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 5

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United States District Court,
N.D. Ohio,
Eastern Division.
In re WELDING FUME PRODUCTS LIABILITY
LITIGATION.
No. 1:03-CV-17000.
June 11, 2010.
West KeySummaryCorporations and Business
Organizations 101
2724(3)
101 Corporations and Business Organizations
101X Mergers, Acquisitions, and Reorganizations
101X(C) Sale, Lease, or Exchange of Substantially All Corporate Assets
101k2721 Assumption of or Succession to
Transferor's Debts and Liabilities
101k2724 Particular Debts and Liabilities
101k2724(3) k. Torts. Most Cited
Cases
(Formerly 101k445.1, 101k215)
Parent corporation had no successor liability
concerning its subsidiaries regarding products liability claims arising from subsidiaries' welding
products that were manufactured before parent corporation acquired the subsidiaries. Parent corporation simply purchased subsidiaries' issued and outstanding capital stock, while each retained its liabilities. The subsidiaries still existed and continued to
operate separately.
MEMORANDUM AND ORDER
KATHLEEN McDONALD O'MALLEY, District
Judge.
*1 Currently pending in this Multi-District Litigation (“MDL”) are several hundred cases. In all
of these lawsuits, the plaintiffs allege: (1) they inhaled fumes given off by welding rods; (2) these
fumes contained manganese; (3) this manganese

caused them permanent neurological injury and other harm; and (4) the defendants knew or should
have known that the use of welding rods would
cause these damages. Although the complaints in
these cases and the theories of liability they recite
are not identical, the plaintiffs generally bring
claims sounding in strict product liability, negligence, fraud, and conspiracy. The gravamen of the
complaints is that the defendants failed to warn the
plaintiffs of the health hazards posed by inhaling
welding fumes containing manganese and, in fact,
conspired to affirmatively conceal these hazards
from those engaged in the welding process.
One of the defendants named in these complaints is Illinois Tool Works, Inc. (“ITW”). In addition to bringing claims directly against ITW,
plaintiffs also allege that ITW is vicariously liable
as a successor-in-interest to two companies that became ITW's subsidiaries: Miller Electric Manufacturing Company (“Miller Electric”) and Hobart
Brothers Company (“Hobart”).
ITW now seeks summary judgment in its favor
on all claims, in every case pending in this MDL
where it is a named defendant (master docket no.
2134). For the reasons stated below, the motion is
GRANTED and ITW is DISMISSED as a party in
FN1
this litigation.
FN1. There is a minor exception to this
ruling in the event that discovery provides
a plaintiff with a factual basis to reinstate
claims against ITW. See Section IV.A. of
this opinion, below.
I. Facts.

FN2
FN2. This Court has previously stated in
detail the historical and factual background
relevant to this MDL. See, e.g., In re Welding Fume Prods. Liab. Litig., 2007 WL
1087605, at *3-9 (N.D.Ohio April 9, 2007)
(granting summary judgment to Metropol-

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itan Life Insurance Company) ( “MetLife”
); In re Welding Fume Prods. Liab. Litig.,
526 F.Supp.2d 775, at 778-95 (N.D.Ohio
2007) (granting summary judgment to
Caterpillar, Inc.) ( “Caterpillar” ). These
two opinions are incorporated here in their
entirety, especially the reasoning employed. The facts relevant to ITW's
pending motion for summary judgment are
only summarized here.
Knowledge of the dangers of manganese in
welding fumes has developed from the 1930s to
today. One of the first suggestions that manganese
in welding fumes could be hazardous appeared in a
FN3
1932 report.
Various publications reiterated
these warnings, noting that manganese poisoning
can destroy the neuro-muscular system and lead to
FN4
permanent disabilities.
Over the next 30 years,
entities in the welding industry debated whether to
FN5
provide warning labels on welding rods.
Eventually, in 1967, the American Welding Society
(AWS), which included as members a number of
defendants, adopted a mandatory warning label for
welding rods stating that welding fumes may be
FN6
hazardous.
Plaintiffs allege that certain defendants, through their AWS membership, conspired
with other defendants to hide the hazards of weldFN7
ing fumes over the years.
FN3. Caterpillar, 526 F.Supp.2d at 779.
FN4. Id.
FN5. Id. at 780.
FN6. Id. at 782.

FN8. Affidavit of E. Scott Santi (“Santi
Aff.”) ¶¶ 3, 4.
First, in 1993, Miller Electric, which manufactures and sells welding machines, became a wholly
FN9
owned subsidiary of ITW.
This occurred
through a stock-acquisition agreement: ITW purchased the issued and outstanding capital stock of
The Miller Group, Ltd., a Wisconsin holding company that owned all of Miller Electric's capital
FN10
stock.
Under the agreement, the Miller companies were to operate “as separate business units
FN11
and maintain their identity.”
Moreover, ITW
did not assume any of Miller Electric's liabilities.
FN12
FN9. Id. ¶ 6.
FN10. Id.
FN11. Miller Stock Acquisition Agreement
at 23, ¶ 4. 10.
FN12. Santi Aff. ¶ 7.
*2 Second, in 1996, Hobart, which manufactures welding consumables, also became a wholly
FN13
owned subsidiary of ITW.
This occurred
through a “reverse triangular merger”: ITW created
a wholly owned subsidiary that merged with
Hobart, and Hobart then survived as a wholly
FN14
owned subsidiary of ITW.
This had the same
effect as the stock purchase of Miller Electric: ITW
obtained the issued and outstanding capital stock of
Hobart, but Hobart retained its own assets and was
to continue to conduct business as it had before the
FN15
acquisition.
Additionally, ITW did not assume
FN16
any of Hobart's liabilities.

