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Class Action Against Atlas Roofing Company Survives Motion to Dismiss

A federal judge has narrowed WBM's class action against Atlas Roofing Corp., but let stand breach of warranty and claims of concealment.

The suit alleges that Atlas Roofing Corp. manufactured defective roofing products, but U.S. District Judge Thomas W. Thrash Jr. in Atlanta dismissed strict liability and negligence claims but retained several others, including breach of warranty claims, as reported in Law360. WBM represents plaintiffs in the multidistrict litigation.

“The plaintiffs only adequately allege damage to the shingles themselves,”Judge Thrash said in his May 12 ruling. “Although they generally allege damage to ‘other property,’ this is too ambiguous.”

Lead plaintiffs David and Patricia Dickson alleged roofing products were improperly manufactured, which allowed moisture into the shingles, creating gas bubbles that expanded in the sun and resulted in blistering and cracking.

Under South Carolina law, plaintiffs must prove strict liability or negligence for a product liability tort. Thrash found that the plaintiffs failed to meet this test. However, he let stand the plaintiffs’ claim that Atlas had violated the warranty for its products, finding that the Dicksons would have purchased the product from another manufacturer if not for the Atlas warranty.

The judge let stand:

  • plaintiffs’ claim that Atlas fraudulently concealed the shingles’ manufacturing defect,
  • claims that parts of Atlas’ warranty are void as unconscionable,
  • that Atlas must notify owners of the alleged defect in its process,
  • that Atlas will reassess all prior warranty claims and pay the full costs of repairs and damages.

The suit is part of a multidistrict litigation created in December that consolidated six product liability cases over the shingles from federal courts in Alabama, Georgia, North Carolina, South Carolina, Ohio, and Tennessee.

“We’re certainly pleased with the judge’s ruling that preserves many of our claims, and we’re disappointed that he dismissed the negligence claim,” WBM partner Daniel K. Bryson, who represents the plaintiffs in the MDL, told Law360. “We think that the economic loss rule as it’s often being applied shouldn’t be applicable to residential situations because homeowners have no opportunity to negotiate the terms of the manufacturers’ warranty.”