Jump to Navigation
Jump to Content

Fuku-Bonsai, Inc. v. E.I. du Pont de Nemours & Co.

Citation: 29 ELR 21430
No. No. 98-15429, 187 F.3d 1031/(9th Cir., 08/11/1999)

The court holds that a settlement agreement resolving product liability claims between a Hawaii ornamental plant company and a Delaware chemical company does not bar the plant company's subsequent claim that the chemical company fraudulently induced settlement. The court first holds that the plant company's claim for fraudulent inducement is not barred by the release language in the product liability settlement agreement. The release is identical to the one in Matsuura v. Alston & Bird, 166 F.3d 1006, 29 ELR 20643 (9th Cir. 1999), in which the court held that under Delaware law, plaintiffs who have been fraudulently induced to settle tort claims have a choice of remedies: they may rescind the contract or they may affirm the contract and sue for fraud. Because no facts that would distinguish this case from Matsuura have been suggested or revealed in the record, its reasoning squarely applies to this case. The court, therefore, reverses and remands the district court decision.

A dissenting judge would hold that because the Delaware Supreme Court has accepted certification of this issue in a similar case, the court should await its decision before attempting to decide the Delaware law question.

[A decision related to this litigation is published at 29 ELR 20643.]

Counsel for Plaintiffs
Stephen T. Cox
Molligan, Cox & Moyer
703 Market St., Ste. 1800, San Francisco CA 94103
(415) 543-9464

Counsel for Defendants
A. Stephens Clay IV
Kilpatrick & Cody
1100 Peachtree St. NE, Ste. 2800, Atlanta GA 30309
(404) 815-6500

Before Schroeder, J., with Boochever, J., dissenting