Alcan Aluminum Corp. v. Basf Corp.
| Decision Date | 30 January 2001 |
| Docket Number | Civil Action No. 3:97-CV-1480-L. |
| Parties | ALCAN ALUMINUM CORP., Plaintiff, v. BASF CORP. d/b/a Delaware New Corp., Defendant. |
| Court | U.S. District Court — Northern District of Texas |
Robbie Malone, R. Scott Seifert, Nelson S. Ebaugh, Hiersche, Martens, Hayward, Drakeley & Urbach, P.C., Addison, TX, for Plaintiff.
Earl B. Austin, Tyler L. Murray, Baker Botts, L.L.P., Dallas, James M. Hall, Jr., Taft, Stettinius & Hollister, Cincinnati, OH, for Defendant.
Before the court are Defendant's Motion for Summary Judgment, filed April 23, 1998; Plaintiff's Motion to Cure Evidentiary Defects, filed April 13, 2000; and Defendant's Motion to Supplement Summary Judgment Authorities, filed May 3, 2000. After careful consideration of the motions, responses, replies, briefs, evidence submitted by the parties and applicable law, the court grants Plaintiff's Motion to Cure Evidentiary Defects, denies as moot Defendant's Motion to Supplement Summary Judgment Authorities, and grants in part and denies in part Defendant's Motion for Summary Judgment.
Plaintiff Alcan Aluminum Corporation ("Alcan"), among other business activities, manufactures aluminum-based panels for gasoline station fascia and sun rooms, in which areas the panels can be subjected to extreme heat. Urethane foam is placed into the final manufactured products as an insulator. The foam is sprayed into the aluminum shells as a liquid; as it cures, it expands and hardens to create a rigid core. Alcan, for some time prior to the events giving rise to this action, used an "Autofroth 8262" system offered by Defendant BASF Corporation ("BASF") or its corporate predecessor. The system consisted of two different chemical components and a mixing gun; the chemicals were mixed in a specific ratio to create the foam. BASF also provided engineering and technical support for its system.
As a result of environmental concerns about the chlorofluorocarbon ("CFC") "blowing agent" in use prior to July 1993, and tariffs imposed on CFC foams by the Environmental Protection Agency, BASF and Alcan agreed on a replacement system, Autofroth 9206, which Alcan used in its manufacturing process from July 1993 until September 1994. Autofroth 9206 used a blowing agent designated R-22, at the time the only such blowing agent available for use in non-CFC systems. The process is complex, and temperature or timing deviations can lead to defective foam; quality control procedures were implemented to ensure adherence to processing parameters. Autofroth 9206 had narrower process parameters than the Autofroth 8262 system and required modification of Alcan's manufacturing process.
Alcan started receiving complaints, and warranty claims, from customers in the spring of 1994 about "bubbling" and deformation in panels constructed using Autofroth 9206. Alcan sought assistance from BASF in determining the cause of the bubbles, but did not conclusively determine the cause at that time. Alcan does not dispute that the chemical components themselves met quality control specifications and were delivered in proper condition. Other customers of BASF, using non-CFC Autofroth systems other than 9206, have also experienced bubbling problems in their products. BASF offered a replacement product, Autofroth 9313, which Alcan tested and then began using in September 1994, with the same manufacturing process and quality control procedures as it had used for Autofroth 9206. The bubbling problem ceased after Alcan began manufacturing panels using the Autofroth 9313 system.
By letter to BASF dated December 16, 1994, Alcan claimed that the bubble problems were a direct result of the change to the Autofroth 9206 system, and requested reimbursement for warranty claims from customers and other expenses incurred. On May 16, 1997, Alcan filed this lawsuit. The parties dispute the actual cause of the bubbling problem. Alcan asserts that the Autofroth 9206 system was defective, in that the formula contained too much R-22, which created excessive gas pressure in the cell structure of the polymer matrix, particularly when subjected to extreme temperatures. BASF disputes the validity of the conclusions of Alcan's experts as to excessive gas pressure, and also asserts that the bubbling problem was likely caused by Alcan's misuse of the system. As a contributing factor to such alleged misuse, BASF claims that Alcan's quality control procedures were inadequate to detect and prevent failures to comply with appropriate processing parameters. The parties also dispute what processing parameters were appropriate.
Alcan filed suit against BASF in state court on May 16, 1997, and BASF removed to this court on June 18, 1997. Alcan asserts causes of action for: 1) breach of contract; 2) breach of warranty; 3) fraud and/or fraudulent concealment; 4) negligent misrepresentation; 5) violation of the Texas Deceptive Trade Practices — Consumer Protection Act ("DTPA"), Tex. Bus. & Comm.Code Ann. § 17.41 et seq. (West 1987 & Supp.2001); and 6) professional negligence.2 Alcan seeks damages, exemplary damages, costs, and attorneys' fees. BASF denies Alcan's claims and also asserts in the alternative various affirmative defenses including, among others, statute of limitations, waiver and estoppel, contributory negligence, failure to mitigate, spoliation of material evidence, ratification, and unclean hands.
BASF also asserts that Alcan, a business entity with assets of $25 million or more, is not entitled to bring suit under the DTPA based on Tex. Bus. & Comm. Code Ann. § 17.45(4, 10). In addition to advancing this as a defense against Alcan's DTPA claim, BASF makes a counter-claim against Alcan for filing a groundless DTPA claim in bad faith.3 BASF seeks to recover attorneys' fees and expenses, as well as any other damages caused by the claim. Alcan denies that the DTPA claim was brought in bad faith, and also asserts an affirmative defense that the DTPA exclusion from coverage of business consumers with assets of $25 million or more, upon which BASF relies for its conclusion that Alcan lacks legal standing for the DTPA claim, violates the Equal Protection clauses of the Texas and United States Constitutions.
Summary judgment shall be rendered when 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. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.1998). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Ragas, 136 F.3d at 458.
Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir.1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527 1533 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id., see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n. 7 (5th Cir.), cert. denied, 506 U.S. 832, 113 S.Ct. 98, 121 L.Ed.2d 59 (1992). "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Disputed fact issues which are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548.
Alcan's motion seeks to cure certain defects, as pointed out by BASF, in some of its summary judgment evidence. BASF opposes Alcan's motion because: 1) the attempted "cures" are inadequate to make the evidence admissible; 2) the evidence is still insufficient to preclude summary judgment; and 3) in the instance of "other business records" attached to an affidavit by John Ahlfors, the "cure" constitutes new evidence not included in Alcan's original summary judgment response. Although Alcan's motion was filed nearly two years after its response to the motion for summary judgment, the court concludes that the materials submitted may aid the court in making its...
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