Court Opinion

ID: 5870686
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:46:23.294522+00
Date Added: 2024-06-11T08:44:42.221332
License: Public Domain

Levine, J. (dissenting in part and concurring in part).
I am unable to agree with the majority’s approval of the proposed amendment’s fraud causes of action. Examination of plaintiff’s fraud claims clearly reveals that they are grounded essentially on two charges of malfeasance or nonfeasance by defendant Robertshaw Controls Company; namely (1) its failure to warn purchasers or consumers after discovering the dangerously defective nature of the control valve, and (2) its misrepresentations and nondisclosure concerning the defective device and reports to the Federal Consumer Products Safety Commission (CPSC).
As to the first of these bases for plaintiff’s fraud causes of action, the proposed pleading and supporting papers are equally clear in indicating that defendant’s actual discovery of the dangerous defect occurred after the device in question was manufactured and sold. The fact that the intentional concealment and nondisclosure did not occur until subsequent to the sale of the product is, in my view, fatal to plaintiff’s fraud actions. This fact distinguishes the instant case from Kuelling v Lean Mfg. Co. (183 NY 78), cited by the majority. Modern authorities on tort law continue to hinge actions in fraud, based upon nondisclosure or concealment, on misconduct occurring before or during the course of the transaction in which the injured party was induced to rely on the nonexistence of the undisclosed fact (Prosser & Keeton, Torts [5th ed], § 106, pp 736-740; 1 Harper and James, Torts, § 7.14, pp 586-589; Restatement, Torts 2d, §§ 550-551, pp 118-126). Obviously, the necessary element of detrimental reliance in a fraud action cannot be established when the nondisclosure or concealment does not take place until subsequent to the transaction out of which the claim arises. The majority’s extension of liability in fraud for subsequent tiondisclosure in effect merges liability in fraud with the currently developing theory of a manufacturer’s negligence or strict prodúcts liability for failure to warn of defects discovered subsequent to sale (Cover v Cohen, 61 NY2d 261, 275). At least one of the dangers in this conceptual confusion of two distinctly different doctrines serving different purposes and having different elements is that on a fraud theory, the risk/burden analysis required in product liability tort law is obviated (see supra, p 276).
Turning to plaintiff’s only alternative factual ground pleaded in the fraud actions, based upon misrepresentations and nondisclosure to the CPSC, I am equally unable to find a basis for liability. Here, plaintiff and Special Term relied on the authority of Butcher v Robertshaw Controls Co. (550 F Supp 692). The *91court in Butcher posited fraud liability on a theory that “an agency relationship exists, as a creature of statute, between the CPSC and members of the consuming public so as to permit the maintenance of an action for fraud and deceit by consumers injured by such fraud and deceit allegedly practiced on the Commission” (supra, p 703; emphasis added). Nowhere in the governing statute (US Code, tit 15, §§ 2051-2083) is any such agency relationship expressly created, however. To imply such a relationship in order to satisfy the necessary element of a consumer’s fraud action arising out of a fraud practiced against the CPSC is therefore really nothing more than to create a general private right of action for a violation of the disclosure requirements of the Federal statute. Recognition of a private right of action for violation of a Federal statute turns on a question of Congressional intent (Touche Ross & Co. v Redington, 442 US 560, 575). I am fully persuaded that, by the same reasoning applied in Riegel Textile Corp. v Celanese Corp. (649 F2d 894), no general private right of action was intended with respect to a violation of the disclosure requirements of the Federal act. It is especially significant that Congress expressly included various civil remedies for private litigants with respect to other violations of the statutory scheme (see, e.g., US Code, tit 15, §§ 2072, 2073), but omitted to provide one for that which is at issue here (see Drinkhouse v Parka Corp., 3 NY2d 82, 88).
Accordingly, I would additionally modify the order entered December 7,1983 by striking the portion thereof which granted plaintiff leave to add fraud causes of action to the complaint.
Kane, J. P., Casey and Weiss, JJ., concur with Yesawich, Jr., J.; Levine, J., dissents in part and concurs in part in an opinion.
Orders entered May 25,1983, August 29, 1983 and April 26, 1984, affirmed, without costs.
Orders entered December 7, 1983 modified; on the law, by reversing so much thereof as granted plaintiff the right to seek punitive damages for loss of consortium, and, as so modified, affirmed, without costs.