Miller v. Herman

In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3093

JOHN P. M ILLER,

Plaintiff-Appellant,

v.

JAMES G. H ERMAN, et al.,

Defendants-Appellees,

and

P ELLA P RODUCTS, INC.,

Defendant/Third-Party Plaintiff-Appellee,

and

JOSEPH N OBILIO C ARPENTERS,

Third-Party Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 06 C 3573—Wayne R. Andersen, Judge.

A RGUED JANUARY 13, 2010—D ECIDED M ARCH 25, 2010

2 No. 08-3093

Before B AUER, M ANION, and T INDER, Circuit Judges.

T INDER, Circuit Judge. Appellant John P. Miller con-

tracted with appellee James G. Herman for the construc-

tion of a new home. Herman installed Pella windows in

the home as part of that contract, and, according to

Miller, the windows have leaked, causing him personal

and property damage. He brought this action against

Herman, Herman’s construction company, James G.

Herman & Associates, and Pella Products, Inc. (“Pella”)

pursuant to the Magnuson-Moss Warranty—Federal Trade

Commission Improvement Act, 15 U.S.C. §§ 2301-2312

(“Magnuson-Moss” or “the Act”), and various Illinois

law theories. On motion by Herman and Herman &

Associates, the district court dismissed the suit for lack

of subject matter jurisdiction. Miller appeals. We affirm

the dismissal of the Magnuson-Moss claims on modified

grounds, though we vacate the dismissal of Miller’s

state law claims and any related crossclaims, third-party

claims, and counterclaims, and order a limited remand

so the district court can determine whether it should

exercise supplemental jurisdiction over them.

I. B ACKGROUND

In April 2003, John P. Miller and his then-wife Terese

Miller entered into an oral contract with builder James G.

Herman and his company, James G. Herman & Associates,

for the construction of a new, custom-built, $497,700.38

home in Lakemoor, Illinois. (We recite the facts as the

Millers allege, with all reasonable inferences in their

favor.) In mid-June 2003, Herman purchased for the

No. 08-3093 3

Millers’ home windows and doors (collectively “win-

dows”) manufactured and warranted by Pella Products.

As construction of the home progressed, Herman and

subcontractor Joseph Nobilio installed the windows

into the nascent structure.

From the time of their installation in summer 2003

through December 2003, when Herman completed the

home and represented to the Millers that it was habitable,

the windows leaked and allowed water into the home. The

Millers complained to Herman and Pella, and in response

Herman caulked around the windows. The Miller

family moved into the home sometime thereafter. Notwith-

standing the additional caulking, the windows continued

to leak. Mold growing in the home eventually caused the

Millers’ daughter to have an asthma attack and prompted

the Millers to seek professional mold remediation.

In April 2005, the Millers contacted Pella and requested

that it inspect a casement window in the basement of the

home. Pella sent two representatives to the home, and they

removed and inspected the window as requested. They

observed water damage and concluded that it had been

caused by faulty installation rather than a defective

window. They reinstalled the window, but Miller alleges

that they, too, deviated from Pella’s official installation

instructions. There is no indication that the Millers

asked for, or that Pella performed, any inspection or

reinstallation of the other windows.

The windows continued to leak, and the Millers eventu-

ally filed a complaint in Illinois state court. They volun-

tarily dismissed that complaint, however, to pursue the

4 No. 08-3093

present action against Herman, Herman & Associates, and

Pella in the Northern District of Illinois, where they filed

an eight-count complaint. Four of the counts, Counts I-IV,

sounded in state law against Herman: breach of contract,

breach of the implied warranty of habitability, violation

of the Illinois Consumer Fraud and Deceptive Business

Practices Act, and common law fraud. Count VIII, products

liability, was levied against Pella. The remaining three

counts, Counts V, VI, and VII, in the Millers’ view pro-

vided the requisite jurisdictional hook to carry the lot

into federal court. All three, Count V against Herman

and Counts VI and VII against Pella, were breach of

warranty claims pleaded with reference to Magnuson-

Moss, which provides a civil cause of action for con-

sumers “damaged by the failure of a supplier, warrantor,

or service contractor to comply with any [Act]

obligation . . . or under a written warranty, implied war-

ranty, or service contract . . . .” 15 U.S.C. § 2310(d)(1)

(emphasis added). The Act’s “unusual jurisdictional

clause,” quoted in the preceding sentence, permits “an

aggrieved customer [to] sue on state-law claims in federal

court, whether or not the parties are of diverse citizen-

ship.” Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955,

956 (7th Cir. 1998). Indeed, Counts V and VI both allege

breaches of Illinois warranty law. The only requirements

a non-class-action plaintiff must meet to get state law

warranty claims into federal court under Magnuson-Moss

both relate to the amount in controversy: the amount in

controversy of each claim must exceed $25, and the total

amount in controversy, exclusive of interests and costs,

must be at least $50,000. 15 U.S.C. § 2310(d)(3).