FN7. Id. at 784.
FN13. Id. ¶ 9.
For most of this time, ITW-which was founded
in 1912 as a manufacturer of metal cutting toolsFN8
had no involvement in the welding industry.
It
was not until the 1990s that ITW acquired companies involved in the industry. Three such acquisitions
are relevant here.

FN14. Id.
FN15. Id.
FN16. Id. ¶ 11.
Third, in June 1998, ITW purchased the capital

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stock of Arcsmith, Inc., which owned a business
FN17
known as National Torch Tip Co.
National
Torch Tip, in turn, included two divisions (Natweld
and Hi-Alloy) that purchased welding consumables
from manufacturers, rebranded them, and sold them
FN18
to distributors.
For the first six months after
the purchase, Arcsmith (like Miller Electric and
Hobart) was a wholly owned subsidiary of ITW.
FN19
On December 31, 1998, however, Arcsmith
sold its assets (including Natweld and Hi-Alloy) to
FN20
ITW.
As of this date, then, sales of products
from Natweld and Hi-Alloy were attributable to
ITW. ITW acknowledges that “sales of welding
consumables may have occurred” at that time,
FN21
though it states it has no records of such sales.
In any event, this arrangement was short lived: ITW
sold the assets of Natweld and Hi-Alloy to another
FN22
entity three months later, in March 1999.
FN17. Id. ¶ 15.
FN18. Id.
FN19. Id.

FN23. Master Docket no. 405.
III. Legal Standard.
Under Federal Rule of Civil Procedure 56(c),
summary judgment “should be rendered if the
pleadings, the discovery and disclosure materials on
file, and any affidavits show that there is no genuine issue as to any material fact and that the movant
is entitled to judgment as a matter of law.”
In reviewing summary judgment motions, this
Court must view the evidence in a light most favorable to the non-moving party to determine whether
FN24
a genuine issue of material fact exists.
A fact
is “material” only if its resolution will affect the
FN25
outcome of the lawsuit.
Determination of
whether a factual issue is “genuine” requires consideration of the applicable evidentiary standards.
Thus, in most civil cases the Court must decide
“whether reasonable jurors could find by a preponderance of the evidence that the [non-moving party]
FN26
is entitled to a verdict.”
FN24. Adickes v. S.H. Kress & Co., 398
U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d
142 (1970).

FN20. Id.
FN21. ITW's Mem. in Support of Summ. J.
at 12.
FN22. Santi Aff. ¶ 15.
II. Procedural History.
Plaintiffs across the country brought various
suits against companies in the welding industry alleging liability for manganese-related injuries, and
the cases were consolidated in this MDL. On October 31, 2004, this Court entered an order requiring
all plaintiffs to complete a Fact Sheet to provide basic information about their claims, including the
FN23
welding products that each plaintiff used.
None of the Fact Sheets stated that plaintiffs used
or were exposed to welding consumables manufactured, supplied, or distributed by ITW (or by Natweld or Hi-Alloy when they were part of ITW).
ITW has moved for summary judgment on all
claims in all cases.

FN25. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986).
FN26. Id. at 252.
*3 Summary judgment is appropriate whenever
the non-moving party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will
FN27
bear the burden of proof at trial.
Moreover,
“the trial court no longer has a duty to search the
entire record to establish that it is bereft of a genuFN28
ine issue of material fact.”
The non-moving
party is under an affirmative duty to point out specific facts in the record as it has been established
that would create a genuine issue of material fact.
FN29
The nonmovant must show more than a scintilla of evidence to overcome summary judgment; it

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is not enough for the non-moving party to show that
there is some metaphysical doubt as to material
FN30
facts.
FN27. Celotex Corp. v. Catrett, 477 U.S.
317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265
(1986).
FN28. Street v. J.C. Bradford & Co., 886
F.2d 1472, 1479-80 (6th Cir.1989).
FN29. Fulson v. City of Columbus, 801
F.Supp. 1, 6 (S.D.Ohio 1992).
FN30. Id.
IV. Analysis.
In response to ITW's motion for summary judgment, plaintiffs begin with two threshold challenges
to the entirety of the motion and then provide further opposition with respect to the individual
claims. These points are addressed in turn.
A. Plaintiffs' Challenges to the Entirety of ITW's
Motion.
First, plaintiffs contend that ITW's motion
should be denied because ITW did not include a
choice-of-law analysis for the various claims.
Plaintiffs rely on this Court's statement that
“choice-of-law constraints are constitutionally mandated because a party has a right to have her claims
governed by the state law applicable to her particuFN31
lar case.”
Of course, if a party would be entitled to summary judgment under every potentially
applicable state's law, the choice-oflaw analysis is
unnecessary. For example, if there is no evidence
that plaintiffs were injured by a product that was
manufactured or sold by ITW, there can be no
FN32
product liability under any state's law.
As explained in more detail in the next section, none of
the state laws that might apply here allow for ITW's
liability in this MDL. Accordingly, the court will
not deny summary judgment for want of a choiceof-law analysis.
FN31. In re Welding Fume Prod. Liab. Litig., 245 F.R.D. 279, 291 (N.D.Ohio 2007).

