Simmers v. American Cyanamid Corp.

• Decision Date: 12 June 1990
• Citation: Simmers v. American Cyanamid Corp., 576 A.2d 376, 394 Pa.Super. 464 (Pa. Super. Ct. 1990)
• Parties: , 59 USLW 2028, 59 USLW 2054 Sherrie SIMMERS and Robert A. Simmers, W/H and Robert S. Simmers, a Minor, by His Parents and Natural Guardians, Sherrie Simmers and Robert A. Simmers, W/H v. AMERICAN CYANAMID CORPORATION, Tenneco, Inc., Tenneco Resin, Inc., Fellows Medical Manufacturing Company, Inc., Chromalloy American Corporation, Chromalloy Pharmaceutical, Inc., Forrest Pharmaceutical Laboratories, Inc., Heyden Products, Inc., the Children's Hospital of Philadelphia, Radiology Department of the Children's Hospital of Philadelphia, Rovena Spenser, M.D., C.E. Koop, M.D. and Joseph Stokes, Jr., M.D. (Two Cases) Appeal of TENNECO RESINS, INC. (Two Cases) Robert J. BOYER, Individually and as Executor of the Estate of Marsha F. Boyer, Deceased v. CHILDREN'S HOSPITAL OF PHILADELPHIA, Heyden Products, American Cyanamid Corp., Tenneco, Inc., Tenneco Resin, Inc. (Formerly "Tenneco Chemical Co"), Fellows Medical Manufacturing Co., Inc., Chromalloy Pharmaceutical, Inc., Forrest Pharmaceutical Laboratories, Inc., Chromalloy American Corporation and Eugene B. Spitz, M.D. (Two Cases) Appeal of CHROMALLOY PHARMACEUTICAL, INC. (Two Cases)
• Court: Pennsylvania Superior Court

Page 376

576 A.2d 376

394 Pa.Super. 464, 59 USLW 2028, 59

USLW 2054

Sherrie SIMMERS and Robert A. Simmers, W/H and Robert S.

Simmers, a Minor, by His Parents and Natural

Guardians, Sherrie Simmers and Robert A.

Simmers, W/H v. AMERICAN CYANAMID CORPORATION, Tenneco, Inc., Tenneco Resin,

Inc., Fellows Medical Manufacturing Company, Inc.,

Chromalloy American Corporation, Chromalloy Pharmaceutical,

Inc., Forrest Pharmaceutical Laboratories, Inc., Heyden

Products, Inc., the Children's Hospital of Philadelphia,

Radiology Department of the Children's Hospital of

Philadelphia, Rovena Spenser, M.D., C.E. Koop, M.D. and

Joseph Stokes, Jr., M.D. (Two Cases)

Appeal of TENNECO RESINS, INC. (Two Cases)

Robert J. BOYER, Individually and as Executor of the Estate

of Marsha F. Boyer, Deceased v. CHILDREN'S HOSPITAL OF PHILADELPHIA, Heyden Products,

American Cyanamid Corp., Tenneco, Inc., Tenneco Resin, Inc.

(Formerly "Tenneco Chemical Co"), Fellows Medical

Manufacturing Co., Inc., Chromalloy Pharmaceutical, Inc.,

Forrest Pharmaceutical Laboratories, Inc., Chromalloy

American Corporation and Eugene B. Spitz, M.D. (Two Cases)

Appeal of CHROMALLOY PHARMACEUTICAL, INC. (Two Cases)

Superior Court of Pennsylvania.

Argued Oct. 25, 1989.

Filed June 12, 1990.

Norbert F. Bergholtz, Philadelphia, for Tenneco Resins, appellant (at 3433 and 3434) and appellee (at 3565 and 3566).

Joseph B. Mayers, West Conshohocken, for Chromalloy Pharmaceutical, appellant (at 3566).

Thomas F. Reilly, Philadelphia, for Simmers, appellees (at 3433 and 3565).

Michael Coren, Cherry Hill, New Jersey, for Boyer, appellee (at 3434 and 3566).

Before MONTEMURO, POPOVICH and CERCONE, JJ.

POPOVICH, Judge:

In this consolidated appeal, we are presented with a question of first impression in Pennsylvania--whether the forum-related contacts and actions of a predecessor corporation may be attributed to its successor for the purposes of establishing in personam jurisdiction.

Herein, appellants, Tenneco Resins, Inc. and Chromalloy Pharmaceutical, Inc., (hereafter "TRI" and "CPI" respectively) challenge the in personam jurisdiction of the Court of Common Pleas of Philadelphia. ¹ To appreciate fully the complexity of this case, a thorough recitation of the underlying facts is necessary, including a history of the product Thorotrast and its corporate lineage.

Thorotrast is the pharmaceutical brand name for colloidal thorium dioxide which is a radioactive contrast dye medium used to perform diagnostic x-rays. By the late 1940's and continuing to the present date, scientific literature and FDA regulations concerning the use of thorium dioxide products explained the medical risks of using Thorotrast, especially an increased risk of cancer. ²

The genealogy of the Thorotrast product line and its manufacturers is complex and is the single most important factor in resolution of the question of jurisdiction. ³ The commercial use of Thorotrast as an x-ray contrast dye was pioneered by the Von Heyden Company of Germany in the early 1930's. At the same time, Heyden Chemical Corporation, a New York Corporation, began to distribute Thorotrast in the United States, including the Philadelphia area where the drug was administered at defendant Children's Hospital, among other medical facilities.