No. 08-3093 5

Herman & Associates moved to dismiss the Millers’

complaint for lack of subject matter jurisdiction. See Fed.

R. Civ. P. 12(b)(1). It did not argue that the amount-in-

controversy requirements had not been satisfied,1 but

instead asserted that the district court lacked subject

matter jurisdiction because the windows installed in the

Millers’ home were not “consumer products” within the

meaning of the Act. See 15 U.S.C. § 2301(1); 16 C.F.R.

§ 700.1. Since the Millers were not raising complaints

related to “consumer products,” Herman & Associates

reasoned, Magnuson-Moss did not apply to the claim and

thus there was no federal question jurisdiction under

28 U.S.C. § 1331. And if that were the case, the district

court would be unable to exercise supplemental juris-

diction over the state law claims pursuant to 28 U.S.C.

1

Although the Millers failed to assign specific dollar values to

the damages alleged in their complaint, and failed to even

mention the amount-in-controversy requirement, we conclude

that it has been satisfied here. See Flying J Inc. v. City of New

Haven, 549 F.3d 538, 544 (7th Cir. 2008) (noting that we are

“obliged to consider” subject matter jurisdiction “at any point

in the litigation”). These were pricey windows, and the Millers

also alleged consequential and incidental damages (which

are recoverable under Illinois warranty law, upon which two

of the three Magnuson-Moss claims are based). “When the

jurisdictional threshold is uncontested, we generally will

accept the plaintiff’s good faith allegation of the amount in

controversy unless it appears to a legal certainty that the claim

is really for less than the jurisdictional amount.” McMillian

v. Sheraton Chi. Hotel & Towers, 567 F.3d 839, 844 (7th Cir.

2009) (quotations omitted).

6 No. 08-3093

§ 1367(a). See Arbaugh v. Y & H Corp., 546 U.S. 500, 514

(2006) (“[W]hen a federal court concludes it lacks

subject matter jurisdiction, the court must dismiss the

complaint in its entirety.”). (Diversity jurisdiction, 28

U.S.C. § 1332, is of no concern here because Miller,

Herman, and Herman & Associates all hail from Illinois.)

The Millers filed a reply to the motion in which they

argued, citing state case law and Federal Trade Commis-

sion (“FTC”) interpretations, that the windows were

consumer products. Shortly thereafter, the district court

denied Herman & Associates’ motion with the enigmatic

explanation that its ruling was “based on our reading of

the Magnuson-Moss Warranty Act.”

Eight months later, Herman & Associates, this time in

conjunction with Herman, again moved to dismiss the

complaint on Rule 12(b)(1) grounds. The Herman defen-

dants asked the court to reconsider its earlier decision in

light of an Illinois Appellate Court decision holding that

windows installed in new homes were not “consumer

products.” See Weiss v. MI Home Prods., Inc., 877 N.E.2d

442, 445 (Ill. App. Ct. 2007). They accompanied their

motion with a Fed. R. Civ. P. 56(b) motion for summary

judgment on alternative, unrelated grounds.

While the Herman defendants’ motions were pending,

Pella filed its own Rule 56(b) motion for summary judg-

ment. In its supporting memorandum, Pella raised the

same argument that the Herman defendants had raised

in the Rule 12(b)(1) context: the windows at issue are not

“consumer products.” (Pella also adopted, in a footnote,

the Herman defendants’ motion.) Rather than couching

No. 08-3093 7

the argument in jurisdictional terms, Pella asserted that

“as a matter of law, the windows and doors at issue

in this case are outside of the definition of a consumer

product contained in [Magnuson-Moss]. As a result, an

essential element of plaintiffs’ claim is missing and there

are no set of facts under which plaintiffs’ claim can suc-

ceed.” Dkt. No. 94 at 6. Pella cited some of the FTC’s

interpretations of the Act, see 16 C.F.R. § 700.1, and case

law, including the Weiss case, to support its position.

Pella also attached an FTC advisory opinion, 88 F.T.C. 1030,

to its memorandum.

The district court ordered consolidated briefing on the

Herman defendants’ and Pella’s motions. The Millers

accordingly filed a single universal response memoran-

dum, in which they argued that the windows were

“consumer products.” They did not address the disparate

procedural postures of the motions they were opposing;

they simply requested that the district court “deny the

Defendants’ Motion to Dismiss and Motion for Sum-

mary Judgment.”

The district court did not accede to the Millers’ request.

