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Economic Loss Doctrine Does Not Bar Claims Under UTPCPL Where Those Claims Are Not Based on Contractual Duties Between the Parties (PA)

February 12, 2021

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<p style="text-align: justify;">Pennsylvania’s economic loss doctrine bars suits for negligence that result solely in economic loss without any accompanying personal injury or property damage.  In<em> <a href="">Dukich v. IKEA US Retail LLC</a></em>, the Eastern District of Pennsylvania clarified that the economic loss doctrine does not preclude claims under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) and a theory of negligence, even though Plaintiffs only pleaded economic injury.  The Court explained that the economic loss doctrine does not bar negligence claims that are based on duties that exist independent of any contractual claim.</p>
<p style="text-align: justify;">Plaintiffs, a married couple, purchased two four-door dressers that were eventually the subject of recall by IKEA due to instability and safety issues.  The recalls permitted either full refund or repair.  In August 2018, after the recalls for a cash refund of the purchase price. Plaintiffs alleged that IKEA refused to accept the dressers or provide refund.  Plaintiffs initiated this proposed class action seeking a full cash refund, damages for returning or disposing of the recalled products, and direct notification by IKEA to all class members of the defective nature of the chests and dressers.  Plaintiff did not seek damages for personal injuries or diminution in the value of the dressers.</p>
<p style="text-align: justify;">Plaintiffs claimed that IKEA violated Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) by engaging in unfair or deceptive practices in promising refunds and failing to issue such refunds.  Plaintiffs also alleged that IKEA acted negligently in voluntarily undertaking a recall and then failing to abide by its terms.  IKEA sought dismissal of the complaint.</p>
<p style="text-align: justify;">Judge Bartle’s opinion held that if a duty arises pursuant to a contract, then a tort action will not be allowed, but “if the duty arises independently of any contractual duties between the parties, then a breach of that duty may support a tort action,” and thus Judge Bartle held that the economic loss doctrine did not bar the Plaintiffs’ claims as they were not based on contractual duties between the parties.  Thus, because Plaintiffs had pleaded both common law and statutory duties that were independent of any contractual obligations between the parties, the economic loss doctrine did not bar their claims.</p>
<p style="text-align: justify;">Thanks to James Scott for his contribution to this post.  Should you have any questions, please contact <a href="">Thomas Bracken</a>.</p>


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