Tavares Ford, On behalf of herself and all other similarly situated v. Toys R Us, Inc. ( 2006 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
NOVEMBER 29, 2005 Session
TAVARES FORD, On behalf of herself and all other similarly situated
v. TOYS R US, INC.
Direct Appeal from the Circuit Court for Shelby County
No. CT-003710-04 James F. Russell, Judge
No. W2005-01117-COA-R3-CV - Filed March 9, 2006
In this appeal, we are asked to determine whether the circuit court erred when it dismissed the
appellant’s class action suit based on lack of standing and primary jurisdiction. On appeal, the
appellant asserts that she had standing to bring her suit and that the circuit court should not have
declined to exercise jurisdiction based on the doctrine of primary jurisdiction. We affirm.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed
ALAN E. HIGHERS, J., delivered the opinion of the court, in which DAVID R. FARMER , J., and HOLLY
M. KIRBY , J., joined.
D. Frank Davis, John E. Norris, Birmingham, AL; Sheila B. Renfroe, Memphis, TN, for Appellant
Sam B. Blair, Jr., Clinton J. Simpson, Memphis, TN, for Appellee
OPINION
I. FACTS & PROCEDURAL HISTORY
Ms. Tavares Ford (“Ford” or “Appellant”) purchased a necklace from Toys R Us, Inc. (“Toys
R Us” or “Appellee”) for her daughter. After discovering that the necklace was made of 100% lead,
she no longer allowed her daughter to come into contact with the jewelry. Thereafter, Ford brought
a class action suit against Toys R Us basing it on a claim for breach of warranty. The complaint
alleged that Toys R Us knowingly sold a hazardous product to consumers. Toys R Us subsequently
filed a motion to dismiss. Thereafter, Ford amended her complaint. The circuit court dismissed
Ford’s complaint stating that she lacked standing to bring such a claim. The circuit court
alternatively dismissed Ford’s complaint declining to exercise jurisdiction pursuant to the doctrine
of primary jurisdiction. When the circuit court declined to exercise jurisdiction pursuant to the
doctrine of primary jurisdiction, it stated that
[t]his case involves a consumer product that plaintiff alleges is
unreasonably dangerous and defective because it is made entirely of
lead. In her First Amended Complaint, plaintiff cites and relies on a
plethora of studies and reports documenting the hazards of lead. One
of the sources relied upon is the Consumer Product Safety
Commission (“CPSC”). The CPSC was created by the Consumer
Product Safety Act (“CPSA”), Public Law 92-573, 15 U.S.C. § 2051,
et seq., in order to, inter alia, protect the public from unreasonable
risks of injury, and to develop uniform safety standards and reduce
conflicting state and local regulations concerning consumer products.
15 U.S.C. § 2051(b). The CPSA authorizes the CPSC to investigate
the safety of consumer products and to ban products it finds
hazardous. Under the CPSA, the CPSC has essentially a two-fold
function: (1) it gathers data relating to health impairments and
economic losses associated with consumer products; and (2) it
develops, promulgates, and enforces consumer product-safety
standards, rules, and bans. See generally 6 Fed. Proc. Forms § 15:1.
Aside from establishing a rule on its own initiative, any
interested person can petition the CPSC to initiate a “rulemaking”
pursuant to 15 U.S.C. § 2058(I). In addition, 15 U.S.C. § 2054 gives
the CPSC the authority to collect information concerning potentially
hazardous products directly from the consumer. Anyone may report
a hazard, regardless of whether personal injury or death resulted from
the use of a particular product, by simply calling a toll-free number
or completing a brief online form. See
http://www.cpsc.gov/talk.html. There is yet another option available
under the CPSA. If the CPSC finds a particular product presents
imminent and unreasonable risk of death, serious illness, or severe
personal injury, it can declare the product to be an “imminent hazard”
pursuant to 15 U.S.C. § 2061. Under this section, the CPSC is
empowered to file an action in any United States district court against
the retailer of a product deemed to be an “imminent hazard.” Among
the temporary and permanent relief available is the issuance of a
recall, the repair or replacement of the product, and the refund of the
purchase price. See 15 U.S.C. § 2061(b)(1). Similar remedies are
available under 15 U.S.C. § 2064(d) for non-compliance with a
consumer product safety rule.
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Congress granted the CPSC broad jurisdiction over the
regulation of thousands of consumer products. The jewelry at issue
here clearly satisfies the definition of a consumer product and lies
within the regulatory authority of the CPSC. This much is evinced by
the CPSC’s issuance of recall notices for similar lead-containing
jewelry. See, e.g., First Amended Complaint at para. 15. In this
lawsuit, plaintiff seeks to both recover the purchase price of the
necklace and enjoin Toys from continuing to sell lead jewelry. As
discussed above, pursuant to the CPSA, the CPSC is authorized to
provide these remedies.
