More Hot, Hot Heaters
July 20th, 2020
Here’s a fun one; From a Court docket in Ohio….
“Plaintiffs further allege the following: Enerco and CSA [Canadian Standards Association] conspired to market defective vent-free heaters to American families, knowing that the units posed a threat of serious harm to person and property, without adequately warning consumers of the hazard.”
Well folks, we’re still waiting for Tabib’s Ruling in favour of her friends, highly confident of the corruption in Crampton’s Court. Yet, while we wait, there’s still stuff to report on. Stuff like fraud.
According to the above noted Ohio Court filings, the CSA was involved in “fraud and conspiracy to defraud” US consumers between 2005 and 2010. How? What a good question.
It seems that a company called Enerco wanted to sell space heaters in the US market. They could sell quality heaters, meeting all legal safety requirements, or they could sell cheap Chinese crap.
They chose cheap crap.
A regular problem with rubbish products is that they rarely perform as advertised and they’re often quite unsafe. The heaters in question were quite unsafe. From the filing…
“The vent-free heaters are [unsafe] because during the heater’s ignition cycle, gas flames often extend or flash outside of the combustion space and the front grill, posing a latent fire hazard to anyone or anything in close proximity to the heater.”
Yet the heaters were CSA certified. They were tested by CSA at their Cleveland facility and, we’re told, passed all their safety tests. Hence, the unsafe heaters were, you know, “safe.”
How do you suppose an unsafe Chinese product passed its safety tests in the US? Well, according to the Plaintiff’s filing…
“On May 12 and May 19, 2005 at CSA’s testing facility, Enerco and CSA jointly conspired to alter a vent-free heater for testing purposes by extending the heater’s hood to contain the flames. On July 15, 2005, CSA issued Enerco a falsified Certificate of Compliance indicating that the heater was compliant with ANSI standard Z21.11.2, which provides that under certain specific conditions, flames shall not flash outside the combustion space of gas-fired room heaters and shall not ignite clothing. Enerco subsequently stamped ANSI certification and CSA’s imprimatur on the boxes of all vent-free heaters, falsely indicating safety compliance.”
And the Court agreed, saying…
“[The] Plaintiffs were defrauded and not warned, and as a result, purchased and own a defectively designed Enerco/Mr. Heater vent-free heater. Second, the alleged injury is traceable to the Defendants […] Enerco and CSA conspired to defraud Plaintiffs by falsifying the testing of the product.”
The CSA responded in their usual fashion, with bombast and pedanticism, trying to cloud the issues and impede the process with a wealth of not especially relevant complaints.
Thus CSA complained to Court; “[The] Plaintiff, at a minimum, must ‘allege time, place, and content of the alleged misrepresentation on which he or she relied; the fraudulent scheme; the fraudulent intent of the defendants; and the injury resulting from the fraud’.”
They tried that with us, too. We replied as did this Plaintiff, that only CSA has records of what time it was when they falsified the test records. Demanding that the Plaintiff have knowledge only available to CSA is to require omniscience of the Plaintiff. It’s also an affront to justice, as the Plaintiffs pointed out; “to dismiss a RICO claim because only Defendants know the exact details of their own malfeasance would be abhorrent to the basic sense of justice that our society demands of our federal court system.”
The CSA argument was silly, and they knew it, and, at least in this instance, the Court knew it too.
Said the Court; “Rule 9(b) does not require omniscience; rather, the Rule requires that the circumstances of the fraud be pled with enough specificity to put defendants on notice as to the nature of the claim.” And, for this, the Court rejected CSA’s complaint.
Then the Court went further, including a little lesson on fraud and doing a spot of CSA damning in the process, saying;
“The elements of fraud are: (1) a representation or, where there is a duty to disclose, concealment of a fact, (2) which is material to the transaction at hand, (3) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (4) with the intent of misleading another into relying upon it, (5) justifiable reliance upon the representation or concealment, and (6) a resulting injury proximately caused by the reliance.
“Upon careful review of the First Amended Complaint in its entirety, […] the Court finds that Plaintiffs have satisfied all of the pleading requirements imposed by Rule 9(b) and have sufficiently pled the elements of fraud.”
And so it went on, for another year or so in the Ohio Court system. And CSA worked that system just as they worked ours. And it was just as entertaining.
For instance, the CSA at one point alleged that the heaters they certified as safe were indeed safe as milk, even though the testing to achieve that result was fraudulent. So the Court got the parties to submit the heaters to independent testing. Uh-oh.
Specifically, nineteen randomly selected Enerco heaters, featuring a cross-section of different models, were tested by an independent lab. And we checked the lab, and it appears to be uncompromised by CSA lackies. Said the Court; “The object of the test was to determine whether the alleged ‘flash-outs’ could be observed with respect to those units.”
