SUN CHEMICAL CORPORATION v. FIKE CORPORATION et al

Filing 71

OPINION & ORDER denying deft's 31 Motion to Dismiss. Signed by Judge Faith S. Hochberg on 3/2/2015. (nr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
__________________________________________
:
: Civil Case No. 13-4069
: (FSH)
Plaintiff,
:
: OPINION & ORDER
v.
:
: March 2, 2015
FIKE CORPORATION, et al.,
:
:
Defendants.
:
:
__________________________________________ :
SUN CHEMICAL CORPORATION,

HOCHBERG, District Judge:
This matter comes before the Court upon Defendants’ Motion to Dismiss Plaintiff’s
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) [Dkt. No. 31]. The Court has
reviewed the submissions of the parties and considers the motions pursuant to Federal Rule of
Civil Procedure 78.
I. BACKGROUND
Plaintiff Sun Chemical’s U.S. Ink Division operates an ink manufacturing facility located
in East Rutherford, New Jersey. Defendants Fike Corporation and Suppression Systems, Inc.
(“SSI”) market and install fire explosion and protection systems.
In March 2011, Sun sought to purchase a new dust collection system, including an
explosion protection system, for its facility. SSI allegedly provided Sun with marketing materials
and information concerning the available explosion protection systems. Ultimately, Sun
purchased an explosion suppression/isolation system rather than a venting system.

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Sun contends that Defendants allegedly represented: that the benefit of the suppression/
isolation system is that an explosion is contained within the unit and deflagration is extinguished;
that the system decreases the severity of an explosion to safe levels and prevents catastrophic
destruction; that chemical isolation prevents pressure piling and a secondary explosion; that the
suppression system extinguishes the flame within the dust collector, preventing fire damage; that
the system prevents possible death or injury to personnel; that it minimizes costly replacement
and/or repair of the dust collector; that it protects profits by reducing lengthy plant shutdown and
loss of product; that the explosion venting system was not necessary due to the installation of the
explosion suppression system; and that the suppression system releases agent into any
interconnected ducting that contains combustible material to prevent flame propagation. Sun
contends that it relied upon these alleged representations.
Sun claims that it purchased a suppression/isolation system in May 2012, which was
installed between June and September 2012. On October 1, 2012, SSI purportedly informed Sun
that the system was fully installed and operational and Sun placed the new system into operation.
On October 9, 2012, the first full day of regular operations for the new system, a fire allegedly
ignited in the dust collection system. The newly purchased explosion protection system was
triggered, releasing pressure and suppressant agent into the dust collection system, which Sun
alleges resulted in a fire and an explosion. Sun contends that the suppressant agent from the
isolation unit purportedly failed to adequately infiltrate the ducting that contained combustible
material and purportedly failed to suppress and isolate the fire. The fire and explosion allegedly
injured several workers and damaged the facility.

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Plaintiff seeks recovery under the New Jersey Consumer Fraud Act (“CFA”) for
compensatory, incidental, consequential, and treble damages and the cost of suit, attorneys’ fees,
and expert witness fees.

II. STANDARD
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S.
Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also
Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (“[S]tating . . . a claim requires
a complaint with enough factual matter (taken as true) to suggest the required element. This
does not impose a probability requirement at the pleading stage, but instead simply calls for
enough facts to raise a reasonable expectation that discovery will reveal evidence of the
necessary element.”) (internal quotations omitted).
When considering a motion to dismiss under Iqbal, the Court must conduct a two-part
analysis. “First, the factual and legal elements of a claim should be separated. The District
Court must accept all of the complaint’s well-pleaded facts as true, but may disregard any legal
conclusions. Second, a District Court must then determine whether the facts alleged in the
complaint are sufficient to show that the plaintiff has a plausible claim for relief.” Fowler v.
UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (internal citations and quotations
omitted). “A pleading that offers labels and conclusions or a formulaic recitation of the elements
of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions
devoid of further factual enhancement.” Iqbal, 129 S. Ct. at 1949 (internal quotations and
alterations omitted).

