Bouchillon v. Same Deutz-Fahr, Group et al

Filing 162

ORDER granting 97 Motion for Appointment of Special Master. Signed by District Judge Sharion Aycock on 3/10/2016. (geb)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
JUDY BOUCHILLON
V.

PLAINTIFF

CIVIL ACTION NO. 1:14-CV-135-SA-DAS

SAME DEUTZ-FAHR, GROUP, et al.

DEFENDANTS

ORDER ON MOTION FOR SPECIAL MASTER
Judy Bouchillon commenced this wrongful death, product liability action after her
husband was fatally injured while operating a Deutz model tractor. Deutz AG (“Deutz”) filed a
Motion for Summary Judgment, as did SAME Deutz-Fahr North America, Inc. (“SAME North
America”), and Same Deutz-Fahr, Group (“SAME Group”).1 Also pending is a motion by the
SAME Defendants for appointment of a special master. For the reasons set forth below, the
Court finds that a special master is needed to effectively resolve multiple issues presented in the
summary judgment motions. The Motion for a Special Master [97] is GRANTED, and the
motions for summary judgment [81], [100] will be submitted in part to the special master, to rule
on the issues identified in this order.
Facts and Procedural History
In August 2013, Jim Bouchillon was operating a Deutz model 3006 tractor with an
attached mower to cut the grass on his property. The tractor came into contact with a tree
sapling, causing the sapling to “cinch down on top of Mr. Bouchillon’s back,” resulting in his
death. Mr. Bouchillon’s wife and estate representative, Judy Bouchillon, filed this suit against
Deutz and the SAME Defendants. Deutz manufactured the subject tractor. The SAME
Defendants now own Deutz’s former tractor business.

1

The Court will refer, at times, to SAME North America and SAME Group as the SAME Defendants.

Plaintiff alleges claims of design defect and failure to warn under the Mississippi Product
Liability Act (“MPLA”). The Defendants moving for summary judgment all disclaim the product
liability risks for Plaintiff’s claims, and all deny that they are proper defendants to the suit.
It is undisputed that in 1991, Deutz2 bore the product liability risks for the tractor at issue.
But over the course of two capital contribution agreements, one in 1991 and another in 1992,
Deutz transferred its tractor business to its subsidiary, KHD Agrartechnik GMbH
(“Agrartechnik”). In 1995, Deutz sold its shares and property rights in Agrartechnik to the
corporate predecessors to a wholly owned subsidiary of Defendant SAME Group. After the 1995
sale and through a series of name changes and mergers, Agrartechnik has become known as
SAME DEUTZ-FAHR DEUTSCHLAND GmbH (“SAME Germany”), another Defendant,
owned by the SAME Group, that has not joined in the SAME Defendants’ motion for summary
judgment.3
The basis of both summary judgment motions concerns the legal effect of the 1992
contribution agreement between Deutz and Agrartechnik. Deutz contends that it transferred all
product liability risks for the tractor to Agrartechnik (now SAME Germany) and cannot be liable
to Plaintiff for any judgment in her favor. Primarily, Deutz highlights German language from the
1992 agreement, which it translates to mean that all liabilities “recorded or addressed in the
transfer balance sheet” were transferred. (emphasis added). It argues that product liability risks
were “addressed in” the transfer balance sheet through the line item “other reserves” in accord
with German accounting principles, and that the agreement as a whole evinces the intent to
transfer product liability risks.

2

At the time, Deutz was named Kloeckner-Humboldt-Deutz AG.

3

SAME Germany has filed a separate motion to dismiss for lack of personal jurisdiction [135].

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The SAME Defendants assert that the 1992 agreement did not transfer the product
liability risks, and that no SAME entity is liable. They first contend that a transfer of product
liability is prohibited by the German Product Liability Act (“GPLA”). The SAME Defendants
alternately assert that the language from the 1992 agreement is properly translated as liabilities
“recorded or named” or “recorded or specified.” The category in the balance sheet “other
reserves,” they argue, is not an explicit reference to product liability risks, and is insufficient for
transfer under the language of the 1992 agreement and under German law.
All parties agree that this case is governed in part by Mississippi law and in part by
German law, though they disagree as to the extent of the applicability of each. The SAME
Defendants seek a special master to assist the Court in determining the German legal issues.
Deutz contends that no real conflict between Mississippi law and German law has been
identified, and that no special master is needed. The Court will explain the propriety of
appointing a special master before turning to the specific issues that will be referred.
Necessity of Appointing a Special Master
District courts are empowered to appoint special masters to, among other things, “address
pretrial and posttrial matters that cannot be effectively and timely addressed by an available
district judge or magistrate judge of the district.” FED. R. CIV. P. 53(a)(1)(C). Circumstances
warranting a special master are limited, representing “the exception, not the rule.” Haley v.
Merial, Ltd., No. 4:09-CV-94-DAS, 2010 WL 5185386, at *1 (N.D. Miss. Dec. 15, 2010). The
advisory notes to the 2003 Amendments to Rule 53(a)(1)(a) state that “[a] master should be
appointed only in limited circumstances . . . . and only when the need is clear.” One such limited
circumstance is the “determination of foreign law.” FED. R. CIV. P. 53(a)(1)(a) advisory
committee’s note (alterations omitted); 9C ARTHUR R. MILLER, FEDERAL PRACTICE

