United States District Court, N.D. Ohio, Eastern Division
DURO CORPORATION. Plaintiff,
CANADIAN STANDARDS ASSOC. Defendant.
MEMORANDUM OPINION AND ORDER
C. NUGENT UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff. Duro
Corporation's Motion to Dismiss Canadian Standards
Association's Counterclaim. (ECF #30). Canadian Standards
Association ("CSA") filed an Opposition to the
motion, and Duro Corporation ("Duro") filed a Reply
in support. (ECF #31, 32). Having reviewed the parties'
submissions, the Product Service Agreement, and all relevant
law, the Court finds that Plaintiffs Motion should be
parties agree that the Defendant's Counterclaim asserts a
breach of the Product Service Agreement ("PSA")
entered into between Duro and CSA on or about July 12. 2006.
According to CSA, the PSA is a non-exclusive license allowing
Duro to display CSA's Certification Mark on its products.
(ECF #31 at 5). The Certification Mark indicates that Duro
complies with certain industry standards. (Id.) The
alleged breach is based on Duro's failure to notify CSA
that the United States Department of Energy ("DOE")
initiated an enforcement action against Duro for its failure
to comply with federal regulations, in connection with a
CSA-certified product. CSA argues that this failure to notify
violated the terms of Paragraph 5(c) of the
On July 15. 2014, the DOE "initiated an action to assess
a civil penalty for failing to certify compliance and submit
a certification report" for certain basic Duro cooking
product models, required to ensure compliance with standards
promulgated by the DOE to promote their energy conservation
requirements. (ECF #27-2 at 2-3). There is no indication
anywhere in the record that the DOE alleged a violation of
the energy conservation requirements, only that Duro failed
to provide a certification report showing compliance. Duro
paid a fine, provided certifications, and the DOE dismissed
the charge with prejudice on August 21. 2014. approximately
five weeks after the action was initiated. (ECF #27-2).
5 of the PSA (Notification and Corrective Action)
memorializes the following agreement between the parties:
Section 5.1 Notification to CSA: The Client agrees to notify
CSA immediately of any reports of any incidents of
significant injury' or property damage it receives, or
knowledge of potential hazards that may result in same, that
involve the Certified Product.
The Client agrees to:
(a) keep records of all complaints received or incident
reports as described in Section 5.1 that relate to compliance
of the Product with the Requirements, including the
Certification Report and related corrective action and make
such records available to CSA upon request:
(b) take appropriate corrective action with respect to such
complaints or reports as described in Section 5.land notify
CSA immediately of related pending and actual recalls or
corrective action; and
(c) notify CSA promptly upon notifying any regulator)'
authority of reports of significant injury or property damage
or any action taken by such governmental entity with respect
to Client's Certified Products. Without limiting the
foregoing, this obligation shall arise upon notification made
to the United States Consumer Product Safety Commission
(CPSC) of any matter with respect to any Certified Product
covered by the Agreement required to be reported under the
U.S. Consumer Product Safety Act or promptly upon receiving
notice that the CPSC has been informed of such situation,
together with the affected model designations and nature of
the defect or failure.
Section 5.2 Corrective Action: The Client agrees to cooperate
with CSA and to undertake corrective actions as required by
CSA. at the Client's expense, to ensure that Product
bearing the Certification Mark is brought into compliance
with the applicable Requirement. If corrective action is not
taken. CSA reserves the right to take whatever legal recourse
is needed to address the removal of the Certification Mark
from the Product and/or advise appropriate parties.
Section 5.3 Restrictions: In the event of the Client's
default in respect of any terms of the Agreement or as part
of corrective actions referred to in Section 5.2. CSA may. at
its option: (i) institute restrictions on the Client's
right to represent its Product as Certified. Such
restrictions may include but are not limited to cancellation
or immediate suspension, of the right of the Client to
represent one or more, of its Products as Certified, subject
to terms as determined by CSA; and/or (ii) conduct technical
investigations, inspections or audits as necessary, at the
Client's expense, which may be over and above the fees
referenced in Sections 7.3 and 7.4. and which will be billed
to the Client at CSA's actual cost.
(ECF #27-2). CSA generally alleges that Duro's failure to
notify it of the DOE enforcement action caused it to suffer
damages, but does not specify how it was ...