An interesting case was recently decided by the United States District Court in the State of New Jersey which involved Underwriters Laboratories (UL).

A homeowner purchased an alarm system and came to believe it had a defect. The homeowner (the plaintiff) sued the alarm manufacturers, pointing to alleged misrepresentations on the packaging in which the alarm came.

The plaintiff in the complaint claimed that the packaging said that the alarm was “UL listed” and that it was “listed to” several UL standards. The plaintiff concluded that the alarm did not in fact meet the UL standards and regretted the purchase because if the alarm was not UL-compliant, he would not have bought it.

The plaintiff sued on behalf of a putative class of people who purchased the alarm. The plaintiff’s theory was that the defendant alarm companies were liable under one federal law and various state laws because the alarm’s packaging and some of its advertising said it was “UL listed,” even though it did not actually meet underlying UL standards.

The defendants moved to dismiss the complaint.

The court, in discussing the case, indicated its analysis was in four parts:

1. With reference to the federal claim, the court concluded the complaint must be dismissed as the court has no jurisdiction.
2. The court considered a cluster of state-law claims, each of which rests on the allegation that a false statement was made by the defendants. The court indicated that these claims must be dismissed as no false statement was made.
3. The court dismissed two statutory claims, which arise under New Jersey law, stating that these claims require a false statement and/or an omission. The court pointed out there were no sufficient allegations of either.
4. The court declined to rule on the remaining two state-law claims, giving the parties an opportunity to decide how they wanted to proceed. 

In discussing the federal claim, the court pointed out that a Warranty Act claim can go forward as a class action only if there are 100 or more named plaintiffs. There was only one named defendant, so therefore the court indicated that the Warranty Act claim must be dismissed.

The plaintiff claimed that by saying the alarm was “UL listed” the packaging not only promised that the alarm was UL listed, it also promised that the alarm met the substantive requirements of the underlying UL standards. Therefore this was a false promise because the alarm did not in fact conform to UL standards.

The court referred to other jurisdictions, which held that when a company says its product or service is certified by a third party, a plaintiff cannot claim that the company made a false statement solely by alleging that the certifier should not have made the certification in the first place.

Bottom line, the court pointed out that the decisions of courts in other jurisdictions loom especially large here, and they point in the same direction: a company’s statement that its product is third-party certified implies that the product is indeed so certified, but purports to say nothing about whether the third party made the right decision in issuing its certification. This means that if the third party allegedly got it wrong, then the company cannot, without more information, be sued for a false statement solely on that basis.

The court pointed out that UL is a nationally recognized testing laboratory, and under federal law, such laboratories must be “completely independent of … any manufacturers or vendors of equipment or materials being tested.”

In conclusion, the court predicted that the New Jersey Supreme Court would rule that a company’s statement that its product is third-party certified, does not, without more, allow the company to be sued on a tort claim that rests on a false statement when the alleged false statement is that the third party made the wrong decision in issuing its certification.

In light of this prediction, the court held that the plaintiff’s negligent misrepresentation, common law fraud, and express warranty claims must be dismissed. Each claim is based on the defendants’ statement that the alarm was “UL listed” and the assertion that the statement is false because UL should not have certified the alarm. But that does not state a claim under New Jersey law, as predicted by the court.

Therefore, with respect to each of the above claims, the Defendants’ motion to dismiss was granted.