Products Liability Law Daily Wrap Up, DAMAGES—INDUSTRIAL AND COMMERCIAL EQUIPMENT—W.D. Ky.: Water districts partly permitted amendment in water-meter defect dispute against makers, (Jan 2, 2026)

By Pankhuri Bhatnagar, B.A. LL.B.

A proposed amended complaint expanding factual allegations about defective water meters was largely permitted, but tort claims were barred by the economic loss doctrine.

In an action brought by multiple Kentucky water districts against a water-meter manufacturer over allegedly defective meters, a federal district court in Kentucky granted in part and denied in part the districts’ motion for leave to amend their complaint. The court held that expanding factual allegations regarding the scope and performance of the meters did not prejudice the manufacturer and was consistent with the original pleading, but concluded that any tort-based claims would be futile because the alleged damages were purely economic and thus barred by the economic loss doctrine (Warren County Water District v. Badger Meter, Inc., No. 1:24-CV-00109-GNS-HBB (W.D. Ky. Dec. 16, 2025)).

Background. Warren County Water District, Butler County Water Systems, Inc., and Simpson County Water Districts (collectively, districts) purchased 5/8-inch water meters from Badger Meter, Inc. (Badger or manufacturer) beginning in 2013 under contracts that allegedly warranted the meters’ compliance with American Water Works Association standards for a 15-year period. According to the districts, routine testing beginning in 2023 revealed that a significant portion of the meters failed to accurately measure water flow, resulting in costs associated with testing, replacement, and reputational harm. The districts sued in state court, asserting claims that the manufacturer construed as sounding in product liability, breach of warranty, negligence, and related theories. After removal to federal court, the districts moved for leave to amend their complaint to specify the number of meters purchased each year through 2023 and to allege that 21.8% of the meters tested were inaccurate, without adding new causes of action. The manufacturer opposed, arguing prejudice, futility, and lack of relation back.

Prejudice. The manufacturer argued that discovery had focused on meters sold between 2013 and 2015 and that expanding the timeframe through 2023 would unfairly alter the scope of the litigation. The court disagreed, noting that the original complaint alleged that the districts contracted with the manufacturer “[b]eginning on or about” May 7, 2013, and alleged discovery of inaccurate reporting “[b]eginning on” March 14, 2023, without specifying an end date for sales or limiting the allegedly defective meters to a particular period. Moreover, the proposed amendment did not assert new claims but instead identified the number of meters purchased each year between 2013 and 2023 and quantified the alleged rate of inaccuracy. These additions were characterized as elaborations on the previously alleged defective nature of the meters, not a material alteration of the claims. The court also declined to entertain complaints regarding alleged discovery failures, noting that the deadline for discovery motions had passed. Thus, the districts’ motion was not denied on prejudice grounds.

Futility of tort claims. The court agreed with the manufacturer that the tort claims were barred by the economic loss doctrine, which “prohibits the recovery of tort damages in a breach of contract case.” Nami Res. Co., L.L.C. v. Asher Land & Min., Ltd., 554 S.W.3d 323, 335 (Ky. 2018). A party may recover contract-based economic damages only if it demonstrates “harm above and beyond a broken contractual promise” to pursue tort remedies. New London Tobacco Mkt., Inc. v. Kentucky Fuel Corp., 44 F.4th 393, 414 (6th Cir. 2022). The court noted that the districts’ alleged damages consisted of “the cost of testing, replacement and other inconvenience and damage to reputation,” all of which were economic losses arising directly from the alleged failure of the meters to perform as warranted. The amended complaint failed to differentiate any damages attributable to tortious conduct as opposed to breach of contract. As such, the tort claims were “identical to the underlying breach of contract claim” and were barred.

Futility of contract claims. Badger argued that the amended complaint failed to plead breach of contract with sufficient specificity and amounted to a formulaic recitation of elements. Under Kentucky law, a contract claim requires allegations showing the existence of a valid contract, breach of a contractually imposed duty, and resulting damages. Sudamax Industria e Comercio de Cigarros, Ltd v. Buttes & Ashes, Inc., 516 F. Supp. 2d 841, 845 (W.D. Ky. 2007). The court found that the amended complaint satisfied these requirements. It alleged that the districts contracted with the manufacturer for the purchase of specific water meters; that the manufacturer warranted compliance with industry standards and defect-free performance for a defined period; that the meters failed to accurately report water usage; and that the districts suffered financial losses as a result. These allegations, taken as true, plausibly stated a claim for breach of contract.

Relation back. Finally, Badger contended that the amended allegations concerning later-purchased meters did not relate back to the original complaint under Fed. R. Civ. P. 15(c). The court found the argument misplaced. Rule 15(c) governs whether amendments relate back for statute-of-limitations purposes. The court explained that the districts’ claims were subject to a 15-year statute of limitations under Kentucky law, rendering relation back unnecessary to avoid a time bar. Because no limitations issue was implicated, the relation-back doctrine was inapplicable.

The case is No. 1:24-cv-00109-GNS-HBB.

Judge: Brennenstuhl, H.

Attorneys: Frank Hampton Moore, Jr. (Cole & Moore, PSC) for Warren County Water District, Butler County Water Systems, Inc. and Simpson County Water District. John Howard Zickefoose (Spilman Thomas & Battle, PLLC) for Badger Meter, Inc.

Companies: Warren County Water District; Butler County Water Systems, Inc.; Simpson County Water District; Badger Meter, Inc.

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