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AND

PROCEDURE § 2602.1 (“A pretrial master’s reference may include duties, such as . . . the
determination of foreign law . . . . when the need is clear.”).
After reviewing the arguments and authorities presented, the Court finds that a special
master experienced in German law is needed for an effective and timely resolution of the
summary judgment motions. As will be explained, it is possible that there is no outcomedeterminative difference between Mississippi law and German law, but a thorough analysis of
German law necessarily precedes reaching such a conclusion. The SAME Defendants’ request
for a special master is well taken.
Scope of Referral to Special Master
To determine the law applicable to the various issues presented, and thus the scope of the
referral to the special master, the Court is bound to “apply the choice-of-law rules of the state in
which it sits.” Williams v. Liberty Mut. Ins. Co., 741 F.3d 617, 620 (5th Cir. 2014) (numerous
citations omitted). Under Mississippi law, choice-of-law analysis only arises “when there is a
true conflict” between the laws of different sovereigns and only when each sovereign has an
interest in the litigation. Id. (quoting Zurich Am. Ins. Co. v. Goodwin, 920 So. 2d 427, 432 (Miss.
2006)). Mississippi state and federal courts conduct issue-by-issue choice-of-law analysis,
“recognizing that the answer produced in some instance may be that the law of [Mississippi]
applies and in other questions in the same case the substantive law of another [sovereign] may be
enforceable.” Boardman v. United Servs. Auto. Ass’n, 470 So. 2d 1024, 1031 (Miss. 1985). The
law of a single sovereign “does not necessarily control every issue in a given case . . . .” Walker
v. Williamson, --- F. Supp. 3d ---, 2015 WL 5534297, at *3 (S.D. Miss. Sept. 18, 2015) (quoting
Boardman, 470 So. 2d at 1031).

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Keeping with these choice-of-law principles, the Court explains the four broad issues
implicated by the motions for summary judgment; the law applying to the issues where apparent;
the potential for a conflict where the applicable law is unclear; and the necessity of referral to the
special master.
(1) Plaintiff’s Claims
Though not directly addressed in the summary judgment motions, Plaintiff’s theories of
recovery are relevant to the analysis. Generally speaking, Mississippi law and specifically the
Mississippi Product Liability Act (“MPLA”) apply to Plaintiff’s claims. Under Mississippi’s
choice-of-law rules, issues of tort are governed by “the law of the place of the injury unless
another state has a more substantial relationship to the action.” Williams, 741 F.3d at 623
(quoting Davis v. Nat’l Gypsum Co., 743 F.2d 1132, 1133 (5th Cir. 1984)).4 No party has
suggested that Germany possesses a more substantial relationship to the tort issues than
Mississippi. Thus, the MPLA will apply, and reference to the special master is unnecessary as to
Plaintiff’s prima facie recovery under that statue.
(2) Validity of Transfer
The SAME Defendants contend that the GPLA prohibited the transfer of the product
liability risk pertinent to this case. The parties agree that Mississippi law would not prevent such
a transfer. See Monzingo v. Correct Mfg. Corp., 752 F.2d 168, 174 (5th Cir. 1985). If the SAME
Defendants’ position is correct, then there will be a conflict between Mississippi law and

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In determining whether a different sovereign possesses a “more substantial relationship,” Mississippi courts
consider:
the place where the injury occurred, the place where the conduct causing the injury occurred, the
domicile, residence, nationality, place of incorporation and place of business of the parties, and the
place where the relationship, if any, between the parties is centered.
Williams, 741 F.3d at 623 (quoting Restatement (Second) of Conflict of Laws § 145(2)) (internal quotation marks
omitted).

