By David Yucht, J.D.
A homeowners association’s claim of future harm to its sewer system from the use of purportedly flushable wipes was too speculative to establish standing to sue the makers and sellers of the product.
An argument by a homeowners association that damage to its sewer system in 2012 due to clogs caused by "flushable" wipes, together with the continued use of those types of wipes, demonstrated a likelihood of future damage to its sewer, was too speculative to establish injury-in-fact needed for standing to sue, according to a federal district court in New York. Consequently, a suit filed by the association against manufacturers, marketers, and sellers of the wipes was dismissed. However, because the association may be able to supplement its complaint with additional allegations, the court gave it an opportunity to re-plead (The Preserve at Connetquot Homeowners Association, Inc. v. Costco Wholesale Corp., January 28, 2019, Bianco, J.).
Costco Wholesale Corporation and other companies sell a home hygiene product referred to as "flushable wipes." These wipes are marketed as being safe for sewer systems. The Preserve at Connetquot Homeowners Association, Inc. (the Association) incurred expenses in 2012 because of major repairs to its sewage treatment plant due to an influx of "flushable" wipes. It claimed that based on that past experience and the ongoing use of those wipes by consumers in its area, the wipes could "at any given moment, cause harm in the form of clogs." The Association, on behalf of itself and all other similarly situated entities that own and/or operate sewage or wastewater treatment facilities, brought suit against Costco and other companies involved in the manufacturing, marketing, and sale of these wipes, alleging that their products labeled as "flushable" have caused and will continue to cause injury. The Association relied on several theories, including strict products liability, negligence, and breach of warranty, as well as misleading advertising under the New York General Business Law. Costco and the other companies filed a motion to dismiss.
Standing. The court held that the Association failed to sufficiently plead facts to establish the injury-in-fact requirement under Article III of the U.S. Constitution. Consequently, the complaint was dismissed for lack of standing. The court emphasized that the Association did not seek monetary damages for past harm but, rather, sought to restrain Costco and the other companies from marketing and selling their wipes as flushable, safe for sewer systems, and/or biodegradable. The Association’s allegations of past damage to its sewer system did not establish that the threatened harm of clogging was impending, or that there was a substantial risk that the harm would occur in the future. The Association’s allegations were too speculative to demonstrate standing to sue. The Association referred to a clog that occurred over six years ago without any concrete allegations to support the assertion that it was likely to recur. There was no allegation of any indicia of clogging since 2012. Moreover, there were allegations in the complaint that could support the inference that there were changed circumstances since the 2012 clog that might prevent this harm from recurring in the future. For example, the Association installed new equipment to remedy the situation and issued a directive to its residents to refrain from flushing the wipes down their toilets. These variables, combined with the passage of six years since the previous clog, rendered the Association’s claim of future harm completely speculative. However, because the Association may be able to supplement its complaint with additional allegations, the court gave it an opportunity to re-plead its case.
The case is No. 17-CV-7050 (JFB)(AYS).
Attorneys: Mark S. Reich (Robbins Geller Rudman & Dowd, LLP) for The Preserve At Connetquot Homeowners Association, Inc. Courtney Elizabeth Scott (Tressler LLP) and John Q. Lewis (Tucker Ellis LLP) for Costco Wholesale Corp. and CVS Health Corp. Eamon Paul Joyce (Sidley Austin LLP) for Kimberly-Clark Corp.
Companies: The Preserve At Connetquot Homeowners Association, Inc.; Costco Wholesale Corp.; CVS Health Corp.; Kimberly-Clark Corp.
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