986 F. Supp. 2d 420
S.D.N.Y.2013Background
- Plaintiff Felix Fargas, a New York resident, was injured in New York while operating a milling machine bearing "CINCINNATI" marks; he sued Cincinnati Machine and MAG for product liability and breach of warranty.
- Defendants removed the case to federal court on diversity jurisdiction and moved to dismiss under Rule 12(b)(6), arguing an Ohio statute of repose bars the product-liability claims.
- The machine was manufactured in Ohio and first delivered to a purchaser (allegedly in 1961), which, if true, would be more than ten years before this suit.
- New York law has no product-liability statute of repose; Ohio Rev. Code § 2305.10(C)(1) does.
- Court treated the statute-of-repose question as a choice-of-law issue; no discovery had occurred, so the court declined to convert the motion to summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ohio's 10-year statute of repose applies to bar product-liability claims | New York law (place of injury) governs; no repose under NY law | Ohio repose applies because machine was designed/manufactured/delivered in Ohio more than 10 years before suit | Court held Ohio repose is a loss-allocating rule and a “true” conflict exists; under Neumeier/Cooney, place of injury (New York) governs, so Ohio repose does not apply; product-liability claims survive |
| Characterization of Ohio statute: conduct-regulating vs. loss-allocating | Repose is loss-allocating (limits liability after tort) | Repose regulates conduct by limiting duty and standard of care | Court held statute is loss-allocating, not conduct-regulating |
| Choice-of-law framework to resolve conflict between NY and OH rules | Apply Neumeier second rule (true conflict) and use place of injury | Defendants argued place of manufacture/conduct should govern | Court applied Neumeier second rule: in a true conflict, law of the place of injury governs; therefore New York law applies |
| Motion to dismiss breach of warranty claim as time-barred | Warranty accrual date not alleged; cannot dismiss on face of complaint | Statute of limitations expired because delivery occurred long ago | Court denied dismissal: complaint lacks tender-of-delivery date; dismissal on limitations grounds would require converting to summary judgment or evidence not before the court; denial without prejudice to summary judgment motion |
Key Cases Cited
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (choice-of-law in diversity suits follows forum state law)
- Padula v. Lilarn Props. Corp., 84 N.Y.2d 519 (distinguishes conduct-regulating vs. loss-allocating rules)
- Cooney v. Osgood Mach., 81 N.Y.2d 66 (application of Neumeier rules; place of injury governs in true conflicts)
- Neumeier v. Kuehner, 31 N.Y.2d 121 (choice-of-law rules for split-domicile ‘‘guest statute’’ conflicts)
- Groch v. Gen. Motors Corp., 117 Ohio St.3d 192 (discusses Ohio’s policy reasons for statute of repose)
- Burnett v. Columbus McKinnon Corp., 69 A.D.3d 58 (product-liability situs is place of injury)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard on Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not assumed true on Rule 12(b)(6))