WILSON BY & THR. LINCOLN NAT. BANK & TRUST v. ROBERTSHAW CONTR. CO.

• Decision Date: 08 January 1985
• Docket Number: No. S 83-312.,S 83-312.
• Citation: 600 F. Supp. 671
• Parties: Brian K. WILSON, By and Through LINCOLN NATIONAL BANK & TRUST COMPANY OF FORT WAYNE, Guardian of the Estate of Brian K. Wilson, and Ilene Wilson, Plaintiffs, v. ROBERTSHAW CONTROLS COMPANY, A Delaware Corporation, Defendants.
• Court: U.S. District Court — Northern District of Indiana

600 F. Supp. 671

Brian K. WILSON, By and Through LINCOLN NATIONAL BANK & TRUST COMPANY OF FORT WAYNE, Guardian of the Estate of Brian K. Wilson, and Ilene Wilson, Plaintiffs, v. ROBERTSHAW CONTROLS COMPANY, A Delaware Corporation, Defendants.

No. S 83-312.

United States District Court, N.D. Indiana, South Bend Division.

January 8, 1985.

J. James McKenna, Rockville, Md., Daniel A. Roby, Fort Wayne, Ind., for plaintiffs.

Roland Obenchain, South Bend, Ind., for defendants.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

This cause is before the court on the motion to dismiss Count II of plaintiff's complaint for failure to state a claim upon which relief can be granted of defendant, Robertshaw Controls Company (Robertshaw). As a basis for this motion, defendant contends that no private right of action is created for an alleged violation of the non-binding interpretive rules of the Consumer Product Safety Commission (CPSC) under 15 U.S.C. § 2072(a). For the reasons set forth below, defendant's motion to dismiss is denied.

I.

On June 7, 1979, plaintiff, Brian K. Wilson, sustained second and third degree burns over 90% to 95% of his body as a result of an alleged liquid propane gas explosion and fire in his grandmother's home. Plaintiffs contend that the liquid propane gas escaped from a hot water heater located in the basement of the house as a result of a defect in the control of the hot water heater. Plaintiffs allege that such control was a Unitrol 110 Control containing the date stamp "CX" which was part of a family of controls manufactured by Robertshaw between December 1954 and March 1957 known as Unitrol 110 and 200 Controls.

In addition, plaintiffs state that defendant reported to CPSC, pursuant to § 2064 of the Consumer Product Safety Act, 15 U.S.C. § 2051, et seq. (CPSA), that the controls in question "could" contain a substantial product hazard. Plaintiffs contend that in making such report, defendant failed to provide all necessary information to the CPSC, thereby committing a fraud upon that agency.

Based on these allegations, plaintiffs seek recovery on the following legal theories: (1) (Count I) fraud; (2) (Count II) violation of the provisions of the CPSA; (3) (Count III) breach of express and implied warranty; (4) (Count IV) negligence; (5) (Count V) strict liability in tort; (6) (Count VI) intentional infliction of emotional distress; and (7) (Count VII) loss of familial relationship on the theories set forth in the prior counts.

On April 2, 1984, defendant filed its motion for summary judgment on the statute of limitations question. Plaintiffs response was filed on April 23, 1984. Following a hearing on this motion on April 27, 1984, this court held that plaintiffs' action was governed by the statute of limitations applicable to product liability actions, Ind. Code § 33-1-1.5-5 (1978)¹, but denied defendant's motion on the basis of the existence of a question of material fact with respect to the issue of fraudulent concealment. See Memorandum and Order of this Court, June 28, 1984, p. 10. At that time, this court requested the parties to submit briefs under Fed.R.Civ.P. 56 on the issue of a private cause of action under the CPSA and the applicable statute of limitations under the law of Indiana. In response to that request, defendant filed a motion in accordance with Fed.R.Civ.P. 12(b)(6) to dismiss Count II of plaintiff's complaint on September 4, 1984. Plaintiffs' response was filed September 21, 1984. A hearing was held on such motion on November 9, 1984 in South Bend, Indiana.

II.

A.

Congress enacted the CPSA in September 1972 in order to create a standardized mechanism for regulating the manufacture and distribution of consumer products. See S.Rep. No. 835, 92nd Cong., 2nd Sess., reprinted in 1972 U.S.Code Cong. & Admin.News 4573, 4574. The basic thrust of the legislation is to "protect the public against unreasonable risks of injury associated with consumer products." 15 U.S.C. § 2051(b). To further the goals of the Act, Congress created the CPSC which came into existence on May 14, 1973. The CPSC was empowered to promulgate rules to effectuate the purposes of the CPSA. The CPSC has issued rules which may be classified into two major categories: (1) consumer product safety rules, and (2) administrative rules. The former are comprised of rules whose basic function is to halt or restrict the sale or manufacture of consumer products deemed unreasonably dangerous to the public. Butcher v. Robertshaw Controls Co., 550 F.Supp. 692, 695 (D.Md. 1981). The second category of rules of facilitates the administration of the CPSC and its statutory duties. Crucial among these is the subset of regulations comprising the disclosures rules. Id.

