Kirk v. Schaeffler Group USA, Inc. et al

Filing 399

ORDER denying 386 motion for reconsideration. Signed on January 29, 2016 by Chief District Judge Greg Kays. (Lehr, Jonathan)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHWESTERN DIVISION
JODELLE L. KIRK,
Plaintiff,
v.
SCHAEFFLER GROUP USA, INC., et al.,
Defendants.

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No. 3:13-cv-5032-DGK

ORDER DENYING DEFENDANTS’ MOTION FOR RECONSIDERATION
This case arises from Defendants’ release of trichloroethylene (“TCE”) into the
environment near Plaintiff Jodelle Kirk’s childhood home. Plaintiff alleges she was exposed to
the TCE, and that it caused her to develop several serious illnesses, including autoimmune
hepatitis.
Now before the Court is Defendants’ motion to reconsider or, in the alternative, to alter
or amend the January 7, 2016, ruling (Doc. 386). Pursuant to Federal Rules of Civil Procedure
54(b) and 59(e), Defendants move the Court to reconsider a portion of its Order (Doc. 333)
granting in part Defendants’ renewed motion for summary judgment (Doc. 278). Defendants ask
the Court to reconsider its holding that Defendant Schaeffler Group USA, Inc. (“Schaeffler”) is
judicially estopped from denying that it previously merged with Defendant FAG Bearings
Corporation (“FAG Bearings”), and that Schaeffler inherited FAG Bearings liability in the
merger.
Motions to alter or amend a judgment brought pursuant to Rule 59(e) “serve a limited
function: to correct manifest errors of law or fact or to present newly discovered evidence.”
Hagerman v. Yukon Energy Corp., 839 F.2d 407, 414 (8th Cir. 1988) (citations omitted). They

cannot be used to introduce evidence that could have been offered during the pendency of the
motion, or “to raise arguments which could have been raised prior to the issuance of the
judgment.” Preston v. City of Pleasant Hill, 642 F.3d 646, 652 (8th Cir. 2011). A district court
has “broad discretion” in determining whether to grant a Rule 59(e) motion. Briscoe v. Cty of St.
Louis, Mo., 690 F.3d 1004, 1015 (8th Cir. 2012).
Alternately, if the Court construed the motion as a motion to reconsider an ordinary
interlocutory order, 1 Defendants would have to show: (1) that they did not have a fair
opportunity to argue the matter previously; and (2) that granting the motion is necessary to
correct a significant error. Halloran v. Houlihan’s Rest., Inc., No. 4:11-CV-01028-DGK, 2013
WL 544011, at *2 (W.D. Mo. Feb. 12, 2013).
The Court denies the motion under either standard.

The Court does so because

Defendants had ample opportunity to argue the matter previously, and the Court’s interest in
judicial economy, discouraging seriatim briefing, and ensuring respect for the finality of its
decisions weighs against granting the motion.
The history of the briefing on this issue is as follows. In her Suggestions in Opposition to
Defendants’ renewed motion for summary judgment, Plaintiff argued this matter at some length.
She wrote:
Defendant Schaeffler Group USA, Inc. (hereinafter
“Schaeffler”) should be judicially estopped from denying that it is
a separate company than FAG Bearings Corp. (hereinafter “FAG
Bearings”) since it has taken the position in other litigation that its
2001 purchase of FAG Bearings amounted to a merger of the two
companies and that it is responsible for the pre-2001 actions of
FAG Bearings. In papers filed under oath before the United States
Court of International Trade, Schaeffler represented that it was the
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The ruling Defendants are asking the Court to reconsider—that Schaeffler is judicially estopped from denying that
it previously merged with FAG Bearings and inherited FAG Bearings’ liability in the merger—is not a final
judgment.

