Motion 4 - product liability motion for directed verdict
John N. Scholnick, Heidi K. Oertle, Shelley L. Merkin, Schiff Hardin LLP, 233 South Wacker Drive, Suite 6600, Chicago, Illinois 60606-6473, (312) 258-5500, Firm ID #90219.
Honorable Clare E. McWilliams.
- THE DIRECTED VERDICT STANDARD
- I. PLAINTIFF CANNOT SUSTAIN HIS BURDEN OF PROOF THROUGH RELIANCE ON THE 1993 ANIMAL STUDY
- A. BASF Corporation Is Not Liable For The Actions Or Inactions Of BASF SE
- B. Any Knowledge BASF Corporation Had Of The 1993 Animal Study After 2001 Does Not Create A Duty To Plaintiff
- II. BASF CORPORATION IS ENTITLED TO A DIRECTED VERDICT ON PLAINTIFF'S CLAIM FOR NEGLIGENCE
- A. BASF Corporation Did Not Owe Plaintiff A Duty
- 1. BASF Corporation Did Not Owe Plaintiff a Duty for Plaintiff's Exposure to Diacetyl Supplied by Other Companies
- 2. Plaintiff Did Not Establish that He was Exposed to BASF Corporation-Supplied Diacetyl
- B. BASF Corporation Did Not Fail To Warn Plaintiff
- C. BASF Corporation Did Not Proximately Cause Plaintiff's Injury
- 1. Plaintiff Did Not Satisfy the Thacker Test
- 2. Plaintiff Did Not Establish that Modified Warnings Would Have Prevented H is Lung Condition
- III. BASF CORPORATION IS ENTITLED TO A DIRECTED VERDICT ON PLAINTIFF'S CLAIM FOR STRICT LIABILITY
- A. Diacetyl Is Not Unreasonably Dangerous
- B. BASF Corporation-Supplied Diacetyl Did Not Proximately Cause Plaintiff's Lung Condition
- C. BASF Corporation Did Not Know, Nor Should It Have Known, Of An Unreasonable Danger Posed By Diacetyl
- IV. BASF CORPORATION IS ENTITLED TO A DIRECTED VERDICT BECAUSE PLAINTIFF'S CLAIMS ARE BARRED BY THE STATUTE OF LIMITATIONS
Plaintiff had his opportunity to present his evidence in full to the Court. That evidence is insufficient as a matter of law to support Plaintiff's allegations that BASF Corporation is liable under theories of negligence or strict liability. Accordingly, BASF Corporation is entitled to entry of a directed verdict in its favor.
A directed verdict should be entered where all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand. Pedrick v. Peoria & E. R. Co., 37 Ill. 2d 494, 510, 229 N.E.2d 504, 513 (Ill. 1967) ; see also Mengelson v. Ingalls Health Ventures, 323 Ill. App. 3d 69, 74, 751 N.E.2d 91, 95 (1st Dist. 2001) (same). A defendant is entitled to a directed verdict where the plaintiff has not established a prima facie case, e.g., Sullivan v. Edward Hosp., 209 Ill. 2d 100, 123, 806 N.E.2d 645, 660 (Ill. 2004), or cannot point to evidence “demonstrating a substantial factual dispute,” City of Mattoon v. Mentzer, 282 Ill. App. 3d 628, 634, 668 N.E.2d 601, 605 (4th Dist. 1996) (emphasis in original); Kim v. Mercedes-Benz, U.S.A., Inc., 353 Ill. App. 3d 444, 461, 818 N.E.2d 713, 727 (1st Dist. 2004).
The direction of a verdict does not require a complete absence of evidence on the side against which the verdict is directed, for the right to resolution of issues by the jury exists only if there are factual disputes of some substance. Poelker v. Warrensburg Latham Comm. Unit School Dist. No. 11, 251 Ill. App. 3d 270, 276, 621 N.E.2d 940, 946 (4th Dist. 1993). Plaintiff must present at least some evidence on every essential element of his cause of action or the defendant is entitled to judgment in his favor as a matter of law. Nastasi v. United Mine Workers of Am. Union Hosp., 209 Ill. App. 3d 830, 837, 567 N.E.2d 1358, 1363 (5th Dist. 1991). A directed verdict is still proper where there is some evidence supporting the nonmovant which loses its significance when viewed in the context of all the evidence. Romero v. Ciskowski, 137 Ill. App. 3d 529, 534, 484 N.E.2d 1150, 1154 (1st Dist. 1985).
I. PLAINTIFF CANNOT SUSTAIN HIS BURDEN OF PROOF THROUGH RELIANCE ON THE 1993 ANIMAL STUDY.
Much of Plaintiff's evidence in this case focused on BASF Corporation's alleged failure to publish a 1993 animal study. But that study was not conducted by BASF Corporation, nor is there evidence that BASF Corporation had any knowledge of the study before at least 2001.
A. BASF Corporation Is Not Liable For The Actions Or Inactions Of BASF SE.
Plaintiff's claims rely on piercing the corporate veil between BASF Corporation and BASF SE, the entity that conducted the study. However, “[i]t is a fundamental principle that a corporation is a legal entity that is separate and distinct from ... other corporations with which it may be connected.” Gass v. Anna Hosp. Corp., 392 Ill. App. 3d 179, 185, 911 N.E.2d 1084, 1090 (5th Dist. 2009) (citing Main Bank of Chicago v. Baker, 86 Ill. 2d 188, 204 (1981) ); Old Orchard Urban Ltd. P'ship v. Harry Rosen, Inc., 389 Ill. App. 3d 58, 69-70, 904 N.E.2d 1050, 1061 (1st Dist. 2009) (“Illinois regards a parent corporation as a separate legal entity from a wholly owned subsidiary, even where the two entities have mutual dealings.”).