FN32. Caterpillar, 526 F.Supp.2d at 796 n.
98 (“Regardless of the theory which liability is predicated upon ... it is obvious that
to hold a producer, manufacturer, or seller
liable for injury caused by a particular
product, there must first be proof that the
defendant produced, manufactured, sold or
was in some way responsible for the
product, and this rule is supported in all of
the cases examined in this annotation [of
product-liability cases].”) (citation omitted).
Second, plaintiffs contend that the motion
should be denied because they have not yet had an
adequate opportunity for discovery. In ITW's motion for leave to obtain a briefing schedule, ITW asserted that “[n]o additional discovery is needed to
enable this Court to rule on ITW's proposed motion
FN33
for summary judgment.”
When other defendants had previously filed similar motions, plaintiffs
opposed the motions when they believed additional
FN34
discovery was needed.
Here, however,
plaintiffs did not object; to the contrary, they filed a
FN35
proposed stipulated briefing schedule.
Accordingly, plaintiffs have waived this argument,
and summary judgment will not be denied or postFN36
poned on this basis.
FN33. Master docket no. 2123 at 4.
FN34. See, e.g., master docket no. 1485
(opposition to MetLife's motion); master
docket no. 1381 (opposition to Caterpillar's
motion).
FN35. Master docket no. 2126.
FN36. See Players, Inc. v. City of New
York,
371
F.Supp.2d
522,
533
(S.D.N.Y.2005) (denying continuance of
summary judgment motion where plaintiff
stipulated to briefing schedule); see also
Espada v. Schneider, 522 F.Supp.2d 544,
550 (S.D.N.Y.2007) (rejecting request for
further discovery before summary judg-

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ment ruling because plaintiff had
“opportunity to seek relief from the Court
but failed to do so”).
In any event, to the extent that further discovery reveals newly disclosed facts supporting the
dismissed claims, plaintiffs retain the ability to reinstate them under the same terms as this Court has
stated before:
The Court understands that, in this MDL, the
parties' practice has been to undertake final discovery regarding the specific welding products
used by a particular plaintiff only when a given
case is set for trial, and further that this additional
discovery may uncover evidence that a particular
plaintiff did, in fact, use or suffer injury attributable to [an ITW]-branded welding rod. If this
situation occurs, that individual plaintiff may
then move to amend his complaint to more specifically name [ITW] as a defendant to a product
liability claim. Cf. Peripheral Defendant Order
(master docket no. 1824), exh. A at 6 (discussing
“re-institution of claims against previously dismissed peripheral defendants”). The same is true
with respect to other product-based claims (e.g., a
negligence claim based on the sale of a product,
discussed below, or a claim for breach of product
warranty). To this limited extent, and only because of the discovery practices peculiar to this
MDL, the Court's dismissal of the product liability claims against [ITW] is without prejudice to
the possible, albeit unlikely, request for reinstateFN37
ment of those claims.
FN37. Caterpillar, 526 F.Supp.2d at 796 n.
99.
*4 Indeed, ITW acknowledges this point: “In
the unlikely event that any of the plaintiffs discover
that they used or were exposed to Natweld or HiAlloy welding consumables sold by ITW during the
relevant time period, then, consistent with the protocol of this litigation and with the relief permitted
under Rule 56(f), that plaintiff can reinstate his

product liability claims against ITW.”

FN38

FN38. Master docket no. 2146 (ITW's
reply brief at 12).
With these threshold issues resolved, the Court
turns to the merits of ITW's motion with respect to
its argument that it is entitled to summary judgment
on the individual claims alleged against it.
B. The Individual Claims.
Plaintiffs raise various tort claims directly
against ITW (which included Natweld and Hi Alloy
during the relevant time in 1999). Plaintiffs also allege ITW is vicariously liable as the successor to
Hobart and Miller Electric, as well as pursuant to a
veil-piercing theory.
1. Direct Liability.
Plaintiffs raise six types of claims against ITW
directly: (a) product liability; (b) conspiracy; (c)
negligent undertaking; (d) negligent misrepresentation; (e) fraudulent concealment; and (f) concert of
action, and aiding and abetting. Summary judgment
is appropriate for ITW on all of these claims.
a. Product liability.
Plaintiffs bring four product-liability claims:
negligence, negligent sale of product, strict liability, and breach of warranty. The essence of these
claims is that ITW failed to adequately warn
plaintiffs of the hazards of manganese in welding
fumes emitted from ITW welding consumables.
FN39
But not one of the plaintiff's Fact Sheets
identify an ITW product as one the plaintiff used
(nor does any Fact Sheet identify a Natweld or HiAlloy product for the period that ITW controlled
them in 1999).
FN39. See, e.g., Luiting Compl. ¶¶ 97-98,
107-108,
114,
119
(Case
Nos.
1:05-cv-18008, 1:03-cv-17000); Peruchetti
Compl. ¶¶ 134, 153-54, 170, 181 (Case
No. 1:03-cv-17000).
“It is elementary that in any action claiming injury from a product, the plaintiff must show causal

