jurisdiction, “the suit must aris[e] out of or relat[e] to the defendant’s contacts with the forum.” Bristol-Myers, 137 S. Ct. at 1780 (citing to Daimler AG, 134 S. Ct. at 754) (internal quotation marks omitted; emphasis in original). In other words, there must be “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.” Id (citing to Goodyear, 131 S. Ct. at 2846) (internal quotation marks and brackets omitted in original). A. LUMBER LIQUIDATORS IS NOT SUBJECT TO GENERAL JURISDICTION IN CALIFORNIA Even before the Supreme Court’s decisions in Bristol-Myers, Daimler, and Goodyear, the Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 13 of 19 9 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 standard to establish general jurisdiction was “fairly high.” Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986). Now, the connection must approximate physical presence and “render [the defendant] essentially at home” in the subject location. Daimler AG v. Bauman, 134 S. Ct. at 761. In Goodyear and Daimler, the U.S. Supreme Court held that a corporation normally is subject to general jurisdiction only in the states where it is incorporated or maintains its principal place of business. It is not enough that a corporation conducts business-even substantial business-within a given state. Rather, the corporation’s contacts with the state must rise to a level that renders it essentially “at home” there. Daimler AG, supra, 134 S. Ct. at 761. Lumber Liquidators is not incorporated or organized under the laws of California, does not maintain its principal place of business here, and Plaintiffs do not assert otherwise. See FAC, Lukitsch Decl., Ex. A, ¶ 15; Crowe Decl., ¶ 4. These cases, alone, foreclose general jurisdiction. A company that “operates in many places can scarcely be deemed at home in all of them.” Daimler AG, supra, 134 S. Ct. at 762. If conducting business within a state were enough for general jurisdiction, then a plaintiff could sue “in every State in which a corporation engages in a substantial, continuous, and systematic course of business.” Id. at 761. The Daimler Court rejected that result. Ibid. Lumber Liquidators does not have the requisite deliberate “presence” in California. While Lumber Liquidators currently operates 378 stores across the United States, only 42 of these 378 stores along with one single, additional distribution center are located in California. Crowe Decl., ¶ 5. All 42 California-based stores, in addition to its one single distribution center, are leased and none of these facilities are owned by any Lumber Liquidators entity. Id. The one single California- based distribution along with one store (of the 42 total) located on the distribution center are leased by Lumber Liquidators Services LLC. Id. The remaining 41 California-based stores are leased by Lumber Liquidators. Crowe Decl., ¶ 6. The overwhelming majority of Lumber Liquidators’ “presence” is outside of California. The Morning Star strand bamboo flooring, which is the product that is the subject of this litigation, is not designed or manufactured in California by Lumber Liquidators. Crowe Decl., ¶ 7. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 14 of 19 10 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Lumber Liquidators purchased the product from seven different independent manufacturers located in China and one sourcing agent located outside the United States during the relevant time period. Id. Furthermore, corporate offices, customer call centers, and the marketing department are located entirely in Virginia. Crowe Decl., ¶ 8. Compliance and quality control functions for the Product are in either Virginia or at the Lumber Liquidators Representative Office in Shanghai, China. Crowe Decl., ¶ 9. Lumber Liquidators employees or representatives do not install the Product at any time, or in any state, including California. Crowe Decl., ¶ 10. Third party independent contractors install the Product. Id. Lumber Liquidators does engage in some advertising to consumers in California, but all advertising content originated from Virginia. Crowe Decl., ¶ 11. Indeed, in this case, Plaintiffs only allege that they are “informed and believe that [Lumber Liquidators] conducts business within the United States, and more specifically within the state of California.” Such bare bones allegations of personal jurisdiction does not sufficiently demonstrate that Lumber Liquidators is “at home” in California. Accordingly, Lumber Liquidators is not subject to general jurisdiction in California because it does not have a sufficient “presence” to be “at home” in California. B. LUMBER LIQUIDATORS IS NOT SUBJECT TO SPECIFIC JURISDICTION IN CALIFORNIA The Due Process Clause also prohibits this Court from exercising specific jurisdiction over the Non-California Plaintiffs’ claims. Because “a state court’s assertion of jurisdiction exposes defendants to the State’s coercive power,” it is “subject to review for compatibility with the Fourteenth Amendment’s Due Process Clause,” which “limits the power of a state court to render a valid personal judgment against a non-resident.” Bristol-Myers, 137 S. Ct. at 1779. The primary focus of this Court’s “jurisdictional inquiry is the defendant’s relationship to the forum State.” Id. 1. There is no adequate link between California and the Non-California Plaintiffs’ claims Specific jurisdiction is appropriate only when “the suit ‘aris[es] out of or relate[s] to the Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 15 of 19 11 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 defendant’s contacts with the forum.’” Bristol-Myers, 137 S. Ct. at 1780. There must be an “adequate link between the State and the non-residents’ claims.” Bristol-Myers, 137 S. Ct. at 1781 (“What is needed . . . is a connection between the forum and the specific claims at issue”). The Non-California Plaintiffs cannot meet the “adequate link” requirement described in Bristol-Myers, because they have not alleged and cannot demonstrate that activities by Lumber Liquidators in California caused their damages or injuries in their respective states (West Virginia, Illinois, Minnesota, Pennsylvania, and Florida). Last month on June 19, 2017, immediately prior to Plaintiffs’ filing of their FAC, the U.S. Supreme Court held in Bristol-Myers, that a defendant who had research and laboratory facilities, sales representatives, and sales and marketing operations in a forum state was insufficient to justify the exercise of specific jurisdiction in the absence of an “adequate link between the State and the nonresidents’ claims.” 137 S. Ct. 1773, 1776 (2017). In Bristol-Meyers, “BMS [Bristol-Myers Squibb] did not develop Plavix in California, did not create a marketing strategy for Plavix in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California,” meaning that its activities in California were not sufficiently linked to the out-of-state plaintiffs’ claims. Id. at 1775 (“The relevant plaintiffs are not California residents and do not claim to have suffered harm in that State [California]”). Similarly, here, only Plaintiff Dana Gold is alleged to have had any discussions with Lumber Liquidators’ representatives in California, to have purchased the Product in California, to have installed the Product in California, to have noticed any alleged defects and issues in California, to have sought remedies from Lumber Liquidators and third parties in California, and to have suffered any alleged damages in California. All other Non-California Plaintiffs-including Plaintiff Emery, Plaintiff Mendez, Plaintiff Norris, Plaintiff Fursman, and Plaintiff Triana-allege facts related to states other than California. These allegations, on their own, are insufficient to form an “adequate link” between California and the non-residents’ claims. Specifically, Non-California Plaintiffs only allege that Lumber Liquidators was “responsible for, or otherwise involved in, the development, manufacture, marketing, sales, warranting, and distribution of the Product.” FAC, Decl. Lukitsch, Ex. A, ¶ 15. There are no Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 16 of 19 12 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 allegations which even remotely show that these activities took place in California. In fact, as Plaintiffs know through discovery, Morning Star strand bamboo flooring sold by Lumber Liquidators was manufactured by third-parties located in China. Crowe Decl., ¶ 7. Moreover, there are no facts demonstrating a connection between any actions of Lumber Liquidators in California and the Product purchased, installed, and damaged in various other states. Non-California Plaintiffs do not live in California and do not allege that they were damaged in California. On the contrary, their alleged damages occurred in their respective homes in other states where they purchased and installed the allegedly defective Product. Litigation over these claims depend, in part, on the Non-California Plaintiffs ability to prove legal causation linking the sales persons and managers of each respective local Lumber Liquidators store and other statements allegedly made by Lumber Liquidators to their claimed damages-all of which occurred outside California. There is no connection between any actions of Lumber Liquidators in California and the Product purchased, installed, and allegedly damaged in various other states. Thus, Non- California Plaintiffs cannot prove that there was an “adequate link” between Lumber Liquidators’ activities in California and the Non-California Plaintiffs’ claims to confer personal jurisdiction. Indeed, Non-California Plaintiffs claims would have been exactly the same even if Lumber Liquidators had no contacts with California. 2. California has no interest in the Non-California Plaintiffs’ claims In determining whether personal jurisdiction is present, a court must consider a variety of interests. These include “the interests of the forum State and of the plaintiff in proceeding with the cause in plaintiff’s forum of choice. Bristol-Myers, 137 S. Ct. at 1780. But the “primary concern” is “the burden on the defendant.” Id. “Assessing this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question.” Id. “[E]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 17 of 19 13 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sometimes act to divest the State of its power to render a valid judgment.” Id. (citing to World-Wide Volkswagen, 444 U.S. 286, 293 (1980)). Here, after Plaintiffs dismissed their nationwide class (infra, Motion, p. 3:2), Plaintiffs are now left with five (5) non-California subclasses, consisting of class members who reside outside of California. Lukitsch Decl., Ex. A, ¶ 138. These sub-classes relate to states other than California- Illinois, West Virginia, Minnesota, Pennsylvania, and Florida-and involve state-specific causes of action, individualized allegations from each specific locale, and material facts completely removed from California. While California certainly has an interest in adjudicating claims involving its own consumers, California has no interest in adjudicating alleged violations of causes of action from other states. The Due Process Clause requires that this Court divest itself from adjudicating the claims of the non-California subclasses. See Bristol-Myers, 137 S. Ct. at 1780 (“the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment”). Even after this Court dismisses the Non-California Plaintiffs’ claims against Lumber Liquidators, these Non-California Plaintiffs are not left without a remedy. The Bristol-Myers Court has already allayed these concerns. See Bristol-Myers, 137 S. Ct. at 1784 (“Our straight forward application . . . of settled principles of personal jurisdiction will not result in the parade of horribles that respondents conjure up . . . Our decision does not prevent . . . the plaintiffs who are residents of a particular State . . . [to] sue together in their home states”). Here, Non-California Plaintiffs may bring their actions in the respective federal courts which encompass where each of them reside and are available alternative forums for the adjudication of these disputes. Accordingly, because California has no interest in adjudicating the claims of the Non-California Plaintiffs, this Court has no personal jurisdiction over Lumber Liquidators in California as to Non-California Plaintiffs. /// /// /// /// /// Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 18 of 19 14 DEFENDANT LUMBER LIQUIDATOR INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /// V. CONCLUSION For all of the foregoing reasons, Defendant Lumber Liquidators respectfully requests that the Court grant this Motion and the Non-California Plaintiffs and their attendant claims, including Counts 4-8 of the FAC, be dismissed for lack of personal jurisdiction. Dated: July 10, 2017 Respectfully submitted, MCGUIREWOODS LLP By: /s/ Bethany G. Lukitsch Bethany G. Lukitsch Attorneys for Specially Appearing Defendant Lumber Liquidators, Inc. Case 3:14-cv-05373-TEH Document 172 Filed 07/10/17 Page 19 of 19 DECLARATION OF CHRISTOPHER N. CROWE IN SUPPORT OF DEFENDANT LUMBER LIQUIDATOR INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MCGUIREWOODS LLP David S. Reidy (SBN 225904) dreidy@mcguirewoods.com Two Embarcadero Center, Suite 1300 San Francisco, CA 94111 Telephone: 415.844.9944 Facsimile: 415.844.9922 Bethany G. Lukitsch (SBN 314376) blukitsch@mcguirewoods.com Diane Flannery (Pro Hac Vice) dflannery@mcguirewoods.com 800 East Canal Street Richmond, Virginia 23219-3916 Telephone: 804.775.1000 Facsimile: 804.775.1061 Attorneys Specially Appearing for Defendant Lumber Liquidators, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA, on behalf of themselves and all others similarly situated, Plaintiffs, vs. LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES1 through 200, inclusive, Defendants. CASE NO. 3:14-cv-05373-TEH DECLARATION OF CHRISTOPHER N. CROWE IN SUPPORT OF DEFENDANT LUMBER LIQUIDATOR, INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION [Filed concurrently with Motion to Dismiss for Lack of Personal Jurisdiction; Declaration of B. Lukitsch; [Proposed] Order] Date: August 14, 2017 Time: 10:00 a.m. Crtrm.: 12 Judge: Hon. Thelton E. Henderson Complaint Filed: December 8, 2014 Case 3:14-cv-05373-TEH Document 172-1 Filed 07/10/17 Page 1 of 3 Case 3:14-cv-05373-TEH Document 172-1 Filed 07/10/17 Page 2 of 3 Case 3:14-cv-05373-TEH Document 172-1 Filed 07/10/17 Page 3 of 3 DECLARATION OF BETHANY G. LUKITSCH IN SUPPORT OF DEFENDANT LUMBER LIQUIDATOR INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MCGUIREWOODS LLP David S. Reidy (SBN 225904) dreidy@mcguirewoods.com Two Embarcadero Center, Suite 1300 San Francisco, CA 94111 Telephone: 415.844.9944 Facsimile: 415.844.9922 Bethany G. Lukitsch (SBN 314376) blukitsch@mcguirewoods.com Diane Flannery (Pro Hac Vice) dflannery@mcguirewoods.com 800 East Canal Street Richmond, Virginia 23219-3916 Telephone: 804.775.1000 Facsimile: 804.775.1061 Attorneys for Defendant Lumber Liquidators, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA, on behalf of themselves and all others similarly situated, Plaintiffs, vs. LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES1 through 200, inclusive, Defendants. CASE NO. 3:14-cv-05373-TEH DECLARATION OF BETHANY G. LUKITSCH IN SUPPORT OF DEFENDANT LUMBER LIQUIDATOR, INC.’S NOTICE OF AND MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION [Filed concurrently with Motion to Dismiss for Lack of Personal Jurisdiction; Declaration of Chris Crowe; [Proposed] Order] Date: August 14, 2017 Time: 10:00 a.m. Crtrm.: 12 Judge: Hon. Thelton E. Henderson Complaint Filed: December 8, 2014 Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 1 of 76 1 DECLARATION OF BETHANY G. LUKITSCH IN SUPPORT OF DEFENDANT LUMBER LIQUIDATOR INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURT AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF BETHANY G. LUKITSCH I, Bethany E. Lukitsch, declare as follows: 1. I am an attorney duly licensed to practice law before all courts of the State of California and the U.S. District Court for the Northern District of California and am one of the attorneys of record for Defendant Lumber Liquidators, Inc. (“Lumber Liquidators”). I have reviewed the file and am familiar with its contents, and as such I have personal knowledge of the facts set forth herein. I make this declaration in support of Lumber Liquidators’ Motion to Dismiss for Lack of Personal Jurisdiction. 2. Attached hereto as Exhibit A is a true and correct copy of Plaintiffs’ Fourth Amended Class Action Complaint. 3. Attached hereto as Exhibit B is a true and correct copy of the United States Supreme Court’s opinion in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, et al., 137 S. Ct. 1773 (2017) decided on June 19, 2017. I declare under the penalty of perjury under the laws of the United States and the State of California that the foregoing is true and correct. Executed this 10th day of July, 2017, in Richmond, Virginia. By: /s/ Bethany G. Lukitsch Bethany G. Lukitsch Attorney for Defendant Lumber Liquidators, Inc. Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 2 of 76 EXHIBIT A Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 3 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Jeffrey B. Cereghino, SBN #099480 Email: jbc@rocklawcal.com Matt Malone, SBN #221545 Email: mjm@rocklawcal.com ROCK LAW LLP 101 Montgomery Street, Suite 1800 San Francisco, California 94104 Telephone: (415) 433-4949 Charles J. LaDuca, Admitted Pro Hac Vice Email: charles@cuneolaw.com Brendan Thompson, Admitted Pro Hac Vice Email: brendant@cuneolaw.com CUNEO GILBERT & LaDUCA, LLP 4725 Wisconsin Avenue, NW, Suite 200 Washington, DC 200016 Telephone: (202) 789-3960 [Additional Counsel Appear on Signature Page] Attorneys for Plaintiffs and Proposed Classes UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA, on behalf of themselves and all others similarly situated, Plaintiffs, v. LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES 1 through 200, inclusive, Defendants. No. 3:14-cv-05373-TEH FOURTH AMENDED CLASS ACTION COMPLAINT CLASS ACTION JURY TRIAL DEMAND The Honorable Thelton E. Henderson Complaint Filed: December 8, 2014 Through the undersigned counsel, Plaintiffs DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA on behalf of themselves and all others similarly situated (“Plaintiffs”), file this fourth amended class Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 1 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 4 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 action complaint against Defendant Lumber Liquidators, Inc. (“Defendant” or “Lumber Liquidators”). On personal knowledge of their own circumstances and upon investigation and information and belief of their counsel, Plaintiffs aver the following: INTRODUCTION 1. Defendant develops, manufactures, advertises, sells, and distributes bamboo flooring under the brand name Morning Star Strand Bamboo Flooring (the “Product”) throughout the United States for installation in homes and other structures. 2. Defendant markets and warrants that the Product is durable and meets industry standards, and markets and warrants that the Product has a thirty (30) year warranty. Defendant provided a reasonable expectation to consumers and the industry that the Product would have a usable lifetime of at least thirty (30) years. 3. Contrary to Defendant’s advertising and representations, the Product is subject to premature cracking, splitting, warping, and shrinking, all well before the warranted useful life. 4. The Product’s various modes of failure potentially cause damage to other building components and render the Product susceptible to premature failure. 5. Plaintiffs bring this action to seek redress for damages caused by Defendant’s wrongful conduct. JURISDICTION 6. This Court has jurisdiction over this case under 28 U.S.C. 1332(d)(2) in that: (1) this action is a class action with more than one hundred (100) Class Members; (2) Defendant Lumber Liquidators, Inc. is a Delaware corporation, based in the state of Virginia, and is thus a citizen of the state of Delaware; (3) Plaintiffs and all Class Members are United States citizens; and (4) the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 2 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 5 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 VENUE 7. Venue in this Court is proper: (1) pursuant to 28 U.S.C. 1391(a)(1) in that Defendant does sufficient business in this District to subject it to personal jurisdiction herein; and (2) pursuant to 28 U.S.C. 1391(a)(2) in that a substantial part of the events or omissions giving rise to the claim occurred in this District. INTRADISTRICT VENUE 8. Venue in this Division of the Northern District is proper because a substantial part of the events or omissions which give rise to the claim occurred in Contra Costa County. PARTIES 9. Plaintiff Dana Gold (“Plaintiff Gold”) is a California resident and owns a home located at 1192 Bacon Way in Lafayette, California. 10. Plaintiff Tammy Emery (“Plaintiff Emery”) is a West Virginia resident and owns a home located at 219 Picket Avenue in Inwood, West Virginia. 11. Plaintiff Edwin Mendez (“Plaintiff Mendez”) is an Illinois resident and owns a home located at 2154 Kemmerer Lane in Bollingbrook, Illinois. 12. Plaintiff Laura Norris (“Plaintiff Norris”) is a Minnesota resident and owns a home located at 7327 West 110th Street in Bloomington, Minnesota. 13. Plaintiff Donald Fursman (“Plaintiff Fursman”) is a Pennsylvania resident and owes a home located at 626 Trimble Blvd. in Brookhaven, Pennsylvania. 14. Plaintiff John Triana (“Plaintiff Triana”) is a Florida resident and owns a home located at 24 Captiva Drive in Ponte Verde Beach, Florida. 