Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 186

APPENDIX re: 178 MOTION for Summary Judgment filed by Epic Media Group, Incorporated. by Epic Media Group, Incorporated (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13) (Delgado, William)

Exhibit 12

Page 1
Not Reported in F.Supp.2d, 1998 WL 1041328 (E.D.Mich.)
(Cite as: 1998 WL 1041328 (E.D.Mich.))

Only the Westlaw citation is currently available.
United States District Court, E.D. Michigan.
Hollis and Janet POOLE, Plaintiffs,
v.
SOFAMOR DANEK GROUP, INC., Defendant.
No. 94-40191.
Dec. 9, 1998.
Sheldon L. Miller, Jeffrey S. Cook, for Plaintiffs.
Scott L. Gorland, Karl S. Dahlquist, for Defendants.
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
OMEARA, District J.
*1 This matter came before the court on defendant Sofamor Danek Group's (“SDG's”) September 2, 1998 motion for summary judgment.
Plaintiffs filed a response November 10, 1998; and
Defendant filed a reply November 17, 1998. Oral
argument was heard November 20, 1998.
BACKGROUND FACTS
Plaintiffs Hollis and Janet Poole filed this action against SDG in 1994, alleging causes of action
based on product liability, warranty, negligence and
negligent misrepresentation. Each of the claims is
based on the implantation in plaintiff Hollis Poole's
spine of a prescription medical device known as the
Cotrel-Dubousset or “CD” System.
Following filing of Plaintiffs' First Amended
Complaint, the case was transferred by the Judicial
Panel on Multidistrict Litigation to the United
States District Court for the Eastern District of
Pennsylvania, where it was docketed as part of In
re Orthopedic Bone Screw Products Liability Litigation, MDL Docket No. 1014 (“MDL 1014”). The
parties conducted extensive, generic discovery applicable to all cases in which the plaintiffs alleged

injury as a result of the use of orthopedic bone
screws in spinal surgery. In addition to discovery
on issues of general applicability, the parties, as
directed by the MDL court, conducted fact and expert discovery specific to each case. In this case,
the parties obtained medical records and other documents from more than 20 third parties and took the
depositions of plaintiffs Hollis and Janet Poole, Dr.
Graziano, and Albert Moeller, M..D. The case was
remanded to this court December 16, 1997, for final
pretrial matters and a determination on the merits.
The court received the record from the MDL court
February 9, 1998.
Defendant SDG has moved for summary judgment on the following bases: 1) SDG neither manufactured or sold the CD System, 2) there is no evidence that the CD System is defective, and 3) there
is no evidence that the CD System caused Plaintiffs'
alleged injuries.
STANDARD OF REVIEW
Under Rule 56(c) of the Federal Rules of Civil
Procedure, summary judgment may be granted “if
the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to judgment as a matter of law.”
“A fact is ‘material’ and precludes grant of
summary judgment if proof of that fact would have
[the] effect of establishing or refuting one of the essential elements of the cause of action or defense
asserted by the parties, and would necessarily affect
[the] application of appropriate principle[s] of law
to the rights and obligations of the parties.” Kendall
v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984)
(citation omitted)(quoting Black's Law Dictionary
881 (6th ed.1979)).
The court must view the evidence in a light
most favorable to the nonmovant as well as draw all
reasonable inferences in the nonmovant's favor. See

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Page 2
Not Reported in F.Supp.2d, 1998 WL 1041328 (E.D.Mich.)
(Cite as: 1998 WL 1041328 (E.D.Mich.))

United States v. Diebold, Inc., 369 U.S. 654, 655
(1962); Bender v. Southland Corp., 749 F.2d 1205,
1210-11 (6th Cir.1984).
*2 The movant bears the burden of demonstrating the absence of all genuine issues of material
fact. See Gregg v. Allen-Bradley Co., 801 F.2d 859,
861 (6th Cir.1986). The initial burden on the
movant is not as formidable as some decisions have
indicated. The moving party need not produce evidence showing the absence of a genuine issue of material fact. Rather, “the burden on the moving party
may be discharged by ‘showing’-that is, pointing
out to the district court-that there is an absence of
evidence to support the nonmoving party's case.”
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
Once the moving party discharges that burden, the
burden shifts to the nonmoving party to set forth
specific facts showing a genuine triable issue.
Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.
To create a genuine issue of material fact,
however, the nonmovant must do more than present
some evidence on a disputed issue. As the United
States Supreme Court stated in Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249-50 (1986),
There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for
a jury to return a verdict for that party. If the
[nonmovant's] evidence is merely colorable, or is
not significantly probative, summary judgment
may be granted.
(Citations omitted). See Catrett, 477 U.S. at
322-23; Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986). The standard
for summary judgment mirrors the standard for a
directed verdict under Fed.R.Civ.P. 50(a). Anderson, 477 U.S. at 250. Consequently, a nonmovant
must do more than raise some doubt as to the existence of a fact; the nonmovant must produce evidence that would be sufficient to require submission
to the jury of the dispute over the fact. Lucas v.
Leaseway Multi Transp. Serv., Inc., 738 F.Supp.
214, 217 (E.D.Mich.1990), aff'd, 929 F.2d 701 (6th