In its memorandum order and opinion, after discussing

the FTC’s interpretations, 16 C.F.R. § 700.1(e) and (f), the

district court concluded:

We find that the Millers contracted with Herman

for the construction of a new home, not for the

individual sale of windows. Because those win-

dows were intended to be integrated into the

Millers’ home, we find that they do not constitute

“consumer products” under the Magnuson-Moss

8 No. 08-3093

Act, but are instead building materials indistin-

guishable from the real property. Thus, the Millers

have no valid claims under the Magnuson-Moss

Act, and this court therefore lacks subject matter

jurisdiction over any of the Millers’ claims. Ac-

cordingly, Herman’s motion to dismiss this case

is granted. We note that the defendants have also

moved for summary judgment on the Millers’ state

law claims. The defendants may reassert those

arguments in state court should the Millers

choose to refile their state law claims in state court.

For the foregoing reasons, defendants James G.

Herman’s and James G. Herman & Associates,

Inc.’s motion to dismiss for lack of subject matter

jurisdiction is granted. This case is terminated.

Miller v. Herman, No. 06 C 3573, 2008 WL 4889094, at *3

(N.D. Ill. July 15, 2008). The district court later clarified that

its pronouncement of termination (and entry of final

judgment) applied to all defendants and encompassed

all motions and claims pending before it, including

Pella’s motion for summary judgment.

II. D ISCUSSION

A. Magnuson-Moss Claims

John Miller, who after the Millers’ recent divorce solely

holds all obligations and rights associated with the

home, including those stemming from this action, now

appeals. He argues, as he did before the district court,

that the windows Herman and Nobilio installed in his

No. 08-3093 9

home are “consumer products” that entitle him to the

benefits and protections of the Magnuson-Moss Act.

Before we reach that argument, however, we address a

procedural hiccup that entered this case as part and parcel

of Herman & Associates’ first motion to dismiss. Since

that motion, the “consumer product” debate at the heart

of this case has been framed as a jurisdictional question.2

But because Miller must show that the windows are a

consumer product to prevail, and not just to get into

federal court, see 15 U.S.C. § 2310(d), the Herman defen-

dants’ Rule 12(b)(1) motion was in fact an indirect attack

on the merits of Miller’s case. See Gentek Bldg. Prods., Inc. v.

The Sherwin-Williams Co., 491 F.3d 320, 331 (6th Cir. 2007)

(“To establish a Magnuson-Moss claim, a plaintiff must

show that the item at issue was a ‘consumer product.’ This

disputed fact therefore goes to the merits.”); Miller v.

Willow Creek Homes, Inc., 249 F.3d 629, 632 (7th Cir. 2001)

(noting that it would “not reach the merits” of the

dispute but nonetheless commenting that “it seems

doubtful at best that a court would find the mobile

home in question to be a consumer product covered by

the Act”).

The conflation of jurisdictional and non-jurisdictional

limitations on causes of action is not an uncommon

occurrence. Indeed, the Supreme Court has taken up the

issue on several occasions, as have we. See, e.g., Reed

2

We note that Pella (correctly) characterized the issue as merits-

based rather than jurisdictional in its motion for and memoran-

dum in support of summary judgment. Dkt. Nos. 94 & 95.

10 No. 08-3093

Elsevier, Inc. v. Muchnick, No. 08-103, 2010 WL 693679, at *8,

*11 (U.S. Mar. 2, 2010) (holding that the registration

requirement in 17 U.S.C. § 411(a) of the Copyright Act

“imposes a precondition to filing a claim” and “does not

restrict a federal court’s subject-matter jurisdiction”);

Arbaugh, 546 U.S. at 511 (recognizing the “subject-

matter jurisdiction/ingredient-of-claim-for-relief dichot-

omy” and noting that “[s]ubject matter jurisdiction in

federal-question cases is sometimes erroneously conflated

with a plaintiff’s need and ability to prove the defendant

bound by a federal law asserted as the predicate for

relief—a merits-related determination” (quotation omit-

ted)); Bell v. Hood, 327 U.S. 678, 682 (1946) (“Jurisdiction . . .

is not defeated . . . by the possibility that the averments

might fail to state a cause of action on which petitioners

could actually recover.”); Williams v. Fleming, No. 09-2410,

2010 WL 668889, at *3-*4 (7th Cir. Feb. 26, 2010) (holding

that in the context of the Federal Tort Claims Act, claims

dismissed on sovereign immunity grounds are “not

dismissed for lack of jurisdiction, but for the existence of

a defense”); Doss v. Clearwater Title Co., 551 F.3d 634, 638-

39 (7th Cir. 2008) (discussing 15 U.S.C. § 1635(f) and

concluding that there is “nothing jurisdictional” about it).