15. Defendant Lumber Liquidators, Inc. is a Delaware corporation with its principal place of business in Toano, Virginia. Plaintiffs are informed and believe that Defendant conducts business within the United States, and more specifically within the state of California. Also on information and belief, Plaintiffs allege that Defendant was responsible for, or Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 3 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 6 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 otherwise involved in, the development, manufacture, marketing, sales, warranting and distribution of the Product. 16. Plaintiffs are ignorant of the true names and capacities of Defendants sued herein as Does 1 through 100, inclusive, (“Doe Defendants”) and therefore sues these Doe Defendants by fictitious names. Plaintiffs will amend this Complaint to allege the true names and capacities of these fictitiously-named Doe Defendants when they are ascertained. Each of the fictitiously-named Doe Defendants is responsible for the conduct alleged in this Complaint and Plaintiffs’ damages were actually and proximately caused by the conduct of the fictitiously named Doe Defendants. 17. Plaintiffs are informed and believe, and on that basis allege, that each of these Doe Defendants was the agent, joint venture, and/or employee of Defendant and/or the Doe Defendants, and in doing the things hereinafter alleged, were acting within the course and scope of the agency, joint venture, and employment with the advance knowledge, acquiescence, or subsequent ratification of Defendant and each and every other Doe Defendant. FACTUAL ALLEGATIONS B. Plaintiff Gold’s Factual Allegations 18. Plaintiff Gold is a California resident and owns a home located at 1192 Bacon Way in Lafayette, California. 19. Before purchasing the Product, Plaintiff Gold visited her local Lumber Liquidators store in Concord, California. There, she spoke with the sales manager who convinced her to purchase the Product rather than traditional hardwood flooring. 20. In making his sales pitch, the sales manager described how the Product was made, discussed the quality of the materials used, and discussed the high quality of manufacture. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 4 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 7 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 21. The sales manager informed Plaintiff Gold that the Product was harder and more durable than real wood, and that, if she dropped a can of cat food on the Product, it would not dent, unlike hardwood, and that the Product was virtually scratch and dent resistant. 22. The sales manager also informed Plaintiff Gold that the Product was at least two-and-a-half times stronger than Red Oak. 23. The sales manager also informed Plaintiff Gold that the Product had a lengthy warranty but she was not given the warranty or informed of its terms before her purchase. Although Plaintiff Gold does not recall the length of the warranty, she does recall it was long and implied to her that the Product would last that length of time. 24. In reliance on the information she had been given by Defendant, Plaintiff Gold purchased the Product and, in early October 2013, Plaintiff Gold used the services of a licensed flooring contractor to install the Product in her home. Within weeks of installation, and while her home remained unoccupied, Plaintiff Gold observed initial defects with the Product. She observed the Product was scratching easily and splintering. 25. She notified Defendant by phone on October 30, 2013. The customer service representative requested she complete a “General Disclosure Statement” to begin the claims process. Plaintiff Gold completed the General Disclosure Statement, and mailed it to Defendant’s claims department. 26. On or about December 2, 2013, Richard King of Inspect Solutions, a company retained by Defendant, inspected the Product installed at Plaintiff Gold’s home. He drafted a report on or about December 6, 2013, in which he concluded that Plaintiff Gold and the installers were completely at fault and no Product defects existed. 27. The Product continues to manifest defects to the present day, including warping, splitting, buckling, and shrinking. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 5 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 8 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28. On September 4, 2014, Plaintiff Gold placed Defendant on notice of these defects via a Consumers Legal Remedies Act notice (Cal. Civil Code §1782), attached as Exhibit A hereto. C. Plaintiff Emery’s Factual Allegations 29. Plaintiff Emery is a West Virginia resident and owns a home located at 219 Picket Avenue in Inwood, West Virginia. 30. Before purchasing the Product, Plaintiff Emery was prompted by a local television advertisement about the cost of bamboo flooring to visit her local Martinsburg Lumber Liquidators store. At the store, she viewed samples of the Product and spoke with the manager, William S. Dyess, about the Product. 31. Mr. Dyess informed Plaintiff Emery that the Product was “made from the hardest wood.” 32. Mr. Dyess provided Plaintiff Emery with a demonstration of the hardness of the Product by hitting a sample of the Product with another piece of wood to demonstrate its durability. 33. Plaintiff Emery also reviewed a brochure about the Product and was given a six- inch sample to take home with her. 34. Plaintiff Emery was also told the Product had a 30 year warranty but did not review the warranty terms before purchase. She understood that the 30-year warranty implied that the Product would last for that period of time. 35. On July 10, 2014, in reliance on the demonstration, samples, and information she had been provided by Defendant, Plaintiff Emery purchased 517 square feet of the Product from Lumber Liquidators. 36. On August 4, 2014, the Product was installed in her living and dining rooms and two hallways. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 6 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 9 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 37. The installation was conducted by Falling Water Floor, who was referred to Plaintiff Emery by Defendant. 38. The cost of the installation was $4,794.59. 39. Within only a few weeks after installation, Plaintiff Emery noticed that the Product was delaminating, warping, splitting, shrinking, and scratching, and generally deteriorating in various places. 40. On four occasions, Falling Water Floor Installation had to make repairs to Plaintiff Emery’s floor. 41. On December 15, 2014, Plaintiff Emery contacted Defendant to put them on notice that her floor was failing and that Falling Water Floor’s repair efforts were futile. Instead of immediately taking reasonable steps to replace Plaintiff Emery’s flooring, in a letter presumably incorrectly dated “January 5, 2015,” Defendant’s Customer Care Team stated that they “assigned her claim to James L.” 42. The Product continues to manifest defects to the present day. 43. Plaintiff Emery put Defendant on notice of her claim under the West Virginia Consumer Credit and Protection Act, W. Va. Code §§ 46A-6 et seq., in a letter dated February 10, 2015, attached as Exhibit B, hereto. D. Plaintiff Mendez’s Factual Allegations 44. Plaintiff Mendez is an Illinois resident and owns a home located at 2154 Kemmerer Lane in Bolingbrook, Illinois. 45. Before purchasing the Product, Plaintiff Mendez visited Defendant’s website and his local Lumber Liquidators store in Bollingbrook, Illinois (Store 1086). 46. Plaintiff Mendez recalls that Defendant’s website advertised the Product as “much harder than most hardwoods.” Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 7 of 59Case 3:14-cv-05373-TEH Document 172-2 il 7/10/ 10 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 47. At his local store, Plaintiff Mendez spoke with various employees who stated that the Product was “much stronger than oak and most hardwoods” and that the Product “wouldn’t crack, wouldn’t bend,” and that it was the “strongest, best quality product.” 48. Also at his local store, Plaintiff Mendez observed a store display and demonstration in which store personnel attempted to put a nail through a board of the Product to demonstrate its durability. Between August 9 and September 18, 2014, in reliance on the store display, the demonstration, and the information he had been given by Defendant, Plaintiff Mendez purchased approximately 1,434 square feet of the Product from his local Lumber Liquidators store located in Bollingbrook, Illinois (Store 1086). 49. Plaintiff Mendez noticed that the invoices he was given referred to a warranty but did not receive a copy of the warranty. 50. Installation was conducted by GS Home Remodels and was completed around mid-October 2014. Plaintiff Mendez spent approximately $9,117-$3,022.50 for labor, $5,634.34 for materials and other installation supplies from Defendant, and approximately $460 for replacement of trim that had to be removed in order to install the Product. 51. In addition to becoming sick from the smells associated with his new flooring, in or around September 2014, while installation of the Product was ongoing, Plaintiff Mendez noticed that the glue sold to him by Defendant provided little if any adhesion between the flooring and subfloor. 52. Plaintiff Mendez notified Defendant of this issue and, and at the request of the Defendant’s “Customer Care Team,” submitted a General Disclosure Statement. In response, as communicated by Customer Relations Specialist “Maggie T.,” Defendant denied all responsibility for this issue, attributing the problems to insufficient adhesive coverage. After Plaintiff Mendez continued to complain about the glue issue, Defendant offered Plaintiff Mendez $500 to resolve the specific issue. Plaintiff Mendez signed a release solely related to the glue issue on October 8, 2014. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 8 of 59Case 3:14-cv-05373-TEH Document 172-2 il 7/10/ 11 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 53. Soon after he resolved the glue issue, Plaintiff Mendez began to notice that the flooring was buckling and shrinking in several areas. 54. The Product continues to manifest defects to the present day. E. Plaintiff Norris’ Factual Allegations 55. Plaintiff Norris is a Minnesota resident and owns a home located at 7327 West 110th Street in Bloomington, Minnesota. 56. Before purchasing the Product, Plaintiff Norris was prompted by a local television advertisement regarding the flooring products sold at Lumber Liquidators to contact Defendant. 57. Plaintiff Norris contacted Defendant by telephone to learn about the different flooring options. During the call, Plaintiff Norris inquired about hardwood, laminate, and bamboo flooring. The customer service representative advised Plaintiff Norris to purchase the Product, stating that it was the most durable option. 58. Soon after speaking with the Defendant’s customer service representative, Plaintiff Norris visited her local Lumber Liquidators store in Burnsville, Minnesota. There, she spoke with a sales associate who explained to her that the Product is much stronger than traditional hardwood flooring. 59. In order to demonstrate the durability of the Product, the sales associate showed Plaintiff Norris a large, approximately 6’ x 8’ sample of the Product, which was located next to the main entrance of the store. 60. As part of his sales pitch, the sales associate explained that Lumber Liquidators stands behind its products and that the Product is supported by a warranty. The sales associate, however, did not review the terms of the warranty with Plaintiff Norris or provide a copy for Plaintiff Norris to review prior to purchasing the Product. 61. In August 2014, and in reliance on the information she had been given by Defendant over the telephone and in the store, Plaintiff Norris purchased the Product. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 9 of 59Case 3:14-cv-05373-TEH Document 172-2 il 7/10/ 12 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 62. Plaintiff Norris used the services of a licensed contractor to install the Product in her home in September 2014. 63. Within two months of installation, Plaintiff Norris observed that the Product was cupping, shrinking, warping, and splitting. 64. In or around November 2014, Plaintiff Norris contacted Defendant via telephone regarding the problems she was experiencing with the Product. The customer service representative requested that Plaintiff Norris complete a “General Disclosure Statement” to begin the claims process. Plaintiff Norris completed the General Disclosure Statement, and mailed it to Defendant’s claims department. F. Plaintiff Fursman’s Factual Allegations 65. Plaintiff Fursman is Pennsylvania resident and owns a home located at 626 Trimble Blvd. in Brookhaven, Pennsylvania. 66. Before purchasing the Product, Plaintiff Fursman visited his local Lumber Liquidators store in Claymont, Delaware on two occasions. Plaintiff Fursman’s first visit was in July 2014 and his second visit was in August 2014. 67. During his first visit, Plaintiff Fursman spoke with a Lumber Liquidators sales representative who emphasized the high quality and durability of the Product as well as the superior performance of the Product as compared to other hardwood flooring products. 68. The sales representative informed Plaintiff Fursman that the Product was “harder and more durable than real wood,” “remarkably tougher, harder, stronger than normal hardwoods,” “more water resistant than normal hardwood floors,” “superior and better quality than other hardwoods,” and “came with a thirty year warranty.” 69. In touting the hardness and durability of the Product, the sales representative provided Plaintiff Fursman with a demonstration by hitting a sample of the Product with an object, which did not dent the flooring sample. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 10 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 13 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 70. Plaintiff Fursman also reviewed product brochures for the Product as well as other hardwood flooring products, which he took home. 71. In addition, Plaintiff Fursman was given an eight to ten inch sample of the Product to take home. 72. Plaintiff Fursman returned to his local Lumber Liquidators store in Claymont, Delaware for his second visit in August 2014. 73. During this second visit, Plaintiff Fursman spoke with a Lumber Liquidators sales representative who again emphasized the high quality and durability of the Product as well as the superior performance of the Product as compared to other hardwood flooring products. 74. The sales representative reiterated the same sales pitch as the first sales representative and informed Plaintiff Fursman that the Product was harder and more durable than real wood, remarkably tougher, harder, stronger than normal hardwoods, more water resistant than normal hardwood floors, was superior and better quality than other hardwoods, and came with a thirty year warranty. 75. Plaintiff Fursman was given an additional eight to ten inch sample of the Product to take home. 76. After completing his second visits to a Lumber Liquidators store, Plaintiff Fursman reviewed the product brochures he took home as well as the information on Defendant’s website regarding the Product. The information reviewed and relied upon by Plaintiff Fursman included, but was not limited to, the following statements: a. “They’re finely crafted to ensure they’re free of defects.” b. “Each Morning Star floor is manufactured to be exceptionally durable so it withstands the rigors of everyday life.” c. “Morning Star Bamboo is two to two-and-a-half times harder than red oak, so it holds up well to “pretty much anything you can put it through.” Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 11 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 4 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 d. “To make strand bamboo, shredded bamboo fibers are compressed under extreme heat and pressure. This manufacturing process yields flooring that is even harder and denser than traditional bamboo floors.” e. “Morning Star Bamboo Flooring is one of the best bamboo floors on the market today. It is produced from old growth bamboo reeds that are at least 4 years old, thereby increasing hardness. Morning Star Bamboo Flooring creates a naturally beautiful and ecologically friendly product that evokes a feeling of luxury.” 77. After his visits to his local Lumber Liquidators stores, Plaintiff Fursman also reviewed the Product’s limited warranty and installation instructions. 78. Plaintiff Fursman also reviewed and relied on Defendant’s representations that its Product meets accepted industry standards, including ASTM International. 79. Based on the samples, demonstration, and information provided by Defendant in its brochures, on its website, and by its sales representatives, including the Product’s limited warranty, installation instructions, and marketing and advertising materials, Plaintiff Fursman, purchased 597.30 square feet of the Product from Defendant on or around September 30, 2014. He paid $2,802.54 for the Product. 80. Prior to installation, and in accordance with the installation instructions, the Product was acclimated in the room in which the Product was to be installed from date of purchase, September 30, 2014, until the last week of October 2014. 81. After the product was properly acclimated in accordance with the installation instructions, Plaintiff Fursman installed the Product in his home’s living room, dining room, and kitchen during the period of October 23-29, 2104. 82. After installation, Plaintiff Fursman observed that the Product was excessively shrinking throughout his home. The shrinkage was so severe that it created large gaps between the Product slats and the baseboards. In some areas, the shrinkage produced three-inch gaps between the Product and the baseboards. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 12 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 15 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 83. On or around March 12, 2014, as a result of the excessive shrinkage of the Product, Plaintiff Fursman contacted his local Lumber Liquidators store, where he purchased the Product, regarding the defective nature of the Product. He was instructed by his local Lumber Liquidators store to call (800) HARDWOOD and report his claim. 84. On or around March 12, 2014, Plaintiff Fursman called (800) HARDWOOD and spoke to a Lumber Liquidators claims representative about the premature failure of the Product. 85. On April 13, 2015, Plaintiff Fursman received a letter from Defendant’s Customer Care Team indicating that his claim had been assigned to a customer care representative. 86. Shortly thereafter, Plaintiff Fursman properly and completely filled out Defendant’s warranty claim form and submitted it to Defendant along with all of the requested information and photographs of the Product. 87. On May 11, 2015, Plaintiff Fursman received a letter from Defendant denying his warranty claim and indicating that the gapping issue he was experiencing was the result of either inadequate installation or environmental factors in his home. The letter further stated that because the gapping is typically not a manufacturing issue, Defendant does not order an inspection of the flooring. G. Plaintiff Triana’s Factual Allegations 88. Plaintiff Triana is a Florida resident and owns a home located at 24 Captiva Drive in Ponte Vedra Beach, Florida. 89. Before purchasing the Product, Plaintiff Triana considered several retailers, who sent representatives to his home to take measurements and discuss various flooring options. 90. With a dog living in the home and his grandchildren visiting frequently, Plaintiff Triana’s most important criteria for the new floor included stability and hardness/durability. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 13 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 16 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 91. In researching various flooring materials and brands online, Plaintiff Triana looked into the Product on Defendant’s website, where he recalls reading claims touting the Product’s hardness relative to other flooring materials and other bamboo flooring products. 92. In addition, Defendant’s representatives with whom Plaintiff Triana spoke at his home and later at the Jacksonville, Florida store recommended the Product as the best option for his needs. 93. These individuals represented that the Product was very stable and very hard- two-and-a-half times harder than hardwood flooring. 94. Furthermore, they represented that the Product was “carbonized” and heat- treated, under extreme pressure, to remove natural oils in the material making it much harder than traditional bamboo flooring. 95. A salesperson in the Jacksonville store provided a demonstration in support of these representations, hitting the Product with a hammer to show it would not dent. 96. Plaintiff Triana also recalls representations by Defendant that the Product was protected by a 30 year warranty, though he did not receive a copy of the warranty, nor was he made aware of its specific terms, before his purchase of the Product. However the length of the warranty implied that the Product would last. 97. In reliance on Defendant’s representations, Plaintiff Triana purchased approximately 820 square feet of the Product from the Jacksonville Lumber Liquidators store in April and May 2012, at a total cost of $4,726.38. 98. Defendant provided Plaintiff Triana a list of three approved contractors who could install the flooring, and, based on the specific recommendation of the salesperson who sold him the flooring, Plaintiff Triana selected Coastline Customs Floors, who installed the flooring in his home at a total (labor) cost of $3,075.41. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 14 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 17 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 99. Not long after the Product was installed, Plaintiff Triana began noticing that the Product was cracking, splitting, peeling, and cupping, making the floor increasingly unattractive and unsafe. 