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September 17th, 2014

Three Cheers for NYC Judge Who Dismissed Bogus Heating Oil Lawsuit — for the Second Time

On September 5, Manhattan Supreme Court Justice Shirley Kornreich dismissed for the second time a commercial class action that was flimsily based on a claim of “theoretical defect” in heating oil.  Justice Kornreich had previously dismissed the plaintiffs’ claims of negligent misrepresentation, unjust enrichment, and violations of both the Magnuson-Moss Warranty Act and state law barring unfair or deceptive trade practices.  She had allowed an amended complaint, alleging breach of contract and breach of warranty, to proceed until now.

As first reported by the New York Commercial Litigation Insider, BMW Group v. Castle Oil concerned deliveries of “blended” heating oil, instead of unadulterated or unblended oil, to commercial and residential buildings.  In dismissing the theories presented in the original complaint, Justice Kornreich determined that Castle Oil’s practice of blending used oils with heating oil complied with state and federal regulations and violated no state or federal laws. In fact, the Environmental Protection Agency and New York’s Department of Environmental Conservation have established rules that allow blending.

Now, dismissing the amended complaint, Justice Kornreich refused to entertain the plaintiffs’ marginally revised argument, noting that a “theoretical defect that never manifests itself . . . or causes harm is an insufficient ground upon which to base a damage claim.” Justice Kornreich also refused to entertain the plaintiff’s assertion that purchasing heating fuel is equal to a consumer’s purchase of luxury goods.

Of course, when a society dame plunks down big cash for a Louis Vuitton handbag, she does so to show off.  And when a high-flying personal injury lawyer, against his accountant’s better judgment, buys a Bentley, it’s for the same reason.  But nobody ever brags about their unadulterated heating oil, do they?

Justice Kornreich’s firm dismissal of this nervy theoretical defect claim shines as an all too rare Point of Light in a state that is effectively dominated by the plaintiffs’ bar and sadly sliding steadily into the often inescapable darkness of a Judicial Hellhole.

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