Cir.1991). The evidence itself need not be the sort
admissible at trial. Ashbrook v. Block, 917 F.2d
918, 921 (6th Cir.1990). However, the evidence
must be more than the nonmovant's own pleadings
and affidavits. Id .
LAW AND ANALYSIS
In order to prevail in a products liability suit,
the plaintiff must prove that the product at issue
was manufactured or sold by the defendant. Caldwell v. Fox, 394 Mich. 401, 410 (1975). In this case
Plaintiffs acknowledge that defendant SDG neither
manufactured nor sold the CD System. Rather,
Plaintiffs argue that SDG is liable “under the theory
of successor corporation liability.” Plaintiffs' resp.
at 6-10.
Successor liability requires a showing that “the
selling corporation ceased ordinary business operation, liquidated, and dissolved soon after distribution of consideration received from the buying corporation.” Turner v. Bituminous Casualty Co., 397
Mich. 406, 430 (1976). In this case, however, the
evidence is uncontradicted that Sofamor S.N.C. did
not cease business operations, liquidate, and dissolve. To the contrary, SDG merely acquired the
stock of Sofamor S.N.C., which continues to exist
and operate as an independent company with its
own facilities and personnel. Defendant's Ex. A.
*3 The United States Supreme Court recently
noted, “It is a general principle of corporate law
deeply ingrained in our economic and legal systems
that a parent corporation (so-called because of control through ownership of another corporation's
stock) is not liable for the acts of its subsidiaries.”
United States v. Bestfoods, 118 S.Ct. 1876 (1998)
(citations omitted).
Under Michigan law the corporate veil “should
not be pierced ... in the absence of fraud, illegality,
or injustice.” Allstate Ins. Co. v. Citizens Ins, Co. of
America, 118 Mich.App. 594, 601 (1982) (citation
omitted). In order to pierce the corporate veil, a
plaintiff must prove that the controlling shareholder: 1) exercised ‘undue domination and control’

© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 3
Not Reported in F.Supp.2d, 1998 WL 1041328 (E.D.Mich.)
(Cite as: 1998 WL 1041328 (E.D.Mich.))

such that the subsidiary was not a genuine entity
but only a ‘mere instrumentality’ of the parent; 2)
exercised complete control over the subsidiary's affairs in a manner that is unjust, fraudulent, or
wrongful toward the plaintiff; and 3) manipulated
the subsidiary's corporate form for the purpose of
causing the plaintiff to suffer an unjust loss or injury. Seasword v. Hilti. Inc., 449 Mich. 542, 547-48
(1995).

It is hereby ORDERED that Defendant's
September 2, 1998 motion for summary judgment
is GRANTED.

In this case Plaintiffs informally have failed to
present any evidence that SDG exercised undue
dominion and control over Sofamor, S.N.C., or that
Sofamor, S.N.C. is a mere instrumentality of SDG.
Nor have Plaintiffs presented any evidence of
fraud, illegality, or injustice on the part of SDG.
Accordingly, Plaintiffs cannot prevail on its theory
of “successor liability,” and defendant SDG is entitled to summary judgment.

*4 IT IS ORDERED AND ADJUDGED that
defendant's motion for summary judgment is
GRANTED and the case DISMISSED.

JUDGMENT
This action came before the Court, Honorable
John Corbett O'Meara, District Judge, presiding,
and the issues having been duly heard and a decision having been duly rendered,

E.D. Mich.,1998.
Poole v. Sofamor Danek Group, Inc.
Not Reported in F.Supp.2d, 1998 WL 1041328
(E.D.Mich.)
END OF DOCUMENT

Plaintiffs have requested leave of the court to
file an amended complaint to add Sofamor, S.N.C.
as a defendant. Plaintiffs filed a second amended
complaint to add Sofamor, S.N.C. over two years
ago. The MDL court, however, struck that pleading
November 1, 1996, because of Plaintiffs' failure to
obtain leave of the court and because it violated
pretrial orders. Defendant's Ex. P. In the ensuing
two years, Plaintiffs neither sought reconsideration
of the order nor filed another motion for leave to
amend. Plaintiffs' request at this late date, after discovery and on the eve of trial, would be prejudicial
to any newly-named defendant. The United States
Court of Appeals for the Sixth Circuit has held that
“a party must act with due diligence if it intends to
take advantage of [Rule 15(a)'s] liberality.” United
States v. Midwest Suspension and Brake, 49 F.3d
1197, 1202 (6th Cir.1995). “The longer the period
of unexplained delay, the less will be required of
the nonmoving party in terms of showing prejudice.” Phelps v. McClellan, 30 F .3d 658, 662 (6th
Cir.1994). Therefore, the court will decline to honor Plaintiffs' request for leave to amend the complaint.
ORDER

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