100. In or around January 2014, Plaintiff Triana notified Defendant of these problems. The in-store representative with whom he spoke provided no assistance. He also called Defendant’s main customer service group, which responded by assigning his claim to “Natasha D.” and asking him to complete a “General Disclosure Statement.” Plaintiff Triana filled out and returned this form on or around March 3, 2014. 101. Rather than assessing Plaintiff Triana’s claim based on that information or its further investigation, Defendant responded that Plaintiff Triana would need to hire an inspector to come to his home, assess the problems, and provide the results to Defendant (all at Plaintiff Triana’s own expense). 102. The Product continues to manifest the aforementioned defects to the present day. H. Product Manufacturing Process and Representations 103. The Product is made by slicing bamboo into strips, cutting the strips into desired widths, immersing the strips in an acid solution to eliminate sugars and starch, (in some cases) staining the material, binding it together into planks using an adhesive, and finally applying a curing lacquer. Plaintiffs are informed and believe that Defendant has been manufacturing and selling the Product since approximately 2008. Defendant has sold the Product to thousands of consumers throughout the United States, including California. The Product was and is marketed and sold for use in homes and other structures. 104. Defendant concealed from and/or failed to disclose to Plaintiffs and Class Members the defective nature of the Product. a. Plaintiffs are informed and believe that Defendant used a variety of methods to communicate representations about the durability and quality of the Product and Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 15 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 18 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 about its warranty to the general public and contractors in the flooring installation business. These representations were published on Internet sites such as YouTube, on Defendant’s website, at trade, building, and home shows typically open to the general public and contractors who service ultimate consumers of the Product, and at Defendant’s product retail stores. Defendant communicated a common and repeated theme regarding the Product: (i) “Morning Star Bamboo is two to two-and-a-half times harder than red oak, so it holds up well to “pretty much anything you can put it through.” (ii) “To make strand bamboo, shredded bamboo fibers are compressed under extreme heat and pressure. This manufacturing process yields flooring that is even harder and more dense than traditional bamboo floors.” (iii) “Morning Star Bamboo Flooring … is produced from old growth bamboo reeds that are at least 4 years old, thereby increasing hardness. Morning Star Bamboo Flooring creates a naturally beautiful and ecologically friendly product that evokes a feeling of luxury.” 105. Defendant states that its flooring meets accepted industry standards, stating on its website: “QUALITY GUARANTEE: This Flooring is constructed and tested to meet or exceed industry standards for emissions” -- including ASTM 4066 (wear resistance), ASTM 3359 (Finish Adhesion) and ASTM 4442 (Moisture Content). See http://www.lumberliquidators.com/assets/images/product_page/Morning_Star_10023638_HS_ Str_Antique.pdf (citing various “Technical Specifications”). 106. The hardness of the Product is a misleading indicator of whether it can withstand scratching and denting better than other hardwood flooring products. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 16 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 19 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 107. Defendant knew that it did not manufacture the Product in such a way as to withstand scratching and denting better than other hardwood flooring products, such as red oak. 108. By focusing on the hardness of the Product rather than the other factors that cause the defects experienced by Plaintiffs and Class Members, Defendant intended to mislead consumers into believing its representations that the Product “does not scratch easily” and is “virtually scratch and dent resistant.” These statements were and are false and misleading because Defendant deliberately failed to disclose that factors other than hardness will result in the Product being easily scratched and dented. 109. Defendants also failed to disclose that its manufacturing process did not create a product that could prevent scratches and dents better than other hardwood flooring products. 110. Defendant represents that the Product meets ASTM 4442, the standard for moisture content. But ASTM 4442 actually prescribes the process for drying wood and wood particle material but does not prescribe the acceptable moisture content of the final, dried product. 111. Indeed, bamboo, like wood flooring products, is hydroscopic, meaning it gains and loses moisture as the air around it gains and loses moisture. 112. The typical moisture content in wood flooring products is 6% to 9%. See http://www.hardwoodfloorsmag.com/installation/understand-wood-floor-moisture-content- dimensional-change.html (last visited December 16, 2015); http://www.greenbuildingsupply.com/Not-All-Bamboo-is-Created-Equal (last visited December 16, 2015). 113. By claiming that the Product meets moisture content standard ASTM 4442, Defendant is deliberately misleading consumers to believe that ASTM 4442 means that the Product’s moisture content is within an acceptable range. 114. Defendant’s installation instructions provide that the Product may contain up to 12% moisture at installation - 3% more than the expected standard. See Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 17 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 20 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 http://www.lumberliquidators.com/assets/images/installation/morning_star_clic.pdf (last visited December 16, 2015). 115. Defendant fails to disclose to consumers that the Product may contain an elevated moisture content such that even after acclimatization it will fail of its essential purpose and crack, cup, warp, gap, shrink, and otherwise degrade in a defective manner. 116. Defendant continues to advertise and sell the Product for use in homes and other structures, omitting to disclose to Plaintiffs and Class Members, their agents, or contractors material facts concerning the Product, including, but not limited to, concealing that the Product was defectively formulated, was and is susceptible to warping, splitting, shrinking, and splintering, does not otherwise perform as represented, and fails far in advance of its purported thirty year warranted life. All of these facts are material to a reasonable consumer. The Product did not perform in accordance with the reasonable expectations of Plaintiffs and Class Members in that it was not durable and suitable for use as a flooring system in their homes and other structures. 117. The Product is a manufactured wood product that is defectively designed, tested, and manufactured, and will warp, buckle, splinter, and unreasonably scratch and dent when used in its intended manner. These failures are common in the Product regardless of when, where, or how it is installed. 118. As a result of Defendant’s misconduct, Plaintiffs and Class Member have suffered actual damages in that the flooring in their homes and other structures has prematurely failed and will continue to do so, potentially damaging other building elements, causing continuous and progressive damage to property, and requiring Plaintiffs and Class Members to expend thousands of dollars to repair or replace the flooring long before the expiration of the “useful life” of the Product as represented by Defendant. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 18 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 21 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 119. Due to the defective nature of the Product, it is not sufficiently durable to serve as flooring. The following photographs depict some of the problems Plaintiffs and others have experienced with the Product. 120. Because of the relatively small size of the typical damages, and the modest resources of most homeowners and of the individual Class Members, it is unlikely that most Class Members could afford to seek recovery against Defendant on their own. A class action is Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 19 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 22 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 therefore the only viable, economical, and rational means for Class Members to recover from Defendant for the damages they have caused. I. Defendant’s Knowledge of and Notice that its Flooring was Defective 121. Defendant is well aware of the problems related to the cracking, splitting, warping, cupping, scratching, and denting of the Product. It has received warranty claims and complaints from customers (like those submitted by the Named Plaintiffs). In addition, websites such as www.mythreecents.com and www.consumeraffairs.com contain complaints about the Product dating back to 2011 and 2012 - which further continue to put the Defendant on notice concerning the defective nature of the Product. 122. Upon information and belief, Defendant pays to be a member of www.consumeraffairs.com, which means that it is notified of each complaint and has the option of responding to each complaint. A review of this website demonstrates that Defendant does review and respond to customer posts on www.consumeraffairs.com. 123. The following is an example of a complaint about the Product from October 2, 2013 on www.consumeraffairs.com/homeowners/lumber_liquidators.html?page=12 (last visited December 16, 2015): judy of Ione, CA Oct. 2, 2013Verified Reviewer We purchased dark stranded bamboo flooring from Lumber Liquidators. We were very particular to request a very durable floor that would not scratch easily and had the best resistance for moisture spills etc. This flooring was highly recommended by their salesman as one of the most durable. We installed this flooring throughout our entire downstairs living room, dining room, and kitchen. This flooring now has scratches everywhere!! Scratches from everything and anything that is slid across the floor such as: unoccupied bar stools that have protective plastic caps, TV trays that were only slid forward enough to allow us to eat while sitting on the couch, and even an empty 5 gallon bucket when slid a couple of inches. There are many, many scratches all over the house and we have no idea how they got there. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 20 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 23 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 All of these scratches show up as bright white lines on the dark flooring which obviously was not treated well enough to make the surface as durable as we were told. We have no pets, no children at home, no high heels, and all of the heavy furniture have the felt pads to protect from scratching the floor. The flooring was only installed in April/May of this year. We have a thirty year warranty on the flooring and have called the Lumber Liquidators customer services department to complain about the flooring and see what they will do to honor the product warranty. We are waiting for Lumber Liquidators to get back to us. How disappointing to spend so much money on a product recommended by Lumber Liquidators sales and yet it absolutely does not meet the standards we requested. DO NOT BUY FROM LUMBER LIQUIDATORS!!!! They sell less than quality materials!!!! 124. The following complaints are also from www.consumeraffairs.com and relate to complaints made to Defendant between 2011 and 2013: I purchased $6000 of morningstar bamboo from Lumber Liquidators in Jan 2012 and $3000 more in adjacent room on same floor in April 2012. Approximately 6 months after installation the $6000 floor began to show gaps and shrinkage. The 2nd installation has been trouble free. I contacted the LL store and they said not our problem. Contacted LL customer service and they told me it was my fault due to humidity levels in my home. If that were the case the $3000 floor would also show gaps and shrinkage since they are next to each other! Their salesman never mentioned any problem with this wood and humidity. Salesman said the wood was "tougher than oak". What a lie! It scratches plenty! They offered $200 on a $1000 repair contingent on me waving any future claims. What a joke!1 Can someone please tell me if there is a group from here in Texas that is getting together to bring a class action against LL? We purchased 1200 sq. ft. of Morning Star Bamboo Flooring in November and it is cupping EVERYWHERE. We came home from being gone over the weekend and now it is actually buckling up. From EVERYTHING I have read, it is defective product we were sold and do NOT expect to get any help from 1 https://www.consumeraffairs.com/homeowners/lumber_liquidators.html?page=9 (last visited December 16, 2015). Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 21 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 24 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 LL. As of now, they have been completely useless in taking care of my problem floor. I WILL continue to go through the motions to hopefully get my money for the flooring refunded and the cost to have it pulled up reimbursed!!! I do NOT want this junk in my home. If anyone has information, please forward it to me. When you hire a lawyer for something like this, does LL have to pay the attorney or do you have to? I do NOT have the money to hire and pay an attorney.2 Lost first level contents and flooring from Sandy. January 2013, made purchase of 800 sq ft of Morning Star Bamboo, $3661.78. Had their installers, Palermo to home to inspect and recommend how and when to install (another $1100). Had delivery, allowed floor to acclimate for specified 3-5 days. Their installers returned to install. By end of March, had some gaps. Called Lumber Liquidators, they called installers. Was assured that with full year of warranty for installation and product, allow it to go thru summer months. July noticed scratches. While scratches are normal, these were white, not the bamboo color. Made claim to LL, was told to mail balance of floor for inspection. They received, said floor not at fault, never returned floor. Dec 2013, gaps grew to over 1/2 inch, separation from walls. Called Lumber Liquidators. Made claim on Dec. 2, repeated claim on Dec 13, 2013. January 17th, began follow up and no one called us. Googled issue online. Found we were one of many. Inspections began from LL and their installers, Palermo. They agreed separation not normal - many homes in area with issue. Went to two of the LL stores. They agreed with issue and fault of floor and had numerous issues with customers and made changes to how they sell and allow acclimation of product. Three inspections were done, no issue at home cited. March inspection found moisture level now low in home. They are now blaming us. No one has record of 3 other inspections. Our gaps are all thru home from the front door on. As large as 1 inch in some spots. Unsightly and embarrassing. We had none of these issues with our floor before Sandy in its 5 year life. It is not our home, it is the product. Lumber Liquidators knows it. Every salesperson you ask in their store in my NY area cautions the purchaser not to buy this product. I don't know if the product was too wet when manufactured, or too dry or from endangered Tiger habitat as 2 https://www.consumeraffairs.com/homeowners/lumber_liquidators.html?page=10 (last visited December 16, 2015). Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 22 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 5 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 stated online, but we are so frustrated and embarrassed by our home's floor every day.”3 I bought 1000 square feet of Morning Star Bamboo from Lumber Liquidators in November 2011 after consulting with the sales associates in the Perrysburg, OH store. We received the product, allowed it to acclimate indoors for several weeks and then had it installed by the installer recommended by the company. About one month later, the floor began to gap, snap, crackle and pop all over the place. Our installer could not be reached for some time. I called the store that referred me to corporate. The proper warranty protocol was followed and several weeks later, nothing! The customer service rep is mysteriously gone and no one will help. Unreturned phone calls and emails continue. I need to list my home to sell in the next month, meanwhile my floor is disintegrating.4 125. In fact, on information and belief, Defendant started excluding any negative reviews from its own website starting in at least 2010. 126. Other websites include similar customer complaints. For instance, on http://www.trulia.com, there is a string of complaints concerning almost immediate failure of the Product and related ignored warranty claims: crabbyburton, Home Buyer, Basking Ridge, NJ I am having the same problem! House is bone dry- yet after 6 months our floor looks awful, the edges are cupping and the boards are the finish is bubbling and cracking. Looks awful!! I have filed a warranty claim but haven't heard back- Fri Nov 29, 20135 somis53, Home Buyer, 11727 I had the exact same problem as you. I was told by the sales person that it would be great on a cement slab. Within 3 to 4 months Joints separated, floor cupped and in certain areas discolored, got very dark. When I called lumber liq. they said it 3 https://www.consumeraffairs.com/homeowners/lumber_liquidators.html?page=10 (last visited December 16, 2015). 4 http://www.consumeraffairs.com/homeowners/lumber_liquidators.html?page=14 (last visited December 16, 2015). 5 http://www.trulia.com/voices/Remodel_and_Renovate/Has_anyone_tried_the_bamboo_floors_from_lumber_liq- 51225 (last visited December 16, 2015). Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 23 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 26 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 shouldn't have been installed on a slab because of the moisture. They took no responsibility and blamed it on the installer. And now I'm concerned about the amount of formaldehyde it contains.6 Sun Mar 1, 2015 127. Indeed, Defendant’s conduct shows actual notice and knowledge of the Product’s defects as it responded directly to complaints and attempted to attribute reported problems on installation issues. For instance, in 2012, Defendant responded to a complaint posted on http://lumber-liquidators.pissedconsumer.com/buyer-beware-defective-product- lumber-liquidators-20120328308399.html (last visited December 16, 2015): Dir. Customer Care _ LL Mar 31, 2012 Sales associates answer questions and offer guidance as needed. A final choice is made by a consumer when they agree and purchase material, so staff never makes anyone buy any particular item, but advises them based on exchanges of information during the sales process. The FINAL DECISION for any flooring installation no matter where you shop comes from the installers onsite assessment of the project. Your installer (Joseph) is ultimately responsible for a projects needs and we noted on 3.20.12 that he never read the instructions, so the qualified installer was not properly educated to install this material as evident in your complaint. This is publicly verifiable on our website (Customer Care page) where the installation instructions can be viewed to support the above mentioned statement. Michelle from Customer Relations is well educated and capable. The dimpling is not an ongoing problem, rather the result of improper installation as noted the installer did not read this information until the problem surfaced. The instructions state (one of several examples) "Owner and installer are solely and jointly responsible for site conditions, pre-installation moisture checking of new floor and subfloor and must ensure that all conditions and specifications listed in this guide have been thoroughly met prior to Installation of hardwood floor." The installers likely upset for failing to read the document because he failed to follow direction, so this is an installation concern and we do not fix installer mistakes as we’re not responsible for independent installer errors” Not [sic] supplier ever is. A good 6Id.. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 24 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 27 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 reputation is earned when directions are reviewed and adhered to, so we disagree with your assessment of his credentials in this case. Unfortunately, this is not a product defect but installer error meaning it’s not covered under the warranty. The other product installed was obviously conducted following direction as an example of what a floor can look like when instructions are followed. Sorry to hear this happened. We sell thousands of bamboo floors each week without issue and the return business alone accounts for most of these sales. People are satisfied when the instructions are followed and this is a terrible way to learn the importance of those documents. Yes “ Everyone be aware to review the warranty and the install instructions to avoid this from happening on your project. We're taking additional steps April to provide even more information about what a consumer can do to further help avoid these situations from happening. Always check installer references and oversee the project so the job meets your satisfaction within the first 25% installed at a minimum. 