SDNY Decision Denies Motion to Dismiss Rejecting Defense of Release

As readers of this blog know, there is an abundance of litigation over the subject of releases of claims. I have chronicled the decisions, with their nuisances and dogma, rolling through the winding road of fraud jurisprudence. See the Topic “Release.” There is enough support on both sides of the issues to argue the respective positions. The key is knowing the decisions and how to use them effectively. When in federal court, it is always helpful and strategic to cite and rely upon federal court decisions, even when substantive state law is applicable.

That brings us to a recent decision of the United States District Court for the Southern District of New York in Bur-Tex Hosiery, Inc. v. World Tech Toys, Inc., et al, 23 Civ. 3454 (LGS) (U.S.D.C. S.D.N.Y. Mar. 7, 2024). For those who wish to argue against the release of claims, this is a strong, well-reasoned decision that would provide helpful support for the party trying to assert the claims.

Bur-Tex Facts

In Bur-Tex, the case arose from a scenario all-too-common in the COVID-19 pandemic setting. Many cases have arisen due to fraudulent practices involving personal protective equipment (PPE) that was in high demand due to the pandemic where the supplier of PPE misrepresents the authenticity or true quality (or lack thereof) of the goods. See, e.g., my post. In Bur-Tex, plaintiff was a business involved primarily in making and selling hosiery. During the outset of the COVID-19 pandemic, plaintiff decided to get involved in selling genuine nitrile gloves to a corporate customer. The case involves plaintiff’s attempt to locate and purchase the required “100% nitrile gloves.” Ultimate defendants included the whole group of individuals and entities involved in supplying the gloves to plaintiff.

Read the full blog here.