good morning honors please the court my name is scott tate and i represent law school products the appellate in this matter and i would like to reserve seven minutes if possible you just want your time yes your honor i believe your honor that there are your honors that there are two major areas of discussion for today which lead to the four different areas that we pointed out in our opening brief on appeal and the two major topics of course in into something else and with it so you know i'm quite basis can you really assert that the economic cost doctrine does not apply well your honor first of all on the application of the the question that you raise whether or not it's an interim rule product that presupposes a determination that we're looking at the product of being the window and if you look at the majority opinion in the m and s case the majority opinion says that you must focus on the product that's placed into the stream of commerce which is consistent with the talk consistent with easter her consistent with everything and in fact the majority opinion which is signed off on by six of the seven justices the majority opinion focuses on the entire history of strict product liability in the state of california as you know beginning with justice trainer way back in one thousand nine hundred eighty nine and the key through all of the development of strict products liability is to place liability on those in the stream of commerce and who are responsible for placing that product in the stream of commerce every one of the cases cited greenman vanda markets around as well know from the majority opinion places that  is the premise or the the beginning discussion if union then opposed to that the court says now oppose that we must apply the economic loss doctor and in order to do that we must determine what the product is here there is no question that the product here placed into the stream of commerce by bostic was steam and there is no there's the big question i mean when you when you when you play at that level you lose the forest and the whole idea here is the difference between contract and warranty and floors and you lose the forest when you play everything as a product i mean your analysis is everything is a pro not necessarily on how do you make that differentiation what if it's some point everything goes into the stream of commerce so everything is a product you know your honor if you bought raw material for instance on the raw material in another itself failed that would be the product causing damage to itself as opposed to a component that's in course they're being liability arising out of contract that's correct and that's a tort because it's a product and that's the purpose not to would be controlled by the contract assuming there was a contract as the court points out and that is that is the very question that you focus on in k b or in east river or saratoga what is that what is the product which was placed into the stream of commerce by that yeah but you can't just look at it in terms of you know stick your nose in something and say is that a product has a larger context in which this works a larger context as you know what's the difference between tort and contract warranty and all of those kinds of things i would fully agree your idea of what's a product seems to just go blue to rate the entire purpose of the economic loss doctrine it's gone well i don't agree with that characterization but i understand your honor and i think you find can fin commerce it becomes a product for the for the stock yes that's what i heard you say so in this case you have a product that is the sealant of the party to say hit me there because they both went into commerce and you have this entire gadget to put together and it's also a product so all of these are products yes now at some point though you have to decide the product is for a purpose this isn't a case where the sealant went out and it dropped on somebodies foot the sealant became material to your case when it became part of the process yes so if  don't we have to get the relevant product that we're going to deal with as far as the lawsuit is concerned and the relevant product wasn't when it first went into a box and dropped on some of these foot the relevant product occurred when you got this gadget put together yes your honor from the purchasing standpoint between it was go and the entity with whom they were purchasing the completed window i g u n in the papers completed window that is a product that is a that is a distinguishable situation then what we have here by the way to prevent your ultra carefree went bankrupt the only the party within the stream of commerce with whom they were in contract their bankrupt that's why they're not present obviously for other reasons so that is why here we have two parties not in contract didn't relief not from the seller of the purchased home not the developer not the builder they start relief from i know other party who had supplied windows which were defective which lead to damage to the completed home to other property and the question is for these defendants their product does it cause damage to other property and clearly bostic sealant by failing causes damage to other property and the other property here is the completed window product answer here yes that's the only one that militates in favor your honor if you look at the other factors and there are four of those are the component has in the independent used to the consumer now what independent used to the consumer does the of the component itself or the larger product was placed in the stream of commerce that's another one against you one of the component was purchased from another manufacturer with a larger project was sold in other markets while the component can be readily removed from a larger product no i mean these factors seem to line up against you just as you run through them i respectfully disagree ron when you if you look at k b the the court of appeal opinion they focus on four of those factors and i disagree with with your characterization and let me tell you why was the component placed into the stream of commerce the answer is that component was placed into the stream of commerce that's that's issue number one the government component  well and that's precisely what struck products i thought a lot seeks to place responsibility and liability from vanda market all the way through to the present your ability you're just throwing the economic loss knocking out the window with your interpretation of what the product every every every product that's made up in other products is made up of other products well your honor if you want to start at the garden of eden that's the end of the whole doctrine that's why it doesn't work well the product that was placed into river steamship the fact was is that the completed turban was placed into the stream of commerce the parties are different here where