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connection between the defendant manufacturer
FN40
and that product.”
“There can be no product
liability claim against a defendant where there was
FN41
no use of the defendant's product.”
Accordingly, aside from the exception noted earlier regarding possible reinstatement of claims, ITW is entitled to summary judgment on all the product-liability claims against it.
FN40. Caterpillar, 526 F.Supp.2d at 796.
FN41. Id.
b. Conspiracy.
Plaintiffs also allege that, beginning in the late
1930s and continuing to the present, many
“Defendants created committees within trade organizations and then used the committees to fraudulently and negligently misrepresent, conceal, suppress, and omit material information about the
health effects of welding fumes and necessary preFN42
cautionary measures.”
Plaintiffs further allege that “Defendants combined with each other,
and non-defendants[,] to engage in unlawful conFN43
FN44
duct.”
This is a civil conspiracy claim.
All states generally agree that a civil conspiracy requires (1) an object to be accomplished, (2) a meeting of the minds on the object or course of action,
(3) one or more overt acts, and (4) damages as the
FN45
proximate result.
FN42. Luiting Compl. ¶¶ 28, 31.
FN43. Id. ¶ 75.
FN44. These portions of the complaint also
raise a fraudulent concealment claim, discussed below.
FN45. MetLife, 2007 WL 1087605, at *9.
*5 Plaintiffs have not adduced sufficient evidence to create a genuine issue of material fact suggesting that ITW-which had no involvement in the
welding industry until 1993-agreed to join a conspiracy that plaintiffs contend began in the 1930s.
The second element of a conspiracy claim-a

“meeting of the minds”-occurs “when the parties
reach a unity of purpose of common design and understanding.... There must be a preconceived plan.”
FN46
Plaintiffs fail to identify any evidence tending to show that ITW or any ITW employee entered
into any such agreement. Indeed, this Court already
rejected similar claims against Caterpillar, whichunlike ITW-was a member of the trade organizations and could have been present when other deFN47
fendants decided to engage in tortious acts.
There is no evidence that allows a reasonable jury
to conclude ITW joined any such alleged conspiracy. Accordingly, summary judgment on this claim
is appropriate.
FN46. Caterpillar, 526 F.Supp.2d at 802
(quoting 15A C.J.S. Conspiracy § 12
(Feb.2007)).
FN47. Id.
c. Negligent undertaking.
Plaintiffs allege generally that “defendants” in
this MDL, as members and participants in the welding trade associations, voluntarily undertook the
duty “to inform and apprise plaintiff[s], [plaintiffs']
employers, OSHA and other governmental agencies
..., the welding industry, and the public health community of all issues relating to the health and safety
FN48
of welders and welding fumes.”
FN48. See, e.g., Luiting Compl. ¶ 176.
Claims for negligent performance of an undertaking can be based on two provisions of the Restatement (Second) of Torts (1965). First, § 323,
entitled “Negligent Performance Of Undertaking
To Render Services,” provides for liability where
the plaintiff is the direct beneficiary of the defendant's voluntary undertaking:
One who undertakes, gratuitously or for consideration, to render services to another which he
should recognize as necessary for the protection
of the other's person or things, is subject to liability to the other for physical harm resulting from

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his failure to exercise reasonable care to perform
his undertaking, if (a) his failure to exercise such
care increases the risk of such harm, or (b) the
harm is suffered because of the other's reliance
upon the undertaking.
Second, § 324A, entitled “Liability To Third
Person For Negligent Performance Of Undertaking,” provides for liability where the plaintiff is a
third party who is injured by the defendant's voluntary undertaking to another:
One who undertakes, gratuitously or for consideration, to render services to another which he
should recognize as necessary for the protection
of a third person or his things, is subject to liability to the third person for physical harm resulting
from his failure to exercise reasonable care to
FN49
[perform]
his undertaking, if (a) his failure
to exercise reasonable care increases the risk of
such harm, or (b) he has undertaken to perform a
duty owed by the other to the third person, or (c)
the harm is suffered because of reliance of the
other or the third person upon the undertaking.
FN49. The Restatement uses the word
“protect” instead of “perform,” but this is a
typographical error. Hill v. United States
Fidelity and Guaranty Co., 428 F.2d 112,
115 n. 5 (5th Cir.1970).
*6 ITW is entitled to summary judgment under
either provision. Under both sections, the plaintiffs
must establish that ITW undertook a duty to render
FN50
services for their protection.
Plaintiffs have
identified no statement by ITW suggesting that it
undertook such a duty, nor have they shown a relationship with ITW that would create such a duty.
FN51
Moreover, ITW's alleged participation in the
welding trade associations does not create a duty to
FN52
the end users of the welding products.
Indeed,
ITW (which has relationships to the trade association through some employees, but is itself not a
member), is even further removed from liability under these theories than the trade association mem-

