Ferro Corp. v. Cookson Group, No. 1:06CV3070.

• Decision Date: 11 April 2008
• Docket Number: No. 1:06CV3070.
• Citation: 561 F.Supp.2d 888
• Parties: FERRO CORPORATION, Plaintiff, v. COOKSON GROUP, et al. Defendants.
• Court: U.S. District Court — Northern District of Ohio

561 F.Supp.2d 888

FERRO CORPORATION, Plaintiff, v. COOKSON GROUP, et al. Defendants.

No. 1:06CV3070.

United States District Court, N.D. Ohio, Eastern Division.

April 11, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Brian E. Roof, Gregory R. Farkas, M. Neal Rains, Barbara J. Arison, James B. Niehaus, Frantz Ward, Cleveland, OH, for Plaintiff.

Lisa Kimmel, Roxann E. Henry, Howrey, Washington, DC, Maria A. Del Monaco, Melissa L. Zujkowski, Michael N. Ungar, Ulmer & Berne, Cleveland, OH, for Defendants.

MEMORANDUM OPINION AND ORDER

SARA LIOI, District Judge.

This matter is before the Court on cross-motions for summary judgment. Plaintiff Ferro Corporation ("Ferro" or "Plaintiff) filed a motion for partial summary judgment (Doc. No. 55), seeking a determination that it is entitled to recover on its claim that Defendants Cookson Group pic, Cookson America, Inc., and Cookson Investments, Inc., (collectively, "Cookson" or "Defendants") breached their duty to defend and indemnify Ferro. Cookson opposed Ferro's motion for partial summary judgment, and filed its own motion for summary judgment (Doc. No. 54), asserting that it is entitled to judgment in its favor on each of Ferro's claims. Both motions have been briefed fully, and are ripe for decision.¹

I. Statement of Facts and Procedural Background

Ferro produces and sells chemical products, including plastic additives. On or about October 25, 1995, Ferro entered into an Asset Purchase Agreement (the "APA") whereby Ferro acquired certain assets of Synthetic Products Corporation ("Synpro"), including Synpro's plastic additives business. (Compl. ¶ 14.)² At the time of the APA, Synpro was a subsidiary or affiliate of Cookson. Ferro had engaged independently in the plastic additives business since at least the 1980s, and its acquisition of Synpro's assets supplemented that segment of its existing business. What was left of Synpro remained a part of the Cookson corporate family.

The APA provided that Synpro retained "all liabilities and obligations, whether or not associated with the Business, whether accrued, absolute, contingent, known or unknown, that are not expressly assumed by (Ferro under the APA]." (Defs.' Mot. for Summ. J., Ex. 2 at 5, § 1.4.) The APA further provided that Ferro assumed "no liabilities or obligations of [Synpro], whether such liabilities are or may be direct or indirect, absolute or contingent, or relating to the Business [ ... ]." (Id., § 1.5.)

Section 12.2 of the APA entitled "Indemnification by Cookson and [Synpro]" provided, in pertinent part, that

Cookson and [Synpro], jointly and severally, shall hold harmless, indemnify and defend [Ferro] and permitted successors and assigns from and against any loss, claim, cause of action or liability, cost or expense including, without limitation, fines, penalties, court costs and reasonable attorneys' fees, consultants' fees, disbursements and expenses, that arise out of:

a. Retained Liabilities. All Retained Liabilities of [Synpro] not expressly assumed by [Ferro] pursuant to Section 1.5;

(Id. at 61.)

In May 2003, Ferro revealed in a Securities and Exchange Commission filing that it had received a request for production of documents from the United States Department of Justice regarding an investigation into possible antitrust violations in the plastic additives³ industry. Shortly thereafter, Ferro was named as a defendant in four civil antitrust lawsuits (collectively the "Antitrust Cases").⁴ Plaintiffs in the Antitrust Cases (the "Antitrust Plaintiffs") alleged that Ferro and the other defendants engaged in a price-fixing conspiracy, allocated customers and markets, and committed other unlawful practices designed to raise, maintain and/or stabilize prices artificially for plastic additives. (Compl. ¶ 11.) According to the Antitrust Plaintiffs, this alleged conspiracy existed and continued from January 1990 through January 2003. (Id.) Neither Cookson nor Synpro was named as a defendant in any of the Antitrust Cases, nor do their names appear in the allegations of the complaints in those cases. (See Pl.'s Mot. for Partial Summ. J., Ex. F.) Ferro has since expended significant sums defending the Antitrust Cases, and paid millions of dollars to settle two of the cases.⁵