128. On information and belief, to date, Defendant continues to review customer complaints online and, instead of offering reasonable remedies for customers, responds by blaming defects with the Product on care and/or installation: LLResponse, Just Looking, Toano, VA LL Response: Reviewing the dated and current postings we find a need for consumer education to understand how flooring is to be cared for before, during, and after installation. Installing flooring without reviewing the installation instructions or failing to review the credentials of their hired installers is never recommended and leads to problems. If you rely solely on the installer to make all the project decisions on your behalf is a common mistake and complaining about board selection, quality of work and care given to the floor during the process can all be avoided by being present and overseeing the work performed. We make every effort to educate consumers and the one thing about the flooring business is all flooring products require the same type of acclimation, pre-installation testing, installation technique, proper application of the floor to include moisture protection, and finally proper ongoing maintenance of the floor to include temperature and humidity controls. A common theme with gapping concerns stems from customers refusing to install transitions for floating floor systems, or improper application of transitions such as T- moldings allowing the floor to expand and contract as designed. Application of the floor is just as important as choosing the color or style of flooring for your home. We can ask questions at the Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 25 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 28 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 point of sale, but ultimately the installer has the final say on whether the floor type is the right one for the scope of your project. Hire a professional with the installation backed by a warranty, but know that a product warranty covers the finish wearing down to the wood layer, or core as it may be. Scratches, dents, chipping, cupping, buckling and other issues are not a covered event and point to other installation and care issues. This does not change when you shop somewhere else and the best advice is to read the warranty, follow the instructions, hire a flooring contractor not a general contractor to install your floor, and follow the care instructions. Thousands of people shop everyday with us and have a wonderful experience. Choosing the right floor and caring for it after installation leads to complete satisfaction with a warranty that covers finish wear through the period offered. Flooring requires care like any other investment, so please visit our site for more information or assistance if you have questions. It can be rather frustrating to get flooring advice from others who may not have taken the proper steps to install the floor, or care for it according to the instructions. If you need assistance please locate the Customer Care tab on the upper right hand corner of our main web page, or call 1800HARDWOOD. Wed May 7, 2014 LLResponse, Just Looking, Toano, VA The warranty does not cover scratches or dents - no flooring warranty does - this is a care issue and not something a manufacturer or seller pays for. I have a scratch on my car and don't expect Ford to pay for the repair. This is a matter of understanding what you are responsible for versus the seller. Wed May 7, 2014 129. Similarly, the Better Business Bureau (“BBB”) website reports that, since 2013, 819 complaints against Defendant have been resolved, and 605 complaints against Defendant remain unresolved, some of which relate to the defective nature of the Product. 130. Like www.consumeraffairs.com, the BBB notifies Defendant of each complaint and Defendant has the option of responding to the consumer making the complaint. 131. On information and belief, Defendant’s CEO was put on notice that the company is knowingly selling a product containing defects and his response was to issue a refund without demanding the customer go through the warranty process: Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 26 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 29 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Morning Star bamboo flooring from LL seems to be a major issue. I installed 1800sqft using a licensed flooring contractor after labor day 2014. I left the product on studs inside the house in an empty room for over a month as directed by salesman at LL; with a fan blowing from the floor and ceiling fan above. I cut off the ends of the boxes also as directed. Within a week; the floor started to cup in the dining room in front of the china cabinet and is now cupping at various places throughout the house. LL customer service replied to my letter of complaint with the same reply; cupping is caused from moisture above and below the wood. We installed with MS adhesive directly to prepared concrete pad of house we just purchased. Seems to me LL is knowingly selling product that has systemic issues. I wrote to the CEO about being charged "restocking" fee on $10,000 purchase. I was not happy to be charged because I ended up with 14 extras cartons with only 1 carton that was waste. Installer wasted very little product. CEO issued a refund to us after he received a letter. In my opinion and 35 years in retail management; this is product liability. I am writing to the CEO now to voice my disgust. I also believe LL is knowingly selling "wet" NOT KILN DRIED product. 2 flooring contractors independently walked my home and stated installation was done correctly in there [sic.] opinion. I believe legal action will be necessary. I don't think the CEO will venture from their customer support teams reply.7 J. Defendant’s Warranty Practices and Procedures Also Put Them on Notice of the Products’ Defects 132. When consumers complaint to their local Lumber Liquidators store about the Product’s defects, they are directed to contact the corporate customer care department for assistance. 133. Defendant’s corporate customer care department has each customer fill out a “General Disclosure Statement,” which includes a description of the Product, its mill code and production date, how long it was acclimatized, whether it was installed professionally, and a description of the defects that have appeared. 134. Defendant then determines whether to order an inspection of the flooring or not. 7 http://www.4inspirationsphotographyblog.com/suzanne-mcgrath-photograp/2013/04/a-product-review- morningstar-bamboo-click-floors.html (last visited January 16, 2015). Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 27 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 30 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 135. Inevitably, Defendant determines that the defects complained of are the result of poor installation and denies the claim. See, e.g., ¶¶ 155, 156, 158-60, supra. 136. Indeed, after this Complaint was publicized 64 comments were received, including the following two about Product purchased in 2013 that describe Defendant’s practice of always blaming the consumer: Purchased 1400 S.F. of Morningstar carbonized strand bamboo in July 2013 and had it professionally installed by their installer. Same problems as everyone else speaks of. Worst problems are shrinking and gaps. Still continues to shrink a year and a half later. Went through entire claim process with Lumber Liquidators. Arbitrarily turned down at every step. Paid for two different professional flooring inspectors, and on their advice paid for professional re-installs of large sections twice. Shrinking and gaps continue to happen. I have detailed and contemporaneous notes on all events and conversations, and would like to be part of the class action suit.8 I have had the same issue with my LL Morning Star Bamboo flooring (we had over 2000 sqft installed). The floors began to warp and buckle within 3 months after installation in October 2013. I went through the entire claim process with LL and received a letter from them informing me that the issue with my flooring has nothing to do with the product itself and everything to do with a moisture issue (despite purchasing the most expensive moisture barrier/adhesive they sell). The will take NO responsibility for anything. I have fought with the installer and my contractor, and am now purchasing new flooring and working out the rest with my contractor. I am now concerned about the formaldehyde. I have a neurological condition and cannot have this s*&t in my home!!! Please send me some information as to what I can do, and whether ALL of the flooring needs to come out.9 CLASS ACTION ALLEGATIONS 137. Plaintiffs bring this action as a class action pursuant to Rule 23(b)(2) and Rule 23(b)(3) of the Federal Rules of Civil Procedure on behalf of themselves and the class. This 8 http://topclassactions.com/lawsuit-settlements/lawsuit-news/45644-lumber-liquidators-facing-bamboo-flooring- class-action/ (last visited December 16, 2015). 9 Id. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 28 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 31 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 action satisfies the numerosity, commonality, typicality, adequacy, predominance, and superiority requirements as set forth in Rule 23(a) and Rule 23(b)(3). 138. Plaintiffs advance this action on behalf of the following classes (together, the “Class” or “Class Members”): California Class: All individuals in the State of California who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. Illinois Class: All individuals in the State of Illinois who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. West Virginia Class: All individuals in the State of West Virginia who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. Minnesota Class: All individuals in the State of Minnesota who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 29 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 32 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Pennsylvania Class: All individuals in the State of Pennsylvania who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. Florida Class: All individuals in the State of Florida who purchased, for personal, family, or household use, Morning Star Strand Bamboo Flooring manufactured and sold by Lumber Liquidators, Inc. from January 1, 2008 to present. Excluded from the Class are Defendants, their legal representatives, assigns and successors and any entity in which Defendants have a controlling interest. Also excluded is the judge to whom this case is assigned and any member of the judge’s immediate family and judicial staff. Claims for personal injury are specifically excluded from the Class. 139. Numerosity (Rule 23(a)(1)). Although the actual size of the Classes is uncertain, Plaintiffs are informed and believes the Classes are comprised of many of thousands of property owners, making joinder impractical. The disposition of the claims of these Class Members in a single class action will provide substantial benefits to all parties and to the Court. 140. Communality (Rule 23(a)(2)). There exist questions of law and fact common to all Class Members. Common questions include, but are not limited to, the following: a. Whether the Product is subject to premature failure well in advance of its represented thirty-year useful life; b. Whether the Product is not suitable for use as a long-term flooring product; c. Whether Defendant knew, or should have known, of the defective nature of the Product before making available for purchase and use by the Plaintiffs and Class Members; Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 30 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 33 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 d. Whether Defendant failed to disclose to Plaintiffs and Class Members the defective nature of the Product; e. Whether Defendant, through making misleading representations of material facts regarding the Product’s hardness and omitting other material facts regarding the particular susceptibility of the Product to cupping, warping, scratching, denting, and other defects, had a duty to disclose full information regarding the Product’s characteristics; f. Whether Defendant’s failure to disclose material facts violated Business Professions Code Section 17200; g. Whether Defendant’s warranty practices, by repeatedly concealing the true nature of the defects in the Product through the use of diversionary tactics and false investigative reports, violated Business & Professions Code Section 17200; h. Whether Defendant’s failure to inform purchasers that the Product was susceptible to the failures alleged herein was a material omission, the nondisclosure of which was a deceptive sales practice under the consumer protection statutes of applicable state law; i. Whether Defendant owed a duty to Plaintiffs and Class Members to exercise reasonable and ordinary care in the testing, design, production, manufacturing, warranting and marketing of the Product; j. Whether Defendant breached its duties to the Plaintiffs and Class Members by designing, manufacturing, producing, marketing, advertising, and selling defective flooring to Plaintiffs and Class Members; k. Whether Defendant had a duty to Plaintiffs and Class Members to disclose the true nature of the Product; l. Whether the facts not disclosed by Defendant to Plaintiffs and Class Member are material facts; Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 31 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 34 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 m. Whether Defendant knew, or should have known that the Product would prematurely fail, is not suitable for use as flooring in residences or businesses, and is otherwise is not as represented by Defendant; n. Whether Defendant violated California’s Consumers Legal Remedies Act (California Civil Code § 1750 et seq.), when it concealed, made partial misleading representations, or failed to disclose the true nature of the Product, and led consumers to believe, through its advertising, warranties, and other express representations that the Product had characteristics that it did not actually have; o. Whether, in committing the acts alleged herein, Defendant engaged in unfair competition and in an unfair business practice or practices within the meaning of California Business and Professions Code § 17200; p. Whether such acts or practices were illegal, unfair, or fraudulent within the meaning of California Business and Professions Code § 17200; q. Whether Plaintiffs and Class Members are entitled to compensatory damages, restitution, and the amounts thereof respectively; r. Whether Defendant should be declared financially responsible for notifying all Class Members of the defective Product and for the costs and expenses of repair and replacement of all defective flooring materials and providing restitution of monies paid and inadequate value given; s. Whether Defendant should be ordered to disgorge, for the benefit of Class Members, all or part of their ill-gotten profits received from the sale of defective Product and/or to make full restitution to Plaintiffs and Class Members; and t. Whether Defendant should be enjoined from continuing to market the Product, as defined herein, utilizing misleading misrepresentations and omission of material facts. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 32 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 35 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 141. Typicality (Rule 23(a)(3)). The claim of the representative Plaintiffs are typical of the claims of Class Members, in that the representative Plaintiffs, like all Class Members, own a structure in which the defective Product was installed and failed prematurely. The representative Plaintiffs, like all Class Members, have suffered a common injury: Plaintiffs will incur the cost of repairing and/or replacing the defective Product in their homes and repairing any resultant consequential damage to other building components. The factual basis of Defendant’s misconduct is common to all Class Members. 142. Adequacy (Rule 23(a)(4)). Plaintiffs will fairly and adequately represent and protect the interests of the Class. Plaintiffs have retained counsel with substantial experience in prosecuting consumer class actions, including actions involving defective building products, failure to disclose material information regarding product performance, and violation of consumer protection statutes. Plaintiffs and their counsel are committed to vigorously prosecuting this action on behalf of the Class and have the financial resources to do so. Neither Plaintiffs nor their counsel have any interests adverse to those of the Class. 143. Predominance of Common Questions (Rule 23(b)(3)). Common questions of law and fact predominant over any questions involving individualized analysis. Fundamentally, there are no material questions of fact or law that are not common to Class Members. Common issues of fact include: All Class Members purchased the same Product and received the same misrepresentations, evasions, and omissions. The performance of the Product relative to its represented qualities is a common question, as is the Defendant’s knowledge regarding the Product performance and Defendant’s uniform omission to Class Members of these material facts. Common questions of law include whether Defendant’s conduct violates California’s consumer protection statutes and other law, and the Class Members’ entitlement to damages and remedies. 144. Superiority (Rule 23(b)(3)). Plaintiffs and Class Members have all suffered and will continue to suffer harm and damages as a result of Defendant’s unlawful and wrongful Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 33 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 6 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 conduct. A class action is superior to other available methods for the fair and efficient adjudication of the subject controversy. Because of the relatively small size of the individual Class Members’ claims, most Class Members likely would find the cost of litigating their individual claims to be prohibitive and will have no effective remedy at law. Thus, absent a class action, Class Members will continue to incur damages and Defendant’s misconduct will proceed without remedy. The class treatment of common questions of law and fact is also superior to multiple individual actions or piecemeal litigation in that it conserves the resources of the courts and the litigants and promotes consistency and efficiency of adjudication. There is no impediment to the management of this action because of the virtual identity of the common questions of law and fact to all Class Members. 145. Injunctive Relief (Rule 23(b)(2)). Defendant has engaged and continues to engage in business practices which are unfair, unlawful, and/or fraudulent in violation of California’s Unfair Competition Law (Business & Professions Code §§ 17200 et seq.) and the False Advertising Law (Business & Professions Code §§ 17500 et seq.) by, among other things, advertising and representing that the Product has characteristics and benefits that it does not. 146. Plaintiffs seek class-wide injunctive relief on grounds consistent with the standards articulated in Rule 23(b)(2) that establish final injunctive relief as an appropriate class-wide remedy, in that Defendant continues to advertise the Product, continues to provide half-truths and misleading information about the Product, and continues to omit to disclose material facts regarding the Product. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 34 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 37 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ESTOPPEL FROM PLEADING THE STATUTE OF LIMITATIONS 147. Defendant knew or reasonably should have known that the Product was defective before its sale. Defendant intentionally concealed material truths and disclosed half- truths while at the same time concealing material information that would have corrected consumers’ perceptions, concerning the Product from the general public and Class Members, while continuing to falsely represent that the Product is fit for its intended use. 148. Defendant affirmatively represented to the general public the Product carried a thirty-year (30) warranty. Through these representations, Defendant created a reasonable expectation among ordinary consumers and in the construction trades that the Product would have a useful life of at least thirty (30) years. 149. Defendant’s acts of fraudulent concealment also include, but are not limited to, using improper warranty tactics and commissioning sham inspections of Class Members’ flooring in response to complaints in order to mislead consumers as to the cause of the Product’s failures and the true nature of the Product defects. 150. Based upon Defendant’s misrepresentations and concealment, Defendant is equitably estopped from asserting a statute-of-limitations defense. 151. Alternatively, to the extent Defendant pursued a common policy of diverting warranty claims or other consumer complaints about the Product through misleading and erroneous investigation, or delaying tactics that induced Plaintiffs or Class Members to not assert their rights in a timely manner, Defendant is equitably estopped from asserting a statute- of-limitations defense. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 35 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 38 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 FIRST CAUSE OF ACTION (Violation of Consumers Legal Remedies Act (“CLRA”)) 152. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 153. Defendant and the Doe Defendants are “persons” as defined by California Civil Code §1761(c). 