bers themselves. Accordingly, ITW is entitled to
summary judgment on the plaintiffs' claims of negligent performance of a voluntary undertaking.
FN50. See Caterpillar, 526 F.Supp.2d at
798; see also Paz v. California, 22 Cal.4th
550, 93 Cal.Rptr.2d 703, 994 P.2d 975,
980 (Cal.2000) (“Section 324A's negligent
undertaking theory of liability subsumes
the well-known elements of any negligence
action,” including a duty to plaintiff).
FN51. Cf. Caterpillar, 526 F.Supp.2d at
798 (“[P]laintiffs identify no statement
made by Caterpillar directly to any
plaintiff suggesting that Caterpillar explicitly undertook a duty to that plaintiff. Nor
does any plaintiff suggest he and Caterpillar had a fiduciary or other special relationship ... that might impose a duty.”);
Solis v. Lincoln Electric Co., 2006 WL
1305068, at *7 (N.D.Ohio May 10, 2006)
(rejecting same claims).
FN52. See Caterpillar, 526 F.Supp.2d at
798-99 (concluding that the trade association's mission statements do not represent
legally binding undertakings, that each organization belonging to the association is
even further removed from these statements, and that the trade associations
themselves have no duty to users of
products in the trade).
d. Negligent misrepresentation.
To establish negligent misrepresentation, a
plaintiff must generally show: (1) the defendant had
a duty to exercise reasonable care in the giving of
information; (2) the defendant supplied false information; (3) with reasonable reliance by the
plaintiff upon the information given; and (4) the
plaintiff suffered damages proximately caused by
FN53
the defendant's negligence.
To show that ITW
had a duty to plaintiffs, the plaintiffs must establish
a fiduciary or other special relationship between
FN54
ITW and themselves.
In this case, however,

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there is no evidence of any relationship (fiduciary
or otherwise) between plaintiffs and ITW. Nor is
there any evidence that any plaintiff relied upon
any information supplied by ITW (as opposed to
Hobart or Miller Electric). As noted, there is not
even any evidence that plaintiffs used any ITW
products. In short, there is no evidence of a negligent misrepresentation made by ITW to plaintiffs,
so ITW is entitled to summary judgment on this
claim as well.
FN53. MetLife, 2007 WL 1087605, at *7
(citing 37 Am.Jur.2d Fraud and Deceit §
128 (Jan.2007)).
FN54. Chiarella v. United States, 445 U.S.
222, 228, 100 S.Ct. 1108, 63 L.Ed.2d 348
(1980) (“[T]he duty to disclose arises when
one party has information that the other
[party] is entitled to know because of a fiduciary or other similar relation of trust
and confidence between them.”).
e. Fraudulent concealment.
The same is true for the fraudulent-concealment claims. “There is general agreement in all
states that, to maintain an action for damages for
fraud by reason of concealment, the following elements must generally be present: [1] an actual concealment [2] of a material fact [3] with knowledge
of the fact concealed [4] with intent to mislead another into relying upon such conduct [5] followed
by actual reliance thereon by such other person
having the right to so rely [6] with injury resulting
FN55
to such person because of such reliance.”
Moreover, the plaintiff must establish that the defendant had a duty to communicate the concealed
FN56
information.
As noted earlier, there is no evidence of any relationship (fiduciary or otherwise)
between plaintiffs and ITW and, thus, no evidence
of any duty flowing from ITW to plaintiffs. Accordingly, summary judgment is appropriate on the
MDL plaintiffs' fraudulent concealment claim.
FN55. MetLife, 2007 WL 1087605, at *7
(internal quotation marks and alterations

deleted) (citing 37 Am.Jur.2d Fraud and
Deceit § 200 (May 2006)).
FN56. Chiarella, 445 U.S. at 228; see also
MetLife, 2007 WL 1087605, at *9
(rejecting fraudulent-concealment claim
and noting that defendant had no duty to
provide information to plaintiffs).
f. Concert of action, and aiding and abetting.
The theoretical foundation for these claims is
set out in § 876 of the Restatement (Second) of
Torts. Subsection (a) describes concert of action;
subsection (b) describes aiding and abetting:
*7 § 876. Person Acting in Concert.
For harm resulting to a third person from the
tortious conduct of another, one is subject to liability if he
(a) does a tortious act in concert with the other or
pursuant to a common design with him, or knows
that the other's conduct constitutes a breach of
duty and gives substantial assistance or encourFN57
agement to the other ....
FN57. 4 Restatement (Second) of Torts §
876 (1977).
To act in concert, there must be an agreement:
“Parties are acting in concert when they act in accordance with an agreement to cooperate in a particular line of conduct or to accomplish a particular
FN58
result.”
As noted earlier, the Court concludes
that no reasonable jury could find ITW acted in accordance with an agreement to cooperate with any
other defendant in this case (including its own subsidiaries, Hobart and Miller Electric) to commit a
FN59
tortious act.
Accordingly, ITW is entitled to
summary judgment on claims that it acted in conFN60
cert.
FN58. Caterpillar, 526 F.Supp.2d at 806
(quoting 4 Restatement (Second) of Torts §
876, cmt. a (1977)).

