Ferro Corp. v. Cookson Group, Plc

• Decision Date: 06 November 2009
• Docket Number: No. 08-3624.,08-3624.
• Parties: FERRO CORPORATION, Plaintiff-Appellant, v. COOKSON GROUP, PLC, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

585 F.3d 946

FERRO CORPORATION, Plaintiff-Appellant, v. COOKSON GROUP, PLC, et al., Defendants-Appellees.

No. 08-3624.

United States Court of Appeals, Sixth Circuit.

Argued: June 19, 2009.

Decided and Filed: November 6, 2009.

ARGUED:

James B. Niehaus, Frantz Ward, LLP, Cleveland, Ohio, for Appellant. Roxann E. Henry, Howrey, LLP, Washington, D.C., for Appellees.

ON BRIEF:

James B. Niehaus, Brian E. Roof, Frantz Ward, LLP, Cleveland, Ohio, for Appellant. Roxann E. Henry, Lisa Kimmel, Howrey, LLP, Washington, D.C., for Appellees.

Before McKEAGUE and WHITE, Circuit Judges, MARBLEY, District Judge.^*

MARBLEY, D.J., delivered the opinion of the court, in which McKEAGUE, J. joined. WHITE, J. (pp. 954-55), delivered a separate concurring opinion.

OPINION

MARBLEY, District Judge.

Plaintiff-Appellant Ferro Corporation ("Ferro") appeals the decision of the district court to grant summary judgment to Defendants-Appellees Cookson Group, plc; Cookson America, Inc.; and Cookson Investments, Inc. (Cookson Group, plc; Cookson America, Inc.; and Cookson Investments, Inc., will be referred to collectively as "Cookson") and dismiss all of Plaintiff-Appellant's claims. For the reasons set forth below, we AFFIRM the judgment of the district court.

I. BACKGROUND

A. Synpro Asset Purchase and Agreement

Ferro competes in the manufacture and sale of plastic additives. It has produced and sold plastic additives since at least 1990 to the present. Prior to October 1995, a Cookson affiliate, Synthetic Products Corporation ("Synpro"), also competed in the plastic additives market. In October 1995, Ferro purchased certain assets of Synpro, including its plastic additives business. After the sale, Cookson and what was left of Synpro (now named SPC Divestitures) were and continue to be part of the same corporate family.

Under the Asset Purchase Agreement ("APA"), Synpro retained all liabilities not expressly assumed by Ferro (the "Retained Liabilities"), including any liability it might have had for actual or alleged pre-closing antitrust violations. Cookson also agreed to defend and indemnify Ferro "from and against any loss, claim, cause of action or liability, cost, or expense . . . that arise out of . . . [a]ll Retained Liabilities of [Synpro] not expressly assumed by Ferro." (Record on Appeal ("ROA") Vol. I, p. 29.) No provision of the APA stated that Cookson or Synpro would defend or indemnify Ferro for Ferro's own conduct.

B. The Antitrust Cases

In early 2003, Ferro and various other competitors in the plastics additives industry received grand jury subpoenas in furtherance of a Department of Justice investigation into alleged antitrust violations. In March 2003, Ferro was named as a defendant in numerous civil lawsuits alleging that various named and unnamed competitors in the plastics additives industry had violated state and federal antitrust laws from January, 1990 through January, 2003. Those cases were eventually consolidated into four cases: the Indirect Purchasers Litigation, the Direct Purchasers Litigation, the PolyOne Litigation, and the California Litigation (altogether the "Antitrust Cases"). Synpro competed in the plastic additives industry during the alleged conspiracy period until October, 1995. Synpro, however, was not specifically named in the complaints in the Antitrust Cases. There were also not any allegations in the complaints against Ferro of successor liability on behalf of Synpro. The complaints in the Antitrust Cases have been amended as recently as March 1, 2006. None of the amended complaints mentions Synpro or Cookson.

Ferro asserts that around September, 2006, during discovery in the Antitrust Cases, it became apparent that the plaintiffs had sued Ferro, at least in part, because the Antitrust plaintiffs believed that Ferro was liable for Synpro's alleged anticompetitive conduct. The APA required that notice be given to Cookson within 30 days of learning of facts or circumstances that give rise to a claim under the APA.

In September 2006, Ferro sought defense and indemnification from Cookson pursuant to the APA. On October 16, 2006, Cookson refused to defend and indemnify Ferro. Ferro then filed the current action seeking damages for Cookson's breach of its duty to defend, and further seeking a declaratory judgment requiring Cookson to defend and indemnify Ferro.