154. Defendant engaged in unfair competition or unfair or deceptive acts or practices in violation of California Civil Code §1770(a)(5) and (a)(7) when Defendant represented, through its advertising and other express representations, that the Product had benefits or characteristics that it did not actually have and when Defendant made misleading statements about the Product’s hardness without further disclosing that factors other than the Product’s hardness can lead to the Product easily scratching and denting and manifesting other defects complained of by Plaintiffs and Class Members. Defendant further violated the CLRA when Defendant falsely represented that the Product was of a particular standard or quality. Finally, Defendant violated the CLRA when it advertised the Product with the intent not to sell it as advertised. 155. Defendant’s deceptive practices were specifically designed to induce Plaintiffs and Class Members to purchase the Product. Defendant engaged in marketing efforts as detailed in the general allegations, to reach Class Members, their agents, and/or third parties on whom they relied to persuade them to purchase and install the Product manufactured by Defendant, or to purchase homes and other structures in which the defective Product manufactured by Defendant has been installed. 156. To this day, Defendant continues to engage in unlawful practices in violation of the CLRA. Defendant continues to conceal the defective nature of the Product, make misleading statements about the Product, and has omitted to disclose, on inquiry from Plaintiffs and Class Members, the Product’s defective propensities. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 36 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 39 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 157. Plaintiffs served Defendant with notice of their violation of the CLRA by serving notice on their General Counsel by certified mail to their corporate offices, on September 4, 2014. A copy of this notice is attached hereto as Exhibit A. WHEREFORE, Plaintiffs on behalf of themselves and for all others similarly situated, demand a permanent injunction be issued against Defendant to refrain from continued advertising of the Product at issue herein that omits material facts about product performance, injunctive relief forcing Defendant to replace and repair all Product at issue herein for Class Members, consequential damages for Class Members who have replaced or will replace the Product at issue herein, plus costs and attorneys’ fees pursuant to California Civil Code §1780(d). SECOND CAUSE OF ACTION (Violation of Unfair Competition Law- Unlawful Business Practice) 158. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this Complaint. 159. California Business and Professions Code §17200 et seq. prohibits acts of unfair competition, which includes unlawful business practices. 160. Defendant engaged in unlawful business practices in that Defendant represented, through its advertising, warranties, and other express representations that the Product had characteristics it did not actually have and provided misleading information to Plaintiffs and Class Members about the Product while omitting to disclose information about other characteristics of the Product that cause it to scratch and dent easily and manifest other defects. 161. Defendant violated § 17200 when Defendant falsely represented the Product was of a particular standard or quality, including representations that the Product met industry standards, “virtually scratch and dent resistant,” and “two to two and a half times harder than red oak.” Defendant further violated the Unfair Competition Law when it unlawfully tested, Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 37 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 40 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 designed, manufactured, formulated, sold, and introduced in the stream of commerce for purchase by Plaintiffs, Class Members, and the general public, the defective Product. 162. Defendant’s deceptive practices constitute an unlawful business practice in that the practices were specifically designed to induce Plaintiffs, Class Members, and their agents or third parties upon whom Plaintiffs and Class Members’ relied to provide appropriate guidance regarding suitable flooring products, to purchase on Class Members’ behalf the Product and install the Product, recommend the use of the Product, or to purchase homes and other structures in which the Product has been installed. 163. To this day, Defendant has engaged and continues to engage in unlawful business practices by concealing the defective nature of the Product and have knowingly misrepresented to Class Members the Product possess qualities and characteristics it does not have. 164. As a direct and proximate cause of Defendant’s unfair and unlawful methods of competition and unfair, deceptive or unlawful acts or practices, Plaintiffs and Class Members have suffered actual damages in that they own homes and other structures on which defective Product is or was installed. The Product has failed and will continue to prematurely fail due to its poor design, poor manufacture, and unsuitability for its intended purpose, which will require (or has already required) Plaintiffs and Class Members to incur costs to prematurely repair and/or replace their floorings. 165. As a proximate result of their unlawful, unfair, or fraudulent practices, Defendant has been unjustly enriched and should be required to make restitution to the Plaintiffs and Class Members pursuant to §§ 17203 and 17204 of the California Business & Professions Code. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 38 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 41 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 WHEREFORE, Plaintiffs, on behalf of themselves and all others similarly situated, demand judgment against Defendant, and each of them, for restitution and/or disgorgement of funds paid to Defendant by Plaintiffs and Class Members to purchase the Product, or the value of the product in their home or structure, or in the form of repair and/or replacement of the defective Product on the Class Members’ homes and other structures. THIRD CAUSE OF ACTION (Violation of Unfair Competition Law - Unfair Business Practice) 166. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 167. Defendant engaged in an unfair business practice by failing to disclose material facts concerning the Product, and representing, through advertising, warranties and other representations that the Product had particular qualities, including, that the Product met industry standards, “does not scratch easily,” and is “two to two and a half times harder than red oak,” all qualities that were inconsistent with Defendant’s knowledge of Product performance. 168. Defendant’s “unfair” practices were designed to induce Plaintiffs and Class Members, or their agents, and/or third parties upon whom Plaintiffs and Class Members relied to provide appropriate flooring products, to purchase and install the Product, recommend the use of the Product, or to purchase homes and other structures on which the Product has been installed. 169. To this day, Defendant has failed to disclose facts concerning the Product performance, facts that would be and are material to the consumer or those third parties, such as flooring contractors and general contractors, on whom the consumer relies. 170. As a direct and proximate cause of Defendant’s unfair methods of competition and unfair or deceptive acts or practices, Plaintiffs and Class Members have suffered actual damages in that they own homes and other structures in which defective Product is or was installed. The Product will prematurely fail due to inadequate product testing, poor design Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 39 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 42 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 and/or manufacturing techniques, and poor installation guidelines, which will require Plaintiffs and Class Members to incur costs to prematurely repair and/or replace their flooring. FOURTH CAUSE OF ACTION (Violation of Illinois Consumer Fraud and Deceptive Business Practices Act) 171. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 172. The conduct described in this Complaint constitutes a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. (the “CFA”), and substantially similar state consumer protection statutes. 173. Defendant engaged in unfair or deceptive practices in violation of the CFA when it (1) represented that the Product was ASTM acceptable when, at best, it lacked credible evidence to support those claims, and, at worst, knew the Product would fail prematurely, was not suitable for use as flooring, and otherwise was not as warranted and represented by Defendant; (2) failed to disclose to, or concealed from, consumers, installers, and distributors material facts about the defective nature of the Product; (3) failed to disclose its own knowledge of the defective nature of the Product; and (4) limited its warranty obligations in an unfair and unconscionable way in light of its failure to disclose the defective nature of the Product. 174. Defendant either knew or should have known its Product was defective, would fail prematurely, and was not as warranted and represented by Defendant. 175. Defendant’s conduct and omissions described herein repeatedly occurred in Defendant’s trade or business and were capable of deceiving a substantial portion of the consuming public. 176. The facts concealed or not disclosed by Defendant are material facts in that Plaintiff Mendez, Illinois Class Members, and any reasonable consumer would have considered those facts important in deciding whether to purchase the Product or purchase homes or structures with flooring applying the Product. Had Plaintiff Mendez and Illinois Class Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 40 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 43 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Members known the Product was defective (and did not meet ASTM or other flooring industry standards), they would not have purchased the Product or they would have either negotiated additional warranty coverage, negotiated a lower price to reflect the risk or simply avoided the risk all together by purchasing different flooring products. 177. Defendant intended that Plaintiff Mendez and Illinois Class Members would rely on the deception by purchasing its Product, unaware of the undisclosed material facts. Defendant knew that Plaintiff Mendez and Illinois Class Members would rely on its product literature and advertisements, statements made by its salespeople and other representations. This conduct constitutes consumer fraud within the meaning of the various consumer protection statutes. 178. Defendant’s unlawful conduct is continuing, with no indication that Defendant will cease. 179. As a direct and proximate result of the deceptive, misleading, unfair, and unconscionable practices of Defendant set forth above, Plaintiff Mendez and Illinois Class Members are entitled to actual damages, compensatory damages, penalties, and attorney’s fees and costs as set forth in Section 10a of the CFA. 180. The Defendant’s deceptive, misleading, unfair and unconscionable practices set forth above were done willfully, wantonly and maliciously entitling Plaintiff Mendez and Illinois Class Members to an award of punitive damages. WHEREFORE, Plaintiffs pray for judgment as hereinafter set forth. FIFTH CAUSE OF ACTION (Violation of Pennsylvania Unfair Trade Practices & Consumer Protection Law) 181. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 182. This Count is brought by Plaintiff Fursman on behalf of himself and Pennsylvania Class Members. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 41 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 44 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 183. At all times relevant hereto, Plaintiff Fursman and Pennsylvania Class Members were “persons” within the meaning of 73 P.S. § 201-2(3). 184. Defendant’s conduct, as alleged herein, constituted unfair or deceptive acts or practices and unfair methods of competition in trade or commerce (within the meaning of 73 P.S.§ 201-2(4)), in violation of 73 P.S. § 201-3, and regulations promulgated thereunder, including the following types of conduct specified in 73 P.S. § 201-2: a. Representing that goods or services have characteristics or ingredients that they do not have (§ 201-2(vi)); b. Representing that goods are of a particular standard, quality or grade, if they are of another (§ 201-2(vii)); c. Advertising goods or services with intent not to sell them as advertised (§ 201-2(ix)); and d. Engaging in fraudulent or deceptive conduct that creates a likelihood of confusion or misunderstanding (§ 201-2(xxi)). 185. Defendant’s unfair and deceptive acts and practices (including conduct prohibited by the provisions cited in subparagraphs (a) through (e) above), as alleged in greater detail herein, include, but are not limited to: (1) representations that the Product was more water resistant than hardwood when, at best, it lacked credible evidence to support those claims, and, at worst, knew the Product would fail prematurely, was not suitable for use as flooring, and otherwise was not as represented by Defendant; (2) failed to disclose to, or concealed from, consumers, installers, and distributors material facts about the defective nature of the Product; and (3) failed to disclose its own knowledge of the defective nature of the Product. 186. As a result of Defendant’s unfair and deceptive acts and practices, Plaintiff Fursman and Pennsylvania Class Members have suffered ascertainable losses of money or property within the meaning of 73 P.S. § 201-9.2, which they seek for restitution and/or Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 42 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 45 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 disgorgement of funds paid to Defendant by Plaintiff Fursman and Pennsylvania Class Members to purchase the Product, or the value of the product in their home or structure, or in the form of repair and/or replacement of the defective Product on Plaintiff Fursman’s and Pennsylvania Class Members’ homes and other structures. 187. Plaintiff Fursman and Pennsylvania Class Members are entitled to recover these actual damages or statutory damages of $100, whichever is greater, plus multiple damages. SIXTH CAUSE OF ACTION (Violation of Minnesota Consumer Fraud Act, M.S.A. § 325F.68, et seq.) 188. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 189. This Count is brought by Plaintiff Norris on behalf of herself and Minnesota Class Members. 190. At all times relevant hereto, Defendant was a “person” within the meaning of M.S.A. § 325F.68(3). 191. Defendant’s conduct, as alleged herein, constitutes unlawful practices, in violation of M.S.A. § 325F.69 subd. 1, including fraud, false pretense, false promises, misrepresentations, misleading statements, and/or deceptive practices, with the intent that others rely thereon, in connection with the sale of the Product to Plaintiff Norris and Minnesota Class Members. 192. Defendant’s unlawful practices (including fraud, misrepresentation, and deceptive practices prohibited by § 325F.69 subd. 1)), as alleged in greater detail herein, include, but are not limited to: (1) representations that the Product was not suitable for use as flooring, and otherwise was not as warranted and represented by Defendant; (2) failed to disclose to, or concealed from, consumers, installers, and distributors material facts about the defective nature of the Product; and (3) failed to disclose its own knowledge of the defective nature of the Product. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 43 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 46 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 193. As a result of Defendant’s fraud, misrepresentation, and deceptive practices, Plaintiff Norris and Minnesota Class Members have suffered injury within the meaning of M.S.A. § 8.31 subd. 3a, which they seek restitution and/or disgorgement of funds paid to Defendant by Plaintiff Norris and Minnesota Class Members to purchase the Product, or the value of the Product in their home or structure, or in the form of repair and/or replacement of the defective Product on Plaintiff Norris’ and Minnesota Class Members’ homes and other structures. 194. Plaintiff Norris and Minnesota Class Members also seek injunctive relief pursuant to M.S.A. § 8.31 subd. 3a, directing Defendant to cease the unlawful practices alleged herein and to issue corrective statements and advertising. 195. Plaintiff Norris and Minnesota Class Members are entitled to bring an action for damages and injunctive under M.S.A. § 8.31 subd. 3a, because this action has a public benefit. The public benefit of this action is demonstrated by at least the following: a. This action seeks injunctive relief in order to stop Defendant from continuing to engage in the fraud, false pretense, false promises, misrepresentations, misleading statements, and/or deceptive practices alleged herein, and to issue corrective statements and advertising, in an effort to protect Minnesota Class Members and members of the public; and b. Members of the public have been and are concerned about the quality and safety of the Product, as evidenced by, among other things, the thousands of complaints by consumers that can be found on the Internet regarding its defective nature. SEVENTH CAUSE OF ACTION (Violation of West Virginia’s Consumer Credit and Protection Act, W. Va. Code §§ 46A-6 et seq.) 196. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 197. Defendant published, disseminated and/or circulated oral and written information and matter that tended to and/or did induce, directly and indirectly West Virginia Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 44 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 7 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 residents, including Plaintiff Emery and West Virginia Class Members to enter into contracts and agreements to purchase the Product. 198. Defendant, acting directly or by agents, servants, employees, conspirators and/or joint ventures set about to sell, offer for sale, and attempt to sell in West Virginia, for cash or credit, the Product. 199. That the defendants acting as aforesaid set about to and did engage in unfair methods of competition and unfair or deceptive practices as set forth in West Virginia Code 46- A-6-102, including, but not limited to: The act, use or employment by any person of any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or omission of any material fact with the intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any goods or services, whether or not any person has in fact been misled, deceived or damaged thereby; Advertising, printing, displaying, publishing, distributing, or broadcasting, or causing to be advertised, printed, displayed, published, distributed or broadcast in any manner, any statement or representation with regard to the sale of goods…which is false, misleading, or deceptive, or which omits to state material information which is necessary to make the statements therein not false, misleading or deceptive; Engaging in any other conduct which similarly creates a likelihood of confusion of misunderstanding. 200. That the acts and conduct above violated West Virginia Code, Chapter 46A, Article 6, Section 101, et seq. in that Defendant engaged in unfair and deceptive acts or practices, including, but not limited to, engaging in part of a scheme or plan to sell the Product to the public without disclosing that it was not made from the “hardest wood,” that bamboo is not a wood but is actually a grass that is fibrous and flooring made from it is susceptible to scratching and denting, and that the Product was not otherwise free from defects. These acts and practices had the capacity to deceive a substantial portion of the public. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 45 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 48 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 201. As a proximate result of the violation by defendants of the aforesaid statute, Plaintiff Emery and West Virginia Class Members suffered an ascertainable loss of money or property and Plaintiff Emery and West Virginia Class Members are entitled to recover damages all as provided in West Virginia Code, 46A-6-106. EIGHTH CAUSE OF ACTION (Violation of Florida’s Deceptive and Unfair Trade Practices Act Florida Statute § 501.201 et seq. (“FDUTPA”)) 202. Plaintiffs hereby incorporate by reference the allegations contained in all preceding paragraphs of this complaint. 203. This cause of action is brought pursuant to the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. The stated purpose of this Act is to “protect the consuming public . . . from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.” Id. §501.202(2). 204. Plaintiff Triana and Florida Class Members are “consumers” and the transactions at issue in this complaint constitute “trade or commerce” as defined by FDUTPA. See id. § 501.203(7)-(8). 205. FDUTPA declares unlawful “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Id. § 501.204(1) 206. Defendant violated FDUTPA by representing to Plaintiff Triana and Florida Class Members that the Product had particular qualities, including that the Product was “two- and-a-half times harder than hardwood flooring,” and, by virtue of being “carbonized” and/or treated “under extreme heat and pressure,” was “much harder than traditional bamboo”-when in fact Defendant knew that the Product did not possess these qualities. 