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FN59. It is questionable whether a parent
corporation can conspire, act in concert
with, or aid and abet its own wholly-owned
subsidiary. See American Needle, Inc. v.
National Football League, --- U.S. ----at ---, 130 S.Ct. 2201, 176 L.Ed.2d 947 at ---, 2010 WL 2025207 at *7 (May 24,
2010) (“a parent corporation and its wholly
owned subsidiary ‘are incapable of conspiring with each other for purposes of § 1
of the Sherman Act’ ”) (quoting Copperweld Corp. v. Independence Tube Corp.,
467 U.S. 752, 777, 104 S.Ct. 2731, 81
L.Ed.2d 628 (1984)); Williamson v. Ocwen
Loan Servicing, LLC, 2009 WL 5205405 at
*4-5 (M.D.Tenn. Dec.23 2009) (noting
that, “[a]s a general matter of conspiracy
law, a company cannot conspire with its
corporate affiliates or employees,” but acknowledging contrary authority). Even if
the Court were to adopt the minority view
that the law recognizes such conspiracies,
it remains true that, on the undisputed facts
presented, no reasonable jury could conclude ITW conspired, aided and abetted, or
acted in concert with its own subsidiaries
to engage in a tortious act.
FN60. Cf. Caterpillar, 526 F.Supp.2d at
807 (same conclusion regarding Caterpillar).
To be liable as an aider and abettor, a defendant must “act with the intention of advancing the
FN61
tortious activity.”
Moreover, the defendant
must knowingly give “substantial assistance” that
FN62
proximately results in the harm.
Mere knowledge that a tort is being committed and the failure
to prevent it do not constitute aiding and abetting.
FN63
Here, plaintiffs have not pointed to any acts
of substantial assistance or encouragement by ITW
to commit a tortious act. Given that there is no
genuine dispute of material fact, ITW is entitled to
summary judgment for these claims as well.

lar Joint (TMJ) Implants Prods. Liab. Litig., 113 F.3d 1484, 1496 (8th Cir.1997)
(alterations deleted)).
FN62. Id.
FN63. Id. (quoting Fiol v. Doellstedt, 50
Cal.App.4th 1318, 58 Cal.Rptr.2d 308, 313
(Cal.Ct.App.1996)).
***
In sum, ITW is entitled to summary judgment
on each claim asserted against it on a direct theory
of liability. ITW is therefore also entitled to summary judgment on any derivative claims, such as
loss of consortium, medical monitoring, and punitive damages. The remaining question is whether
ITW can be held vicariously liable for alleged torts
committed by Hobart and Miller Electric.
2. Vicarious Liability.
In addition to asserting claims against ITW directly based on plaintiffs' alleged use of welding
rods manufactured or sold by ITW, plaintiffs also
seek to hold ITW vicariously liable for the alleged
torts of Hobart and Miller Electric. Plaintiffs allege
ITW is liable as “a successor in interest to Hobart
FN64
and Miller.”
The purpose of successor liability is to ensure that claimants are not left without
recourse against an entity simply because the entity
sells all of its assets or changes its corporate form.
FN65
Successor liability enables claimants to seek
recourse from the successor that has replaced or entirely taken over the original entity. Of course, if
the original entity still exists, there is no successorFN66
and no successor liability.
FN64. See, e.g., Peruchetti Compl. ¶ 21
(“ITW is liable as a successor in interest to
Hobart and Miller, and is responsible for
the conduct of said predecessor entities....”).
FN65. United States v. Mexico Feed &
Seed Co., 980 F.2d 478, 487 (8th Cir.1992)
(“The purpose of corporate successor liab-

FN61. Id. (quoting In re Temporomandibu-

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ility is to prevent corporations from evading their liabilities through changes of
ownership.”); see also Restatement (Third)
of Torts: Product Liability, § 12 cmt. b
(1988) (discussing this rationale for successor liability).
FN66. See, e.g., White v. Cone-Blanchard
Corp., 217 F.Supp.2d 767, 772 (E.D.Texas
2002) (“[I]t is axiomatic that to establish
corporate successor liability there must in
fact be a corporate successor.”); Roy v.
Bolens Corp., 629 F.Supp. 1070, 1073
(D.Mass.1986) (holding that successor liability doctrine does not apply where acquired company remains in existence).
Even to the extent the law on successor liability differs from state to state, it remains
a bedrock principle that, if the original entity still exists, there is no successor-and
no successor liability. This remains true
even in states that have adopted more lenient doctrines of successor liability. See
Guerrero v. Allison Engine Co., 725
N.E.2d 479, 487 (Ind.Ct.App.2000)
(holding that “a successor corporation is liable only when the predecessor corporation no longer exists,” and noting that a
“similar requirement is found [even]
among that minority of states applying the
[more-lenient] product-line exception”);
White v. Cone-Blanchard Corp., 217
F.Supp.2d 767, 774 (E.D.Tex.2002)
(noting the California Supreme Court adopted a more lenient approach to successor
liability because “sale and dissolution of
the old company destroyed the plaintiff's
remedies against the original manufacturer,
thus leaving the plaintiff with ... no remedy”-a justification that does not apply
when the original manufacturer “remain[s]
in existence”); Conway v. White Trucks,
Div. of White Motor Corp., 885 F.2d 90,
95 (3rd Cir.1989) (“If a remedy against the
original manufacturer was available,