“The laboratory concluded that each of the infrared liquid-propane models, representing ten out of the nineteen units tested, exhibited at least one occurrence in which flames reached beyond the combustion space when tested under a variety of conditions.”
So, a majority of units tested failed their tests. Actually, I’ve seen the test results and can further note that while most of the heaters couldn’t pass their safety tests, none of the heaters passed their performance tests. That is, none of the 19 heaters rated for 30,000 btu could reach 30,000 btu, some missing by a massive margin. One of the units could only manage 9,735 btu. Customers were buying heaters producing less than one-third of the performance claim, and at significant safety risk.
This is ungood, so CSA did what CSA does best; They muddied it and tried to muck the process.
“The controlling law,” said CSA, “is the law of any state where the injuries occurred, that is, where economic losses were sustained by way of consumer purchase. Because the [case] would thus necessitate the application of the laws of all fifty states, [the case] would be unmanageable.”
Caught that? The fraudulent testing created victims in all fifty states, making legal accountability an unwieldy process. Thus, the victims’ case should be dismissed.
Well, that didn’t work, so CSA tried another pass.
Said CSA, they “conduct business principally in Ohio but CSA [are] a Delaware entity.” Therefore the Ohio Court has no jurisdiction, it could only be tried in Delaware. So Ohio should dismiss the case.
That didn’t work either. So CSA tried again, this time questioning their own relevance in the market.
“It is entirely possible that a potential class member did not notice the [CSA] seal prior to purchasing the heater,” said CSA. “If the seal was noticed, it is equally plausible that it was not interpreted in the manner claimed by Plaintiffs. Certainly, the seal does not communicate that the heater is ANSI-compliant or that flames will not flash-out during the ignition cycle. Even if the class member observed the seal and understood its meaning, he or she may have decided to purchase the heater for reasons entirely unrelated to the representation. And, even if CSA or Enerco placed warnings on the heaters regarding the flash-outs, a consumer may well have purchased the heater anyway”.
So, the CSA certification doesn’t mean anything, it surely doesn’t mean that the product is safe or has passed safety testing. Indeed, customers, being quite stupid anyway, might’ve bought the product even if CSA hadn’t been dishonest.
This was exactly their defence in the Bauer case, that CSA certification doesn’t mean anything. In this argument, the CSA safety certification process is just a rubber stamp, a hoop to jump through, and a tax on industry. The testing itself is the excuse the levy the tax. That’s it. And that’s quite close to true in today’s CSA.
But, as we noted in our coverage of Bauer, the CSA says one thing in one Court and the opposite elsewhere. In California Court earlier this year, the CSA repudiated its own argument on the meaninglessness of its trademarks, saying instead that “the CSA Marks tell potential customers and users that a product has been evaluated by a formal process – involving examination, testing and follow-up inspection – and that it complies with applicable standards for safety and performance.” See? Exactly the opposite.
Anyway, the CSA’s denigration of their own certifications didn’t do the trick, the Ohio case continued.
The Plaintiffs got a bit frustrated with CSA’s barracking. Their filings got feisty, including this summery of events, as below;
“[Defendants] sent their representatives to China to buy cheap space heaters to sell in the United States. They brought home heaters purportedly designed for consumer use that shoot flames into the air around them. The […] Defendants then hired CSA Americas and / or CSA International to ‘test’ the heaters to fabricate industry standard compliance. Together, on May 15, 2005, at CSA’s facility in Cleveland, Ohio, CSA and the Defendants conspired to extend the ‘tested’ heater’s hood to contain the flames for the sole purpose of the compliance ‘testing’. They stamped an ANSI certification and CSA’s imprimatur on the box and induced suppliers like Tractor Supply to sell the units without the extended hoods to consumers across the country. The Defendants and CSA made the deliberate decision to market their dangerous heaters to American families, despite their knowledge that the units pose a threat of serious harm to person and property.”
See? Fiesty. Notice the language as they continue (and emphasis is in the original);
“Unbelievably, Defendants argue [that] ‘Plaintiffs predicate their claims on the bald, factually unsupported conclusion that the heaters are unsafe.’ The heaters shoot flames into the air around them. Plaintiffs cannot more plainly state the factual basis for their conclusion that the heaters are unsafe for consumer use. Their inherent danger to person and property is self-evident. Nor can Plaintiffs more simply recount the deliberative efforts of the Defendants and CSA to rig the ‘tested’ heater to comply with ANSI standards to induce suppliers to market them to the public.”
“The [CSA] defendants knew of the danger as they sold the unaltered heaters after extending the hood on one solely for ‘testing’ purposes. They then received voluminous consumer complaints. Beyond those, they have defended product liability claims involving serious burn injuries.”
Caught that? The CSA’s certification fraud involves “serious burn injuries.” Elsewhere, for instance, we learn of Mr. Fred Hamton, “who recently filed a personal injury lawsuit […] claiming to have been injured” by one of CSA’s falsely certified heaters.