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III. DISCUSSION
The CFA prohibits “[t]he act, use or employment by any person of any unconscionable
commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the
knowing, concealment, suppression, or omission of any material fact with intent that others rely
upon such concealment, suppression or omission, in connection with the sale or advertisement of
any merchandise or real estate, or with the subsequent performance of such person as aforesaid,
whether or not any person has in fact been misled, deceived or damaged thereby.” N.J.S.A. §
56:8-2. It permits recovery of treble damages and reasonable attorneys’ fees. N.J.S.A. § 56:8-19.
“The rights, remedies and prohibitions accorded by [the CFA] provisions” are “to be in addition
to and cumulative of any other right, remedy or prohibition accorded by the common law or
statutes of [New Jersey], and nothing contained herein shall be construed to deny, abrogate or
impair any such common law or statutory right, remedy or prohibition.” N.J.S.A. § 56:8-2.13.
The parties dispute whether the CFA claim is subsumed by New Jersey’s comprehensive
products liability statute. The Products Liability Act (“PLA”), N.J.S.A. § 2A:58C-2, “established
the sole method to prosecute a product liability action” such that “only a single product liability
action remains.” Tirrell v. Navistar Int’l, Inc., 248 N.J. Super. 390, 398-99 (App. Div. 1991).
“The language chosen by the Legislature in enacting the PLA is both expansive and inclusive,
encompassing virtually all possible causes of action relating to harms caused by consumer and
other products.” In re Lead Paint Litig., 191 N.J. 405, 436-47 (2007). It “effectively creates an
exclusive statutory cause of action for claims falling within its purview.” Repola v. Morbark
Indus., Inc., 934 F.2d 483, 492 (3d Cir.1991). It subsumes any cause of action “for harm caused
by a product, irrespective of the theory underlying the claim, except actions for harm caused by
breach of an express warranty.” N.J.S.A. § 2A:58C-1(b)(3). “Harm” is defined as, “(a) physical

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damage to property, other than to the product itself; (b) personal physical illness, injury or death;
(c) pain and suffering, mental anguish or emotional harm; and (d) any loss of consortium or
services or other loss deriving from any type of harm described in subparagraphs (a) through (c)
of this paragraph.” N.J.S.A. § 2A:58C-1(b)(2).
“Courts have found that the NJPLA subsumes common law and statutory fraud claims so
long as the harm alleged was caused by a product.” Montich v. Miele USA, Inc., 849 F. Supp. 2d
439, 456 (D.N.J. 2012). “[T]he language of the PLA represents a clear legislative intent that,
despite the broad reach we give to the CFA, the PLA is paramount when the underlying claim is
one for harm caused by a product . . . [Where] the heart of plaintiffs’ case is the potential for
harm caused by [defendants’ product] . . . , plaintiffs may not maintain a CFA claim.”
Sinclair v. Merck & Co., Inc., 195 N.J. 51, 66 (2008); see McDarby v. Merck & Co., Inc., 401
N.J. Super. 10, 96-99 (App. Div. 2008) (finding “no basis, in legislative history, statutory
language or Court decisions, to conclude that plaintiffs can maintain separate causes of action
under the PLA and the CFA in this case.”).
The analysis of whether the PLA subsumes a CFA claim is based on “the essential nature
of the claim presented and . . . whether the claim would traditionally be considered a products
claim.” Worrell v. Elliott & Frantz, 799 F. Supp. 2d 343, 351 (D.N.J. 2011) (quoting Rodnite v.
Hovnanian Enters., Inc., No. 08-3787, 2010 WL 3079576, at *3 (D.N.J. Aug. 5, 2010)). Where
the “essential nature of the claim” is “that the product was not reasonably fit, suitable or safe for
its intended purpose because it either contained a manufacturing defect, failed to contain
adequate warnings or instructions, or was designed in a defective manner,” the PLA subsumes
the claim. Koruba v. Am. Honda Motor Co., 396 N.J. Super. 517, 531 (App. Div. 2007) (quoting
N.J.S.A. 2A:58C-2.); see New Hope Pipe Liners, LLC v. Composites One, LCC, Civ. No. 09-