however, the consumer has not been obliged to bear the risk[,] and the justification
for imposing successor liability evaporates”).
There can be no successor liability in these
MDL cases because Hobart and Miller Electric still
exist and continue to operate separately as subsidiaries of ITW. ITW simply purchased their issued
and outstanding capital stock, while each retained
its liabilities. Moreover, courts have recognized that
the “reverse triangular merger,” by which ITW obtained Hobart, does not result in the parent company (ITW) assuming the liabilities of the acquired
FN67
company (Hobart).
Even if plaintiffs are correct that Hobart, Miller Electric, and ITW have
overlapping operations (e.g., employee participation in a single pension plan, use of the same
vendor for payroll services, and sharing of executive personnel), this does not mean that Hobart and
Miller Electric ceased to exist. Indeed, plaintiffs
have not created a genuine issue of fact suggesting
that Hobart or Miller Electric are unable to pay
their claimants-the driving concern behind successor liability. Other courts have rejected similar
claims of successor liability based on ITW's acquisFN68
itions of Hobart and Miller Electric.
This
Court does so as well. In short, if plaintiffs have viable claims against Hobart and Miller Electric,
plaintiffs can pursue those claims against Hobart
and Miller Electric-not against ITW.
FN67. See, e.g., In re McKesson HBOC,
Inc., Secs. Litig., 126 F.Supp.2d 1248,
1277 (N.D.Cal.2000) (“[A] ‘reverse triangular merger’ of the sort performed here
(merger of target with a specially formed
subsidiary of the acquirer, which then becomes the sole shareholder of the newly
merged subsidiary), does not effect a ‘de
facto’ merger unless the transaction has
been structured to disadvantage creditors
or shareholders.”) (citing Orzeck v. Englehart, 195 A.2d 375, 378 (Del. Ch.1962));
see also Binder v. Bristol-Myers Squibb

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Co., 184 F.Supp.2d
(N.D.Ill.2001).

762,

769-72

FN68. See, e.g., Grant v. Illinois Tool
Works, No. 04-21112 (Cook Cty., Ill.,
Aug. 3, 2005) (master docket no. 2135-11)
(rejecting this argument in welding fume
case).
*8 Instead of pressing the successor liability
theory stated in their complaints, plaintiffs now
contend that ITW can be vicariously liable for alleged acts of Hobart and Miller Electric based on a
veil-piercing theory. That is, in their response brief,
plaintiffs change the focus of their argument from
successor liability to veil piercing, arguing that
Hobart and Miller Electric, though still in existence, have corporate structures that are “largely ignored by ITW” such that plaintiffs should be entitled to pierce these corporate veils and reach
ITW's assets for compensation. This is a new theory
of liability: “Successor liability ... and corporate
veil-piercing, while based on many overlapping
factors, are separate legal doctrines with distinct
FN69
legal consequences.”
“Unlike its veilpiercing cousin, successor liability does not speak
to an existing relationship between the corporation
and its current owner, but to the relationship
between the corporation and its predecessor....”
FN70
FN69. Carter Enters. v. Ashland Specialty
Co., 257 B.R. 797, 801 (S.D.W.Va.2001);
see also id. (“This case is not about corporate veil-piercing ....”) (emphasis in original).
FN70. Id.
None of the plaintiffs' complaints, however, allege facts that can support a veil-piercing theory
under any state's law. For example, plaintiffs did
not allege facts suggesting that ITW and these two
subsidiaries are, as plaintiffs now argue, a “single
business enterprise,” or that ITW is simply their
FN71
“alter ego.”
Accordingly, the complaint is de-

ficient regarding a veilpiercing theory.