The Supreme Court has provided a “readily administra-

ble bright line” test to resolve the question of whether a

provision is jurisdictional. Arbaugh, 546 U.S. at 516. Under

that test,

[i]f the Legislature clearly states that a threshold

limitation on a statute’s scope shall count as juris-

dictional, then courts and litigants will be duly

No. 08-3093 11

instructed and will not be left to wrestle with the

issue. But when Congress does not rank a statutory

limitation on coverage as jurisdictional, courts

should treat the restriction as nonjurisdictional

in character.

Id. at 515-16 (citations omitted). The Court has also ex-

plained that the location of statutory requirements can be

instructive; when requirements are in provisions “sepa-

rate” from a statute’s “jurisdiction-granting section,” Reed

Elsevier, 2010 WL 693679, at *6, that is some indication

that the requirements are not jurisdictional, see id. (citing

Arbaugh, 546 U.S. at 514-15). Applying these principles

here confirms that Magnuson-Moss’s “consumer prod-

ucts” requirement, see 15 U.S.C. §§ 2301-2305, 2308, is not

jurisdictional. Neither the definition of consumer

products, § 2301(1), nor the provisions that set out rules

governing warranties of consumer products, §§ 2302-

2305, 2308, “clearly state” that they are jurisdictional. We

thus treat them as “nonjurisdictional in character.” In

contrast, § 2310(d)(1) has the heading “Jurisdiction” and

grants “appropriate district court[s] of the United States”

the ability to hear claims. See Steel Co. v. Citizens for a Better

Env’t, 523 U.S. 83, 89 (1998) (stating that “subject-matter

jurisdiction” refers to “the courts’ statutory or constitu-

tional power to adjudicate the case”). Moreover, the

term “consumer product” does not appear in the juris-

dictional provision; it is used only in separate sections

of the Act. We therefore conclude that whether an item

is a “consumer product” is not a jurisdictional require-

ment of the Magnuson-Moss Act. Thus, the Herman

defendants’ filing before the district court was, despite

12 No. 08-3093

its label, more properly considered as a motion to

dismiss for failure to state a claim. Reynolds v. United

States, 549 F.3d 1108, 1111-12 (7th Cir. 2008); see also Palay

v. United States, 349 F.3d 418, 424-25 (7th Cir. 2003); Health

Cost Controls v. Skinner, 44 F.3d 535, 538 (7th Cir. 1995)

(“This Court ordinarily may modify a dismissal for lack

of jurisdiction and convert it to a dismissal on the merits

if warranted.”); Peckmann v. Thompson, 966 F.2d 295, 297

(7th Cir. 1992) (“If a defendant’s Rule 12(b)(1) motion is

an indirect attack on the merits of the plaintiff’s claim,

the court may treat the motion as if it were a Rule 12(b)(6)

motion to dismiss for failure to state a claim upon

which relief can be granted.”).

Yet a Rule 12(b)(6) motion must be decided solely on the

face of the complaint and any attachments that accompa-

nied its filing. See Fed. R. Civ. P. 10(c), 12(d); Segal v. Geisha

NYC LLC, 517 F.3d 501, 504-05 (7th Cir. 2008). Here,

“matters outside the pleadings were presented to and not

excluded by the court,” so “the motion shall be treated as

one for summary judgment and disposed of as provided

in Rule 56.” Fed. R. Civ. P. 12(d). There is no problem

construing the motion as one for summary judgment

here; “[a]dequate notice is provided when the moving

party frames its motion in the alternative as one for

summary judgment,” Tri-Gen Inc. v. Int’l Union of

Operating Eng’rs, Local 150, 433 F.3d 1024, 1029 (7th Cir.

2006), and not only did the Herman defendants do just

that, but Pella also explicitly filed a motion requesting

summary judgment on identical grounds to those

asserted in the Rule 12(b)(1) motion. Moreover, Miller

responded to the motions collectively and universally, and

No. 08-3093 13

had the opportunity to “present all the material that is

pertinent to” a summary judgment motion. Fed. R. Civ. P.

12(d); see also Malak v. Assoc. Physicians, Inc., 784 F.2d 277,

280 (7th Cir. 1986).

Our review is thus de novo (as it would have been under

a Rule 12(b)(1) or Rule 12(b)(6) motion as well), and sum-

mary judgment is appropriate “if the pleadings, the dis-

covery and disclosure materials on file, and any affidavits

show that there is no genuine issue as to any material fact

and that the movant is entitled to summary judgment as a

matter of law.” Fed. R. Civ. P. 56(c); Reget v. City of La

Crosse, No. 06-1621, 2010 WL 424581, at *2 (7th Cir. Feb. 8,

2010). We construe all facts in the light most favorable

to Miller and draw all reasonable inferences in his favor. Id.

