Ekx v. Diamondlac Corp., CV-S-87-746-PMP (RJJ).
| Citation | 722 F. Supp. 625 |
| Decision Date | 05 September 1989 |
| Docket Number | No. CV-S-87-746-PMP (RJJ).,CV-S-87-746-PMP (RJJ). |
| Parties | Raymond Scott EKX; William K. Weldon, Sr.; Ann J. Weldon; Kathy M. Howard, Special Administratrix of the Estate of William K. Weldon, Jr., deceased; and Artistic Hardwood Floors, Inc., Plaintiffs, v. DIAMONDLAC CORPORATION; Glitsa American, Inc.; Lundwick & Brown Floor Company; Rudd Company, Inc., Defendants. STATE INDUSTRIAL INSURANCE SYSTEM, a public agency of the State of Nevada, Plaintiff-In-Intervention, v. Raymond Scott EKX; William K. Weldon, Sr.; Ann J. Weldon; Kathy H. Howard, Special Administratrix of the Estate of William K. Weldon, Jr., deceased; and Artistic Hardwood Floors, Inc.; Diamondlac Corporation; Glitsa American, Inc; Lundwick & Brown Floor Company; Rudd Company, Inc.; Roe Corporations I Through X, inclusive, Defendants-In-Intervention. |
| Court | U.S. District Court — District of Nevada |
Joyce E. Borkenhagen, Harry R. Gensler and Mark Ferrario, Keefer, O'Reilly & Ferrario, Las Vegas, Nev., for plaintiffs and defendants-in-intervention.
Riley M. Beckett, Carson City, Nev., for plaintiff-in-intervention.
Drake De Lanoy, Beckley, Singleton, De Lanoy, Jemison & List, Las Vegas, Nev., for defendants and defendants-in-intervention Diamondlac Corp., Glitsa American, Inc. and Lundwick & Brown Floor Co.
James Olson and Richard E. Desruisseaux, Rawlings, Olson & Cannon, Las Vegas, Nev., for defendants and defendants-in-intervention Rudd Co.
This case arises out of an explosion and fire which occurred in 1985 while Plaintiffs were applying a floor sealant product, Diamondlac Clearwood Sealer ("Diamondlac"), to a hardwood floor. In September 1987, Plaintiffs filed a complaint in Nevada state court against Defendants, alleging causes of action for strict product liability, breach of express and implied warranties, fraud and misrepresentation and violations of the Federal Consumer Products Safety Act ("CPSA"), 15 U.S.C. § 2051, et seq., resulting from the injuries and death following the 1985 explosion and fire. Plaintiffs allege that the explosion and injuries were caused by defects in the manufacturing, testing, inspection, packaging, labeling, and distribution of Diamondlac.
Defendants removed this action from Nevada state court pursuant to 28 U.S.C. § 1441(b) by virtue of this court's diversity jurisdiction. Defendants have moved for partial summary judgment as to Plaintiffs' second cause of action, which was brought under the CPSA.1
Pursuant to Fed.R.Civ.P. 56, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
The party moving for summary judgment has the initial burden of showing the absence of a genuine issue of material fact. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 883 (9th Cir.1982). Once the movant's burden is met by presenting evidence which, if uncontroverted, would entitle the movant to a directed verdict at trial, the burden then shifts to the respondent to set forth specific facts demonstrating that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). If the factual context makes the respondent's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); Cal. Arch. Bldg. Prod. v. Franciscan Ceramics, 818 F.2d 1466, 1468 (9th Cir.1987), cert. den., 484 U.S. 1006, 108 S.Ct. 698, 699, 98 L.Ed.2d 650 (1988).
A material issue of fact is one that affects the outcome of the litigation and requires a trial to resolve the differing versions of the truth. See Admiralty Fund v. Hugh Johnson & Co., 677 F.2d 1301, 1305-06 (9th Cir.1982); Admiralty Fund v. Jones, 677 F.2d 1289, 1293 (9th Cir.1982).
All facts and inferences drawn must be viewed in the light most favorable to the responding party when determining whether a genuine issue of material fact exists for summary judgment purposes. Poller v. CBS, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). After drawing inferences favorable to the respondent, summary judgment will be granted only if all reasonable inferences defeat the respondent's claims. Admiralty Fund v. Tabor, 677 F.2d 1297, 1298 (9th Cir.1982).