FN72

FN71. Cf. response brief (master docket
no. 2138) at 36-38 (listing factors of corporate control not alleged in any complaint
but that courts generally consider under a
veil-piercing theory, including the following: common stock ownership; common
directors or officers; common business departments; consolidation of financial statements; financing of the subsidiary; whether
the parent incorporated the subsidiary;
whether the subsidiary operates with
grossly inadequate capital; and whether the
parent pays salaries and other expenses of
the subsidiary).
FN72. United States ex rel. Pilecki-Simko
v. Chubb Inst., No. 06-3562, 2010 U.S.
Dist. LEXIS 27187, at *38-52, 2010 WL
1076228 (D.N.J. March 22, 2010)
(rejecting veil-piercing theory despite allegations
that
parent
companies
“exclusively controlled” subsidiary, where
complaint failed to allege other essential
facts, such as whether the subsidiary was
“grossly undercapitalized”); see also Scarbrough v. Perez, 870 F.2d 1079, 1084 (6th
Cir.1989) (“Neither the original complaint
nor the amended complaint ... alleged that
[the acquired company] was the mere instrumentality or alter ego of [the acquirer],
or that [the acquired company's] separate
existence ought to be disregarded.”)
(rejecting veil-piercing theory).
Moreover, the failure to allege these facts in
the complaint cannot be cured by raising them for
the first time in opposition to a motion for summary
judgment, as plaintiffs do here. “District Courts
have broad discretion to disallow the addition of
new theories of liability at the eleventh hour,” such
as those raised in opposition to a summary judgFN73
ment motion.
This is a sound approach, because the earlier failure to allege the theory or
claim leaves the defendant without notice. Indeed,

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other courts have rejected similar attempts to invoke the veil-piercing theory at the summary judgment stage when it was not alleged in the comFN74
plaint.
This result is even more appropriate in
this MDL context, where litigation and discovery
has been ongoing for over six years.

tions to support veil piercing, they cannot proceed
on the veil-piercing theory. And because there can
be no successor liability on the undisputed facts,
ITW is entitled to summary judgment on plaintiffs'
claims that it is vicariously liable for the alleged
FN75
torts of Hobart and Miller Electric.

FN73. Carr v. Gillis Assoc. Indus., Inc.,
227 F. App'x 172, 176 (3rd Cir.2007)
(citing cases that disallow the plaintiff
from raising claims for the first time in opposition to a summary judgment motion).

FN75. Even if plaintiffs had alleged facts
supporting a veil-piercing claim, summary
judgment would likely still be warranted,
as there is scant evidence that ITW's control over Hobart and Miller Electric has
been exercised in such a way as to commit
“fraud, an illegal act, or a similarly unlawful act.” See Dombroski v. Wellpoint, Inc.,
119 Ohio St.3d 506, 895 N.E.2d 538, 545
(Ohio 2008) (stating veil-piercing requirements in Ohio, where Hobart is incorporated); Consumer's Co-op. of Walworth Cty.
v. Olsen, 142 Wis.2d 465, 419 N.W.2d
211, 217-18 (Wisc.1988) (stating similar
veil-piercing requirements in Wisconsin,
where Miller Electric is incorporated).
While plaintiffs adduce substantial evidence that ITW, Hobart, and Miller Electric
have ignored aspects of their corporate
forms and act as a single business enterprise, there is no evidence tending to show
that ITW has done so in pursuit of fraud.

FN74. See, e.g., United States v. Atlas
Minerals & Chems., No. 91-5118, 1993
U.S. Dist. LEXIS 18411, at *17-18, 1993
WL 518421 (E.D.Pa. Dec. 7, 1993)
(“Plaintiff's pursuit of the alter ego theory
in this regard is commendable; however, as
the defendant[s] point out in their
[summary judgment] memorandum, the
use of this theory in order to pierce the
corporate veil is inappropriate where the
complaint offers no allegations to put the
defendant on notice.”); Klein v. Colorado
126 P'ship, No. 90-A-560, 1991
Bankr.LEXIS 1649, 1991 WL 242181
(Bankr.N.D.Ill. May 6, 1991) (“The
primary basis of plaintiffs['] ... opposition
to the motion for summary judgment is
that [the defendant] should be held liable
under the piercing the corporate veil theory. This theory, however, was never pled
in the compl[ai]nt and is simply not an issue in this proceeding.”); cf. United States
ex rel. Beattie v. Comsat Corp., No.
96-966, 2001 U.S. Dist. LEXIS 26185, at
*13, 2001 WL 35992080 (M.D. Fl. April
18, 2001) (“While ... the aforementioned
allegation does not properly allege a claim
for abuse of the corporate form/veil piercing, the ... allegation does appear to set
forth a claim for successor liability....”).
Here, because plaintiffs alleged only a successor liability theory and made no factual allega-

V. Conclusion.
Plaintiffs' claims against ITW under theories of
direct liability cannot succeed because there is no
evidence that plaintiffs were harmed by an ITW
product or that ITW had a duty to plaintiffs.
Moreover, ITW cannot be vicariously liable as a
successor to Hobart and Miller Electric, because
those companies still exist. Finally, plaintiffs did
not allege in their complaints any facts that would
support a veil-piercing theory, nor do plaintiffs suggest that ITW has exercised control over Hobart or
Miller Electric in pursuit of fraud. Accordingly,
ITW's motion for summary judgment is GRANTED and all claims against it are DISMISSED.
*9 IT IS SO ORDERED.

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N.D.Ohio,2010.
In re Welding Fume Products Liability Litigation
Not Reported in F.Supp.2d, 2010 WL 2403355
(N.D.Ohio), Prod.Liab.Rep. (CCH) P 18,431
END OF DOCUMENT

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