Gee v. Tenneco, Inc.

Decision Date26 March 1980
Docket NumberNo. 78-3168,78-3168
Citation615 F.2d 857
PartiesAlice C. GEE, as Executrix of the Will of Tom B. Gee, and Alice C. Gee, Individually, Plaintiff-Appellant, v. TENNECO, INC., as Successor to Heyden Newport Chemical Corporation and Does I through X, inclusive, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

David Jaroslawicz, New York City, argued for plaintiff-appellant; David H. Greenberg, Beverly Hills, Cal., Julien & Schlesinger, P. C., New York City, on the brief.

Dov M. Grunschlag, Steinhart, Falconer & Morgenstein, San Francisco, Cal., argued for defendant-appellee; Joseph T. C. Hart, Fulton, Duncombe & Rowe, New York City, on the brief.

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

Before WALLACE and ANDERSON, Circuit Judges, and SOLOMON, * Senior District Judge.

J. BLAINE ANDERSON, Circuit Judge:

Plaintiff Alice C. Gee appeals from the granting of summary judgment in favor of defendant Tenneco, Inc. on Gee's complaint against Tenneco for the wrongful death of her husband, Tom B. Gee, and for other claims arising from his death. We affirm in part and reverse in part.


The district court's jurisdiction over this matter was based on diversity of citizenship. 28 U.S.C. § 1332. Jurisdiction on appeal derives from our jurisdiction over appeals from final decisions of the district courts. 28 U.S.C. § 1291.

We note initially an issue of timeliness in the filing of Gee's Notice of Appeal. The district court's Order Granting Motion for Summary Judgment was filed on July 10, 1978. Gee's Notice of Appeal was received by the district court clerk's office on August 7, 1978, but the filing fee was not paid until August 16, 1978. Where a notice of appeal is physically placed in the hands of the clerk's office within the prescribed time limit for filing, but the fee is not paid and filing does not take place until the limit expires, the notice may be treated as timely. See, e. g., Halfen v. United States, 324 F.2d 52 (10th Cir. 1963). We treat Gee's Notice of Appeal accordingly.


Summary judgment, under Fed.R.Civ.Pro. 56(c), is rendered "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." In reviewing a grant of a motion for summary judgment, the court on appeal must draw all possible inferences from the record in favor of the non-moving party. See, e. g., Ruffin v. County of Los Angeles, 607 F.2d 1276, 1279, (9th Cir. 1979).

In the present case, defendant Tenneco included with its Motion for Summary Judgment an affidavit by George S. Flint, Assistant Secretary of Tenneco, Inc., and the Vice President, Secretary and General Counsel of Tenneco's subsidiary, Tenneco Chemicals, Inc., and also included various exhibits. Gee filed a brief in opposition to Tenneco's motion, but filed no affidavits containing factual allegations contrary to those found in the Flint affidavit. In opposing a motion for summary judgment, a party normally must come forward with allegations demonstrating a factual dispute which calls for a trial. However, where the material submitted by the moving party is insufficient or demonstrates on its face genuine issues of material fact, the non-moving party need not file any affidavits or other supporting material. See, e. g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 439 (9th Cir. 1979).

In the absence of contravening affidavits from Gee, our task on this appeal is to determine whether the affidavit and documents submitted by Tenneco raise a genuine issue of material fact, and whether Tenneco is entitled to judgment as a matter of law.


The material facts in this appeal mainly involve the corporate evolution of Tenneco and raise issues of the liability of successor corporations for torts committed by their predecessors. We here set out facts which are largely undisputed. The nuances and inferences which the parties urge upon us are discussed at length later in this opinion.

In 1944, while serving in the Armed Forces, plaintiff's decedent, Tom B. Gee, was given a substance known as "Thorotrast," 1 a contrast dye material used for X-ray purposes. According to the allegations in Gee's complaint, the Thorotrast dosage eventually caused her husband to contract a malignant tumor, and his death resulted on August 28, 1976.

Thorotrast was manufactured and sold by Heyden Chemical Corporation, a New York corporation, beginning some time in the early 1930's. Following a consolidation in 1943, Heyden Chemical Corporation became a Delaware corporation. Heyden Chemical continued the manufacture and sale of Thorotrast through its antibiotic division until 1953, when the antibiotic division and its assets were sold to American Cyanamid Company, a Maine corporation. Pursuant to the terms of the sales agreement between Heyden and American Cyanamid, Heyden agreed to indemnify Cyanamid against claims arising from the operation of the antibiotic division prior to December 1953. Sometime in 1954, Cyanamid sold the Thorotrast business to the Testagar division of the Fellows Medical Manufacturing Company, Inc. of Detroit, Michigan.