not in suing the party who placed the house into the stream of commerce but the component part manufacture if i could turn to the summary of the stats limitations argument in the next few minutes your honor i believe there are several issues that where the court erred because i believe the court improperly weighed evidence and came to some conclusions which were not justified  the fact that mr sampson was put on some notice that there were elevated seal failures led him to believe that there were facts that were a problem and he began to as the law required he began to investigate a reasonable diligent investigation is required which led him to these defendants and to the both of these defendants volunteered to undertake investigations they did not simply deny liability as they argue in the response brief now that they volunteered to once one has damaged then one has has a cause of action which may begin to run as long as you know that some wrongful conduct has led to that claim which is what i think fox versus at the con recently  city of san diego case your honor there are three bases for that holding and one of those is that the asbestos is completely inundated in the buildings and is naturally deteriorating at that time universally remember here we have a series of transactions a series of purchases and remember your honor when they told a lost fellow that it was all manufacturing air and they continue to make separate purchases they purchased from different manufacturers not ultra and not care free and solicited the defendant's assistance in pursuing those manufacturers who they believed and confirmed going to writing at their record at one thousand one hundred eleven confirmed that they believed that it was manufacturing  continued to be purchases after that each of those purchases under beaumont's i think is the clearest case which found fourteen thousand different violations of the unfair competition law cascading after a series of leases many of those occurring well after the initial four year execution of the lease your honor each of those payments was an act which constituted i'm for an act under the unfair competition law we have both here we have seventeen that philosophy under the original under the their original leases which occurred and payments under those leases long after the for my four year statute limitations yield violations under the v these wrongs for twenty years and then decide this particular one is the one i'm going to file on yes strike yes or would you be able to get damages for the ones that occurred for the preceding twenty years absent some cooperation between the two parties you would be limited to the last four years under even aside from that i'm going from a legal point of view now i get the entire twenty years i don't believe so i think their reading of the statute is stricter th continuing wrongful approach what i'm submit to the court is that they're continuing purchases each of those purchases constitutes the final it's the same product doing the same thing no change at all that's not a continuing and wrong approach i think it's a series of transactions your honor and i think both my purpose of the statute of limitations the entire concept when you do something like i beg to differ your utterances what it what it says is that you'll be limited for those four years what it does is give the defendant repose for the first sixteen case or claim it's a strict product it's a strict liability statute for wrongful conduct it is not a knowledge then you could discover the wrongful aspect in your sixteen as judge la poses and you could bring the action for those four years directly proceeding now there is an additional gloss over on top of this and that is that these parties clearly as their factual record demonstrated jointly developed their own words  language is stark they continued to market this product every one of these specifications sheets was wrong every one of them overstated the capabilities and every one of those statements injured competition injure not only the purchasers but injured competition within the state of california and elsewhere that moment is very clear i think on what constitutes in this situation civil conspiracy there is no claim about allegations here this is an extremely detailed com twenty three require them to to distribute and produce the very document which that our seal is prematurely fails they chose not to produce that doesn't matter if there's any discovery request under twenty three van under rule twenty three then they have an obligation to produce it and they both chose not to the significance of that document cannot be understated you rarely find it immediately upon drafting the document mr christan so immediately faxed it to south law so that they could have their story straight and no question that there's a concert of i to meet and you can as the court pointed out earlier you can infer from certain facts like destruction of documents you can insert infer certain facts here we have an agreement you can confer because they began with jointly developing this sealant they jointly discussed its limitations and the fact that it was not up to what they claimed it to be they jointly marketed it they jointly distributed the materials and they jointly concealed the true nature of their findings i submit that where the district court said there was not a single fact from which the court could find or infer a civil conspiracy i submit that there are a number and i tried to put those in the there an actual agreement that you are relying upon no your honor there is not a written agreement that i do within the written documentation that says we here by jointly i develop this sealant that is in writing and announcement to the writing with ailes where they both say that anything over one hundred forty degrees it will prematurely fail those writings memorializing activity but not a specific agreement other than the fact that other than are for violations of the unfair competition law and for negligence the claims against bostic are slightly different and we understand we have to share our time this morning i would like to address mr tate points in any questions the courts have the product or the component itself the purchased item and there's no question here about that the purchase i purchased by wasco was the entire i g u that the court below correctly found that the sealant manufacture by pasco and recommended by south wall was an integral part of that i g u unit which cannot be removed has no other purpose and otherwise meets all of the factors from the katie holmes test for  obviously the window is something which can windows have independent purpose they are themselves products they are sold to consumers you can switch out your windows you can you can go to the home depot and buy replacement windows that that would need and it's left open the possibility that in the strict liability