Triple S Farms, LLC v. DeLaval Inc.

Background

Triple S Farms alleged that defendants misrepresented the capabilities of the DeLaval VMS V300 robotic milking system, that the system was defective, and that the alleged defects caused damage involving its cows, milk, barn, and V300 machines. Triple S asserted ten causes of action: breach of contract; breach of implied warranties of merchantability and fitness for a particular purpose; breach of express warranty; strict products liability; negligence; fraudulent inducement; negligent misrepresentation; fraudulent concealment or omission; and violation of the Minnesota Deceptive Trade Practices Act. Triple S also sought to represent a nationwide class, a direct-purchaser subclass, and a Minnesota subclass.

DeLaval Inc. moved for partial dismissal under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. West Agro moved to dismiss all claims against it and joined DeLaval Inc.’s arguments. Both defendants also moved to strike the class allegations under Rule 12(f).

Motion to Strike Class Allegations

The court denied the motion to strike class allegations. The defendants argued that some potential class members had arbitration agreements that waived participation in class actions. The court found that Triple S’s own agreement did not contain an arbitration clause, so the defendants did not face the same risk of waiving arbitration rights that was present in the precedent they cited. The court also found that the defendants relied on material outside the complaint to argue that arbitration issues would prevent class certification.

The denial did not determine whether any class would ultimately be certified or whether people with valid arbitration agreements could be included in a certified class.

DeLaval Inc.’s Motion

The court granted in part and denied in part DeLaval Inc.’s motion to dismiss or alternatively strike.

Breach of contract. The court dismissed Count 1 against DeLaval Inc. The sales agreement identified Professional Dairy Systems, described as an independent dealer, as the seller. Triple S and Professional Dairy Systems executed the agreement, and the agreement stated that Professional Dairy Systems was not an agent of DeLaval Inc. The court concluded that Triple S had not plausibly alleged that it formed a purchase contract with DeLaval Inc. The court also stated that the contract theory overlapped with the express-warranty claim.

Economic-loss arguments. DeLaval Inc. sought dismissal or striking of portions of Counts 5, 6, and 8 seeking damages for the value of the V300s, barn-related expenses, and removal or replacement costs. The court denied that request. It explained that the complaint alleged damage to Triple S’s cows, milk product, and barn, and that whether the barn-related damages were barred by the economic-loss doctrine involved factual issues not suitable for resolution under Rule 12(b)(6) at this stage. The court also declined to strike the related allegations because DeLaval Inc. had not shown the significant prejudice required for that remedy.

Minnesota Deceptive Trade Practices Act. DeLaval Inc. argued that Count 10 improperly sought monetary damages because the Minnesota Deceptive Trade Practices Act provides injunctive relief. Triple S conceded that monetary relief was unavailable. Because the parties agreed on that point, the court denied DeLaval Inc.’s motion as moot rather than dismissing or striking the challenged allegations.

West Agro’s Motion

The court denied in part without prejudice and granted in part West Agro’s motion to dismiss.

West Agro argued that Triple S improperly grouped the defendants together and failed to identify conduct specifically attributable to West Agro. It also argued that the fraud-based claims did not satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity. The court concluded that these arguments could be renewed after Triple S filed an amended complaint. It therefore denied those portions of West Agro’s motion without prejudice, meaning the arguments could be raised again.

West Agro also adopted DeLaval Inc.’s arguments. The court granted the motion to the extent it challenged Count 1 because West Agro was not a party to the sales agreement. The court denied West Agro’s other adopted arguments for the same reasons it rejected them as to DeLaval Inc.

Disposition

The motion to strike class allegations was denied. DeLaval Inc.’s motion to dismiss or alternatively strike was denied in part and granted in part. West Agro’s motion to dismiss for failure to state a claim was denied in part without prejudice and granted in part. Judge Katherine Menendez did not decide whether Triple S would ultimately prevail on its claims or whether a class would be certified.