Here, the Herman defendants moved to dismiss on the

theory that Miller’s windows were not—and could not

be—“consumer products” giving rise to a Magnuson-Moss

cause of action. Pella cited the same grounds in its

motion for summary judgment. The determination of

what constitutes a “consumer product” is thus crucial to

the resolution of this case. In making that determination,

we look first to the definition of “consumer product”

provided in the Magnuson-Moss Warranty Act. See

Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002). The

definition, “any tangible personal property which is

distributed in commerce and which is normally used

for personal, family, or household purposes (including

any such property intended to be attached to or installed

in any real property without regard to whether it is so

attached or installed),” 15 U.S.C. § 2301(1), is on its face

14 No. 08-3093

expansive but the extent of its intended scope is some-

what hazy. To clarify the meaning of § 2301 and other

provisions, the FTC, in connection with its authority to

implement the Act, see 15 U.S.C. § 2312(c), issued “inter-

pretations” in 1977 via notice-and-comment procedures,

see 42 Fed. Reg. 36112, 36112 (July 13, 1977). The inter-

pretations are codified at 16 C.F.R. § 700.1, and both

Miller and the appellees direct our attention to them.

In the FTC’s own words, its Magnuson-Moss interpreta-

tions are “advisory in nature,” are not “substantive rules,”

and lack “the force or effect of statutory provisions.” 42

Fed. Reg. 36112, 36112 (July 13, 1977). The FTC’s inter-

pretations consequently may not be entitled to full

Chevron deference, see Christensen v. Harris County, 529

U.S. 576, 587 (2000) (citing Chevron, U.S.A., Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837 (1984)), but “an agency’s

interpretation may merit some deference whatever

its form, given the specialized experience and broader

investigations and information available to the agency,

and given the value of uniformity in its administrative

and judicial understandings of what a national law re-

quires,” United States v. Mead Corp., 533 U.S. 218, 234 (2001)

(citations and quotations omitted). We have looked

favorably upon these very interpretations in the past, see

Waypoint Aviation Servs. Inc. v. Sandel Avionics, Inc., 469 F.3d

1071, 1073 (7th Cir. 2006) (citing 16 C.F.R. § 700.1(d)), and

we acquiesce to the parties’ requests to consult them

here because they have “power to persuade,” Christensen,

529 U.S. at 587 (quoting Skidmore v. Swift & Co., 323 U.S.

134, 140 (1944)).

No. 08-3093 15

An interpretation’s “power to persuade” is measured

by numerous factors, including “the thoroughness

evident in its consideration, the validity of its reasoning,

[and] its consistency with earlier and later pronounce-

ments.” Skidmore, 323 U.S. at 140; Joseph v. Holder, 579

F.3d 827, 832 (7th Cir. 2009); see also Mead, 533 U.S. at

228 (citing the degree of an agency’s care, consistency,

formality, and relative expertise as factors affecting the

“fair measure of deference” due). Those factors tilt

strongly in favor of deference here. The FTC was respon-

sible for implementing the Act. 15 U.S.C. § 2312(c); see also

Carcieri v. Salazar, 129 S. Ct. 1058, 1065 n.5 (2009) (noting

that a commissioner’s responsibilities relating to the

implementation of the Indian Reorganization Act of 1934

rendered his interpretations of the statute “unusually

persuasive” but not deferring because the statute was

unambiguous); Good Samaritan Hosp. v. Shalala, 508 U.S.

402, 414 (1993) (“[W]e generally defer to a permissible

interpretation espoused by the agency entrusted with

its implementation.”). The FTC promulgated the inter-

pretations using notice-and-comment procedures even

though it was not required to do so. See Long Island Care at

Home, Ltd. v. Coke, 551 U.S. 158, 173 (2007); White v. Scibana,

390 F.3d 997, 1000-01 (7th Cir. 2004). It has adhered to its

interpretative positions consistently since the 1970s, even

after soliciting comments on them repeatedly in the late

1990s. 64 Fed. Reg. 19700, 19700 (Apr. 22, 1999); see also

Good Samaritan Hosp., 508 U.S. at 417 (“[T]he consistency of

an agency’s position is a factor in assessing the weight

that position is due.”). And it grounded its reasoning

in Magnuson-Moss’s legislative history. See 64 Fed. Reg.

16 No. 08-3093

19700, 19702-03 (Apr. 22, 1999). These considerations

lead us to give the interpretations a reasonably high

degree of deference. See Skidmore, 323 U.S. at 140.