In fact, during the pendancy of this Motion to Dismiss, the
CPSC announced a new policy addressing lead in children’s jewelry
(the “Policy”). See Press Release, U.S. Consumer Product Safety
Commission, CPSC Announces New Policy Addressing Lead in
Children’s Metal Jewelry, Release #05-097 (Feb. 3, 2005). The
Interim Enforcement Policy issued by the CPSC’s Department of
Compliance describes the approach the office will follow in
addressing children’s jewelry containing lead. Specifically, it details
the criteria for deeming an article of jewelry a “banned hazardous
substance” under the Federal Hazardous Substances Act (“FHSA”).
See 15 U.S.C. § 1261(f)(1)(A); 15 U.S.C. § 1261(q)(1)(A). As
outlined in the Policy, CPSC staff will conduct tests of all component
parts of a particular piece of jewelry to determine whether to pursue
enforcement under the FHSA. If the tests reveal lead content above
a prescribed minimum threshold, the CPSC will determine, on a case
by case basis, whether to pursue corrective action. In light of this
regulatory scheme and the facts of this case, the Court finds that the
CPSC is better situated and equipped to address the issues raised in
this lawsuit. Indeed, the CPSC has already invoked its jurisdiction
with regard to the subject matter embraced within the Amended
Complaint. The Court will, therefore, decline to exercise jurisdiction
in deference to the primary jurisdiction of the CPSC.
(footnotes omitted).
II. ISSUES PRESENTED
Appellant has timely filed her notice of appeal and presents the following issues for review:
1. Whether the circuit court erred when it declined to exercise jurisdiction based on the doctrine
of primary jurisdiction;
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2. Whether the circuit court erred when it held that Appellant did not sufficiently state a claim
for breach of warranty because she did not affirmatively allege in her complaint that she
demanded a refund; and
3. Whether the circuit court erred when it held that the economic loss doctrine barred Plaintiff’s
claims for punitive damages.
Additionally, Appellee has presented one issue for review:
4. Whether the circuit court erred when it ruled the “no injury” line of cases did not apply to all
of Appellant’s claims.
For the following reasons, we affirm the decision of the circuit court.
III. DISCUSSION
While both parties have presented numerous issues on appeal, we find one that is dispositive
of this case. On appeal, Appellant asserts that the circuit court erred when it declined to exercise
jurisdiction based on the doctrine of primary jurisdiction. Specifically, Appellant has asserted that
declining to exercise jurisdiction based on the doctrine of primary jurisdiction was erroneous because
(1) there is no private right of action under the CPSA; (2) the CPSC cannot adjudicate a private
dispute; (3) the CPSA preserves all common law claims. Taking each of Appellant’s assertions in
turn, not one demonstrates reversible error.
First, Appellant asserts that the circuit court erred when it dismissed her claims based on the
doctrine of primary jurisdiction because the CPSA does not create a private right of action.
However, while the cases cited by Appellant in her brief on appeal set forth the proposition that
courts may not provide relief to an individual for a claim based on the CPSA, see, e.g., Avery v. Gas
Prods., Inc., 18 F.3d 448 (7th Cir. 1994); Penn. Gen. Ins. Co. v. Landis, 96 F. Supp. 2d 408 (D. N.J.
2000), nothing in the CPSA precludes Appellant from petitioning the CPSC to grant the relief
requested by Appellant in her complaint, see Consumer Product Safety Act, Pub. L. No. 92-573, 86
Stat. 1207 (codified as amended at 15 U.S.C. 2051, et seq.).
Second, Appellant contends that the circuit court erred when it dismissed her complaint based
on the doctrine of primary jurisdiction because the CPSC cannot adjudicate a private dispute such
as this one. Although the CPSC cannot adjudicate a dispute such as this one, the CPSC can provide
the relief Appellant seeks if it determines that Appellant’s claims are an imminent hazard as
Appellant claims. See 15 U.S.C. § 2061(b)(1) (2004).
Finally, Appellant contends that dismissing her complaint based on the doctrine of primary
jurisdiction was erroneous because the CPSA preserves all common law claims. Relying on Nader
v. Allegheny Airlines, Inc., 426 U.S. 290 (1976), Appellant contends that, because her common law
claims are not wholly inconsistent with CPSA, a ruling by the CPSC would not preclude her
common law claims. However, under the doctrine of primary jurisdiction, a court may defer
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adjudicating a claim to an administrative agency that has the necessary expertise to dispose of an
issue even though the court has jurisdiction. See 73 C.J.S. Pub. Admin. Law & Procedure § 72
(2004). When the circuit court declined to exercise jurisdiction based on the doctrine of primary
jurisdiction, it did not do so because Appellant did not have a proper claim that it may adjudicate.
