Deluca v. Portland Orthopaedics Ltd.
| Decision Date | 02 December 2017 |
| Docket Number | 2:15-cv-05562 (ADS)(AKT) |
| Court | U.S. District Court — Eastern District of New York |
| Parties | ROCCO DELUCA and MARGARET DELUCA, Plaintiffs, v. PORTLAND ORTHOPAEDICS LIMITED, an Australian company; PLUS ORTHOPEDICS, a California corporation; MAXX HEALTH, INC., a Pennsylvania corporation; MAXX ORTHOPEDICS, INC, a Pennsylvania corporation; and MIPRO US, INC., a Pennsylvania corporation, Defendants. |
APPEARANCES:
Houssiere Durant & Houssiere, LLP
Counsel for the Plaintiffs
Houston, TX 77056
By: Monica C. Vaughan, Esq., Of Counsel
Peters Berger Koshel & Goldberg, P.C.
26 Court Street, Suite 2803
Brooklyn, NY 11242
By: Richard L. Goldberg, Esq., Of Counsel
Kristen G. Niven, Esq., Of Counsel
On September 25, 2015, Plaintiffs Rocco Deluca ("Rocco") and Margaret Deluca ("Margaret") (together, the "Delucas" or "Plaintiffs") initiated this action against the Defendants Portland Orthopaedics Limited ("Portland"), Plus Orthopedics ("Plus"), Maxx Orthopedics, Inc., ("Maxx Ortho"), Maxx Health, Inc. ("Maxx Health"), Mipro US, Inc. ("Mipro US") (together, the "Defendants"). The complaint alleges numerous claims that arise out of the alleged failure of a hip replacement device, the M-Cor Modular Hip System ("M-Cor"), which was surgically implanted into Rocco. See Docket Entry ("DE") 1. The complaint asserts five causes of action: (1) strict products liability - failure to warn; (2) strict products liability - manufacturing defect; (3) strict products liability - design defect; (4) negligence; and (5) breach of implied warranty. Id. Portland and Plus both failed to appear in this action and as a result, the action against Portland was dismissed on May 12, 2016. Defendants' Rule 56.1 Statement and Plaintiffs' Counter-Statement of Undisputed Material Facts ("SOF") ¶ 6.
Presently before the Court is a motion for summary judgment filed by Maxx Health, Maxx Ortho and Mipro US (together, the "Moving Defendants") pursuant to Federal Rule of Civil Procedure ("FED. R. CIV. P." or "Rule") 56, seeking summary judgment.
For the reasons set forth herein, the Moving Defendants' motion for summary judgment is granted in part and denied in part.
A. THE FACTUAL BACKGROUND
On January 5, 2009, Rocco, a New York resident, received an M-Cor implant during hip replacement surgery at Plainview Hospital in Plainview, New York. SOF ¶ 2. X-rays confirmedthat Rocco's M-Cor implant failed on September 26, 2012. Id. ¶ 3. As a result, Rocco required incidental medical treatment, which occurred in New York. Id. ¶ 4.
Portland, an Australian company that has not appeared in this action, designed and manufactured M-Cor. Id. ¶ 7. The company went into voluntary administration on December 2, 2008 and entered into receivership on or about December 5, 2008. Id. ¶ 8. Public auctions conducted by the trustees and receivers of Portland resulted in an Asset Sale and Purchase Agreement (the "Agreement") with Mipro Ortho Pte. Ltd., the Singaporean parent of Mipro US, on March 27, 2009. The Agreement included the purchase of the M-Cor product line as well as the intellectual property, inventory, equipment and design documents regarding that product. Id. ¶¶ 11-12. The Agreement specifically excluded the sale of other product lines, Portland's goodwill, cash, accounts receivable, insurance policies, tax documents, minute books. The agreement provided that the buyer: "shall not assume and shall not be liable for all of the debts, contracts, commitments, obligations and other Liabilities of any nature whatsoever of [Portland] and [its] direct and indirect subsidiaries, whether known or unknown, accrued or not accrued, fixes or contingent..." Id. ¶¶ 13-14.