207. Furthermore, Defendant employed fraud, deception, false promise, misrepresentation, and the knowing concealment, suppression, or omission of material facts in Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 46 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 49 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 its sale and advertisement of the Product in the State of Florida by: (1) representing that the Product was ASTM acceptable when, at best, Defendant lacked credible evidence to support those claims, and, at worst, Defendant knew the Product would fail prematurely and was not suitable for use as flooring; (2) failing to disclose to, or concealing from, consumers, installers, and distributors material facts about the defective nature of the Product; and (3) failing to disclose its own knowledge of the defective nature of the Product. 208. Plaintiff Triana and the Florida Class Members directly or indirectly relied upon Defendant’s representations regarding the quality of the Product in their purchase decisions. 209. Plaintiff Triana and the Florida Class Members were misled by Defendant’s misrepresentations and omissions because they believed that the Product was harder, stronger, more durable, and more stable than other flooring materials and other bamboo flooring products. 210. As a direct and proximate result of the FDUTPA violations described above, Plaintiff Triana and the Florida Class Members have been injured in that they purchased the defective Product or purchased homes or other structures with the defective Product, based on the misrepresentations and nondisclosures of material facts alleged above. 211. Had Plaintiff Triana and the Florida Class Members known the defective nature of the Product and the truth concerning Defendant’s claims, they would not have purchased or would not have paid what they did for the Product or their structures. 212. As a result of Defendant’s practices in violation of FDUTPA, Plaintiff Triana and Florida Class Members suffered an ascertainable loss in the form of monies paid to Defendant for the Product that, contrary to Defendant’s representations, prematurely failed. 213. Accordingly, Plaintiff Triana and Florida Class Members are entitled to such damages, as well as equitable relief, costs, reasonable attorney's fees, and other relief, as are permitted under the law. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 47 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 50 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray that the Court enter judgment against Defendant, and each of them, and in favor of Plaintiffs, and to award the following relief: 1. Certification of the following classes: a. A California class and appointing Dana Gold as class representative, b. A West Virginia class and appointing Tammy Emery as class representative, c. An Illinois class and appointing Edwin Mendez as class representative, d. An Minnesota class and appointing Laura Norris as class representative, e. A Pennsylvania class and appointing Donald Fursman as class representative, and f. A Florida class and appointing John Triana as class representative; 2. Appointment of the undersigned as counsel for the proposed Class(es); 3. A declaration that Defendant’s actions complained of herein violate the state consumer protection statutes; 4. A declaration that Defendant is financially responsible for notifying all Class Members; 5. Injunctive relief requiring Defendant to replace and/or repair all Products installed in structures owned by the Class; 6. A declaration that Defendant must disgorge, for the benefit of the Class, all or part of its ill-gotten profits received from the sale of defective Product, and/or to make full restitution to Plaintiffs and the Class Members; 7. An award of costs and attorneys’ fees, as allowed by law, and/or from a common fund created hereby; 8. Leave to amend this Complaint to conform to the evidence presented at trial; and Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 48 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 51 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 9. Orders granting such other and further relief as may be appropriate under the circumstances. JURY TRIAL DEMAND Plaintiffs hereby demand a jury trial for all individual and Class claims so triable. RESPECTFULLY SUBMITTED AND DATED this 26th day of June, 2017. ROBINS KAPLAN LLC By: /s/ Michael F. Ram, SBN #104805 Michael F. Ram, SBN #104805 Email: mram@robinskaplan.com Susan Brown, SBN #287986 Email: sbrown@robinskaplan.com ROBINS KAPLAN LLC 2440 West El Camino Real, Suite 100 Mountain View, CA 94040 Telephone: (650) 784-4040 Facsimile: (650) 784-4041 Jeffrey B. Cereghino, SBN #099480 Email: jbc@rocklawcal.com Matt Malone, SBN #221545 Email: mjm@rocklawcal.com ROCK LAW LLP 101 Montgomery Street, Suite 1800 San Francisco, California 94104 Telephone: (415) 433-4949 Facsimile: (415) 433-7311 Charles J. LaDuca, Admitted Pro Hac Vice Email: charles@cuneolaw.com Brendan Thompson, Admitted Pro Hac Vice Email: brendant@cuneolaw.com CUNEO GILBERT & LaDUCA, LLP 4725 Wisconsin Avenue, NW, Suite 200 Washington, DC 200016 Telephone: (202) 789-3960 Facsimile: (202) 789-1813 Interim Co-Lead Class Counsel Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 49 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 52 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Beth E. Terrell, SBN #178181 Email: bterrell@terrellmarshall.com Jennifer Rust Murray Email: jmurray@terrellmarshall.com Mary B. Reiten, SBN #203142 Email: mreiten@terrellmarshall.com Adrienne D. McEntee, Admitted Pro Hac Vice Email: amcentee@terrellmarshall.com 936 North 34th Street, Suite 300 Seattle, Washington 98103-8869 Telephone: (206) 816-6603 Facsimile: (206) 319-5450 Jordan L. Chaikin, Admitted Pro Hac Vice Email: jchaikin@yourlawyer.com PARKER WAICHMAN LLP 27300 Riverview Center Blvd., Suite 103 Bonita Springs, Florida 34134 Telephone: (239) 390-1000 Facsimile: (239) 390-0055 Michael McShane Email: mmcshane@audetlaw.com Jonas P. Mann Email: jmann@audetlaw.com AUDET & PARTNERS, LLP 221 Main Street, Suite 1460 San Francisco, California 94105 Telephone: (415) 568-2555 Facsimile: (415) 568-2556 Robert K. Shelquist, Admitted Pro Hac Vice Email: rkshelquist@locklaw.com Rebecca A. Peterson, SBN #241858 Email: rapeterson@locklaw.com LOCKRIDGE GRINDAL NAUEN 100 Washington Avenue South, Suite 2200 Minneapolis, Minnesota 55401 Telephone: (612) 339-6900 Facsimile: (612) 339-0981 Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 50 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 53 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Charles E. Schaffer, Admitted Pro Hac Vice Email: cschaffer@lfsblaw.com LEVIN, FISHBEIN, SEDRAN & BERMAN 510 Walnut Street, Suite 500 Philadelphia, Pennsylvania 19106 Telephone: (215) 592-1500 Facsimile: (215) 592-4663 Erica C. Mirabella Email: erica@mirabellallc.com 132 Boylston Street, 5th Floor Boston, Massachusetts 02116 Telephone: (617) 580-8270 Daniel C. Calvert, Admitted Pro Hac Vice Email: dcalvert@yourlawyer.com PARKER WAICHMAN LLP 27300 Riverview Center Blvd., Suite 103 Bonita Springs, Florida 34134 Telephone: (239) 390-1000 Facsimile: (239) 390-0055 Attorneys for Plaintiffs and Proposed Classes Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 51 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 54 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 LOCAL RULE 5-1(I)(3) STATEMENT Pursuant to Local Rule 5-1(i)(3), I hereby attest that in concurrence to the filing of this document permission was obtained from the signatory, and that I will maintain records to support this concurrence by the signatory subject to this document as required under the local rules. DATED this 26th day of June, 2017. TERRELL MARSHALL LAW GROUP PLLC By: /s/ Beth E. Terrell, CSB #178181 Beth E. Terrell, CSB #178181 Email: bterrell@terrellmarshall.com 936 North 34th Street, Suite 300 Seattle, Washington 98103-8869 Telephone: (206) 816-6603 Facsimile: (206) 319-5450 Attorneys for Plaintiffs and the Proposed Classes Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 52 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 55 of 76 NO. 3:14-CV-05373-TEH - FOURTH AMENDED CLASS ACTION COMPLAINT 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 CERTIFICATE OF SERVICE I, Beth E. Terrell, hereby certify that on June 26, 2017, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Diane Flannery, Admitted Pro Hac Vice Email: dflannery@mcguirewoods.com Bethany Gayle Lukitsch, Admitted Pro Hac Vice Email: blukitsch@mcguirewoods.com Christopher Edward Trible, Admitted Pro Hac Vice Email: ctrible@mcguirewoods.com Robert F. Redmond, Admitted Pro Hac Vice Email: rredmond@mcguirewoods.com McGUIREWOODS LLP 800 East Canal Street Richmond, Virginia 23219-3916 Telephone: (804) 775-1000 Facsimile: (804) 775-1061 Joan S. Dinsmore, SBN #245629 Email: jdinsmore@mcguirewoods.com MCGUIREWOODS LLP 434 Fayetteville Street, Suite 2600 Raleigh, North Carolina 27601 Telephone: (919) 755-6600 Facsimile: (919) 835-5996 Attorneys for Defendant Lumber Liquidators, Inc. DATED this 26th day of June, 2017. TERRELL MARSHALL LAW GROUP PLLC By: /s/ Beth E. Terrell, SBN #178181 Beth E. Terrell, SBN #178181 Email: bterrell@terrellmarshall.com 936 North 34th Street, Suite 300 Seattle, Washington 98103-8869 Telephone: (206) 816-6603 Facsimile: (206) 319-5450 Attorneys for Plaintiffs and Proposed Class Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 53 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 56 of 76 - EXHIBIT A - Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 54 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 57 of 76 Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 55 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 8 of 76 Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 56 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 59 of 76 - EXHIBIT B - Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 57 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 60 of 76 Erica C. Mirabella T: 855.505.5342 F: 617.583.1905 132 BOYLSTON STREET, 5th FLR BOSTON, MA 02116-4606 MIRABELLA LAW ___________________________________________________________________________________________ February 10, 2015 VIA CERTIFIED MAIL, RRR Mr. Thomas Sullivan, President and CEO Lumber Liquidators 3000 John Deere Road Toano, VA 23168 (757)566-7546 Re: Demand for relief under West Virginia Consumer Credit and Protection Act Dear Sir or Madam: Cuneo Gilbert & LaDuca and Mirabella Law are among the counsel representing Tammy Emery of Inwood, West Virginia. On or around July 10, 2014, Ms. Emery purchased approximately 517 square feet of Morning Star Bamboo Flooring from Lumber Liquidators (hereinafter the “Bamboo Flooring”) from her local Martinsburg Lumber Liquidators. Ms. Emery purchased her Bamboo Flooring after reviewing samples of it at the store and being told by a Lumber Liquidator Manager that it was durable, the best product available, and sold with thirty (30) year warranty. On or around August 4, 2014, the Bamboo Flooring was installed in her living and dining rooms and two hallways. Within only a few weeks after installation, Ms. Emery noticed that the Bamboo Flooring was delaminating, warping, splitting, shrinking and scratching and generally deteriorating in various places. The Bamboo Flooring is not “durable” and is not fit for the purpose for which it is sold. The thirty (30) year warranty placed on the product creates false expectations. These representations amount to “[u]nfair methods of competition and unfair or deceptive acts or practices.” See W. Va. Code § 46A-6-104. Each of the elements of a colorable claim under this section is present in this situation: “unlawful conduct by the seller, an ascertainable loss on the part of the consumer, and a causal connection between the ascertainable loss and the [seller’s] conduct.” White v. Wyeth, 705 S.E.2d 828, 835 (W. Va. 2010). Therefore, this constitutes a violation of the West Virginia Consumer Credit and Protection Act, W. Va. Code §§ 46A-6- et seq. (the “WVCCPA”). Like Ms. Emery, other similar purchasers across the country also purchased defective Bamboo Flooring and warranties from Lumber Liquidators. Lumber Liquidators knew or should have known that its Bamboo Flooring was defective and would not last the length of its purported _________________________________________________________________________________________________________________________________________ ONE HUNDRED THIRTY-TWO BOYLSTON STREET, OVERLOOKING HISTORIC BOSTON COMMON, IS LISTED ON THE NATIONAL REGISTER OF HISTORIC PLACES. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 58 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 61 of 76 upon belief, did not repair or replace the flooring products in accordance with the terms of its warranties. Ms. Emery, along with other similarly situated owners of Bamboo Flooring, has suffered damages as a result of Lumber Liquidator’s unfair and deceptive business practices. On behalf of Ms. Emery and all other similarly situated purchasers of Morning Star Bamboo Flooring, we demand that Lumber Liquidators remedy the above violations within twenty (20) days of receiving this letter, as required by the WVCCPA, by refunding the purchase price of the Bamboo Flooring to all purchasers and notifying potential class members that refunds are available. Failure to meet these demands may subject Lumber Liquidators to civil liability under the WVCCPA and any other law prohibiting unfair competition and unfair or deceptive acts of practices. I am available to discuss any reasonable offer of settlement you may wish to make. You may reach me directly at 617-580-8270 or by email at erica@mirabellaLLC.com. Very Truly Yours, Erica C. Mirabella ECM/lmm _________________________________________________________________________________________________________________________________________ ONE HUNDRED THIRTY-TWO BOYLSTON STREET, OVERLOOKING HISTORIC BOSTON COMMON, IS LISTED ON THE NATIONAL REGISTER OF HISTORIC PLACES. Case 3:14-cv-05373-TEH Document 171 Filed 06/26/17 Page 59 of 59Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 62 of 76 EXHIBIT B Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 63 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 137 S.Ct. 1773 Supreme Court of the United States BRISTOL-MYERS SQUIBB COMPANY, Petitioner v. SUPERIOR COURT OF CALIFORNIA, SAN FRANCISCO COUNTY, et al. No. 16-466. | Argued April 25, 2017. | Decided June 19, 2017. Synopsis Background: Consumers brought products liability action against prescription drug manufacturer in California state court. The Superior Court, City and County of San Francisco, JCCP. No. 4748, John E. Munter, J., entered an order denying manufacturer's motion to quash service of summons on nonresident consumers' claims. Manufacturer petitioned for a writ of mandate, which the Court of Appeal summarily denied. Manufacturer petitioned for review, which the Supreme Court of California granted, transferring matter back to the Court of Appeal. The Court of Appeal denied petition, and manufacturer petitioned for review. The Supreme Court of California granted review, superseding the opinion of the Court of Appeal. The Supreme Court of California, Cantil-Sakauye, C.J., 1 Cal.5th 783, 206 Cal.Rptr.3d 636, 377 P.3d 874, affirmed. Certiorari was granted. [Holding:] The Supreme Court, Justice Alito, held that due process did not permit exercise of specific personal jurisdiction in California over nonresident consumers' claims. Reversed and remanded. Justice Sotomayor filed a dissenting opinion. *1775 Syllabus * A group of plaintiffs, most of whom are not California residents, sued Bristol-Myers Squibb Company (BMS) in California state court, alleging that the pharmaceutical company's drug Plavix had damaged their health. BMS is incorporated in Delaware and headquartered in New York, and it maintains substantial operations in both New York and New Jersey. Although it engages in business activities in California and sells Plavix there, BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in the State. And the nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California. The California Superior Court denied BMS's motion to quash service of summons on the nonresidents' claims for lack of personal jurisdiction, concluding that BMS's extensive activities in the State gave the California courts general jurisdiction. Following this Court's decision in Daimler AG v. Bauman, 571 U.S. ----, 134 S.Ct. 746, 187 L.Ed.2d 624 the State Court of Appeal found that the California courts lacked general jurisdiction. But the Court of Appeal went on to find that the California courts had specific jurisdiction over the claims brought by the nonresident plaintiffs. Affirming, Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 64 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 the State Supreme Court applied a “sliding scale approach” to *1776 specific jurisdiction, concluding that BMS's “wide ranging” contacts with the State were enough to support a finding of specific jurisdiction over the claims brought by the nonresident plaintiffs. That attenuated connection was met, the court held, in part because the nonresidents' claims were similar in many ways to the California residents' claims and because BMS engaged in other activities in the State. Held : California courts lack specific jurisdiction to entertain the nonresidents' claims. Pp. 1779 - 1784. (a) The personal jurisdiction of state courts is “subject to review for compatibility with the Fourteenth Amendment's Due Process Clause.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918, 131 S.Ct. 2846, 180 L.Ed.2d 796. This Court's decisions have recognized two types of personal jurisdiction: general and specific. For general jurisdiction, the “paradigm forum” is an “individual's domicile,” or, for corporations, “an equivalent place, one in which the corporation is fairly regarded as at home.” Id., at 924, 131 S.Ct. 2846. Specific jurisdiction, however, requires “the suit” to “aris[e] out of or relat[e] to the defendant's contacts with the forum.” Daimler, supra, at ----, 134 S.Ct., at 754 (internal quotation marks omitted). The “primary concern” in assessing personal jurisdiction is “the burden on the defendant.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490. Assessing this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question. At times, “the Due Process Clause, acting as an instrument of interstate federalism, may ... divest the State of its power to render a valid judgment.” Id., at 294, 100 S.Ct. 559. Pp. 1779 - 1781. (b) Settled principles of specific jurisdiction control this case. For a court to exercise specific jurisdiction over a claim there must be an “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” Goodyear, supra, at 919, 131 S.Ct. 2846 (internal quotation marks and brackets omitted). When no such connection exists, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State. The California Supreme Court's “sliding scale approach”-which resembles a loose and spurious form of general jurisdiction-is thus difficult to square with this Court's precedents. That court found specific jurisdiction without identifying any adequate link between the State and the nonresidents' claims. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California does not allow the State to assert specific jurisdiction over the nonresidents' claims. Nor is it sufficient (or relevant) that BMS conducted research in California on matters unrelated to Plavix. What is needed is a connection between the forum and the specific claims at issue. Cf. Walden v. Fiore, 571 U.S. ----, 134 S.Ct. 1115, 188 L.Ed.2d 12. Pp. 1780 - 1782. (c) The nonresident plaintiffs' reliance on Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790, and Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628, is misplaced. Keeton concerned jurisdiction to determine the scope of a claim involving in-state injury and injury to residents of the State, not, as here, jurisdiction to entertain claims involving no in-state injury and no injury to residents of the forum *1777 State. And Shutts, which concerned the due process rights of plaintiffs, has no bearing on the question presented here. Pp. 1782 - 1783. (d) BMS's decision to contract with McKesson, a California company, to distribute Plavix nationally does not provide a sufficient basis for personal jurisdiction. It is not alleged that BMS engaged in relevant acts together with McKesson in California or that BMS is derivatively liable for McKesson's conduct in California. The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State. Pp. 1783 - 1784. (e) The Court's decision will not result in the parade of horribles that respondents conjure up. It does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS. Alternatively, the nonresident plaintiffs could probably sue together in their respective home Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 65 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 States. In addition, since this decision concerns the due process limits on the exercise of specific jurisdiction by a State, the question remains open whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court. Pp. 1783 - 1784. 1 Cal.5th 783, 206 Cal.Rptr.3d 636, 377 P.3d 874, reversed and remanded. ALITO, J., delivered the opinion of the Court, in which ROBERTS, C.J., and KENNEDY, THOMAS, GINSBURG, BREYER, KAGAN, and GORSUCH, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion. Attorneys and Law Firms Neal Katyal, Washington, DC, for Petitioner. Rachel P. Kovner, for the United States as amicus curiae, by special leave of the Court, supporting the petitioner. Thomas C. Goldstein, Bethesda, MD, for Respondents. Anand Agneshwar, Arnold & Porter Kaye Scholer LLP, New York, NY, Daniel S. Pariser, Arnold & Porter Kaye Scholer LLP, Washington, DC, Neal Kumar Katyal, Jessica L. Ellsworth, Frederick Liu, Sean Marotta, Mitchell P. Reich, Hogan Lovells US LLP, Washington, DC, Sara Solow, Hogan Lovells US LLP, Philadelphia, PA, for Petitioner. Paul J. Napoli, Hunter J. Shkolnik, Marie Napoli, Shayna E. Sacks, Jennifer Liakos, Napoli Shkolnik PLLC, New York, NY, Thomas C. Goldstein, Eric F. Citron, Charles H. Davis, Goldstein & Russell, P.C., Bethesda, MD, for Respondents. Opinion Justice ALITO delivered the opinion of the Court. More than 600 plaintiffs, most of whom are not California residents, filed this civil action in a California state court against Bristol-Myers Squibb Company (BMS), asserting a variety of state-law claims based on injuries allegedly caused by a BMS drug called Plavix. The California Supreme Court held that the California courts have specific jurisdiction to entertain the nonresidents' claims. We now reverse. I A BMS, a large pharmaceutical company, is incorporated in Delaware and headquartered in New York, and it maintains substantial *1778 operations in both New York and New Jersey. 