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Board-Tech Electronic Co., Ltd. v. Eaton Electric Holdings LLC

United States District Court, S.D. New York

October 31, 2017


          OPINION & ORDER


         In this case, Board-Tech Electronic Co., Ltd. (“Board-Tech”), a manufacturer and seller of light switches, asserts that its competitor, Eaton Corporation and Cooper Wiring Devices, Inc. (“Eaton”), [1] has engaged in false and misleading advertising. The nub of plaintiff's claim is that while defendants were authorized to apply the “UL” certification mark to certain products, those products did not in fact comply with the requisite safety standards. Eaton has moved to dismiss on two principle bases: (1) that by failing to specify which products are at issue (and instead only naming a range of products within three product categories), plaintiff has failed to comply with its basic Rule 8 pleading obligations, and (2) that in all events, plaintiff has failed to allege actionable falsity.

         For the reasons set forth below, the Court agrees with the defendant and GRANTS the motion to dismiss.


         The facts set forth below are taken from the Second Amended Complaint.[2]While the Court accepts as true all well-pled factual allegations, it does not do the same with regard to legal conclusions; to the extent such conclusions are cited below, the Court's purpose is solely to fully set forth plaintiff's claims.

         Plaintiff Board-Tech, a Taiwanese Corporation, and Eaton, an Ohio Corporation, are competitors in the manufacture and sale of light switches.[3] Both have sought and obtained authorization from Underwriters Laboratories to apply its “UL” certification mark on products.

         To protect against certain dangers, including electrical fires and the risk of human injury, the U.S. government, retailers, businesses and consumers demand that the electrical products being used comply with industry safety requirements. (Second Amended Complaint (“SAC”), ECF No. 46, ¶ 18.) In the case of light switches manufactured and sold by plaintiff and defendants, the prevailing standard is UL 20, applicable to “General Use Snap Switches.” (Id.) The National Electric Code (“NEC”) requires light switches in new buildings to be UL 20 compliant; the NEC has been adopted at the state or local level in all 50 states. (Id. ¶ 20.) Even where use of a UL 20 switch is voluntary under the law, consumers rely on labeling that a product complies with safety standards at the time of purchase. (Id. ¶ 21.) Many retailers, such as Wal-Mart, additionally require compliance for products they sell. (Id.) “In practice, no manufacturer can expect to successfully operate in the U.S. light switch market without representing that its switches comply with UL 20.” (Id. ¶ 22.) “[T]he form of manufacturer representation that governments and consumers routinely require is a certification by a third party testing organization.” (Id.)

         Entities that are designated as Nationally Recognized Testing Laboratories (“NRTLs”), are tasked with rigidly testing products according to standards developed by the Occupational Safety and Health Administration (“OSHA”). (Id. ¶ 23.) “Consumers and retailers have also come to rely on an NRTL approval, certification or ‘listing' as a mark of safety.” (Id.) Underwriters Laboratories serves as an NRTL. (Id. ¶ 24.)

         Underwriters Laboratories owns the “UL” certification mark. (Turner Decl. Exs. 3, 4.) The 1964 UL mark registration states, “The certification mark is used by persons authorized by applicant to indicate that representative samplings of the products conform to the safety requirements used by the applicant.” (Id., Ex. 3, p. 2.) The 2000 registration similarly provides, “The certification mark as used by persons authorized by applicant certifies that representative samplings of the goods conform to the requirements of the applicant.” (Id., Ex. 4, p. 2.)

         In order to be authorized to apply the UL mark, a manufacturer must provide six sets of representative samples of switches they want certified to an NRTL, such as Underwriters Laboratories, for testing. (Id. ¶ 29.) The light switches must then pass a series of tests detailed in the booklet UL Standard for Safety for General-Use Snap Switches, UL 20, May 10, 2010, revised February 17, 2012. (Id. ¶ 27.) “Of course, an NRTL cannot test every product a manufacturer offers for sale prior to sale, and cannot be certain the samples provided by the manufacturer are of the same quality, or share the same properties as those the manufacturer sells to consumers.” (Id. ¶ 29.) “Accordingly, NRTLs do not guarantee the products actually sold by a manufacturer comply with the applicable safety requirements; they only certify that a purportedly representative sample did.” (Id.) Thus, according to plaintiff, “If a product carries [the UL Listing Mark], it means UL found that a representative sample of that product met UL safety requirements and the manufacturer is representing that the product meets those requirements.” (Id.) (Citing a portion of the UL website) (emphasis in original).

         Plaintiff further asserts that consumers rely on the certification mark or listing, and base their purchases on the belief that every product containing a mark or that is listed actually complies with the applicable written safety standards. (Id. ¶ 30.) After testing a product sample that meets requirements, “Underwriters Laboratories authorizes the use of its certification marks, on their products, packaging, and in their marketing and advertising, but according to the company, it is the responsibility of the manufacturer to ensure that all of the products it sells bearing the UL mark actually comply with the standards tested for, not just the samples that were tested.” (Id. ¶ 31.)

         “All of Defendants' light switches at issue in this case have been ‘listed' or ‘classified' by Underwriters Laboratories.” (Id. ¶ 26.) Furthermore, “each of Defendants' light switches manufactured, marketed, advertised, and sold bearing the UL mark have in fact been granted permission for such use and ‘listed' by Underwriters Laboratories as complying with UL 20.” (Id. ¶ 32.)

         Plaintiff asserts that in 2015-2017, it tested samples of switches actually sold by defendants, and that bear the UL mark. (Id.) The switches tested did not comply with the UL 20 standards. (Id.) Plaintiff alleges that it tested eight sets of six light switches (48 in total) from defendants' 7500, 7600, and 7700 series of products, for compliance with the UL 20 standards, and that all failed (Id. ¶¶ 37- 39.) Based upon this testing, plaintiff asserts that “none of the General-Use snap switches identified in Exhibit A that Defendants advertise, market, and sell to consumers as UL Certified and compliant with UL 20 standards actually complies with those standards.” (Id. ¶ 48.)

         Plaintiff alleges that because defendants' light switches do not meet the UL 20 testing requirements, defendants' advertising that their light switches are UL 20 compliant is actually false and misleading. (Id.) II. THE CLAIMS Plaintiff has asserted claims for false advertising under the Lanham Act, 15 U.S.C. § 1125(a) (First Cause of Action), unjust enrichment (Eighth Cause of Action), and various state law claims arising under the laws of New York (Second and Third Causes of Action), California (Fourth and Fifth Causes of Action), Illinois (Sixth Cause of Action), and Texas (Seventh Cause of Action). As discussed below, all of the claims require some showing of falsity or other wrongful or inequitable conduct.


         A. Moti ...

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