More than three years after the filing of the first of the Antitrust Cases,⁶ on September 22, 2006, Ferro's Vice President and General Counsel James Bays sent a letter to Cookson demanding that Cookson defend and indemnify Ferro in the Antitrust Cases pursuant to the APA. (Defs.' Mot. Summ. J., Ex. 7.) In the demand letter, Ferro asserted that it had learned that the allegations against Ferro in the Antitrust Cases were based in part upon activities of Synpro that occurred before its acquisition by Ferro. Specifically, the demand letter referenced an inquiry⁷ by the Antitrust Plaintiffs as to whether Synpro President Tom Jennings had a meeting with Nirmal Jain of Chemtura Corporation in 1993. (Id.) Jain subsequently invoked his Fifth Amendment privilege against self-incrimination at his deposition taken in the Antitrust Cases,⁸ and Jennings declined to discuss his involvement in the industry when contacted by Ferro's counsel.⁹

Ferro filed this lawsuit against Cookson on December 22, 2006, claiming breach of contract and seeking a declaration that Cookson is required, pursuant to the APA, to defend and indemnify Ferro for any and all liabilities arising out of the Antitrust Cases resulting from conduct of Synpro that occurred before October 31, 1995. (Doc. No. 1.) Ferro filed an amended complaint on June 15, 2007. (Doc. No. 16.) According to Ferro, the allegations against it in the Antitrust Cases are based, at least in part, upon activities of employees or agents of Synpro. (Compl. ¶ 15.) Ferro also contends that the Antitrust Plaintiffs have taken the position that Ferro's part in the alleged antitrust conspiracy is founded partially upon conduct of Synpro during the alleged conspiracy period. (Id.)

Cookson filed a motion for judgment on the pleadings on July 16, 2007, asserting that even if Ferro proved all the allegations in the amended complaint, it would not be entitled to the relief sought. (Doc. No. 20.) Specifically, Cookson contended in its motion for judgment on the pleadings that the joint and several nature of antitrust liability for the conduct of coconspirators meant that any liability Ferro faced as a defendant in the Antitrust Cases existed without regard to the liability of coconspirators, whether named or unnamed. Ferro opposed Cookson's motion (Doc. No. 21), and Cookson replied. (Doc. No. 24.) On December 14, 2007, the Court informed the parties that it was converting Cookson's motion for judgment on the pleadings to one for summary judgment, and permitted the parties to supplement the record and file additional briefing. Filing of the instant motions ensued. The matter has been briefed fully and is ripe for decision.

II. Law and Analysis

A. Standard of Review

Fed.R.Civ.P. 56(c) governs summary judgment motions and provides:

The judgment sought shall be rendered forthwith if 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 a judgment as a matter of law [ ... ].

Rule 56(e) specifies the materials properly submitted in connection with a motion for summary judgment:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein [...]. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denial of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

However, the movant is not required to file affidavits or other similar materials negating a claim on which its opponent bears the burden of proof, so long as the movant relies upon the absence of the essential element in the pleadings, depositions, answers to interrogatories, and admissions on file. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In reviewing summary judgment motions, this Court must view the evidence in a light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); White v. Turfway Park Racing Ass'n, 909 F.2d 941, 943-44 (6th Cir.1990). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Determination of whether a factual issue is "genuine" requires consideration of the applicable evidentiary standards. Thus, in most civil cases the Court must decide "whether reasonable jurors could find by a preponderance of the evidence that the [non-moving party] is entitled to a verdict." Id. at 252, 106 S.Ct. 2505. "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50, 106 S.Ct. 2505 (citations omitted).

Summary judgment is appropriate whenever the non-moving party fails to make a showing sufficient to establish the existence of an...