1 Cal.5th 783, 790, 206 Cal.Rptr.3d 636, 377 P.3d 874, 879 (2016). Over 50 percent of BMS's work force in the United States is employed in those two States. Ibid. BMS also engages in business activities in other jurisdictions, including California. Five of the company's research and laboratory facilities, which employ a total of around 160 employees, are located there. Ibid. BMS also employs about 250 sales representatives in California and maintains a small state-government advocacy office in Sacramento. Ibid. One of the pharmaceuticals that BMS manufactures and sells is Plavix, a prescription drug that thins the blood and inhibits blood clotting. BMS did not develop Plavix in California, did not create a marketing strategy for Plavix in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California. Ibid. BMS instead engaged in all of these activities in either New York or New Jersey. Ibid. But BMS does sell Plavix Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 66 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 in California. Between 2006 and 2012, it sold almost 187 million Plavix pills in the State and took in more than $900 million from those sales. 1 Cal.5th, at 790-791, 206 Cal.Rptr.3d 636, 377 P.3d, at 879. This amounts to a little over one percent of the company's nationwide sales revenue. Id., at 790, 206 Cal.Rptr.3d 636, 377 P.3d, at 879. B A group of plaintiffs-consisting of 86 California residents and 592 residents from 33 other States-filed eight separate complaints in California Superior Court, alleging that Plavix had damaged their health. Id., at 789, 206 Cal.Rptr.3d 636, 377 P.3d, at 878. All the complaints asserted 13 claims under California law, including products liability, negligent misrepresentation, and misleading advertising claims. Ibid. The nonresident plaintiffs did not allege that they obtained Plavix through California physicians or from any other California source; nor did they claim that they were injured by Plavix or were treated for their injuries in California. Asserting lack of personal jurisdiction, BMS moved to quash service of summons on the nonresidents' claims, but the California Superior Court denied this motion, finding that the California courts had general jurisdiction over BMS “[b]ecause [it] engages in extensive activities in California.” App. to Pet. for Cert. 150. BMS unsuccessfully petitioned the State Court of Appeal for a writ of mandate, but after our decision on general jurisdiction in Daimler AG v. Bauman, 571 U.S. ----, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), the California Supreme Court instructed the Court of Appeal “to vacate its order denying mandate and to issue an order to show cause why relief sought in the petition should not be granted.” App. 9-10. The Court of Appeal then changed its decision on the question of general jurisdiction. 228 Cal.App.4th 605, 175 Cal.Rptr.3d 412 (2014). Under Daimler, it held, general jurisdiction was clearly lacking, but it went on to find that the California courts had specific jurisdiction over the nonresidents' claims against BMS. 228 Cal.App.4th 605, 175 Cal.Rptr.3d, at 425-439. The California Supreme Court affirmed. The court unanimously agreed with the Court of Appeal on the issue of general jurisdiction, but the court was divided on the question of specific jurisdiction. The majority applied a “sliding scale approach to specific jurisdiction.” 1 Cal.5th, at 806, 206 Cal.Rptr.3d 636, 377 P.3d, at 889. Under this approach, “the more wide ranging the defendant's forum contacts, the more readily is shown a connection between the forum contacts and the claim.” Ibid. (internal *1779 quotation marks omitted). Applying this test, the majority concluded that “BMS's extensive contacts with California” permitted the exercise of specific jurisdiction “based on a less direct connection between BMS's forum activities and plaintiffs' claims than might otherwise be required.” Ibid. This attenuated requirement was met, the majority found, because the claims of the nonresidents were similar in several ways to the claims of the California residents (as to which specific jurisdiction was uncontested). Id., at 803-806, 206 Cal.Rptr.3d 636, 377 P.3d, at 887-889. The court noted that “[b]oth the resident and nonresident plaintiffs' claims are based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product.” Id., at 804, 206 Cal.Rptr.3d 636, 377 P.3d, at 888. And while acknowledging that “there is no claim that Plavix itself was designed and developed in [BMS's California research facilities],” the court thought it significant that other research was done in the State. Ibid. Three justices dissented. “The claims of ... nonresidents injured by their use of Plavix they purchased and used in other states,” they wrote, “in no sense arise from BMS's marketing and sales of Plavix in California,” and they found that the “mere similarity” of the residents' and nonresidents' claims was not enough. Id., at 819, 206 Cal.Rptr.3d 636, 377 P.3d, at 898 (opinion of Werdegar, J.). The dissent accused the majority of “expand[ing] specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction.” Id., at 816, 206 Cal.Rptr.3d 636, 377 P.3d, at 896. Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 67 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 We granted certiorari to decide whether the California courts' exercise of jurisdiction in this case violates the Due Process Clause of the Fourteenth Amendment. 580 U.S. ----, 137 S.Ct. 827, 196 L.Ed.2d 610 (2017). 1 II A [1] [2] [3] It has long been established that the Fourteenth Amendment limits the personal jurisdiction of state courts. See, e.g., Daimler, supra, at ---- - ----, 134 S.Ct., at 753-757; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 316-317, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565 (1878). Because “[a] state court's assertion of jurisdiction exposes defendants to the State's coercive power,” it is “subject to review for compatibility with the Fourteenth Amendment's Due Process Clause,” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011), which “limits the power of a state court to render a valid personal judgment against a nonresident defendant,” World-Wide Volkswagen, supra, at 291, 100 S.Ct. 559. The primary focus of our personal jurisdiction inquiry is the defendant's relationship to the forum State. See Walden v. Fiore, 571 U.S. ----, ---- - ----, 134 S.Ct. 1115, 1121-1123, 188 L.Ed.2d 12 (2014); Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 806-807, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). [4] [5] [6] [7] Since our seminal decision in International Shoe, our decisions have recognized *1780 two types of personal jurisdiction: “general” (sometimes called “all-purpose”) jurisdiction and “specific” (sometimes called “case- linked”) jurisdiction. Goodyear, 564 U.S., at 919, 131 S.Ct. 2846. “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Id., at 924, 131 S.Ct. 2846. A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State. Id., at 919, 131 S.Ct. 2846. But “only a limited set of affiliations with a forum will render a defendant amenable to” general jurisdiction in that State. Daimler, 571 U.S., at ----, 134 S.Ct., at 760. [8] [9] [10] Specific jurisdiction is very different. In order for a state court to exercise specific jurisdiction, “the suit ” must “aris[e] out of or relat[e] to the defendant's contacts with the forum.” Id., at ----, 134 S.Ct., at 754 (internal quotation marks omitted; emphasis added); see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-473, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). In other words, there must be “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.” Goodyear, 564 U.S., at 919, 131 S.Ct. 2846 (internal quotation marks and brackets omitted). For this reason, “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Ibid. (internal quotation marks omitted). B [11] [12] [13] [14] [15] In determining whether personal jurisdiction is present, a court must consider a variety of interests. These include “the interests of the forum State and of the plaintiff in proceeding with the cause in the plaintiff's forum of choice.” Kulko v. Superior Court of Cal., City and County of San Francisco, 436 U.S. 84, 92, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978); see Daimler, supra, at ---- - ----, n. 20, 134 S.Ct., at 762, n. 20; Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 113, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); World-Wide Volkswagen, 444 U.S., at 292, 100 S.Ct. 559. But the “primary concern” is “the burden on the defendant.” Id., at 292, 100 S.Ct. 559. Assessing Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 68 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question. As we have put it, restrictions on personal jurisdiction “are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States.” Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). “[T]he States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State ... implie[s] a limitation on the sovereignty of all its sister States.” World-Wide Volkswagen, 444 U.S., at 293, 100 S.Ct. 559. And at times, this federalism interest may be decisive. As we explained in World-Wide Volkswagen, “[e]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying *1781 its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.” Id., at 294, 100 S.Ct. 559. III A [16] [17] Our settled principles regarding specific jurisdiction control this case. In order for a court to exercise specific jurisdiction over a claim, there must be an “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” Goodyear, 564 U.S., at 919, 131 S.Ct. 2846 (internal quotation marks and brackets in original omitted). When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State. See id., at 931, n. 6, 131 S.Ct. 2846 (“[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales”). [18] [19] For this reason, the California Supreme Court's “sliding scale approach” is difficult to square with our precedents. Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction. For specific jurisdiction, a defendant's general connections with the forum are not enough. As we have said, “[a] corporation's ‘continuous activity of some sorts within a state ... is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.’ ” Id., at 927, 131 S.Ct. 2846 (quoting International Shoe, 326 U.S., at 318, 66 S.Ct. 154). [20] The present case illustrates the danger of the California approach. The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents' claims. As noted, the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California-and allegedly sustained the same injuries as did the nonresidents-does not allow the State to assert specific jurisdiction over the nonresidents' claims. As we have explained, “a defendant's relationship with a ... third party, standing alone, is an insufficient basis for jurisdiction.” Walden, 571 U.S., at ----, 134 S.Ct., at 1123. This remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents. Nor is it sufficient-or even relevant-that BMS conducted research in California on matters unrelated to Plavix. What is needed-and what is missing here-is a connection between the forum and the specific claims at issue. Our decision in Walden, supra, illustrates this requirement. In that case, Nevada plaintiffs sued an out-of-state defendant for conducting an allegedly unlawful search of the plaintiffs while they were in Georgia preparing to board a plane bound Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 69 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 for Nevada. We held that the Nevada courts lacked specific jurisdiction even though the plaintiffs were Nevada residents and “suffered foreseeable harm in Nevada.” Id., at ----, 134 S.Ct., at 1124. Because the “relevant conduct occurred *1782 entirely in Georgi[a] ... the mere fact that [this] conduct affected plaintiffs with connections to the forum State d [id] not suffice to authorize jurisdiction.” Id., at ----, 134 S.Ct., at 1126 (emphasis added). In today's case, the connection between the nonresidents' claims and the forum is even weaker. The relevant plaintiffs are not California residents and do not claim to have suffered harm in that State. In addition, as in Walden, all the conduct giving rise to the nonresidents' claims occurred elsewhere. It follows that the California courts cannot claim specific jurisdiction. See World-Wide Volkswagen, supra, at 295, 100 S.Ct. 559 (finding no personal jurisdiction in Oklahoma because the defendant “carr[ied] on no activity whatsoever in Oklahoma” and dismissing “the fortuitous circumstance that a single Audi automobile, sold [by defendants] in New York to New York residents, happened to suffer an accident while passing through Oklahoma” as an “isolated occurrence”). B The nonresidents maintain that two of our cases support the decision below, but they misinterpret those precedents. In Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), a New York resident sued Hustler in New Hampshire, claiming that she had been libeled in five issues of the magazine, which was distributed throughout the country, including in New Hampshire, where it sold 10,000 to 15,000 copies per month. Concluding that specific jurisdiction was present, we relied principally on the connection between the circulation of the magazine in New Hampshire and damage allegedly caused within the State. We noted that “[f]alse statements of fact harm both the subject of the falsehood and the readers of the statement.” Id., at 776, 104 S.Ct. 1473 (emphasis deleted). This factor amply distinguishes Keeton from the present case, for here the nonresidents' claims involve no harm in California and no harm to California residents. The nonresident plaintiffs in this case point to our holding in Keeton that there was jurisdiction in New Hampshire to entertain the plaintiff's request for damages suffered outside the State, id., at 774, 104 S.Ct. 1473 but that holding concerned jurisdiction to determine the scope of a claim involving in-state injury and injury to residents of the State, not, as in this case, jurisdiction to entertain claims involving no in-state injury and no injury to residents of the forum State. Keeton held that there was jurisdiction in New Hampshire to consider the full measure of the plaintiff's claim, but whether she could actually recover out-of-state damages was a merits question governed by New Hampshire libel law. Id., at 778, n. 9, 104 S.Ct. 1473. The Court's decision in Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), which involved a class action filed in Kansas, is even less relevant. The Kansas court exercised personal jurisdiction over the claims of nonresident class members, and the defendant, Phillips Petroleum, argued that this violated the due process rights of these class members because they lacked minimum contacts with the State. 2 According to the defendant, the out-of-state class members should not have been kept in the case unless they affirmatively opted in, instead of merely failing to opt out after *1783 receiving notice. Id., at 812, 105 S.Ct. 2965. Holding that there had been no due process violation, the Court explained that the authority of a State to entertain the claims of nonresident class members is entirely different from its authority to exercise jurisdiction over an out-of-state defendant. Id., at 808-812, 105 S.Ct. 2965. Since Shutts concerned the due process rights of plaintiffs, it has no bearing on the question presented here. Respondents nevertheless contend that Shutts supports their position because, in their words, it would be “absurd to believe that [this Court] would have reached the exact opposite result if the petitioner [Phillips] had only invoked its own Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 70 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 due-process rights, rather than those of the non-resident plaintiffs.” Brief for Respondents 28-29, n. 6 (emphasis deleted). But the fact remains that Phillips did not assert that Kansas improperly exercised personal jurisdiction over it, and the Court did not address that issue. 3 Indeed, the Court stated specifically that its “discussion of personal jurisdiction [did not] address class actions where the jurisdiction is asserted against a defendant class.” Shutts, supra, at 812, n. 3, 105 S.Ct. 2965. C [21] In a last ditch contention, respondents contend that BMS's “decision to contract with a California company [McKesson] to distribute [Plavix] nationally” provides a sufficient basis for personal jurisdiction. Tr. of Oral Arg. 32. But as we have explained, “[t]he requirements of International Shoe ... must be met as to each defendant over whom a state court exercises jurisdiction.” Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980); see Walden, 571 U.S., at ----, 134 S.Ct., at 1123 (“[A] defendant's relationship with a ... third party, standing alone, is an insufficient basis for jurisdiction”). In this case, it is not alleged that BMS engaged in relevant acts together with McKesson in California. Nor is it alleged that BMS is derivatively liable for McKesson's conduct in California. And the nonresidents “have adduced no evidence to show how or by whom the Plavix they took was distributed to the pharmacies that dispensed it to them.” 1 Cal.5th, at 815, 206 Cal.Rptr.3d 636, 377 P.3d, at 895 (Werdegar, J., dissenting) (emphasis deleted). See Tr. of Oral Arg. 33 (“It is impossible to trace a particular pill to a particular person.... It's not possible for us to track particularly to McKesson”). The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State. IV Our straightforward application in this case of settled principles of personal jurisdiction will not result in the parade of horribles that respondents conjure up. See Brief for Respondents 38-47. Our decision does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS. BMS concedes that such suits could be brought in either New York or Delaware. See Brief for Petitioner 13. Alternatively, the plaintiffs who are residents of a particular State-for example, the 92 plaintiffs from Texas and the 71 from Ohio-could probably sue together in their home States. In addition, since our decision concerns the due process limits on the *1784 exercise of specific jurisdiction by a State, we leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court. See Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 102, n. 5, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). * * * The judgment of the California Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion. It is so ordered. Justice SOTOMAYOR, dissenting. Three years ago, the Court imposed substantial curbs on the exercise of general jurisdiction in its decision in Daimler AG v. Bauman, 571 U.S. ----, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). Today, the Court takes its first step toward a similar contraction of specific jurisdiction by holding that a corporation that engages in a nationwide course of conduct cannot be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State. Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 71 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 I fear the consequences of the Court's decision today will be substantial. The majority's rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone. It will make it impossible to bring a nationwide mass action in state court against defendants who are “at home” in different States. And it will result in piecemeal litigation and the bifurcation of claims. None of this is necessary. A core concern in this Court's personal jurisdiction cases is fairness. And there is nothing unfair about subjecting a massive corporation to suit in a State for a nationwide course of conduct that injures both forum residents and nonresidents alike. I Bristol-Myers Squibb is a Fortune 500 pharmaceutical company incorporated in Delaware and headquartered in New York. It employs approximately 25,000 people worldwide and earns annual revenues of over $15 billion. In the late 1990's, Bristol-Myers began to market and sell a prescription blood thinner called Plavix. Plavix was advertised as an effective tool for reducing the risk of blood clotting for those vulnerable to heart attacks and to strokes. The ads worked: At the height of its popularity, Plavix was a blockbuster, earning Bristol-Myers billions of dollars in annual revenues. Bristol-Myers' advertising and distribution efforts were national in scope. It conducted a single nationwide advertising campaign for Plavix, using television, magazine, and Internet ads to broadcast its message. A consumer in California heard the same advertisement as a consumer in Maine about the benefits of Plavix. Bristol-Myers' distribution of Plavix also proceeded through nationwide channels: Consistent with its usual practice, it relied on a small number of wholesalers to distribute Plavix throughout the country. One of those distributors, McKesson Corporation, was named as a defendant below; during the relevant time period, McKesson was responsible for almost a quarter of Bristol-Myers' revenue worldwide. The 2005 publication of an article in the New England Journal of Medicine questioning the efficacy and safety of Plavix put Bristol-Myers on the defensive, as consumers around the country began to claim that they were injured by the drug. The plaintiffs in these consolidated cases are 86 people who allege they were injured by Plavix in California and several hundred others who say they were injured by *1785 the drug in other States. 