Ferro eventually settled both the Direct Purchasers Litigation and the PolyOne Litigation. The PolyOne litigation settled for $750,000. That settlement does not refer to either Synpro or Cookson. The Direct Purchasers Litigation settled for $5,500,000, and released Ferro and Synpro. The claims against Ferro in the Indirect Purchasers Litigation and the California Litigation remain pending.

Following discovery, Ferro and Cookson filed cross-motions for summary judgment. On April 11, 2008, the district court granted Cookson's motion, denied Ferro's motion, and dismissed all of Ferro's claims. Ferro appeals.

II. JURISDICTION

The district court had diversity jurisdiction pursuant to 28 U.S.C. §§ 1332.¹ Because Ferro has appealed from a final judgment that disposed of all of the parties' claims, we have jurisdiction under 28 U.S.C. § 1291.

III. STANDARD OF REVIEW

We review de novo a district court's grant of summary judgment. Miller v. Admin. Office of the Courts, 448 F.3d 887, 893 (6th Cir.2006). Summary judgment is proper if "there is no genuine issue as to any material fact [such that] the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). But "summary judgment will not lie if the . . . evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering a motion for summary judgment, the court must construe the evidence in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The movant therefore has the burden of establishing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388-89 (6th Cir.1993). But the non-moving party "may not rely merely on allegations or denials in its own pleading." Fed.R.Civ.P. 56(e)(2); see Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Searcy v. City of Dayton, 38 F.3d 282, 286 (6th Cir.1994). The non-moving party must present "significant probative evidence" to show that there is more than "some metaphysical doubt as to the material facts." Moore v. Philip Morris Co., 8 F.3d 335, 339-40 (6th Cir.1993).

The standard of review for cross-motions of summary judgment does not differ from the standard applied when a motion is filed by only one party to the litigation. Taft Broad. Co. v. U.S., 929 F.2d 240, 248 (6th Cir.1991).

The fact that both parties have moved for summary judgment does not mean that the court must grant judgment as a matter of law for one side or the other summary judgment in favor of either party is not proper if disputes remain as to material facts . . . Rather, the court must evaluate each party's motion on its own merits. . . .

Id. (citations omitted).

IV. LAW & ANALYSIS

Ferro filed the current action seeking damages as a result of Cookson's alleged breach of its duty to defend and indemnify, and a declaratory judgment that Cookson is obligated to defend and indemnify Ferro for any loss or liability that arises out of the Antitrust Cases resulting from conduct of Synpro, its employees, or its agents that may have occurred before October, 1995.

The APA that is the source of Ferro's claims is a contract. Construction of a contract is a question of law. In re All Kelley & Ferraro Asbestos Cases, 104 Ohio St.3d 605, 821 N.E.2d 159, 167 (2004) (citations omitted). Thus, "[i]n construing the terms of a written contract, the primary objective is to give effect to the intent of the parties, which . . . rests in the language that they have chosen to employ." Id. (citations omitted). And, "[w]here the terms are clear and unambiguous, a court need not go beyond the plain language of the agreement to determine the rights and obligations of the parties." Id. at 168.

The APA required Cookson to defend and indemnify Ferro "from and against any loss, claim, cause of action or liability, cost, or expense . . . that arise out of . . . [a]ll Retained Liabilities of [Synpro] not expressly assumed by Ferro." (ROA Vol. I, p. 29.) Under the plain language of the APA, the defense and indemnification provision was triggered only by the assertion of claims against Ferro based upon Synpro's "Retained Liabilities," which included any antitrust violations Synpro may have committed pre-closing.

A. Duty to Defend

In the complaints and amended complaints in the Antitrust Cases, Synpro is not named as a defendant, successor liability is not asserted against Ferro based upon its acquisition of Synpro assets, and there are no factual allegations implicating Synpro or its employees in the alleged wrongdoing. Only Ferro was sued for antitrust violations by the Antitrust plaintiffs in the Antitrust Cases.

Ferro, however, contends that the Antitrust plaintiffs, instead of suing Synpro or Cookson, treated Ferro as including pre-APA Synpro, and sought to hold Ferro liable for antitrust violations committed by Synpro.² Ferro argues that even though nothing is apparent in the complaints or the amended complaints in the Antitrust Cases that implicates Synpro, the discovery that took place in those cases reveals that the claims were based, at least in part, upon conduct of Synpro. Ferro asserts that this later-learned information triggered Cookson's duties to defend and to indemnify Ferro.

The duty to defend need not arise solely from the allegations in the complaint, but may arise at a point subsequent to the filing of the...