The Duty of Manufacturers to Consumers Under California Fraudulent Concealment Law
Abstract
Under California tort law, consumers injured by products whose dangers were not disclosed by manufacturers may not only bring traditional product liability claims for negligence or strict liability, but they also may have viable intentional concealment claims based on fraud. It is well-established and relatively uncontroversial that intentional concealment tort claims are generally available under California fraud law, and that the elements of such a cause of action include a duty owed by the defendant. However, a degree of confusion persists regarding the extent to which defendant manufacturers have a duty to disclose the product hazards to consumers with whom they do not have fiduciary or direct transactional relationships, or to the consumer public generally, thanks to vague language in court decisions describing the requirements for intentional concealment claims. The California Court of Appeal decision LiMandri v. Judkins lists several scenarios under which concealment may constitute actionable fraud, even absent a fiduciary relationship between plaintiff and defendant. Rather than providing clarity, however, LiMandri includes a vague requisite to establish the elements of an intentional concealment claim; that there should be “some” relationship and “some sort” of transaction between the parties for a duty to be established.
The more recent Bigler-Engler v. Breg court of appeal case, interpreting LiMandri, further compounded the ambiguity regarding the requirements for establishing a manufacturer's duty to consumers. While emphasizing the need for a “transaction” to exist for a duty to be found under fraud law, Bigler-Engler failed to clarify what type of transaction or relationship satisfies that requirement. Those who portray Bigler-Engler as precluding any manufacturer duty to the public or to consumers generally in fraud cases, or to individual members of the consumer class absent any type of direct transactional relationship, are wrong for a number of reasons. Although the decision did contain language calling into question a manufacturer's duty owed to the “public at large,” Bigler-Engler, which was written in narrow terms and only addressed a woefully incomplete and largely inapplicable body of legal authority presented to the court, left intact a number of precedents recognizing such a duty to consumers. Courts are particularly receptive to finding such a duty in toxic torts and other cases involving safety risks, cases involving egregious conduct by manufacturers, in cases in which manufacturers profit from consumers' use of a product, and in cases in which manufacturers intend for misrepresentations about product safety to induce end users to use their products, even absent direct transactions and communications with those consumers.
It would be contrary both to well-established California law and to public policy to allow manufacturers to evade liability for intentional acts of fraud upon consumers based on overbroad interpretations of vaguely worded case law. Consumers injured by manufacturers who, through fraudulent concealment, induced them to use their dangerous products should rest assured that, even if they are absent from direct contact with the manufacturers, fraud claims remain available to them. Correspondingly, members of the bench and bar should apply the law as it existed prior to Bigler-Engler and continues to exist in its aftermath.