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German law, and the Court will undertake a choice-of-law analysis pursuant to Mississippi’s
choice-of-law rules. See Zurich, 920 So. 2d at 432. However, two questions about the GPLA’s
applicability make it unclear whether a conflict exists.
As an initial matter, the parties dispute whether the GPLA applies to prevent transfer of
liability in the type of corporate contribution agreement at issue here. By way of undisputed
translation, Section 14 of the GPLA provides:
The liability of a [manufacturer] in accordance with the Act cannot be excluded or
restricted in advance. Any agreement to the contrary is void.
The SAME Defendants afford Section 14 a broad construction, positing that it applies to any
attempt to avoid liability by agreement. Deutz supplies a more constrictive reading, explaining
that Section 14 was only intended to prevent manufacturers from seeking prospective waivers
with consumers and end-users of their products. The correct interpretation of the GPLA is a
question of German law, and it will be referred to the special master.
Another scope-related issue is whether the GPLA’s prohibition of “excluding” or
“restricting” liability applies to Plaintiff’s Mississippi product liability claims. It appears that
Section 14, by its terms, only prevents exclusion or restriction of “liability . . . in accordance with
the [GPLA] . . . .” Plaintiff seeks recovery, not under the GPLA, but under the MPLA. Thus, the
Court is inclined to rule that Section 14 has no application here. But because this question too
requires an interpretation of German law, the Court will refer it to the special master.
The answers to these German law questions may reveal an absence of conflict with
regard to Section 14 and obviate the need for a choice-of-law analysis. See id. Therefore, the
Court will defer the choice-of-law analysis in this regard until it becomes necessary.

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(3) Construction of the 1992 Agreement
Even if the GPLA did not prohibit the transfer of the product liabilities in this case, the
SAME Defendants dispute, as noted above, whether the 1992 contribution agreement effectively
transferred the liabilities. The parties have not identified a specific conflict between Mississippi
law and German law on the issue of contract interpretation, but they agree that, to the extent a
conflict exists, German interpretive principles will control. Indeed, the agreement involved two
German corporations, is written in German, and was entered into in Germany.5
The Court recognizes that under both Mississippi law and German law, with any
contractual provision, several interpretive principals may be at play. As such, the existence of a
conflict may not be apparent until a thorough application of German law has been conducted. For
this reason, and because a special master fluent in German will be better able to ascertain
contractual intent by reviewing the language as written, the Court refers the issue of contract
interpretation to the special master.
(4) Continuity of Enterprise Theory
If the Court determines that the product liability risks at issue were not transferred to the
SAME Defendants, they may be nonetheless liable to Plaintiff pursuant to Mississippi’s
“continuity of enterprise” theory. This doctrine imposes liability on a successor company for
“debts owed by the predecessor when the successor takes on the identity of the predecessor
company in every way except taking responsibility for the predecessor’s debts.” Paradise Corp.
v. Amerihost Development, Inc., 848 So. 2d 177, 180-81 (Miss. 2003). The parties have not

5

In the absence of a contractual choice-of-law provision, relevant considerations for determining which body of
contract law applies are: “the place of contracting,” “the place of negotiation of the contract,” “the place of
performance,” “the location of the subject matter of the contract,” and “the domicil, residence, nationality, place of
incorporation and place of business of the parties.” Restatement (Second) of Conflict of Laws § 188(2); see also
ABS Servs., Inc. v. New York Marine & General Ins. Co., 524 F. App’x 946, 949 (5th Cir. 2013) (“Mississippi, the
forum state, follows the choice-of-law rules set forth in the Restatement (Second) of Conflict of Laws.”).

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discussed whether there is a similar doctrine under German successor liability law, or whether
there is a conflict requiring choice-of-law analysis.6 The special master will be asked to
determine the existence of a similar German law doctrine, and apply it to the facts of this case. In
the event of an outcome-determinative conflict on this issue, the Court will conduct a choice-oflaw analysis. See Zurich, 920 So. 2d at 432.
Conclusion
For the foregoing reasons, the motion for a special master [97] is GRANTED, and the
motions for summary judgment [81, 100] are submitted in part to the special master, to answer
the following questions:
(1) At the time of the 1992 contribution agreement between Deutz, then named
Kloeckner-Humboldt-Deutz AG, and Agrartechnik GMbH, did German law
prohibit Deutz from transferring to Agrartechnik the product liability risk of the
claims brought by Plaintiff under the Mississippi Product Liability Act?
(2) In the 1992 contribution agreement, did Deutz expressly or impliedly transfer
to Agrartechnik the product liability risk of the claims brought by Plaintiff?
(3) Even if the product liability risk at issue was not transferred in the 1992
agreement, are the SAME Defendants nonetheless liable for a judgment, if any, in
Plaintiff’s favor, pursuant to German successor liability law, under a doctrine
similar to Mississippi’s “continuity of enterprise” theory, identified herein?
The Court will supply a notice to the parties describing the special master’s proposed
duties, time to complete the duties, standards of review, compensation, and appointment
procedure.
SO ORDERED, this the 10th day of March, 2016.

/s/ Sharion Aycock
UNITED STATES DISTRICT JUDGE

6

Because it serves to expand a plaintiff’s avenues for recovery and not to restrict them, see Paradise Corp., 848 So.
2d at 180-81, the “continuity of enterprise” theory would not run afoul of Section 14 of the GPLA, if applicable.

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