Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—DSC: Roofing Manufacturer’s Shingle Quality Representations Could Be Deceptive, (Jan 11, 2013)

By Jody Coultas, J.D.

A roofing product purchaser stated a Florida Deceptive and Unfair Trade Practices Act (DUTPA) claim against a roofing product manufacturer that allegedly misrepresented the quality of its shingles and concealed a defect from purchasers, the federal district court in Anderson, South Carolina has held (In re: Building Materials Corporation of America Asphalt Roofing Shingle Products Liability, January 10, 2013, Childs, J.). The court lacked jurisdiction over the purchaser’s New Jersey Consumer Fraud Act (CFA) claim.

Building Materials Corporation of America, doing business as GAF Materials Corporation’s manufactures roofing materials, including asphalt roofing shingles marketed under the Timberline® brand name. Morocco purchased and installed Timberline shingles on the roof of his home. Morocco filed CFA and DUTPA claims alleging that he relied on representations made by GAF and its agents including promotional statements marketing the shingles as having superior durability qualities and expressly warranting on the shingle packaging that the product complied with industrial standards. The shingles allegedly contained a latent defect that caused the shingles to prematurely crack, which GAF failed to disclose.

The court rejected GAF’s argument that Morocco failed to allege proximate cause. GAF argued that Morocco failed to allege a cognizable injury that was proximately caused by the shingles. Morocco made multiple allegations of injuries proximately caused by GAF’s marketing and selling of shingles which purportedly fail to comply with industry standards. The argument was insufficient to grant the motion to dismiss.

The majority of Morocco’s claims of fraudulent conduct do not meet the heightened standard of Federal Rule of Civil Procedure 9(b), according to the court. Morocco failed to specify the time, place, or manner of the alleged fraudulent activities regarding statements in brochures, on websites, in advertising, or in sales presentations. However, the claims that consumers relied on the written representations regarding the industry standards and code compliance on the packaging were sufficient to meet the Rule 9(b) pleading standard.

Morocco stated a DUTPA claim based on GAF’s affirmative misrepresentations of the quality of the shingles, according to the court. GAF argued that the claim was time barred as it was brought four years after the purchase of the shingles. GAF argued that the statute of limitations began to run when Morocco purchased the shingles, rather than when he discovered the alleged defect. Due to the latent nature of the alleged defect, consumers had no reasonable method of discovering a cause of action until the product began to manifest an issue. Therefore, the claim was not untimely because Morocco sufficiently alleged fraudulent concealment.

The court dismissed the CFA claim based on a finding that the Florida law was applicable to the case. GAF argued that because Morocco was a Florida resident, purchased and installed the shingles in Florida, and was exposed to the allegedly fraudulent statements in Florida, Florida law applied. A claim under the CFA does not include the element of reliance while claims under the DUTPA do require reliance. Due to this conflict, the court was required to determine which jurisdiction had the most significant relationship to the claims. Courts generally factor in the interests of interstate comity, the interests of the parties, the interests underlying the field of tort law, the interests of judicial administration, and the competing interests of the states to determine the most significant relationship. The advertising and marketing statements at issue were made or originated from GAF’s headquarters in New Jersey, but exposure to those statements occurred in Florida. The shingles were located in Florida at all relevant times. Three of the six factors of weighed in favor of applying Florida law. Therefore, Morocco could not recover under the CFA.

The case is No. 8:11-mn-02000-JMC.

Michael M. Weinkowitz (Levin Fishbein Sedran and Berman) for James Morocco. Anna H. Fee (Sullivan and Cromwell) for Building Materials Corporation of America.

Cases: StateUnfairTradePractices SouthCarolinaNews