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legal successor to FAG Bearings and that FAG Bearings was
absorbed into Schaeffler:
Schaeffler is a U.S. corporation with its principal place
of business at Ft. Mill, South Carolina. Together with
INA-USA Corporation of Ft. Mill, South Carolina, and
FAG Bearings Corporation of Stamford and Danbury,
Connecticut, and Joplin, Missouri, which by change of
name and/or merger were absorbed into Schaeffler (and
are hereby included within the definition of “Schaeffler”
for purposes of this complaint)...

(SOF 119).
Defendant Schaeffler made these admissions so that it
could advantageously rely on FAG Bearing’s participation in an
investigation which took place prior to Schaeffler’s 2001 purchase.
Defendant Schaeffler’s position was accepted by the Court. (SOF
120). On the basis of Schaeffler’s statements, the U.S. Court of
International Trade Court concluded as follows:
Plaintiff Schaeffler Group USA, Inc. (“Schaeffler”), a
U.S. producer of antifriction bearings,3 is the legal
successor to two U.S. producers of antifriction bearings
who participated in a 1988 investigation conducted by
the ITC that
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The Court accepts Plaintiff’s undisputed representation
that it is the legal successor to INA Bearing Co., Inc. and
FAG Bearings Corp., and will refer to these companies
interchangeably as “Schaeffler.”

Defendant Schaeffler has repeatedly affirmed that it is the
legal successor to FAG Bearings Corp through merger. In other
litigation Schaeffler went so far as to declare that, “FAG Bearings
Corp. does not exist as a separate legal entity apart from
Schaeffler.” Defendant Schaeffler should be judicially estopped
from asserting otherwise.
The doctrine of judicial estoppel “protects the integrity of
the judicial process.” Stallings v. Hussmann Corp., 447 F.3d 1041,
1047 (8th Cir. 2006) (internal citations omitted). Judicial estoppel
prevents a party who successfully takes a position in one judicial
proceeding from then denying that position in a later judicial

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proceeding. Id. “The circumstances under which judicial estoppel
may appropriately be invoked are probably not reducible to any
general formulation of principle.” Id. (citing New Hampshire v.
Maine, 532 U.S. 742, 121 S. Ct. 1808, 149 L. Ed. 2d 968 (2001)).
Instead three factors are to be considered:
First, a party’s later position must be clearly inconsistent
with its earlier position. Second, courts regularly inquire
whether the party has succeeded in persuading a court to
accept that party’s earlier position, so that judicial
acceptance of an inconsistent position in a later
proceeding would create the perception that either the
first or the second court was misled. Absent success in a
prior proceeding, a party’s later inconsistent position
introduces no risk of inconsistent court determinations,
and thus poses little threat to judicial integrity. A third
consideration is whether the party seeking to assert an
inconsistent position would derive an unfair advantage
or impose an unfair detriment on the opposing party if
not estopped.

