Lee v. Certainteed Corp.

Decision Date16 July 2015
Docket NumberNo. 5:13–CV–826–FL.,5:13–CV–826–FL.
Citation123 F.Supp.3d 780
CourtU.S. District Court — Eastern District of North Carolina
Parties Larry Winslowe LEE and Susan Provost Lee, Plaintiffs, v. CERTAINTEED CORPORATION; Formosa Plastics Corporation U.S.A., sued individually and as parent, alter ego and successor-in-interest to J–M Manufacturing Company and to J–M A/C Pipe Corporation ; Genuine Parts Company, d/b/a National Automotive Parts Association (a/k/a NAPA); J–M Manufacturing Company, Inc., sued individually and as parent and alter ego to J–M A/C Pipe Corporation; Kawasaki Motors Corp., U.S.A.; Metropolitan Life Insurance Company; Pneumo Abex LLC, sued individually and as successor-in-interest to Abex Corporation and as successor-in-interest to American Brakeblok; and Yamaha Motor Corporation, U.S.A., Defendants.

Kevin W. Paul, Simon Greenstone Panatier Bartlett, P.C., Dallas, TX, Janet Ward Black, Ward Black Law, Greensboro, NC, for Plaintiffs.

Charles M. Sprinkle, III, Moffatt G. McDonald, Scott E. Frick, William David Conner, Haynsworth Sinkler Boyd, P.A., Daniel B. White, Stephanie G. Flynn, Gallivan, White & Boyd, P.A., Greenville, SC, Elizabeth R. Geise, Schiff Hardin LLP, Washington, DC, Heather Bell Adams, Matthew Patrick McGuire, Richard Anthony McAvoy, Ryan P. Ethridge, Alston & Bird LLP, Durham, NC, Carrie Lin, Manion Gaynor & Manning, LLP, San Francisco, CA, Christopher O. Massenburg, Manion Gaynor & Manning LLP, New Orleans, LA, James M. Dedman, IV, Gallivan, White & Boyd, P.A., Charlotte, NC, John T. Hugo, Manion Gaynor & Manning, LLP, Boston, MA, Sarah M. Bowman, Volvo Group, Greensboro, NC, Keith E. Coltrain, Wall Templeton & Haldrup, P.A., Raleigh, NC, Timothy W. Bouch, Leath Bouch & Seekings, Charleston, SC, for Defendants.


LOUISE W. FLANAGAN, District Judge.

This case, originally brought against 23 defendants where the eight above-captioned now remain, comes before the court on motions premised on Rule 56 of the Federal Rules of Civil Procedure separately filed March 10, 2015, on behalf of defendants J–M Manufacturing Company, Inc. ("JMM") (DE 151) and Formosa Plastics Corporation U.S.A. ("Formosa") (DE 148). The issues raised are ripe for consideration. For the reasons explained, the court grants defendant Formosa's summary judgment motion, dismissing it from the case, and grants in part and denies in part the partial summary judgment motion of defendant JMM.


Plaintiffs, residents of Wake County, North Carolina, complain of personal injury and loss of consortium, where plaintiff Larry Winslowe Lee ("Larry Lee") was diagnosed with mesothelioma

on or about September 13, 2013. Plaintiffs allege that his condition resulted from exposure to asbestos during his employment as mechanics' helper, maintenance laborer, inspector, construction worker, and salesman, in addition to automotive maintenance work performed on his own personal vehicles and those of his family.

Plaintiffs bring a total of eight claims for relief entitling them, it is alleged, to recover actual and punitive damages, lost wages and special damages. Five claims are asserted against all defendants with the exception of defendant Metropolitan Life Insurance Company ("MetLife"). With respect to claims against all defendants excluding Metlife, defendants are alleged to have: 1) acted negligently in putting asbestos or asbestos-containing products into interstate commerce (First Cause); 2) breached implied warranties that asbestos materials were of good and merchantable quality and fit for their intended use (Second Cause); 3) acted willfully and wantonly in exposing plaintiff Larry Lee to asbestos (Third Cause); 4) committed false representation and fraud regarding the dangers of asbestos exposure to plaintiff Larry Lee (Fourth Cause)1 ; and failed to warn plaintiff Larry Lee of the dangers associated with asbestos exposure (Fifth Cause). In a separate claim, defendant MetLife is alleged to have engaged in a conspiracy and to be liable for punitive damages, where, it is asserted, Metlife aided and abetted the negligence and marketing of asbestos-containing products (Sixth Cause). Defendants Formosa and JMM are also the subject of a separate claim premised on conspiracy and punitive damages liability for the manufacture and sale of asbestos-containing products (Seventh Cause). Plaintiff Susan Provost Lee ("Susan Lee") seeks also to recover for her loss of consortium (Eighth Cause).

Defendants deny liability. As noted, a number of defendants have been dismissed from the case.2 Four of the remaining eight defendants have moved in some fashion for summary judgment.

