Skidmore v. Syntex Laboratories, Inc.

• Decision Date: 12 April 1976
• Docket Number: No. 74--3642,74--3642
• Citation: 529 F.2d 1244
• Parties: Mary M. SKIDMORE, Plaintiff-Appellant, v. SYNTEX LABORATORIES, INC., a Division of Syntex Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1244

529 F.2d 1244

Mary M. SKIDMORE, Plaintiff-Appellant, v. SYNTEX LABORATORIES, INC., a Division of Syntex Corporation,

Defendant-Appellee.

No. 74--3642.

United States Court of Appeals, Fifth Circuit.

April 12, 1976.

Max E. Ramsey, Odessa, Tex., Dick Stengel, El Paso, Tex., for plaintiff-appellant.

Wayne P. Sturdivant, Amarillo, Tex., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before BROWN, Chief Judge, RIVES and GEE, Circuit Judges.

RIVES, Circuit Judge:

This diversity action was filed by the plaintiff, a citizen of Texas, against Syntex Laboratories, Inc., a corporation organized under the laws of Delaware and having its principal place of business in California, ¹ and Syntex Corporation, a corporation organized under the laws of Panama with its principal place of business located elsewhere than in the State of Texas. ² Plaintiff's complaint alleged that at all relevant times the defendants were engaged in manufacturing and distributing birth control pills under the tradename of Norinyl 1 $ 80, and sought the recovery of damages for personal injuries suffered by the plaintiff as the result of her use of these oral contraceptives.

The defendants moved to dismiss for lack of in personam jurisdiction over the defendants, and on December 5, 1973, the district court denied that motion in an order reading in part:

'(1) Dismiss for Lack of Personal Jurisdiction--this court hereby DENIES the motions on behalf of both Syntex Laboratories, Inc. and Syntex Corporation and finds that based on the record before the court at this time, this court has personal jurisdiction over the Defendants. There is shown service of process on the Secretary of State of Texas as provided by the Texas Long Arm Statute, Tex.Rev.Civ.Stat.Ann. art. 2031b (1964). The Defendants apparently base their motion on a due process argument in that they do not have sufficient minimum contacts' with Texas to come under the personal jurisdiction of this court. Based on the record at this time and the opinion in Coulter v. Sears, Roebuck, and Co., 426 F.2d 1315 (5th Cir. 1970), this court finds it has the requisite jurisdiction.' (App. p. 42.)

Beginning August 15th, the district court reconsidered and on August 20, 1974 granted the motion to dismiss for lack of jurisdiction. It is from that order that the present appeal is prosecuted. We quote at length pertinent parts of the supporting opinion of the district court:

'. . . Initially the motion to dismiss was denied by order of this court dated December 5, 1973 based upon the record at the time that denial was entered. Subsequent to such time considerable discovery has been completed and filed with the court and the defendants have again renewed their motion to dismiss. Accordingly the court advised the attorneys for all parties that it would again consider the motion to dismiss and a hearing was held thereon in Lubbock, Texas on August 15, 1974. In addition to the above-memtioned motions to dismiss, the defendants have filed a motion for summary judgment on the grounds that the plaintiff's complaint is barred by the statute of limitations, but in view of the action by this court dismissing the complaint for lack of jurisdiction, no ruling will be entered or made on the motions for summary judgment.

'The affidavits which have been filed in this case, the answers to interrogatories and other discovery documents show without any contradiction the following:

'Syntex Laboratories, Inc., the Delaware corporation, did not commence business until August 1, 1972 and was incorporated on November 19, 1971. The oral contraceptives in question in this case, known as Norinyl 1 $ 80, were prescribed to the plaintiff and she commenced taking them in September 1970 and ceased taking the pills in March of 1971, before Syntex Laboratories, Inc. was incorporated and before they commenced doing business. There is no showing in the record in this case that Syntex Laboratories, Inc. was a successor to any other legal entity that might have manufactured or distributed the pills in question.

'An interrogatory in the record does show that the pills in question are now a product of Syntex Laboratories, Inc. but nothing indicates that at the time the plaintiff took these pills that it was a product of Syntex Laboratories, Inc., or of its predecessor corporations, or any of its affiliates.

