US District Court Dismisses Solar Panel Certification Fraud Case, but Leaves Option to Amend Complaint

Hounen, a solar-module distributor, brought the case against UL, a product and facility safety certification company, alleging that UL committed fraud and negligence by eliciting promises that it never intended to honor. UL guaranteed that it would confirm to CBP that Hounen was authorized to use UL’s mark on its solar modules during importation. Between the agreement and shipping, UL did not finalize certification of a production facility used by Hounen, which led CBP to believe the modules were counterfeit and to seize them. Hounen said that the seizure delayed delivery of the modules to an American buyer and caused a breach of contract with Enpedo, a foreign goods transaction facilitator.

The court found that the certification agreement between Hounen and UL-CCIC, a UL subsidiary, was unclear, as were the particulars of the company's affiliation. Those uncertainties meant that the complaint left many "critical points" unanswered, Judge John Tharp said in his order. Hounen’s own allegations showed that UL did not cause Hounen’s shipment delay that led to a breach of contract, Tharp ruled, saying, "Hounen would have breached the underlying contract regardless of any action on UL’s part."

However, Tharp did not find that any amendment would be futile. "There may be additional facts that would bear upon questions of causation, and plaintiffs ordinarily should be given at least one opportunity to amend after a court dismisses a complaint," he said.