In 1953, Heyden sold its antibiotics division to American Cyanamid, including all trademarks, patents, goodwill and business relating to Thorotrast. The November 3, 1953 sales agreement, in part, provided:

[ARTICLE IV, A(1) ] CYANAMID shall: (1) Duly assume as of the closing provided for herein all obligations of HEYDEN thereafter arising under all licenses, rights, permits, leases, agreements and contracts assigned by HEYDEN to CYANAMID pursuant to this Agreement; provided, however, that with respect to any thereof not identified in the Exhibits attached hereto CYANAMID shall have the option of reassigning the same to HEYDEN, such option to be exercised by notice to HEYDEN within two (2) weeks after an officer of CYANAMID shall have notice thereof. ⁴

[ARTICLE V, B.] HEYDEN: agrees to indemnify, defend and save CYANAMID and/or their successors and assigns harmless from and against any and all claims of whatsoever nature, including the cost of any litigation thereof, arising out of or in connection with the operation of and conduct by HEYDEN of the business of its Antibiotic Division prior to the closing date hereunder, including, without limitation, claims for infringement of patents, defaults in performance of contract obligations, nuisance claims and claims or liability arising through violation of any law or governmental regulation.

After the sale, Heyden continued in business but no longer made or sold Thorotrast.

In 1954, American Cyanamid sold its Thorotrast product line to Testagar and Company. ⁵ Appellees allege that as early as 1949, Testagar distributed Heyden's Thorotrast product line. However, the earliest delivery of Thorotrast by Testagar into Pennsylvania documented in the record occurred in 1961.

In 1962, Testagar underwent a statutory consolidation and became part of the Fellows Medical Manufacturing Company. In 1971, Fellows was merged into FMM, Inc., a wholly owned subsidiary of Chromalloy American Corporation. Later the same year, FMM changed its corporate name to Fellows Medical Manufacturing Corporation, Inc., a Delaware Corporation. The Thorotrast product line was passed to each new corporate entity in succession; each, in turn, manufactured the drug and distributed it to the medical profession, including that of Pennsylvania.

Late in 1973, Chromalloy American incorporated Chromalloy Pharmaceuticals, Inc., appellant CPI. In 1974, CPI became the surviving corporation following a statutory consolidation of numerous Chromalloy American subsidiaries, including Fellows Medical Manufacturing Corporation. While it appears that CPI never manufactured or distributed Thorotrast, CPI, through its O'Neil, Jones and Feldmen Division, had filed a New Drug Application for Thorotrast with the Food and Drug Administration. However, in 1977, CPI withdrew its Thorotrast application. Subsequent thereto, portions of CPI were sold to Forest Laboratories, including the O'Neil, Jones and Feldmen Division which then controlled the Thorotrast line.

Meanwhile, in 1957, Heyden changed its name to Heyden Newport Chemical Corporation. In June of 1963, the Tennessee Gas Transmission Company, commonly known as Tenneco, Inc., acquired all of the assets and liabilities of Heyden Newport by means of a wholly owned subsidiary known as HDN Corporation, a Delaware corporation, created for such purpose. The "Plan of Reorganization," executed by Heyden Newport, Tenneco and HDN, provided: 1) All of Heyden Newport's assets, properties, business and goodwill were to be transferred to HDN in exchange solely for shares of $5.00 par value common stock of Tenneco owned or to be owned by HDN; and 2) Heyden Newport would then dissolve and distribute the Tenneco shares to stockholders of Heyden. In October of 1963, the parties completed the corporate acquisition of Heyden Newport. Heyden Newport then transferred to HDN all of its assets, properties, business and goodwill including the right to use the name Heyden Newport Chemical Corporation for which HDN executed and delivered to Heyden Newport an "Assumption Agreement" under which HDN agreed to pay, perform and discharge, all debts, obligations, contracts and liabilities of Heyden Newport of any kind, character or description, whether accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against on the financial statements of Heyden Newport. Immediately thereafter, Heyden Newport changed its name to Denport Corporation, underwent voluntary dissolution under Delaware corporate law and distributed the Tenneco shares to its stockholders.

In turn, HDN changed its name to Heyden Newport Chemical Corporation, then to Tenneco Chemicals, Inc., and then again to Tenneco Resins, Inc., appellant TRI. The management of former Heyden Newport was retained as a part of the sales agreement. From the moment of their incorporation, TRI and its predecessors in interest were either qualified to do business as a foreign corporation in Pennsylvania or were carrying on a continuous and systematic part of their business in the Commonwealth until TRI voluntarily surrendered its certificate to do so on June 11, 1984. Thereafter, on August 26, 1985, TRI, pursuant to Delaware law, filed a certificate of dissolution.

The Boyer case is a wrongful death and survival action filed on behalf of the estate of Marsha Boyer and her surviving family. On or about April 19, 1949, Marsha Boyer, then five months old, was administered the drug Thorotrast in Children's Hospital of Philadelphia. She first learned of the presence of Thorotrast in her system in February of 1985. Marsha Boyer died on April 26, 1986, at Broad Street Hospital in Philadelphia from a cancer-related illness which appellees allege was induced by Thorotrast. Throughout her life, Mrs. Boyer was a resident of New Jersey, and, at the time of her death, she resided in Stone Harbor, New Jersey.

The Simmers case is factually similar to the Boyer case. Herein, Sherrie Simmers alleges that as a result of the administration of Thorotrast to her on May 31, 1949, at Children's Hospital of Philadelphia, she currently suffers from numerous serious maladies including, but not limited to, fibrosis, lymphatic obstruction with secondary lymphedema and an increased risk of contracting cancer of the bone marrow, liver, kidneys and spleen. Sherrie Simmers, who is also a life-time resident of New Jersey, learned of her Thorotrast problem in 1986. Neither Thorotrast recipient was ever advised of the inherent problems of Thorotrast by any of the defendants below.

Herein, appellants contend that the forum-related actions contacts and actions of a predecessor corporation may not be attributed to its...