Platt Electrical Supply, Inc. v. Eoff Electrical, Inc.

522 F.3d 1049, 2008 U.S. App. LEXIS 8026, 2008 WL 1722882
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 15, 2008
Docket05-15672
StatusPublished
Cited by130 cases

This text of 522 F.3d 1049 (Platt Electrical Supply, Inc. v. Eoff Electrical, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Platt Electrical Supply, Inc. v. Eoff Electrical, Inc., 522 F.3d 1049, 2008 U.S. App. LEXIS 8026, 2008 WL 1722882 (9th Cir. 2008).

Opinion

RAWLINSON, Circuit Judge:

In its complaint, Appellant Platt Electrical Supply, Inc. (Platt) alleged that Appel-lee Underwriters Laboratories, Inc. (UL), a non-profit consumer safety group, negligently misrepresented and fraudulently concealed that defective in-wall heaters were safe. Platt challenges the district court’s grant of UL’s motion to dismiss and motion for judgment on the pleadings. Platt contends that the district court erred in dismissing its negligent misrepresentation and fraudulent concealment claims as time-barred under California’s statutes of limitations. Platt asserts that its claims were not time-barred in view of California’s discovery rule and UL’s fraudulent concealment. Platt also maintains that the *1052 district court erred in dismissing its claims without leave to amend the complaint.

We have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm the judgment of the district court.

/. BACKGROUND

Platt filed its complaint in 2003. According to its complaint, 1 Platt was “engaged in the distribution, marketing, and wholesale supply of electrical products intended for consumer purchase and use.” UL “is a not-for-profit corporation ... principally engaged in the business of formulating safety standards for new consumer products, testing such products against its standards, determining whether the product so tested conforms to the standards, and, if the product does comply, authorizing the product’s manufacturer to imprint UL’s distinctive mark on the complying product.”

Platt asserted that Cadet Manufacturing Company (Cadet) ‘.‘manufactured ... in-wall space heaters under the names ‘Cadet’ and ‘Encore.’ ” UL evaluated Cadet’s heaters, and determined that the heaters complied with UL’s safety standards. UL “authorized Cadet to include the UL mark on the labels of the Heaters.” UL’s “process is known as ‘listing’, and a product that has qualified to bear the UL mark is said to be a ‘listed product.’ ”

Platt charged that by permitting these listings, “UL impliedly represented to Plaintiffs” that the heaters were “suitable for reasonably safe use as an in-wall heater ...”

Platt alleged that the heaters “manufactured between 1978 and the present, and listed by UL since at least 1985, are inherently defective.” According to Platt, “if the heaters had not been endorsed by UL then neither of the Plaintiffs would have engaged in the purchase, sale, advertisement, or distribution of the Heaters. Moreover, Plaintiffs are informed and believe, and based thereon allege, that at no time prior to a 1999 CPSC [Consumer Product Safety Commission] recall did they become aware that the Heaters were inherently defective.”

Platt alleged that “based on the express approval by UL of the Heaters, [it] distributed in excess of nineteen-thousand [sic] (19,000) Cadet heaters.”

Platt also asserted “that since at least 1988, UL became aware that the Heaters were exhibiting defects.... However, UL took no action relative to rescinding its endorsement of the product or notifying the general public, product distributors or retailers ... of the dangerous defects inherent in the Heaters.” “Despite its knowledge, as early as 1988, of the defects inherent in the Heaters, UL continued to list Cadet heaters.” According to Platt, “Plaintiffs did not discover Defendants’ wrongful conduct or its basis for liability until 2001 when they became involved in [sic] consumer class action ... and were granted through pre-trial discovery limited access to Defendant UL’s files concerning the Heaters.” Additionally, Platt charged that “Defendants’ wanton and reckless refusal to disclose such information fraudulently concealed from Plaintiffs crucial facts ...”

“[I]n or around 1998, the [CPSC] became aware that Cadet heaters were defective. Accordingly, on or around January 14, 1999, the CPSC filed an administrative order recalling all Cadet heaters ...” “Plaintiffs were required, *1053 under controlling federal statute to bear a portion of the costs of conducting the recall.”

“[Contemporaneous to the CPSC recall, a consumer class action was filed on behalf of all purchasers of the Heaters ...” Platt “was named as a defendant ... [and] entered into a settlement agreement with the class, pursuant to which Plaintiff PLATT continues to pay money to the class.” According to Platt, it “has paid in excess of one-million one-hundred fifty-six-thousand dollars ($1,156,000.00) pursuant to the class settlement.”

In its negligent misrepresentation claim, Platt alleged that “at least since 1989[UL] had knowledge that the Heaters failed and could, and in fact had, caused catastrophic injury and death. Despite such knowledge, [UL] continued to represent to the world at large that the Heaters were safe products.” “[UL] continued to allow its mark to be placed on the Heaters knowing that consumers, distributors, and retailers rely on the mark as an assurance of safety. [UL] continued to make such material representations of material facts without an adequate basis or knowledge for making such representations.” According to Platt, “[UL] failed to act because such action would constitute a tacit admission that [UL’s] testing procedures were flawed and such an admission would undermine[UL’s] position as the self-proclaimed leader in certifying the safety of consumer goods.”

Platt also alleged that “[a]t no time prior to the Class Action or CPSC recall did Plaintiffs have any reason to suspect that the Heaters were unsafe. Plaintiffs relied on the UL mark as an assurance of the Heaters’ safety and suitability for its end use ...”

In its fraudulent concealment claim, Platt alleged that it was not required to conduct an independent investigation of the heaters’ safety. Rather, Platt “heavily [relied] on the existence, or non-existence, of the UL mark on a good.” Platt alleged that “[UL], by allowing their mark to remain on the Heaters, intentionally intended to mislead consumers, retailers, and distributors like Plaintiff into believing that [UL’s] listing procedures accurately reflected that the Heaters were suitable and safe for their intended use by consumers and were to be absolutely relied on so that [UL] could maintain their position as self-proclaimed leaders in certifying the safety of consumer goods.” Platt also asserted that UL “assumed a duty to disclose, whether by de-listing or public notification, any known incidents that might dissuade consumers, retailers and distributors like [Platt] from trading in the Heaters.”

The district court determined that Platt was “on inquiry notice of their claims as early as 1999.” Specifically, the court held that “once [Platt] became aware [through the CPSC recall and class action] that the cadet heaters they sold were potentially defective, and they began to suffer damages, [they] were on inquiry notice that UL, on whose mark they relied, may have either negligently tested or negligently endorsed those products.... ” The district court, therefore, dismissed Platt’s negligent misrepresentation claim as time-barred without leave to amend. However, the district court denied UL’s motion to dismiss Platt’s fraudulent concealment claim.

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522 F.3d 1049, 2008 U.S. App. LEXIS 8026, 2008 WL 1722882, Counsel Stack Legal Research, https://law.counselstack.com/opinion/platt-electrical-supply-inc-v-eoff-electrical-inc-ca9-2008.