The disclosure provisions are found generally in 16 C.F.R. § 1115. As set out in § 1151.1, the purpose of the regulations is to interpret the reporting requirements imposed on manufacturers, distributors and retailers by 15 U.S.C. § 2064(b)² and to indicate the actions and sanctions which the Commission may require or impose to protect the public.

In this case plaintiffs allege that defendant failed to comply with the reporting provisions of the CPSA and 16 C.F.R. § 1115 et seq. Specifically, plaintiffs contend that defendant notified the CPSC on April 18, 1974 that the Unitrol Models 110 and 200 might have a defect that could create a potential hazard. Plaintiffs argue that such report was inadequate in that defendant was aware of numerous deaths and accidents which occurred prior to April 1974 as a result of an inherent defect in the Unitrol Models 200 and 110 and base their right to recovery on 15 U.S.C. § 2072 (1972).

Defendant argues that the allegations as set forth in plaintiffs' complaint do not state a private right of action cognizable under federal law because neither section 2064(b) nor 16 C.F.R. § 1115 et seq. rise to the level of a "consumer product safety rule, or any other rule order issued by the Commission."

The provision of the CPSA upon which plaintiffs premise their right to recovery states as follows:

Any person who shall sustain injury by reason of any knowing (including willful) violation of a consumer product safety rule or any other rule or order issued by the Commission may sue any person who knowingly (including willfully) violated any such rule or order in any district court of the United States in the district in which the defendant resides or is found or has an agent, shall recover damages sustained, and may, if the court determines it to be in the interest of justice, recover the costs of suit, including reasonable attorneys' fees (determined in accordance with section 2060(f) of this title) and reasonable expert witnesses' fees: Provided, That the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, unless such action is brought against the United States, any agency thereof, or any officer or employee thereof in his official capacity.

15 U.S.C.A. § 2072(a) (West 1982).

The controversy between the parties of this action revolves around that portion of the provision that reads "violation of a consumer product safety rule, or any other rule or order issued by the Commission." Defendant strenuously contends that plaintiffs' claim to a private right of action under the CPSC must fail because the reporting provisions of 16 C.F.R. § 1115 et seq. are interpretive rules which set out an agency's view of the obligations imposed by a regulatory scheme but are not legally binding and enforceable.

Defendant has raised this argument, though couched in different terms, before other courts who had before them the identical issue of the existence of a private cause of action under 15 U.S.C. § 2072(a). The courts in both Young v. Robertshaw Controls Co., 560 F.Supp. 288 (N.D.N.Y.1983) and Butcher v. Robertshaw Controls Co., supra, rejected defendant's argument relying primarily on the unambiguous language of section 2072(a) itself. Young, 560 F.Supp. at 292, 294; Butcher, 550 F.Supp. at 698. Judge Miner, in Young, stated:

Defendant's contention that 16 C.F.R. § 1115, an "interpretive" rule, is not a "rule" within the meaning of the Administrative Procedure Act, 5 U.S.C. § 551, et seq. (Supplemental Memorandum of Law Number One, p. 10), is wholly without merit. Title 5 U.S.C. § 551(4) provides:

"rule" means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency ....

"The breadth of this definition cannot be gainsaid." Batterton v. Marshall, 648 F.2d 694, 700 (D.C.Cir.1980). Clearly, an "interpretive rule," like the disclosure requirement here, is a rule within the meaning of the APA. Moreover, as indicated above, there is no indication in the language of § 2072 that interpretive rules were intended to be excluded from the operation of that section's provisions. This Court, therefore, is still not persuaded that § 2072 should be construed in the restrictive manner suggested by defendant.

Young, 560 F.Supp. 292-93 n. 8.

This court concurs with the reasoning and results of the Butcher and Young courts. The language of the statute at issue is plain and straightforward and the words, therefore, must be accorded their plain meaning. See also Swenson v. Emerson Electric Co., 356 N.W.2d 313 (Minn.Ct.App. 1984). Section 2072, by its express terms, provides plaintiff in this case with a private remedy.³

B.

Having established that a private right of action does exist for the violation of the disclosure provisions of the CPSA found at 15 U.S.C. § 2064 (and amplified by the regulations at 16 C.F.R. 1116 et seq.), the court turns to the question of the proper statute of limitations to govern this claim under the CPSA. In its memorandum and order of June 28, 1984, this court found that, under Indiana law, this action...