On March 26, 2009, Mipro US and Maxx Health incorporated in the State of Pennsylvania. Id. ¶ 10. On April 13, 2009, Mipro US and Mipro Ortho Pte. Ltd. entered into a subsidiary agreement in which Mipro US began manufacturing the M-Cor product line in the United States. The subsidiary agreement states that "Mipro US will be responsible for procuring inventory, components and other supplies and for manufacturing, testing, assembling and delivering the [M-Cor] to its customers." Id. ¶¶ 46-48.
On April 7, 2009, Mipro US and Maxx Health entered into a distributor sales agreement. That same day, Mipro US also entered into a consulting agreement with Maxx Ortho. NeitherMaxx Health nor Maxx Ortho is a parent or subsidiary of any other Defendant nor have they ever acquired assets or liabilities from Portland. Further, neither company has ever manufactured the M-Cor product line. See id. ¶¶ 27-43.
Pursuant to Rule 56, a "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); see Tolbert v. Smith, 790 F.3d 427, 434 (2d Cir. 2015); Kwong v. Bloomberg, 723 F.3d 160, 164-65 (2d Cir. 2013); Holcomb v. Iona Coll., 521 F.3d 130, 137 (2d Cir. 2008). A dispute is genuine if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).
It is the movant's burden to initially demonstrate the absence of material facts that preclude summary judgment. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2005) (citing Castro v. United States, 34 F.3d 106, 112 (2d Cir. 1994)). Such a "burden on the moving party may be discharged by 'showing' ... that there is an absence of evidence to support the nonmoving party's case." PepsiCo, Inc. v. CocaCola Co., 315 F.3d 101, 105 (2d Cir. 2002) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2554, 91 L. Ed. 2d 265 (1986)). If the moving party meets the initial burden, the nonmoving party must present specific facts that demonstrate there is a genuine issue that should be left for the fact-finder to decide. Davis v. New York, 316 F.3d 93, 100 (2d Cir. 2002); see also Matsuhita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986) . Mere conjecture, speculation, or conclusory statements are not enough to defeat summary judgment. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996) (internal citations omitted). The "mere existence of a scintilla of evidence" is insufficient to defeat summary judgment. Anderson, 477 U.S. at 252.
In considering a summary judgment motion pursuant to Rule 56, the Court must "view the evidence in the light most favorable to the non-moving party ... and may grant summary judgment only when 'no reasonable trier of fact could find in favor of the nonmoving party.'" Allen v. Coughlin, 64 F.3d 77, 79 (2d Cir. 1995) (internal citations omitted); see also Doro v. Sheet Metal Workers' Int'l Ass'n, 498 F.3d 152, 155 (2d Cir. 2007) (); Amnesty Am v. Town of W. Hartford, 361 F.3d 113, 122 (2d Cir. 2004) .
It is not the Court's responsibility to resolve any purported issues of disputed facts, but merely to "assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986) (internal citations omitted); accord Cioffi v. Averill Park Cent. Sch. Dist. Bd. Of Educ., 444 F.3d 158, 162 (2d Cir. 2006) (). "A genuine issue of fact for trial exists when there is sufficient evidence on which a jury could reasonably find for the plaintiff." Cioffi, 444 F.3d at 162 (quoting Anderson, 477 U.S. at 252).
As a threshold matter, the Court must determine whether Pennsylvania or New York law applies to the Plaintiffs' successor liability claims.
In both New York and Pennsylvania, a corporation that acquires another's assets is generally not liable for the torts of its predecessor. Schumacher v. Richards Shear Co., 59 N.Y.2d 239, 244-45, 464 N.Y.S.2d 437, 451 N.E.2d 195 (N.Y. 1983); Cont'l Ins. Co. v. Schneider, Inc., 582 Pa. 591, 873 A.2d 1286, 1291 (2005). However, while Pennsylvania recognizes the product line exception to this rule in certain situations, see Kradel v. Fox River Tractor Co., 308 F.3d 328, 331 (3d Cir. 2002), New York does not. Semenetz v. Sterling & Walden, Inc., 7 N.Y.3d 194, 201, 818 N.Y.S.2d 819, 851 N.E.2d 1170 (N.Y. 2006). As New York law more stringently protects successor corporations, the Moving Defendants, who are all incorporated in Pennsylvania, seek to apply it in the instant matter.
This Court exercises jurisdiction over this matter pursuant to its diversity jurisdiction under 28 U.S. § 1332. A district court sitting...
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