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3222, 2009 WL 4282644, at *2 (D.N.J. Nov. 30, 2009) (“In summary, if the facts of a case
suggest that the claim is about defective manufacture, flawed product design, or failure to give
an adequate warning, then the PLA governs and the other claims are subsumed.”). Thus, where
the core issue is a “defect inherent in the product,” then the PLA governs. See Gupta v. Asha
Enterprises, L.L.C., 422 N.J. Super. 136, 146 (App. Div. 2011); Becker v. Smith & Nephew, Inc.,
No. CIV. 14-5452 WHW CLW, 2015 WL 268857, at *3 (D.N.J. Jan. 20, 2015) (“The PLA
further defines a design defect as a danger inherent in a product that has been manufactured as
intended.”).
On the other hand, where a claim does not involve harm caused by the product itself, the
claims are not subsumed. See Worrell v. Elliott & Frantz, 799 F. Supp. 2d 343, 353 (D.N.J.
2011). For instance, the PLA does not subsume a claim based on an otherwise defect-free
product which was allegedly installed and tested negligently. Thomas v. Ford Motor Co., 70 F.
Supp. 2d 521, 530-31 (D.N.J. 1999) (finding negligence claim was not subsumed based on
allegation that defendant “improperly install[ed] properly-functioning products.”); see Fid. &
Guar. Ins. Underwriters, Inc. v. Omega Flex, Inc., 936 F. Supp. 2d 441, 448 (D.N.J. 2013) (“[A]
cause of action based on the negligent installation of a properly functioning, non-defective
product is not subsumed by the PLA under New Jersey law. . . [but] a negligence claim based
upon [defendant’s] alleged installation and sale of an already defective product . . . falls squarely
within the ambit of the PLA and is subsumed by the Act.”). Nor does it subsume a claim where
the seller purportedly misrepresented the suitability of the product. See Knipe v. SmithKline
Beecham, 583 F. Supp. 2d 602, 619 (E.D. Pa. 2008) (finding claim was not subsumed where
company allegedly misrepresented the suitability of pharmaceutical for off label pediatric use in
marketing material) (applying New Jersey law); New Hope Pipe Liners, LLC, 2009 WL

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4282644, at *3 (finding claim not subsumed where defendant allegedly made “affirmative
misrepresentations as to the suitability” of a resin for a particular type of pipe-lining
rehabilitation); Gupta, 422 N.J. Super. at 146 (rejecting argument that claim that defendant
misrepresented product under the CFA is subsumed because “plaintiffs’ claims focus on the
conduct of [defendant’s] employees in supplying the wrong order, not on any ‘defect’ in the
[product].”); Rehberger v. Honeywell Int’l, Inc., Civ. No. 3:11-0085, 2011 WL 780681, at *3-5
(M.D. Tenn. Feb. 28, 2011) (“[T]he gravamen of the plaintiff’s claim is that he would not have
spent money purchasing the F50F if the defendant had not made certain misrepresentations and
omissions,” rather than that the product was defective for its intended use) (applying New Jersey
law).
A claim will not survive merely because it is labeled as “representation-based” if the core
of the issue is, in fact, the danger inherent in a product. See Indian Brand Farms v. Novartis
Crop Prot., Inc., 890 F. Supp. 2d 534, 547-48 (D.N.J. 2012) (“While Plaintiffs also clearly allege
that Novartis misrepresented that AG600 controlled certain insects without inflicting adverse
effects on plants or soil and that Plaintiffs relied on these misrepresentations in purchasing and
using AG600 to treat their blueberry plants, the heart of Plaintiffs’ dissatisfaction is that the
product itself, AG600, caused harm to the blueberry plants.”); Arlandson, 792 F. Supp. 2d at
701-04 (“Plaintiffs’ NJCFA allegations here are that Defendants Hartz and Summit marketed and
continued to market their products to consumers as safe when used as intended, when they knew
that the products posed substantial risk regardless of application and use. . . [T]he core issue in
Plaintiff’s claims is ‘harm caused by a product.’”); Schraeder v. Demilec (USA) LLC, No. CIV.
12-6074 FSH, 2013 WL 3654093, at *4 (D.N.J. July 12, 2013) (“[Although] [plaintiffs] base
their CFA claim on fraudulent misrepresentations made by Demilec, . . . the essence of

