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.
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