1 They filed their suits in California Superior Court, raising product-liability claims against Bristol-Myers and McKesson. Their claims are “materially identical,” as Bristol-Myers concedes. See Brief for Petitioner 4, n. 1. Bristol-Myers acknowledged it was subject to suit in California state court by the residents of that State. But it moved to dismiss the claims brought by the nonresident plaintiffs-respondents here-for lack of jurisdiction. The question here, accordingly, is not whether Bristol-Myers is subject to suit in California on claims that arise out of the design, development, manufacture, marketing, and distribution of Plavix-it is. The question is whether Bristol-Myers is subject to suit in California only on the residents' claims, or whether a state court may also hear the nonresidents' “identical” claims. II A As the majority explains, since our pathmarking opinion in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the touchstone of the personal-jurisdiction analysis has been the question whether a defendant has “certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Id., at 316, 66 S.Ct. 154 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). For decades this Court has considered that question through two different jurisdictional frames: “general” and “specific” jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, nn. 8-9, Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 72 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Under our current case law, a state court may exercise general, or all-purpose, jurisdiction over a defendant corporation only if its “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). 2 If general jurisdiction is not appropriate, however, a state court can exercise only specific, or case-linked, jurisdiction over a dispute. Id., at 923-924, 131 S.Ct. 2846. Our cases have set out three conditions for the exercise of specific jurisdiction over a nonresident defendant. 4A C. Wright, A. Miller, & A. Steinman, Federal Practice and Procedure § 1069, pp. 22-78 (4th ed. 2015) (Wright); see also id., at 22-27, n. 10 (collecting authority). First, the defendant must have “ ‘purposefully avail[ed] itself of the privilege of conducting activities within the forum State’ ” or have purposefully directed its conduct into the forum State. J. McIntyre Machinery, Ltd. *1786 v. Nicastro, 564 U.S. 873, 877, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011) (plurality opinion) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). Second, the plaintiff's claim must “arise out of or relate to” the defendant's forum conduct. Helicopteros, 466 U.S., at 414, 104 S.Ct. 1868. Finally, the exercise of jurisdiction must be reasonable under the circumstances. Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 113-114, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The factors relevant to such an analysis include “the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies.” Id., at 477, 105 S.Ct. 2174 (internal quotation marks omitted). B Viewed through this framework, the California courts appropriately exercised specific jurisdiction over respondents' claims. First, there is no dispute that Bristol-Myers “purposefully avail[ed] itself,” Nicastro, 564 U.S., at 877, 131 S.Ct. 2780 of California and its substantial pharmaceutical market. Bristol-Myers employs over 400 people in California and maintains half a dozen facilities in the State engaged in research, development, and policymaking. Ante, at 1777 - 1778. It contracts with a California-based distributor, McKesson, whose sales account for a significant portion of its revenue. Supra, at 1784 - 1785. And it markets and sells its drugs, including Plavix, in California, resulting in total Plavix sales in that State of nearly $1 billion during the period relevant to this suit. Second, respondents' claims “relate to” Bristol-Myers' in-state conduct. A claim “relates to” a defendant's forum conduct if it has a “connect[ion] with” that conduct. International Shoe, 326 U.S., at 319, 66 S.Ct. 154. So respondents could not, for instance, hale Bristol-Myers into court in California for negligently maintaining the sidewalk outside its New York headquarters-a claim that has no connection to acts Bristol-Myers took in California. But respondents' claims against Bristol-Myers look nothing like such a claim. Respondents' claims against Bristol-Myers concern conduct materially identical to acts the company took in California: its marketing and distribution of Plavix, which it undertook on a nationwide basis in all 50 States. That respondents were allegedly injured by this nationwide course of conduct in Indiana, Oklahoma, and Texas, and not California, does not mean that their claims do not “relate to” the advertising and distribution efforts that Bristol-Myers undertook in that State. All of the plaintiffs-residents and nonresidents alike-allege that they were injured by the same essential acts. Our cases require no connection more direct than that. Finally, and importantly, there is no serious doubt that the exercise of jurisdiction over the nonresidents' claims is reasonable. Because Bristol-Myers already faces claims that are identical to the nonresidents' claims in this suit, it will not be harmed by having to defend against respondents' claims: Indeed, the alternative approach-litigating those claims in separate suits in as many as 34 different States-would prove far more burdensome. By contrast, the plaintiffs' “interest Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 73 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 in obtaining convenient and effective relief,” Burger King, 471 U.S., at 477, 105 S.Ct. 2174 (internal quotation marks omitted), *1787 is obviously furthered by participating in a consolidated proceeding in one State under shared counsel, which allows them to minimize costs, share discovery, and maximize recoveries on claims that may be too small to bring on their own. Cf. American Express Co. v. Italian Colors Restaurant, 570 U.S. ----, ----, 133 S.Ct. 2304, 2316, 186 L.Ed.2d 417 (2013) (KAGAN, J., dissenting) (“No rational actor would bring a claim worth tens of thousands of dollars if doing so meant incurring costs in the hundreds of thousands”). California, too, has an interest in providing a forum for mass actions like this one: Permitting the nonresidents to bring suit in California alongside the residents facilitates the efficient adjudication of the residents' claims and allows it to regulate more effectively the conduct of both nonresident corporations like Bristol-Myers and resident ones like McKesson. Nothing in the Due Process Clause prohibits a California court from hearing respondents' claims-at least not in a case where they are joined to identical claims brought by California residents. III Bristol-Myers does not dispute that it has purposefully availed itself of California's markets, nor-remarkably-did it argue below that it would be “unreasonable” for a California court to hear respondents' claims. See 1 Cal.5th 783, 799, n. 2, 206 Cal.Rptr.3d 636, 377 P.3d 874, 885, n. 2 (2016). Instead, Bristol-Myers contends that respondents' claims do not “arise out of or relate to” its California conduct. The majority agrees, explaining that no “adequate link” exists “between the State and the nonresidents' claims,” ante, at 1781 - 1782-a result that it says follows from “settled principles [of] specific jurisdiction,” ante, at 1780 - 1781. But our precedents do not require this result, and common sense says that it cannot be correct. A The majority casts its decision today as compelled by precedent. Ibid. But our cases point in the other direction. The majority argues at length that the exercise of specific jurisdiction in this case would conflict with our decision in Walden v. Fiore, 571 U.S. ----, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). That is plainly not true. Walden concerned the requirement that a defendant “purposefully avail” himself of a forum State or “purposefully direc[t]” his conduct toward that State, Nicastro, 564 U.S., at 877, 131 S.Ct. 2780 not the separate requirement that a plaintiff's claim “arise out of or relate to” a defendant's forum contacts. The lower court understood the case that way. See Fiore v. Walden, 688 F.3d 558, 576-582 (C.A.9 2012). The parties understood the case that way. See Brief for Petitioner 17-31, Brief for Respondent 20-44, Brief for United States as Amicus Curiae 12-18, in Walden v. Fiore, O.T. 2013, No. 12-574. And courts and commentators have understood the case that way. See, e.g., 4 Wright § 1067.1, at 388-389. Walden teaches only that a defendant must have purposefully availed itself of the forum, and that a plaintiff cannot rely solely on a defendant's contacts with a forum resident to establish the necessary relationship. See 571 U.S., at ----, 134 S.Ct., at 1122 (“[T]he plaintiff cannot be the only link between the defendant and the forum”). But that holding has nothing to do with the dispute between the parties: Bristol-Myers has purposefully availed itself of California-to the tune of millions of dollars in annual revenue. Only if its language is taken out of context, ante, at 1781 - 1782, can Walden be made to seem relevant to the case at hand. *1788 By contrast, our decision in Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), suggests that there should be no such barrier to the exercise of jurisdiction here. In Keeton, a New York resident brought suit against an Ohio corporation, a magazine, in New Hampshire for libel. She alleged that the magazine's nationwide course of conduct-its publication of defamatory statements-had injured her in every State, including New Hampshire. This Court unanimously rejected the defendant's argument that it should not be subject to “nationwide damages” when Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 74 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 only a small portion of those damages arose in the forum State, id., at 781, 104 S.Ct. 1473; exposure to such liability, the Court explained, was the consequence of having “continuously and deliberately exploited the New Hampshire market,” ibid. The majority today dismisses Keeton on the ground that the defendant there faced one plaintiff's claim arising out of its nationwide course of conduct, whereas Bristol-Myers faces many more plaintiffs' claims. See ante, at 1782 - 1783. But this is a distinction without a difference: In either case, a defendant will face liability in a single State for a single course of conduct that has impact in many States. Keeton informs us that there is no unfairness in such a result. The majority's animating concern, in the end, appears to be federalism: “[T]erritorial limitations on the power of the respective States,” we are informed, may-and today do-trump even concerns about fairness to the parties. Ante, at 1780. Indeed, the majority appears to concede that this is not, at bottom, a case about fairness but instead a case about power: one in which “ ‘the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; ... the forum State has a strong interest in applying its law to the controversy; [and] the forum State is the most convenient location for litigation’ ” but personal jurisdiction still will not lie. Ante, at 1780 - 1781 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 294, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). But I see little reason to apply such a principle in a case brought against a large corporate defendant arising out of its nationwide conduct. What interest could any single State have in adjudicating respondents' claims that the other States do not share? I would measure jurisdiction first and foremost by the yardstick set out in International Shoe-“fair play and substantial justice,” 326 U.S., at 316, 66 S.Ct. 154 (internal quotation marks omitted). The majority's opinion casts that settled principle aside. B I fear the consequences of the majority's decision today will be substantial. Even absent a rigid requirement that a defendant's in-state conduct must actually cause a plaintiff's claim, 3 the upshot of today's opinion is that plaintiffs cannot join their claims together and sue a defendant in a State in which only some of them have *1789 been injured. That rule is likely to have consequences far beyond this case. First, and most prominently, the Court's opinion in this case will make it profoundly difficult for plaintiffs who are injured in different States by a defendant's nationwide course of conduct to sue that defendant in a single, consolidated action. The holding of today's opinion is that such an action cannot be brought in a State in which only some plaintiffs were injured. Not to worry, says the majority: The plaintiffs here could have sued Bristol-Myers in New York or Delaware; could “probably” have subdivided their separate claims into 34 lawsuits in the States in which they were injured; and might have been able to bring a single suit in federal court (an “open ... question”). Ante, at 1783 - 1784. Even setting aside the majority's caveats, what is the purpose of such limitations? What interests are served by preventing the consolidation of claims and limiting the forums in which they can be consolidated? The effect of the Court's opinion today is to eliminate nationwide mass actions in any State other than those in which a defendant is “ ‘essentially at home.’ ” 4 See Daimler, 571 U.S., at ----, 134 S.Ct., at 754. Such a rule hands one more tool to corporate defendants determined to prevent the aggregation of individual claims, and forces injured plaintiffs to bear the burden of bringing suit in what will often be far flung jurisdictions. Second, the Court's opinion today may make it impossible to bring certain mass actions at all. After this case, it is difficult to imagine where it might be possible to bring a nationwide mass action against two or more defendants headquartered and incorporated in different States. There will be no State where both defendants are “at home,” and so no State in which the suit can proceed. What about a nationwide mass action brought against a defendant not headquartered or incorporated in the United States? Such a defendant is not “at home” in any State. Cf. id., at ---- - ----, 134 S.Ct., at 772-773 (SOTOMAYOR, J., concurring in judgment). Especially in a world in which defendants are subject to general jurisdiction in only a handful of States, see ibid., the effect of today's opinion will be to curtail-and in some cases eliminate-plaintiffs' ability to hold corporations fully accountable for their nationwide conduct. Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 75 of 76 Bristol-Myers Squibb Co. v. Superior Court of California, San..., 137 S.Ct. 1773 (2017) 17 Cal. Daily Op. Serv. 5786 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 The majority chides respondents for conjuring a “parade of horribles,” ante, at 1783, but says nothing about how suits like those described here will survive its opinion in this case. The answer is simple: They will not. * * * It “does not offend ‘traditional notions of fair play and substantial justice,’ ” International Shoe, 326 U.S., at 316, 66 S.Ct. 154 to permit plaintiffs to aggregate claims arising out of a single nationwide course of conduct in a single suit in a single State where some, but not all, were injured. But that is exactly what the Court holds today is barred by the Due Process Clause. This is not a rule the Constitution has required before. I respectfully dissent. All Citations 137 S.Ct. 1773, 17 Cal. Daily Op. Serv. 5786 Footnotes * The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499. 1 California law provides that its courts may exercise jurisdiction “on any basis not inconsistent with the Constitution ... of the United States,” Cal. Civ. Proc. Code Ann. § 410.10 (West 2004); see Daimler AG v. Bauman, 571 U.S. ----, ----, 134 S.Ct. 746, 753, 187 L.Ed.2d 624 (2014). 2 The Court held that the defendant had standing to argue that the Kansas court had improperly exercised personal jurisdiction over the claims of the out-of-state class members because that holding materially affected the defendant's own interests, specifically, the res judicata effect of an adverse judgment. 472 U.S., at 803-806, 105 S.Ct. 2965. 3 Petitioner speculates that Phillips did not invoke its own due process rights because it was believed at the time that the Kansas court had general jurisdiction. See Reply Brief 7, n. 1. 1 Like the parties and the majority, I refer to these people as “residents” and “nonresidents” of California as a convenient shorthand. See ante, at 1778; Brief for Petitioner 4-5, n. 1; Brief for Respondents 2, n. 1. For jurisdictional purposes, the important question is generally (as it is here) where a plaintiff was injured, not where he or she resides. 2 Respondents do not contend that the California courts would be able to exercise general jurisdiction over Bristol-Myers- a concession that follows directly from this Court's opinion in Daimler AG v. Bauman, 571 U.S. ----, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). As I have explained, I believe the restrictions the Court imposed on general jurisdiction in Daimler were ill advised. See BNSF R. Co. v. Tyrrell, 581 U.S. ----, ----, 137 S.Ct. 1549, --- L.Ed.2d ---- (2017) (SOTOMAYOR, J., concurring in part and dissenting in part); Daimler, 571 U.S., at ----, 134 S.Ct. at 772-773 (SOTOMAYOR, J., concurring in judgment). But I accept respondents' concession, for the purpose of this case, that Bristol-Myers is not subject to general jurisdiction in California. 3 Bristol-Myers urges such a rule upon us, Brief for Petitioner 14-37, but its adoption would have consequences far beyond those that follow from today's factbound opinion. Among other things, it might call into question whether even a plaintiff injured in a State by an item identical to those sold by a defendant in that State could avail himself of that State's courts to redress his injuries-a result specifically contemplated by World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). See Brief for Civil Procedure Professors as Amici Curiae 14-18; see also J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 906-907, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011) (GINSBURG, J., dissenting). That question, and others like it, appears to await another case. 4 The Court today does not confront the question whether its opinion here would also apply to a class action in which a plaintiff injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom were injured there. Cf. Devlin v. Scardelletti, 536 U.S. 1, 9-10, 122 S.Ct. 2005, 153 L.Ed.2d 27 (2002) ( “Nonnamed class members ... may be parties for some purposes and not for others”); see also Wood, Adjudicatory Jurisdiction and Class Actions, 62 Ind. L.J. 597, 616-617 (1987). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-05373-TEH Document 172-2 Filed 07/10/17 Page 76 of 76 [PROPOSED] ORDER GRANTING DEFENDANT LUMBER LIQUIDATOR INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MCGUIREWOODS LLP David S. Reidy (SBN 225904) dreidy@mcguirewoods.com Two Embarcadero Center, Suite 1300 San Francisco, CA 94111 Telephone: 415.844.9944 Facsimile: 415.844.9922 Bethany G. Lukitsch (SBN 314376) blukitsch@mcguirewoods.com Diane Flannery (Pro Hac Vice) dflannery@mcguirewoods.com 800 East Canal Street Richmond, Virginia 23219-3916 Telephone: 804.775.1000 Facsimile: 804.775.1061 Attorneys Specially Appearing for Defendant Lumber Liquidators, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA DANA GOLD, TAMMY EMERY, EDWIN MENDEZ, LAURA NORRIS, DONALD FURSMAN, and JOHN TRIANA, on behalf of themselves and all others similarly situated, Plaintiffs, vs. LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES1 through 200, inclusive, Defendants. CASE NO. 3:14-cv-05373-TEH [PROPOSED] ORDER GRANTING DEFENDANT LUMBER LIQUIDATORS, INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION [Filed concurrently with Notice of and Motion to Dismiss Plaintiffs Fourth Amended Complaint; Declaration of Bethany Lukitsch] Date: August 14, 2017 Time: 10:00 a.m. Crtrm.: 12 Judge: Hon. Thelton E. Henderson Complaint Filed: December 8, 2014 Case 3:14-cv-05373-TEH Document 172-3 Filed 07/10/17 Page 1 of 2 1 [PROPOSED] ORDER GRANTING DEFENDANT LUMBER LIQUIDATOR INC.’S MOTION TO DISMISS PLAINTIFFS’ FOURTH AMENDED CLASS ACTION COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) FOR LACK OF PERSONAL JURISDICTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER Defendant Lumber Liquidators, Inc.’s (“Lumber Liquidators”) Notice of and Motion to Dismiss Plaintiffs’ Dana Gold, Tammy Emery, Edwin Mendez, Laura Norris, Donald Fursman, and John Triana’s (“Plaintiffs”) Fourth Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(2) for Lack of Personal Jurisdiction (“Motion”) came on regularly for hearing before this Court on August 14, 2017. After full consideration of the evidence and arguments by the parties and the Court’s records and files in this action, and good cause appearing therefore, IT IS HEREBY ORDERED AS FOLLOWS: 1. Lumber Liquidators’ Motion is GRANTED. 2. All claims of Plaintiffs Tammy Emery, Edwin Mendez, Laura Norris, Donald Fursman, and John Triana along with their attendant claims, including Counts 4-8 of the Fourth Amended Class Action Complaint, shall be and hereby are dismissed without leave to amend against Defendant Lumber Liquidators, Inc. pursuant to Fed. R. Civ. P. 12(b)(2) because personal jurisdiction cannot be exercised over Lumber Liquidators in this action. IT IS ORDERED. Dated: _______________ _____________________________________ HONORABLE THELTON E. HENDERSON UNITED STATES DISTRICT JUDGE Case 3:14-cv-05373-TEH Document 172-3 Filed 07/10/17 Page 2 of 2