context that could be a component of the larger product the home and if it was defective causing damage to the home case where the home buyers in this case was to go bought the i g you but the i g you is made up of integrated components which cannot be removed from that i g you without destroying the i g you you can remove your windows from your home and replace them without destroying your entire house i think that's the way we do ask you to look at the difference between those two situations and the statute of limitations issues raised by  letter from sampson to the supplier carefree as the sort of last for us problem last possible day and one thing i want to point out there which is very telling in contradiction of was his argument is that that letter didn't just say i think there might be a problem with the sealant and was going has kind of cooked up this argument that it could be any old problem with the seal and maybe the manufacturer mixed it incorrectly and maybe there are other issues that letter said there's a problem with the sealant purchased from bostic not there may be problems with how it's mixed with the manufacturer or not there may be other problems in the manufacturing process but in and with respect to the continuing violations theory which would apply only to the excuse me with respect to the continuing violations theory the idea that was go is putting forth here is that beginning in one thousand nine hundred five with knowledge that there was a problem with the sealant that was causing an increase in failure rates from one percent  three percent wasco was free to continue to purchase units containing that sealant and as judge was pointed out essentially to never have the statute of limitations begin to run as we pointed out in our brief the continuing violation series simply doesn't apply where there's clear knowledge that the product you're purchasing it's defective you you cannot with that the product is defective continue to buy it and wait until someday that's at your convenience to bring your cause of action or negligence or for unfair business practices and here the samps testimony makes it clear that at least by one nine hundred ninety five or at the latest by nine hundred ninety seven wasco had that requisite knowledge with respect to the conspiracy theory as i call it that wa a has put forward obviously that's being put forward here as a sort of last last ditch means to toll the statute of limitations from running the court below in the hearing which is in the record before this court wasco through its counsel for every possible record reference to support this conspiracy theory the court then in its opinion went very carefully through each reference provided to  it by wasco the court correctly concluded that none of those references prove that there had been an agreement to commit a wrong between south wall and bostic and that at best they so showed some sort of parallel activity joint development none of which is sufficient in the context of tolling the statute of limitations to prove up a conspiracy we have in our brief address several other grounds on which they picked the decision below could be upheld your honor i would be happy to go into any of those if the court has questions otherwise i would yield the question counsel relies heavily on the moment especially in relationship because design systems what is your response to his argument on gaumont the primary response your or is that the findings with respect to the continu overt act are consistent that is in the beaumont case the court found two things which are simply not present here when they found an active conspiracy with evidence of an agreement to commit a wrong and in light of that they found that each time it was involved a trailer park and rentals in a trailer park but that each time the wrongdoers were conspired to to to do wrong re noons leases for those trailer homes they were committing new overt act of wrong toward those leaseholders the other major difference your honor is that in that case there was actually no evidence that the plaintiffs were already on notice and aware of the wrongdoing here we have a situation where it is undisputed in the court has found that wasco as of ninety ninety five or nine hundred ninety seven was aware that it had a sealant problem and  in the beaumont case there's no evidence that the plaintiffs had any sort of similar awareness and so there's no evidence that that they should have been on  there was no evidence put in by was still contrary that and therefore the district court correctly determined the issue i think was going misinterpreted the cases when it talks about the stream of commerce according to was was theory every time a component part manufacturer sells the product it goes into the stream of commerce i think it's clear when you look at the cases talking about the stream of commerce factor we're talking about a stream of commerce when it goes out to the ultimate consumer not as a component makes its w required in order to assert the economic lost auction the other key factor apart from the dr declination and k b homes which under the statute of limitations the evidence is overwhelming and und statement that he quote always suspected the sealant as a potential cause of the seal failures sampson suspicions simply put him on notice that he slashed wasco had to reasonably investigate also a page twelve sites in its papers specifically says as we have discussed the supreme court rejected the proposition that the statutory clock did not begin to take until the plaintiff knew or reasonably should have known the facts constituting the wrongful conduct as well as the fact of her injury and its relation to the product in favor of the rule the statute of limitations begins to run when the claimant suspects or should it's suspect that his or her injury was quote caused by someone's wrongdoing and that's at page two twenty eight of ninety eight cal at forth mr sampson testifies if you're insulated glass is failing at a rate that's greater than one percent and that's a concern typically it should be well under one percent later of pages three hundred forty to forty one of the supplemental  to be defective and that that somehow extends the statute of limitations not only does the argument not make sense there are two california cases which specifically deal with a very similar type of argument one is the read em case that says no regardless of whether allegedly lied about it at a deposition in another case i do apparently the contract that there was allegedly a contract to steal trade secrets that was entered into in one thousand nine hundred four and continued to be performed for years thereafter y in the snap case in two thousand and two the california court of appeal measured the statute of limitations from nine hundred ninety three when the plaintiff should have been aware that it that it was on notice of its claims