Miller asserts that 16 C.F.R. § 700.1(e) is the interpreta-

tion most pertinent to this case. It provides:

The coverage of building materials which are not

separate items of equipment is based on the nature

of the purchase transaction. An analysis of the

transaction will determine whether the goods are

real or personal property. The numerous products

which go into the construction of a consumer

dwelling are all consumer products when sold

“over the counter,” as by hardware and building

supply retailers. This is also true where a con-

sumer contracts for the purchase of such

materials in connection with the improvement,

repair, or modification of a home (for example,

paneling, dropped ceilings, siding, roofing, storm

windows, remodeling). However, where such

products are at the time of sale integrated into the

structure of a dwelling they are not consumer

products as they cannot be practically distin-

guished from realty. Thus, for example, the beams,

wallboard, wiring, plumbing, windows, roofing,

and other structural components of a dwelling are

not consumer products when they are sold as part

of real estate covered by a written warranty.

In Miller’s view, the fact that the windows were pur-

chased to be installed into the house at a later time renders

the transaction here an “over the counter” transaction like

No. 08-3093 17

that contemplated in 16 C.F.R. § 700.1(e). He likens his

situation to that of the plaintiffs in Wilson v. Semling-Menke

Co., 766 N.W.2d 128 (Neb. 2009), one of whom, Linda,

served as the general contractor of the house they were

having built for themselves. Linda went to a building

supply store and purchased twenty-two windows, which

were later installed into the house and, like those at

issue here, allegedly allowed water into the structure.

See id. at 130. The Wilsons brought suit under Magnuson-

Moss, alleging the windows were consumer goods, and

the Nebraska Supreme Court ultimately ruled in their

favor. Citing 16 C.F.R. § 700.1(e), that court concluded

that the Wilsons’ purchase of the windows rendered

them “consumer products” because it “resembled a

purchase ‘over the counter’ more than it resembled a

purchase by a contractor.” Id. at 133. The court specifically

noted that the Wilsons “did not have a contract with a

builder for the house as a whole, but instead purchased

the windows separately.” Id. at 134.

We do not find Miller’s situation analogous to that

faced by the Wilsons, or, more fundamentally, within the

purview of 16 C.F.R. § 700.1(e). Miller did not go to the

store and engage in a transaction for windows. Instead,

he specifically alleged that “Herman purchased, on behalf

of the Millers, fixed and casement windows and several

hinged doors and a slider patio door manufactured by

Pella.” Compl. ¶ 12 (emphasis added). This allegation

is supported by the record: the invoice for the windows

lists “Herman, Jim and Associat [sic],” not Miller, as the

customer. The only contract alleged here is one between

Herman and the Millers, for a home. Herman’s separate

18 No. 08-3093

purchase of the windows was incidental to that transac-

tion—it did not stand alone. Although Miller technically

paid for the windows by supplying Herman with the

funds, and may have influenced (or dictated, as Miller

asserted at oral argument) Herman’s decision to pur-

chase Pella-manufactured windows, when he received

the windows they were “integrated into the structure of a

dwelling” and could not be “practically distinguished

from realty.” 16 C.F.R. § 700.1(e). Miller contracted for

the windows in connection with the construction of a

new home, not in connection with the “improvement,

repair, or modification” of an existing home as contem-

plated by subsection 700.1(e). See Muchisky v. Frederic

Roofing Co., 838 S.W.2d 74, 78 (Mo. Ct. App. 1992) (holding

that the shingles used to re-roof an existing home were

consumer products and noting that “[i]t appears that as

to products which are becoming a part of realty the

distinction drawn is whether the product is being added

to an already existing structure or whether it is being

utilized to create the structure”). Indeed, we agree with

the appellees that 16 C.F.R. § 700.1(f), which addresses

the situation in which consumers contract for the con-

struction of a new home, is more applicable here.

Subsection 700.1(f) provides:

In the case where a consumer contracts with a builder to

construct a home, . . . the building materials to be used

are not consumer products. Although the materials

are separately identifiable at the time the con-

tract is made, it is the intention of the parties to

contract for the construction of realty which will

No. 08-3093 19

integrate the component materials. Of course, as

noted above, any separate items of equipment to

be attached to such realty are consumer products

under the Act.

(emphasis added). This interpretation is a much closer fit

to the facts alleged in Miller’s complaint. Miller contracted

with Herman for a home. He agreed to pay Herman

roughly $500,000 for the home under a single contract, not

$(500,000-X) for the home under one contract and $X for

the windows under another. He expected to (and did)

receive a fully, if allegedly poorly, completed home, not

an incomplete home accompanied by a stack of

uninstalled, nonintegrated windows.

Miller nonetheless asserts that Pella’s recognition that

the windows are severable from the house—recall that

its representatives removed and reinstalled one of the

windows—precludes the conclusion that they were

integrated into the home. Not only does this argument

ignore the crucial distinction embodied in subsection

700.1(f), that a contract for a home supersedes any in-

cidental purchases of individual materials for that home,

if taken to its logical conclusion it would obviate the

need for many of the FTC’s interpretations. For under

Miller’s logic, every part of every home, preexisting or

newly constructed, would be a consumer product, because

even elements of homes such as the wiring, walls, or

plumbing can be removed and replaced if necessary. Cf. 16

C.F.R § 700.1(d) (“The coverage of separate items of

equipment attached to real property includes, but is not

limited to, appliances and other thermal, mechanical, and

20 No. 08-3093

electrical equipment. (It does not extend to the wiring,

plumbing, ducts, and other items which are integral component

parts of the structure.)” (emphasis added)).

