Fraudulent concealment tolls statute of limitations (except where not allowed by statute)

Patane v. Nestlé Waters North America, Inc., 2022 WL 343911, No. 3:17-cv-1381 (JAM) (D. Conn. Feb. 4, 2022)

A rare plausible fraudulent concealment scenario to toll the limitations period! The plaintiffs bought Poland Spring water and sued Nestlé, alleging that the water wasn’t from genuine springs. The Connecticut Unfair Trade Practices Act claim was time-limited, but other states’ statutes allowed for a genuine issue of fact whether the limitations period should be equitably tolled.

Common law fraud: There’s a three year limitations period, and plaintiffs sued in August 2017. But to reach back to 2003, they pointed to Connecticut law stating that if a defendant “fraudulently conceals from [the plaintiff] the existence of [a] cause of ... action, [the] cause of action shall be deemed to accrue ... at the time when the [plaintiff] first discovers its existence.” There was a genuine dispute over fraudulent concealment:

For example, the plaintiffs offer evidence that Nestlé has maintained artificial ponds and tried to pass them off as natural springs. The plaintiffs even attach a picture of what they say is the rusty pipe that Nestlé has put in one of the fake springs to make it seem like water is bubbling up from the ground. If a jury believed this evidence, it could reasonably find that Nestlé built the fake springs to mislead third parties about the origin of its water, and thus to delay being sued.

Nestlé argued that, because the plaintiffs ultimately pieced together their claims based on public records, it must not have concealed anything. But “[i]f a party could not claim fraudulent concealment unless a claim was hidden so well that it was never discovered, the doctrine would not be of any use.” By building the fake springs, the plaintiffs argued, the only way to discover the deception was to spend “years poring over maps, aerial photos, property records, and geology reports,” which kept the plaintiffs’ claims hidden much longer. “If a jury believes this, I see no reason why Nestlé’s acts would not count as concealment.” Nestlé’s cases held only that a defendant “could not have concealed information that is plain from the face of an easy-to-access document,” but did not hold that “publicly available information can never be concealed, no matter how deeply buried.”

Nestlé then argued that, because this controversy has been in the news since 2003, the plaintiffs have been on “inquiry notice” of their claims for years. But Nestlé pointed to no evidence that plaintiffs knew about the controversy before 2015, creating a genuine dispute about what they knew or should have known. So too for breach of contract claims:

CUTPA provides that “[a]n action under [CUTPA] may not be brought more than three years after the occurrence of a violation.” The Connecticut Supreme Court has ruled that CUTPA claims are not subject to equitable tolling for reasons of fraudulent concealment. And the “continuing course of conduct” doctrine didn’t allow plaintiffs to reach back to 2003. “Each time they bought a bottle of Poland Spring water, they had a mature claim for false advertising… [A] second sale did not affect whether the first sale was legal or compound the damages from the first sale.”

But claims under the consumer protection laws of other states were governed by their timeliness rules, not Connecticut’s. Although Connecticut would have applied its own rule if these were common-law claims, these laws were new rights that didn’t exist at common law, not just new remedies for fraud. “The State legislatures that passed all these statutes evidently thought that they were different enough [from common-law fraud] to be worth passing. I will respect that judgment.” Nestlé didn’t argue that it deserved summary judgment under non-Connecticut law.