Defendant JMM's motion is one for partial summary judgment. With reliance on plaintiff Larry Lee's deposition, the deposition of his son, Robert Lee, and order of the United States Bankruptcy Court for the Southern District of New York, as clarified, concerning disposition of certain assets in Chapter 11 proceeding involving Johns–Manville Sales Corporation, Johns–Manville Corporation, and Manville Corporation (collectively, "Johns–Manville"), together with the asset purchase and sale agreement therein referenced, it moves for judgment in its favor on any attempt to hold it liable for plaintiff Larry Lee's alleged work with and around asbestos-cement pipe manufactured by Johns–Manville and plaintiffs' claims for punitive damages. Defendant Formosa seeks entry of judgment in its favor on all claims against it, with reliance on plaintiff Larry Lee's deposition and its responses to plaintiffs' interrogatories. In mounting a vigorous defense, plaintiffs rely on a host of evidentiary materials.3

Defendant Genuine Parts seeks partial summary judgment on plaintiffs' third cause of action premised on alleged willful and wanton conduct. Defendant Pneumo Abex LLC ("Pneumo") seeks to join in these motions by defendants JMM, Formosa, and Genuine Parts.4 The court will address in successive order(s) defendant Pneumo's stance, which plaintiffs characterize as an improper motion, as well as the partial summary judgment motion filed by Genuine Parts.

Also remaining to be addressed is defendant JMM's motion to strike and for protective order regarding one of the exhibits relied upon by plaintiffs in defense of its motion, which defendant contends is protected by attorney-client privilege, should be stricken from the court's file, and returned or destroyed by plaintiffs. Without minimizing the significance of the issues therein raised, where no reference is made to that exhibit in deciding JMM's partial summary judgment motion, the court need not now address its motion to strike and for protective order, on which separate order will issue. The court now turns its attention to the motions of defendants JMM and Formosa squarely before it.


Due to considerable overlap in the allegations and evidence against defendants JMM and Formosa, the court consolidates its discussion of the relevant, uncontested facts below.

A. Defendants' Organization and Operations

Defendant Formosa manufactures chemical plastic raw materials. (Alice Nightingale ("Nightingale") Dep., 8:5–6) (DE 166–10).5 Defendant JMM manufactures products including pipes made from polyvinyl chloride ("PVC"), polyethylene ("PE"), and high-density polyethylene ("HDPE"). (James Reichert ("Reichert") Dep., 14:12–16) (DE 164–1).6

From February 1984 through October 2005, defendant Formosa was the parent of defendant JMM. (Nightingale Dep. 10:6–10). It became sole shareholder of defendant JMM in 1984. (Nightingale Dep. 10:8–13, 24:21–26:1).

Defendant JMM came into existence in 1983, when it obtained assets previously held by Johns–Manville. (Asset Purchase & Sale Agreement, Art. I, § 1.1) (DE 158–8); (Reichert Dep., 16:19–24; 17:8–10; 21:19–22:1; 27:19–28:5). In particular, defendant JMM obtained the PVC pipe division of Johns–Manville. (Asset Purchase & Sale Agreement, Art. I, § 1.1); (Reichert Dep., 16:19–24). In addition to PVC pipe, Johns–Manville also produced asbestos cement pipe, also known as "transite" or "A/C" pipe. (Reichert Dep., 14:22–15:5).

The asbestos cement pipe division of Johns–Manville was sold to J–M A/C Pipe Company ("JMAC"). (Reichert Dep., 16:22–24). A Dun & Bradstreet Report from October 31, 1985, states that JMAC's stock "is reportedly 100% owned by Frontier Corp., Liberia and is controlled by FormosaPlasticsGrouop [sic], Taipei, Taiwan." (DE 166–17).

Defendant JMM and JMAC produced a "J–M Policy and Procedure Manual" in April 1986 which defined "J–M" as "[t]he Company, includ[ing] J–M Manufacturing Co., Inc. and J–M A/C Pipe Corporation." (J–M Policy & Proc. Manual, § 102.5) (DE 166–13). The J–M Policy and Procedure Manual further provides that

J–M is part of Formosa–USA, which in turn is associated with the Formosa Plastic Group. Formosa Plastic Group consists of Nan Ya Plastics, Formosa Plastic Corporation and Formosa Chemical & Fiber; and thirteen other companies as well as Ming–Chi Institute of Technology and Chang Gung Memorial Hospital Foundation. The leadership for FPG is provided by Chairman Y.C. Wang and his family.

(Id., § 104.3).

In the course of obtaining Johns–Manville's PVC pipe division, defendant JMM also obtained Johns–Manville's plants in Denison, Texas, and Stockton, California. (Asset Purchase & Sale Agreement, Art. I, § 1.1(A)); (Reichert Dep., 27:19–28:5). JMAC operated out of the Denison and Stockton plants along with defendant JMM. (Reichert Dep., 17:18–23; 27:19–22). Under Johns–Manville, the Denison and Stockton plants had manufactured PVC pipe and asbestos cement pipe. (Id. 12:24–13:22; 14:22–15:5). The plants continued to manufacture both types of pipe after the turnover, with defendant JMM producing PVC pipe and JMAC producing asbestos cement pipe. (Id., 16:2–6; 17:20–18:6; 26:4–22; 28:1–8); (Def's. Resp. to Interrogs., 8, 10) (DE 164–2). Although defendant JMM did not manufacture asbestos cement pipe, it did sell the asbestos cement pipe manufactured by JMAC. (Reiche...

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