Ppg Industries, Inc. v. Industrial Laminates Corporation
664 F.2d 1332 (1982)
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Rule of Law:
Under Louisiana law, a claim for damages arising from a hidden defect in a product is an action in redhibition, subject to a one-year prescriptive period, even if the sale included an express warranty.
Facts:
- PPG Industries, Inc. (PPG), a subcontractor on a construction project, contracted with Industrial Laminates Corporation (Industrial Laminates) to supply spandrel panels.
- Industrial Laminates manufactured and delivered the panels, which PPG then installed on the building's curtain wall.
- After installation and payment, PPG discovered that the panels were delaminating, a significant defect.
- Industrial Laminates acknowledged the failure and provided replacement panels, with the last replacement being delivered in March 1976.
- PPG incurred extra labor costs to remove the defective panels and install the replacements.
- Upon completion of the project in March 1977, the building's owner withheld $51,487.29 from PPG's payment due to losses associated with the defective panels.
Procedural Posture:
- PPG Industries, Inc. filed suit against Industrial Laminates Corporation in federal district court on March 8, 1978, asserting diversity jurisdiction.
- The district court granted summary judgment in favor of the defendant, Industrial Laminates.
- The district court held that PPG's cause of action was in redhibition and was therefore barred by Louisiana's one-year prescriptive period.
- PPG Industries, Inc., as appellant, appealed the summary judgment ruling to the United States Court of Appeals for the Fifth Circuit.
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Issue:
Does a subcontractor's claim against a materials supplier for damages caused by defective building materials constitute an action for breach of contract with a ten-year prescriptive period, or an action in redhibition with a one-year prescriptive period under Louisiana law?
Opinions:
Majority - Clark, Chief Judge
No, the claim is an action in redhibition subject to a one-year prescriptive period. Under Louisiana law, a claim based on a hidden defect in a product that renders it unfit for its intended use falls under the doctrine of redhibition, which carries a one-year statute of limitations. The court reasoned that the delamination of the panels was a classic redhibitory vice. The existence of an express warranty does not convert such a claim into a breach of contract action with a ten-year prescriptive period; Louisiana Civil Code explicitly provides that breach of an express warranty can give rise to a redhibitory action. The court distinguished cases where the wrong type of material was delivered (breach of contract) from this case, where the correct material was delivered but was defective (redhibition). Finally, the court rejected PPG's indemnity argument, noting that under Louisiana precedent, an indemnity claim between a buyer and seller for a defective product is also governed by the prescriptive period for redhibition.
Analysis:
This decision solidifies the dominant role of Louisiana's redhibition doctrine in product defect litigation, confirming that its short one-year prescriptive period cannot be easily circumvented by pleading breach of express warranty or indemnity. It clarifies that the nature of the underlying complaint—a hidden defect rendering a product useless—is determinative, not the plaintiff's characterization of the claim. The ruling serves as a critical precedent for commercial and construction law, compelling buyers of materials to act swiftly to preserve their rights against suppliers upon discovering a defect, rather than waiting until their own liability to a third party is finalized.
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