This court is cognizant that the recent trilogy of Supreme Court cases establishes that "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy, and inexpensive determination of every action.'" Celotex Corp., 477 U.S. at 327, 106 S.Ct. at 2555 (quoting Fed.R.Civ.P. 1); see also Avia Group Intern., Inc. v. L.A. Gear California, 853 F.2d 1557, 1560 (Fed.Cir. 1988).
Applying these legal principles to this action, this court must grant partial summary judgment in Defendants' favor as to Plaintiffs' second cause of action, which is based upon the CPSA. Furthermore, this court must deny Defendant Lundwick & Brown Floor Company's Motion for Summary Judgment, which seeks complete dismissal of Lundwick & Brown from this action.
Section 23(a) of the CPSA vests a private cause of action for damages in any person who is injured by virtue of a knowing violation of a "consumer product safety rule, or any other rule or order" issued by the Consumer Product Safety Commission.2 Section 15(b) of the CPSA, 15 U.S.C. § 2064(b), requires a manufacturer, distributor, or retailer who obtains information that reasonably supports the conclusion that its product contains a defect which could create a substantial product hazard to notify the Commission of the product defect. The Commission, at 16 C.F.R. Part 1115 (1985), has promulgated rules which elaborate on the statutory reporting requirement.
Plaintiffs claim that prior to the 1985 explosion, Defendants knew of defects in Diamondlac which could create a substantial product hazard. Accordingly, Plaintiffs maintain that Defendants' failure to report such information to the Commission constitutes a violation of a rule issued by the Commission and gives rise to a private cause of action under section 23(a) of the CPSA.
Defendants base their argument that a private cause of action cannot arise from noncompliance with the reporting rules (16 C.F.R. Part 1115) on the ground that such rules are not legally enforceable obligations. Accordingly, Defendants argue that Plaintiffs' claim is actually predicated upon a violation of section 15(b) of the CPSA itself. And as Defendants point out, section 23(a) of the CPSA is plain that only a rule violation is subject to private enforcement.
The Ninth Circuit has yet to rule on the issue of whether a private cause of action exists for a violation of the reporting rules of the CPSA. This court has considered, however, the two circuit court decisions which have addressed this issue, and is persuaded that Plaintiffs cannot maintain a private cause of action under section 23(a) of the CPSA.
The two federal court of appeals cases cited by Defendants arise from the Seventh and Eighth Circuits, respectively. The initial case, Drake v. Honeywell, Inc., 797 F.2d 603 (8th Cir.1986), contains a thorough discussion of the CPSA and its legislative history. The plaintiff in Drake asserted a claim identical to Plaintiffs'. Namely, that prior to an explosion which caused injuries, the manufacturer of the product involved in the accident (a water heater control knob) should have reported the possibility of a product hazard to the Commission.
This court concurs with the reasoning of the Eighth Circuit in Drake, and concludes that Congress did not intend for a private remedy for violations of the reporting provisions of the CPSA. The Eighth Circuit panel held, and this court concurs, that permitting a private plaintiff to enforce § 15(b), the reporting provision of the CPSA, through the § 23(a) rule enforcement provision would permit plaintiffs, contrary to Congressional intent, to bring a private right of action to enforce a section of the CPSA itself. See Drake, 797 F.2d at 606.
Moreover, the rules promulgated by the Commission with respect to the reporting provisions are interpretive rather than substantive or legislative. Id., at 606-607. Interpretive rules are issued by an administrative agency to guide parties whose conduct might be governed by the underlying statute, and cannot be independently enforced as law.3
In the more recent circuit decision, Zepik v. Tidewater Midwest, Inc., 856 F.2d 936 (7th Cir.1988), the plaintiff was severely injured diving into a swimming pool. He sued various parties that had manufactured or sold components incorporated in the pool. Regarding his claim under § 23(a) of the CPSA, the plaintiff claimed that the defendants had knowingly violated the rules that require manufacturers, distributors, and retailers to report product defects capable of creating "substantial product hazards." 16 CFR 1115.
The Seventh Circuit panel in Zepik largely followed the Eighth Circuit's example in Drake:
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...some courts have upheld a private cause of action, almost every court since Drake has held otherwise. Compare Ekx v. Diamondlac Corp., 722 F.Supp. 625, 627-29 (D.Nev. 1989) (no private cause of action); Sara Lee Corp. v. Homasote Co., 719 F.Supp. 417, 424-25 (D.Md.1989) (same); Crouse v. Ka......