Nondisclosure Nonpleaded

Stringer v. Remington Arms, No. 18-60590 (Nov, 7, 2022), presents an instructive analysis of failure-to-disclose allegations, in the context of alleged fraudulent nondisclosure of a design defect in a popular rifle design.

The panel majority found a failure to satisfy Rule 9(b):

“In [plaintiffs’] complaint, they explain that they have found public resources that contradict Remington’s public statements regarding the safety of the XMP trigger. They also allege that Remington had “actual and/or physical knowledge of manufacturing, and/or, design deficiencies in the XMP Fire Control years before the death of Justin Stringer” and that the company received customer complaints regarding trigger malfunctions as early as 2008. But Plaintiffs do not make the leap to fraudulent concealment. They say merely that  Remington “ignored” notice of a safety related problem.“

(applying Tuchman v. DSC Commc’ns Corp., 14 F.3d 1061, 1068 (5th Cir. 1994) (“If the facts pleaded in a complaint are peculiarly within the opposing party’s knowledge, fraud pleadings may be based on information and belief. However, this luxury ‘must not be mistaken for license to base claims of fraud on speculation and conclusory allegations.'”).

The dissent would have found that rule satisfied, based in part of the detail provided about what Remington knew: “The complaint’s allegations indicate that Remington knew about problems with the X-Mark Pro trigger before the recall but did not disclose its knowledge of those problems during the limitations period. And, contrary to Defendants’ assertion that the complaint allegations relate only to the “Walker” trigger, the deposition testimony cited in the complaint expressly references the “XMP” trigger at issue here.”