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Plaintiffs’ real claim . . . sounds in products liability; it asserts that Demilec failed to warn of the
potential health issues that could occur if their product was not mixed correctly, which resulted
in harm from the product.”); Brown ex rel. Estate of Brown v. Philip Morris Inc., 228 F. Supp.
2d 506, 517 (D.N.J. 2002) (finding claim that cigarette manufacturers misrepresented the safety
of the product was subsumed because the core issue was harm caused by a product); McDarby v.
Merck & Co., 401 N.J. Super. 10, 95 (App. Div. 2008) (“[Although] [t]he gravamen of plaintiffs’
consumer fraud claim was that Merck marketed Vioxx fully aware of its cardiovascular risk but
made misrepresentations [regarding its safety], . . . in essence, [it] is a claim of failure to warn of
dangers inherent in Vioxx cognizable under the PLA.”); see also Brown v. Abbott Labs., Inc.,
No. 10 C 6674, 2011 WL 4496154, at *3-4 (N.D. Ill. Sept. 27, 2011) (citations omitted)
(dismissing NJ CFA “representation-based” claim because alleged misrepresentation was, in
fact, based on failure to warn of a purported danger).
Here, there are sufficient allegations that the harm allegedly suffered by Plaintiff was
representation based. Plaintiff alleges that it sought Defendants’ advice as to the suitability of
particular explosion suppression systems, and that Defendants purportedly represented that an
explosion suppression system would be suitable, and that explosion venting was unnecessary.
(Compl. ¶¶ 27-29, 33, 34). At this stage, Plaintiffs do not allege that Defendant’s product was
flawed or defective; that Defendant failed to warn Plaintiff regarding a particular danger; or that
Defendant’s product was improperly designed. Taking the facts as pled in the Complaint as true
for the purposes of a motion to dismiss and giving Plaintiff the benefit of all favorable
inferences, the Court cannot say as a matter of law that the “essential nature” of Plaintiff’s claim
is products liability, particularly where Plaintiff was careful to not allege that the product
“contained a manufacturing defect, failed to contain adequate warnings or instructions, or was

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designed in a defective manner.” Nor can the Court determine, based on the pleadings, that “the
core issue is the harmfulness of the product,” as distinguished from representations regarding its
suitability, installation, or testing. Arlandson v. Hartz Mountain Corp., 792 F. Supp. 2d 691, 703
(D.N.J. 2011). However, discovery may reveal that the real issue is a “defect inherent in the
product,” rather that Defendants’ alleged representations regarding the product. As such,
whether Plaintiff’s claim is for “harm caused by a product” will be tested at summary judgment.
See Francis E. Parker Mem’l Home, Inc. v. Georgia-Pac. LLC, 945 F. Supp. 2d 543, 554 (D.N.J.
2013) (denying dismissal where the “CFA and PLA claims brought here are not incompatible, at
least not at the current stage of review while discovery is ongoing. Both classes may be related
but are distinct, and it is not yet certain the factual degree to which consumers have experienced
damage to the PrimeTrim but not to adjacent materials.”); Worrell v. Elliott & Frantz, 799 F.
Supp. 2d 343, 352 (D.N.J. 2011) (finding that, where there was factual uncertainty as to whether
the product itself contained a defect, negligence and PLA claim could proceed because “there are
sufficient factual disputes that prevent the Court from determining the appropriate cause of
action at the summary judgment stage.”); Thomas v. Ford Motor Co., 70 F. Supp. 2d 521, 530-31
(D.N.J. 1999) (“I shall deny Ford’s motion to dismiss . . . since it may yet be proved that Ford
improperly installed otherwise well-functioning and non-defective [products].”)1

IV. CONCLUSION & ORDER
IT IS this 2nd day of March, 2015, hereby

1

Plaintiffs have also alleged facts sufficient to survive a motion to dismiss that the product—a
suppression system allegedly marketed and offered to the public—was “merchandise” within the
meaning of the CFA. See Naporano Iron & Metal Co. v. Am. Crane Corp., 79 F. Supp. 2d 494,
509 (D.N.J. 1999).
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ORDERED that Defendant’s Motion to Dismiss Plaintiff’s Complaint [Dkt. No. 31] is
DENIED.

IT IS SO ORDERED

/s/ Faith S. Hochberg__________
Hon. Faith S. Hochberg, U.S.D.J..

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