Id.
All three of these factors weigh in favor of holding
Schaeffler responsible for FAG Bearing’s actions. Schaeffler has
repeatedly taken the position in multiple judicial proceedings that
it and FAG are really one in the same, a position clearly
inconsistent with its position here. Defendant Schaeffler has been
successful in asserting this position. Finally, allowing Schaeffler
to benefit from its position that it and FAG Bearings are one in the
same but allowing it to separate itself in this proceeding would be
inequitable and tantamount to allowing Schaeffler have its cake
and eat it too. For these reasons, judicial estoppel should be
utilized to prevent Schaeffler from denying that it and FAG
Bearings are the same entity through merger.
As a legal successor through merger or change of name to
FAG Bearings, Schaeffler is responsible for the actions of FAG
Bearings. Under Missouri corporate successor liability law, where
one corporation sells or otherwise transfers all of its assets to
another corporation, purchaser is not liable for debts and liabilities
of transferor, except where purchaser expressly or impliedly agrees
to assume such debts, where transaction amounts to consolidation
or merger of corporations, where purchasing corporation is merely
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continuation of selling corporation, or where transaction is entered
into fraudulently in order to escape liability for such debts.
Sherlock v. Quality Control Equip. Co., 79 F.3d 731 (8th Cir.
1996). Defendant Schaeffler’s own judicial admissions plainly
state that its 2001 purchase of FAG was a de facto merger or
consolidation of corporations. Defendants cannot continue to deny
the relationship between Schaeffer and FAG Bearings given
Defendant’s legally binding admission that FAG Bearings through
“change of name and/or merger was absorbed into Schaeffler.”
Suggestions in Opp’n to Defs.’ Renewed Mot. for Summ. Judg. (Doc. 289) at 19-22 (footnote
omitted).
Defendants answered this argument with the following 260-word response:
Because she has no such evidence—and cannot cite
admissible, record evidence to support such a claim, even if she
had—Plaintiff is forced to rely on a reaching argument regarding
statements that Schaeffler has made in other lawsuits. As
Plaintiff’s own citation makes clear, the Court cannot apply
judicial estoppel based on these cases. See Stallings v. Hussman
Corp., 447 F.3d 1041, 1047–48 (8th Cir. 2006). The fact that the
Court of International Trade found that Schaeffler was the “legal
successor” to FAG Bearings Corporation is not inconsistent with
Schaeffler’s position in this case. Id. (“[A] party’s later position
must be clearly inconsistent with its earlier position.”) The ITC
case involved wholly different claims, a different body of
governing law, and a different set of facts. (PF 119.) Similarly,
regardless of the context for Schaeffler’s statement in the
Euroatlantic case, there is no evidence that Schaeffler’s “position”
in that case—even if somehow inconsistent with this case—was
ever adopted by the District of Connecticut. (PF 121.) In fact, that
case was dismissed before the court made any determination. (Id.)
As a result, that case cannot provide any basis for estopping
Schaeffler from denying alter ego liability for a claim that Plaintiff
failed to plead or support with any evidence. See Stallings, 447
F.3d at 1048–49 (denying judicial estoppel because there was “no
judicial acceptance” of the allegedly inconsistent position in the
prior litigation). Schaeffler simply cannot be liable for the actions

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of its subsidiary. Schaeffler’s prior statements are inadmissible and
provide no basis for imposing liability.
Reply Suggestions in Supp. of Renewed Mot. for Summ. Judg. (Doc. 297) at 13-14 (emphasis
added). As shown by the bolded text above, Defendants answered Plaintiff’s argument about the
Court of International Trade (“CIT”) case in just a single, conclusory sentence.
After carefully considering the parties’ arguments and reviewing the cases cited by them,
the Court found: (1) Schaeffler’s position that it is the parent company, not the successor of FAG
Bearings, was clearly inconsistent with its representation to the CIT that FAG Bearings was
“absorbed into Schaeffler” “by change of name and/or merger;” (2) Schaeffler had succeeded in
persuading the CIT to accept its position; and (3) Schaeffler would derive an unfair advantage in
this litigation if not estopped, because it would avoid any liability that it would otherwise have to
Plaintiff, which would result in a miscarriage of justice. Summ. J. Order (Doc. 333) at 13-15.
The Court concluded that Schaeffer was judicially estopped from denying that it is the successor
to FAG Bearings. Id. at 15.
Now, after the Court issued its decision, Defendants filed a long, well-researched brief
arguing that judicial estoppel does not apply here. It is an excellent piece of legal writing. It
does not, however, contain any new evidence or arguments which could not have been presented
previously. It is eleven pages of argument buttressing the arguments made in Defendants’ reply
brief, albeit more persuasively and in much greater detail. Compare Reply Suggestions at 13-14
with Suggestions in Supp. of Mot. to Recons. at 3-14. Defendants could have, and should have,
presented these arguments in their reply brief, or moved to submit a supplemental brief before
the Court issued its decision. For whatever reason, they did not.
What is clear though, is that Defendants had ample opportunity to present these
arguments before the Court issued its decision. Because Defendants had a fair opportunity to

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argue the matter previously and could have presented these detailed arguments prior to the
Court’s issuing its decision, the motion to reconsider (Doc. 386) is DENIED.
IT IS SO ORDERED.
Date: January 29, 2016

/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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