But, back to the action…
The CSA’s fraudulent certification resulted in “voluminous consumer complaints regarding fire spraying from the heater” and “serious personal injury.” Bit of an issue, it seems. “Their defective heaters have severely burned people -including children.”
“Defendants deliberately misled their suppliers and the American public by selling space heaters they purchased in China that shoot flames into the air around them. They altered one unit for testing to feign industry standard compliance and induce suppliers to market the defective, unaltered units.”
“Defendants would blame Plaintiffs for their injuries demonstrates both their willingness to ignore the facts of this case and their wanton indifference to human health. It is a shameful attempt to mislead this Court which has no place in this discussion. In reality, Defendants have chosen profits over safety.”
Readers will recall the secret records of a CSA meeting in which this principle was openly stated, that the priority wasn’t safety. No. Said CSA; “The bottom line is revenue generation.”
The CSA response to all this was as unfortunate as predictable. I’ll share the following exchange from the deposition of one of CSA’s victims, a man who had bought one of these unsafe heaters. This particular exchange was excerpted and included by CSA in their submissions to Court. What do you suppose CSA’s lawyers were trying to accomplish by selecting this quote specifically?
Here’s the quote:
Q. Tell me exactly what they said to the best of your recollection.
A. I heard them ask one of the guys. They was talking. I heard them say something about just a CSA and I asked them, you know, what do that—what do that mean, because I ain’t know. And they just said, you know, what that means.
Q. What did they tell you CSA meant?
A. That they would—that they certify, you know, a product and state that it’s safe before it come to the consumers.
Alright, what do you think? Of all the quotes in deposition, running for hundreds of pages, why did CSA select this one?
Think of it this way; what do civil servants think about themselves? What do they think about you?
Farmers, black people, the poor, the uneducated, people who wear hard-hats for a living -these are the lesser peoples, the ones beneath the bureaucrats.
Look folks, that quote doesn’t do much for CSA on substance, but from a civil service perspective it does a lot to characterise their victims as unimportant people. Look at the grammar? Look at the phrasing? You know, these people can’t be taken seriously! Or so goes the theory.
I don’t know this man they quoted, but I feel that I’ve met him a thousand times. To read his deposition is to read from the salt of the earth. Such people aren’t unimportant; they’re all important. These people work hard for their living. They don’t lie for a living, they don’t push bits of paper around, pointlessly, purposelessly, pathetically. And they don’t burn things; they build them! These are the guys who get things done, the ones you can depend on. If you ask to borrow their stepladder they will lend it to you.
The very notion that just because some people don’t speak with the eloquence of some piffling bureaucrat that they’re somehow less valuable in society is, to my mind, a pretty vulgar proposition.
Yet here we are.
In the three years of the Ohio heaters case, there were 102 files submitted to Court. Not all were from CSA obviously but, having read them, CSA was the driver in the main. That’s how they do it folks, they grind their opponents under the weight of legal filings. They know that victims rarely have the funds to fight to the end of any battle; while CSA can casually muck the system, secured with funds from the Federal Treasury. It’s hardly fair.
Well, by obfuscation, barracking and impediment, and by outspending, the CSA won the case. But not before the Court got in one good Ruling. It’s almost as if the Ohio Court saw through CSA’s tactics, knew where this would land, and wanted to get CSA conduct clearly on the record before the case was killed.
Damning, yes? Feast your eyes;
From the Ruling of the Court; “On May 12 and May 19, 2005, at CSA’s facility, Enerco and/or CSA deliberately altered a vent-free heater to conceal an unsafe defect for testing purposes, and CSA falsely certified the heaters as safe; Enerco and CSA intended their false representations about the safety of Enerco’s heaters to mislead merchants and Plaintiffs, as consumers, on product packaging, in product literature, and during advertising; Plaintiffs, as consumers, justifiably relied upon Enerco’s and CSA’s representations about the safety of the heaters; and Plaintiffs were injured economically by purchasing the unreasonably dangerous heaters. […] Further, the Court finds that Plaintiffs have sufficiently pled the elements of conspiracy to defraud. Plaintiffs have alleged that Enerco and CSA deliberately agreed to alter the heaters, falsify testing results, falsely certify the heaters, and incorporate this false certification into Enerco’s product packaging and other promotional materials with the intent to mislead merchants and Plaintiffs, as consumers.”
And that, my dear friends, is CSA’s record in Ohio Court.
REQUEST FOR INFORMATION – We have received numerous whistleblower statements regarding CSA certification fraud at their facility in China. While oversight may be lacking in the western world, in China its usually dependent on political alignment. In this, the allegations are that CSA testing in China is rampantly fraudulent and IP transfer to the CCP is routine.
If you have information pertaining to CSA’s fraudulent certification and / or IP transfer in China, please contact us immediately.