Rather, the circuit court dismissed the complaint because it has found that an administrative agency
with concurrent jurisdiction was better suited to redress Appellant’s claims.
In this case, the circuit court did not err when it declined to exercise jurisdiction in deference
to the primary jurisdiction of the CPSC. “Under the doctrine of primary jurisdiction, a court may
suspend review of a claim when its resolution involves issues which, under a regulatory scheme,
have been placed within the special competence of an administrative body with primary
responsibility for government supervision or control of the industry or activity involved . . . .” 73
C.J.S. Pub. Admin. Law & Procedure § 72 (2004). Under the doctrine of primary jurisdiction,
“parties resort first to an administrative agency before they seek judicial action involving a question
within the competence of that agency.” Freels v. Northrup, 678 S.W.2d 55, 57 (Tenn. 1984) (citing
Terrell Oil Corp. v. Atl. Richfield Co., 468 F. Supp. 860 (E.D. Tenn. 1977)). When a court must
decide whether to defer to an administrative agency under this doctrine, it must determine if “deferral
[will] be conducive toward uniformity of decision between courts and the agency, and [if] deferral
[will] make possible the utilization of pertinent agency expertise.” Id. (citing Ricci v. Chicago
Mercantile Exch., 409 U.S. 289 (1973); Great N. Ry. Co. v. Merchs. Elevator Co., 259 U.S. 285
(1922); Texas & P. Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426 (1907)). Whether to apply the
doctrine of primary jurisdiction is discretionary. Id. at 58 (citing Great N. Ry. Co., 259 U.S. 285;
Kerr v. Dep’t of Game, State of Washington, 542 P.2d 467 (Wash. Ct. App. 1975)).
Thus, we must first determine whether the claims made in this case are within the
competency of the CPSC under the CPSA. We find that these claims do fall within the competency
of the CPSC. As the circuit court correctly noted, among the CPSC’s stated purposes under the
CPSA, the CPSC was created “to protect the public from unreasonable risks of injury . . . and to
develop uniform safety standards and reduce conflicting state and local regulations concerning
consumer products.” (T.R. Vol. I, p. 179). The jewelry in question is a consumer product. See 15
U.S.C. § 2052(a)(1) (defining consumer product under CPSA). Further, this type of product claim
is precisely what the CPSA intended the CPSC to monitor and control.
Next, we must determine whether the circuit court properly found that deferral to the CPSC
will promote uniformity of decisions between the courts and the CPSC. In this case, the CPSC is
endowed with the power to address the relief requested by Appellant if this product is considered
an imminent hazard, see 15 U.S.C. § 2061(b)(1), which Appellant has alleged that this product is in
her complaint. Allowing the CPSC to determine first whether a certain piece of jewelry is defective
because of its lead content will eliminate conflicting court judgments as to the defective nature of
this type of product. In addition, Appellant has also requested that Toys R Us be enjoined from
selling this product nationwide. Obviously, the CPSC is in a better position to mandate compliance
assuming that the CPSC found the product to be defective.
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Finally, we must determine whether the CPSC’s expertise may be utilized by deferring
Appellant’s claims to it. Appellant asserts that no special expertise is necessary to determine the
outcome of her claims. We disagree. Here, the CPSC’s expertise in this area could be utilized to
determine whether this particular piece of lead jewelry is in fact unreasonably dangerous or defective
as Appellant claims. As Appellant has noted in her first amended complaint, the CPSC has already
done research and testing with regards to the claims made by Appellant. (T.R. Vol. I, pp. 19-20, 22-
24). In addition, according to the Policy, the CPSC will conduct tests on pieces of lead jewelry to
determine whether that jewelry should be a banned substance under the FHSA. . See Press Release,
U.S. Consumer Product Safety Commission, CPSC Announces New Policy Addressing Lead in
Children’s Metal Jewelry, Release #05-097 (Feb. 3, 2005), available at
http://www.cpsc.gov/cpscpub/prerel/prhtml05/05097.html. Further, this claim is generally not
within the competence of the courts. While a breach of warranty claim is generally within the
competence of the courts, a determination of the hazardous effects of lead and its reasonable use in
children’s jewelry is within the specialized expertise of the CPSC.
Thus, we can find no error in the circuit court’s decision to decline to exercise
jurisdiction based on the doctrine of primary jurisdiction. Accordingly, the decision of the circuit
court is affirmed. All other issues presented for appeal in this case are pretermitted.
IV. CONCLUSION
For the foregoing reasons, we affirm the decision of the circuit court. Costs of this appeal
are taxed to Appellant, Tavares Ford, and her surety, for which execution may issue if necessary.
___________________________________
ALAN E. HIGHERS, JUDGE
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