We are similarly unpersuaded by Miller’s claim that

applying subsection 700.1(f) here would undermine

subsection 700.1(e). His theory is that subsection (f), taken

alone, “proves too much” because it ignores the terms of

the contract between the builder and the buyer. He advo-

cates instead for a concurrent reading of subsections (e)

and (f), which he asserts was the approach taken by the

Nebraska Supreme Court in Wilson. The Wilson court did

indeed take both subsections (e) and (f) into account, but

it did not read the provisions concurrently, nor did it

elevate one above the other: it simply evaluated both and

applied the one that most closely fit the facts before it. The

Wilson court noted that there was no contract between a

buyer and a builder, and explained that “the purchase of

the windows resembled a purchase ‘over the counter’ more

than it resembled a purchase by a contractor, as is required

under 16 C.F.R. § 700.1(e) for building materials to be

considered ‘consumer products.’ ” Wilson, 766 N.W.2d

at 133.

The Wilson court mentioned another FTC interpretation,

subsection 700.1(a), which Miller invites us to apply

notwithstanding any potential undermining effect it

might have on subsections (e) and (f). Subsection 700.1(a)

provides that “[w]here it is unclear whether a particular

product is covered under the definition of consumer

product, any ambiguity will be resolved in favor of cover-

age.” We can envision some situations in which that

No. 08-3093 21

interpretation would carry the day, but this is not one

of them. Subsections 700.1(e) and (f) expressly provide a

framework under which to analyze the “consumer prod-

uct” status of building materials. The facts pleaded in the

complaint in this case are in line with those contemplated

by subsection 700.1(f), which resolves any potential

ambiguity without the aid of subsection (a). Moreover,

even though there is arguably some ambiguity in the

case law interpreting subsections (e) and (f), both pre-

dominant tests lead to the same result in this case. Compare

Weiss, 877 N.E.2d at 445 (“[T]he distinction drawn is

whether the product is being added to an already existing

structure or whether it is being utilized to create the

structure.”), Atkinson v. Elk Corp. of Tex., 48 Cal. Rptr. 3d

247, 255 (Cal. Ct. App. 2006) (“[W]e find that the crucial

distinction is the time of sale. If the products are purchased

in order to add them to an existing dwelling, then

the products are consumer products. If, on the other hand,

the products are purchased as part of a larger real estate

sales contract, or contract for a substantial addition to a

home, they are not.”), and Muchisky, 838 S.W.2d at 78 (“It

appears that as to products which are becoming a part

of realty the distinction drawn is whether the product is

being added to an already existing structure or whether

it is being utilized to create the structure. . . . The presence

of subsection (f) indicates that the Commission was

utilizing ‘time of sale’ as the entry into a commitment not

the completion of the obligation.”), with Illinois ex rel. Mota

v. Cent. Sprinkler Corp., 174 F. Supp. 2d 824, 831 (C.D. Ill.

2001) (“Whether non-separate items of equipment (inte-

gral component parts of the structure, such as wiring,

22 No. 08-3093

plumbing, ducts, and other items) are consumer products

depends upon how they are purchased.”), and Wilson,

766 N.W.2d at 133 (examining the nature of the trans-

action for the windows).

Miller’s final argument is that the district court’s inter-

pretation of the Act is problematic from a policy stand-

point. He claims that under the district court’s reasoning,

Magnuson-Moss only offers the public the “improper

result that a consumer who purchases a component for

a home, such as roofing, windows, or a major kitchen

appliance, is protected, whereas a consumer who allows

any of those items to be actually installed in a new home

loses all protection.” Appellant’s Br. 17. While we agree

that the FTC interpretations draw a fine line between

building materials that are considered consumer products

and those that aren’t, we do not move that line merely

because we might have drawn it differently. Cf. Chevron,

467 U.S. at 866 (“[F]ederal judges—who have no constitu-

ency—have a duty to respect legitimate policy choices

made by those who do.”).