Heyden continued to do business following the sale of the antibiotic division, though it ceased the manufacture and sale of Thorotrast. In 1957 Heyden changed its name to Heyden Newport Chemical Corporation.

In October 1963, HDN Corporation, a Delaware corporation, entered into an agreement whereby HDN acquired all of the assets of Heyden, a transaction whose precise classification is a matter of dispute between the parties. Upon completion of the transfer of its assets to HDN, Heyden changed its name to Denport Corporation, and was subsequently dissolved. HDN thereupon acquired the name "Heyden Newport Chemical Corporation," which was changed two years later to "Tenneco Chemicals, Inc." Tenneco Chemicals, Inc. is a subsidiary of Tenneco, Inc., formerly Tennessee Gas Transmission Company.

The consideration received by Heyden Newport for the 1963 transaction with HDN consisted solely of a certain number of shares of common stock in Tennessee Gas Transmission to be delivered to Heyden and promptly distributed to the shareholders of Heyden upon surrender of their certificates of stock in the dissolved corporation.

Heyden, HDN, and Tennessee Gas Transmission memorialized the 1963 agreement in a document labeled a "Plan of Reorganization," included with Tenneco's summary judgment motion as Exhibit 2. The Plan of Reorganization contained a number of provisions dealing with HDN's assumption of Heyden Newport's pre-1963 liabilities. Each of these provisions is discussed at greater length later in this opinion.

There is apparently no dispute that neither HDN, the second Heyden Newport Chemical Corporation, Tenneco Chemicals, Inc., nor Tenneco, Inc., has ever engaged in the manufacture or sale of Thorotrast. Gee has advanced several theories, however, in favor of imposing liability upon Tenneco for her husband's wrongful death. Gee argues that HDN and Tennessee Gas Transmission expressly assumed Heyden Newport's liabilities in the 1963 Plan of Reorganization, and argues further that certain theories of corporate successor liability impose liability here in any event. Gee also urges that we find as a matter of law that Tenneco had a duty to warn her husband of Thorotrast's dangers.

A. Conflicts of Law and Discovery of the Applicable Law

The court below, sitting as a federal district court in a diversity action, was obliged to apply the substantive law of the state in which it sat, including the state's choice-of-law rules. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

Tenneco here argues that a conflict exists between the laws of Delaware and California on the question of the liability of a corporate successor for the torts of its predecessor. California, the forum state here, follows a variation on the governmental interest analysis approach to resolving conflicts of law known as the "comparative impairment" analysis. See Offshore Rental Company, Inc. v. Continental Oil Co., 22 Cal.3d 157, 583 P.2d 721, 148 Cal.Rptr. 867 (1978); Bernhard v. Harrah's Club, 16 Cal.3d 313, 546 P.2d 719, 128 Cal.Rptr. 215, cert. denied, 429 U.S. 859, 97 S.Ct. 159, 50 L.Ed.2d 136 (1976). While we are inclined to believe that California courts would apply California law in this case, we find it unnecessary to so decide here.

Tenneco urges the application of Delaware law on certain issues; however, we find in favor of Tenneco on those issues even if California law be applied. Consequently, we assume the applicability of California's substantive law on successor liability, unless otherwise indicated.

In ascertaining the law of California, we are guided by certain well-established principles. The task of a federal court in a diversity action is to approximate state law as closely as possible in order to make sure that the vindication of the state right is without discrimination because of the federal forum. Douglass v. Glenn E. Hinton Investments, Inc., 440 F.2d 912, 915 (9th Cir. 1971). In cases where the highest appellate court of the state has not spoken, well-considered dicta should not be ignored. See, e. g., Rocky Mountain Fire & Casualty Company v. Dairyland Insurance Company, 452 F.2d 603, 604 (9th Cir. 1971); Priest v. American Smelting & Refining Co., 409 F.2d 1229, 1232 (9th Cir. 1969); United States Fidelity & Guaranty Co. v. Anderson Construction Co., 260 F.2d 172, 176, n.17 (9th Cir. 1958).

On appeal, we are limited in our review of the district court's interpretation of the law of the state in which it sits. We do not...

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