'. . .sor

'The other defendant, Syntex Corporation, is a Panama corporation. Unlike its co-defendant, this defendant has been in business and a corporation since 1957 under a corporate charter from the Republic of Panama. The uncontradicted evidence with respect to the activities of Syntex Corporation show (sic) that the pills in question were not the principal product of nor manufactured by Syntex Corporation. In answer to another interrogatory, although it was admitted that it was currently a product of the co-defendant, Syntex Laboratories, Inc., the answer fails to show that it is even a sideline product of the defendant, Syntex Corporation. Again the plaintiff has failed to meet the burden to sustain jurisdiction in this court. Syntex Corporation, according to the record now before the court, had nothing to do with the manufacture or distribution of the pills in question and there is no way that service of citation could be perfected on this defendant under Art. 2031b, V.A.T.S., as this cause of action does not arise out of any business transacted in this state or any tort committed in this state by Syntex Corporation. Further, the record does not reveal any contacts by Syntex Corporation in or with the State of Texas that would satisfy the due process clause of the Constitution of the United States and lack of such minimum contacts is a ground for motion of dismissal. Neither of the defendant corporations in this case are subject to the jurisdiction of this court under these facts and the applicable requirements of law. O'Brien v. Lanpar Co., supra (399 S.W.2d 340, Tex. 1966).' (App. 273--277.)

The district court's reconsideration of the defendants' motion to dismiss began at a hearing on August 15, 1974 of the defendants' motion for summary judgment and a like motion filed by the plaintiff. The answers of defendant 'Syntex Laboratories, Inc., a Division of Syntex Corporation' to interrogatories filed by the plaintiff had been filed on March 14, 1974. We can well understand the claim of plaintiff's attorneys that they were actually though unintentionally misled by the answers to Interrogatories 22 and 33:

'Interrogatory No. 22: Is the product Norinyl 1 $ 80 birth control pills a sideline product of either Syntex Laboratories, Inc. or Syntex Corporation?

'Answer: Norinyl 1 $ 80 is a product of Syntex Laboratories, Inc.' (Record on Appeal 93.)

'Interrogatory No. 33: When was the product Norinyl 1 $ 80 birth control pills initially manufactured?

'Answer: 1968.' (Record on Appeal 95.)

After answers of Syntex Laboratories, Inc. to 184 interrogatories, plaintiff remained without a clear understanding of the name of the Syntex Corporation to be sued for her injuries. In Interrogatory No. 35 the plaintiff had inquired, 'Is the product Norinyl 1 $ 80 patented?' and the defendant had answered 'No.' (R. 96.) The plaintiff's attorney did not know the question to elicit the information ultimately disclosed in oral argument on appeal to the effect that either the Syntex Corporation chartered in Panama or else a different 'Syntex Panamaian Corporation' does have a patent on the ingredients of the birth control pill and that from 1968 to 1972 the distributing corporation was called Syntex Laboratories, U.S.A., a name very similar to that of the Delaware corporation sued.

Mr. Sturdivant, attorney for the defendants, stated in the hearing of August 15, 1974, shortly before the entry of the judgment: 'I mean, I probably represent the whole conglomerate of Syntexes, you understand, but who is going to pay this judgment, the stockholders of Syntex Corporation or the stockholders of Syntex--' (R. 320.) In oral argument on appeal, the plaintiff's counsel relied strongly on that admission of Mr. Sturdivant. Mr. Sturdivant did not deny such representation. Further in his oral argument on appeal, Mr. Sturdivant said:

'MR. STURDIVANT: It's real simple. We have a Syntex Panamanian Corporation that has the patent on the ingredients that goes (sic) into the birth control pill.

'JUDGE BROWN: That's what I thought.

'MR. STURDIVANT: In 1968 to 1972 we had a corporation called Syntex Laboratories, U.S.A. That was the marketing and producing corporation that should have been made the defendant. In 1972, on August 1, we created the Syntex Laboratories, Inc., with their offices in Palo Alto, California, and they took all of the rights to the product of manufacturing and distribution and, of course, there possibly could be some liability on an assumption of another corporation, but they could not have proved that if they had gone to trial. They would have had a directed verdict against them because they did not have sufficient evidence there to establish a chain between the two corporations.

'JUDGE BROWN: But they sued Syntex Corporation and Syntex Laboratories?

'MR. STURDIVANT: Well, sorta--

'JUDGE BROWN: No, not sorta, it's in the complaint, there is a prayer--

'MR. STURDIVANT: Right--

'JUDGE BROWN: All right--

'MR. STURDIVANT: Actually, they sued Syntex Laboratories, Inc., a division of--but I don't want--a division of Syntex, Inc., but I don't want to stand on any kind of a misnomer, because we told them time and time again about the misnomer and waived it--

'JUDGE BROWN: I don't think misnomer is the problem.

'JUDGE GEE: Did Syntex Corporation manufacture any of these pills during this period?

'MR. STURDIVANT: 1968 to '72 or '72 after that as the Panamanian Corporation?

'JUDGE GEE: No, Syntex Corporation, the other defendant.

'MR. STURDIVANT: No. Syntex Corporation Panamanian...