Miller contracted with Herman for the construction of

a new home. The home was not existing; the windows

at issue here were purchased by Herman, a contractor,

to install into the home. Miller has not produced any

evidence showing a separate contract for the windows, or

a separate transaction for them in which he was personally

engaged. Under 16 C.F.R. § 700.1(f) and the existing tests

articulated by lower courts who have examined similar

issues, the windows are not “consumer products” within

the meaning of Magnuson-Moss. Thus Miller’s claims fail

No. 08-3093 23

as a matter of law and the district court’s summary dis-

posal of them, although erroneously phrased as a

dismissal for lack of subject matter jurisdiction, was

proper. We modify the district court’s order to reflect

the correct procedural posture and affirm its dismissal of

the Magnuson-Moss claims, Counts V, VI, and VII of

Miller’s complaint.

B. State Law Claims

Although the dismissal of Miller’s Magnuson-Moss

claims was ultimately proper, there remains an issue that

requires further consideration by the district court: the

dismissal of Miller’s state law claims. Since it rested its

disposition of the suit on subject matter jurisdiction

grounds, the district court believed it had no need to

consider whether it should exercise supplemental juris-

diction over the state law claims pursuant to 28 U.S.C.

§ 1367, because if there is no subject matter jurisdiction,

there can be no supplemental jurisdiction. Where a

district court has original jurisdiction over some claims,

however, as we have concluded was the case here, it has

supplemental jurisdiction “over all other claims that are

so related to claims in the action within such original

jurisdiction that they form part of the same case or contro-

versy,” 28 U.S.C. § 1367(a), and that supplemental juris-

diction persists even if all the claims giving rise to orig-

inal jurisdiction have been dismissed, see id. § 1367(c)(3);

Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC,

589 F.3d 881, 883 (7th Cir. 2009). It may decline to exer-

cise supplemental jurisdiction in certain situations, see

24 No. 08-3093

§ 1367(c); that decision is squarely within its discretion, see

Sharp Elecs. Corp. v. Metro. Life Ins. Co., 578 F.3d 505,

514 (7th Cir. 2009) (reviewing court’s decision to decline

supplemental jurisdiction for abuse of discretion).

“Normally, when all federal claims are dismissed before

trial, the district court should relinquish jurisdiction over

pendent state-law claims rather than resolving them on the

merits.” Id. (quotation omitted); see also Leister v. Dovetail,

Inc., 546 F.3d 875, 882 (7th Cir. 2008) (characterizing this

principle as a presumption). This general rule would seem

to militate toward the dismissal of Miller’s state law

claims, particularly since none of them has yet been

addressed in any meaningful way. See Sharp Elecs., 578 F.3d

at 514-15 (setting out the three “acknowledged exceptions”

to the rule). But a district court is never required to relin-

quish jurisdiction over state law claims merely because the

federal claims were dismissed before trial. Nightingale, 589

F.3d at 883; Sharp Elecs., 578 F.3d at 514-15. The only

requirement is that it make a considered determination of

whether it should hear the claims. See Nightingale, 589 F.3d

at 883 (“It is an abuse of discretion not to exercise discre-

tion.”).

Miller has expressed concern, albeit only in the last

paragraph of his reply brief, cf. United States v. Wescott,

576 F.3d 347, 354 (7th Cir. 2009) (“Arguments raised for

the first time in a reply brief are waived.”), about the

fate of his case if the district court declines to exercise

supplemental jurisdiction. He fears that Illinois’ “one-

refiling” rule, 735 Ill. Comp. Stat. 5/13-217; see also Carr

v. Tillery, 591 F.3d 909, 914 (7th Cir. 2010) (discussing

the one-refiling rule); Timberlake v. Illini Hosp., 676 N.E.2d

No. 08-3093 25

634, 636-37 (Ill. 1997), the operation of which was trig-

gered by the Millers’ voluntary dismissal of their initial

state court action, will prevent him from seeking relief

in state court. We do not consider this or any other issue

that may bear on the district court’s ultimate decision.

Whether it chooses to exercise its supplemental jurisdic-

tion is a question the district court must take up in the

first instance. We therefore vacate the district court’s

unconsidered dismissal of Miller’s state law claims (and

any concomitant crossclaims, counterclaims, and third-

party claims) and remand so the district court can deter-

mine whether the exercise of supplemental jurisdiction

is warranted here and, if necessary, conduct appropriate

proceedings incidental to that discretionary determination.

III. C ONCLUSION

The determination that windows are not “consumer

products” is properly understood as a merits-based

rather than a jurisdictional determination. We M ODIFY

the judgment of the district court to reflect a dismissal of

Miller’s Magnuson-Moss claims, Counts V, VI, and VII of

the complaint, pursuant to Rule 56, and we A FFIRM as

modified. We V ACATE the district court’s dismissal of

Miller’s state law claims, Counts I-IV and VIII, and any

crossclaims, counterclaims, and third-party claims predi-

cated thereon, and R EMAND so the district court may

consider whether it should exercise supplemental juris-

diction over the state law claims and any related

crossclaims, counterclaims, and third-party claims.

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