A plaintiff who seeks to have the court apply an exception to the rule of separate corporate existence “must seek that relief in his pleading.” Gass, 392 Ill. App. 3d 179, 911 N.E.2d 1084; see also Pederson v. Paragon Pool Enters., 214 Ill. App. 3d 815, 822, 574 N.E.2d 165, 169 (1st Dist. 1991) (citing South Side Bank v. T.S.B. Corp., 94 Ill. App. 3d 1006, 1010, 419 N.E.2d 477 (1981) and Bevelheimer v. Gierach, 33 Ill. App. 3d 988, 993, 339 N.E.2d 299 (1975) for the rule that a party who seeks to have the court apply an exception to the rule of separate corporate existence must seek that relief in his pleading). A plaintiff seeking to pierce the corporate veil must also make a substantial showing that (1) there is such a unity of interest and ownership that the separate personalities of the corporations no longer exist, and (2) circumstances exist such that adherence to the fiction of a separate corporate existence would sanction a fraud, promote injustice, or promote inequitable consequences. Gass, 392 Ill. App. 3d at 186, 911 N.E.2d at 1091; Main Bank of Chicago v. Baker, 86 Ill. 2d 188, 205, 427 N.E.2d 94, 101 (1981) (“Generally, before the separate corporate identity of one corporation will be disregarded and treated as the alter ego of another, it must be shown that it is so controlled and its affairs so connected that it is a mere instrumentality of another, and it must further appear that observance of the fiction of separate existence would, under the circumstances, sanction a fraud or promote injustice.”); Sumner Realty Co. v. Willcott, 148 Ill. App. 3d 497, 502, 499 N.E.2d 554, 557 (5th Dist. 1986) (“[T]he party seeking to have the corporate entity disregarded must come forward with a substantial showing that one corporation is really a dummy or sham for another.”).
In determining whether the “unity of interest and ownership” prong of the piercing-the-corporate-veil test is met, a court generally will not rest its decision on a single factor, but will examine many factors, including:
(1) inadequate capitalization; (2) failure to issue stock; (3) failure to observe corporate formalities; (4) nonpayment of dividends; (5) insolvency of the debtor corporation; (6) nonfunctioning of the other officers or directors; (7) absence of corporate records; (8) commingling of funds; (9) diversion of assets from the corporation by or to a stockholder or other person or entity to the detriment of creditors; (10) failure to maintai arms-length relationships among related entities; and (11) whether, in fact, the corporation is a mere facade for the operation of the dominant stockholders.
Gass, 392 Ill. App. 3d at 186, 911 N.E.2d at 1091. “[T]he use of common officers and directors of itself does not render one corporation liable for the obligations of another.” Main Bank of Chicago, 86 Ill. 2d at 204, 427 N.E.2d at 101; Gass 392 Ill. App. 3d at 185, 911 N.E.2d at 1090 (“Directors and officers holding positions with a parent corporation and its subsidiary can and do change hats to represent the two corporations separately, despite their common ownership.”). The Illinois Supreme Court recognizes that “these practices are common and exist in most parent-subsidiary relationships.” Main Bank of Chicago, 86 Ill. 2d at 204-05, 427 N.E.2d at 101; Old Orchard, 389 Ill. App. 3d at 68, 904 N.E.2d at 1060 (“Parent corporations necessarily direct and control some aspects of their subsidiaries' businesses.”). “To hold otherwise would render virtually every subsidiary the alter ego of its parent.” Logal v. Inland Steel Indus., Inc., 209 Ill. App. 3d 304, 310, 568 N.E.2d 152, 157 (1st Dist. 1991).
Plaintiff did not allege any misconduct by BASF SE in his pleadings, and BASF Corporation learned for the first time that Plaintiff would seek to pierce the corporate veil between BASF Corporation and BASF SE only a few weeks before this trial began. Notwithstanding Plaintiff's failure to properly plead the allegations he now apparently seeks to assert, he made no showing of “unity of interest and ownership” between BASF Corporation and BASF SE during this case. Plaintiff did not introduce any evidence regarding the corporate formalities observed by the two companies or any evidence that the two companies maintained anything other than arms-length relationships. Plaintiff simply made a number of conclusory statements in an effort to convince the jury that it should infer that BASF Corporation and BASF SE are one and the same. However, the Illinois Appellate Court has held that piercing the corporate veil was not justified when “[the subsidiary] observed corporate formalities, held substantial inventory and assets, and conducted their own business separate from [the parent].” Old Orchard, 389 Ill. App. 3d at 70, 904 N.E.2d at 1062; Gass, 392 Ill. App. 3d at 188, 911 N.E.2d at 1092 (The court found that the plaintiff “failed to allege or present facts involving the unity-of-interest factors or the injustice that would result from the recognition of the separate corporate entities” after the plaintiff presented “conclusory statements that [the parent corporation's] ownership and acquisition of [the subsidiary], along with their common executives, were indicative of a unity of interest and ownership between the companies.”). Plaintiff also made no showing regarding any injustice that would result from the Court's failure to pierce the corporate veil in this case.
B. Any Knowledge BASF Corporation Had Of The 1993 Animal Study After 2001 Does Not Create A Duty To Plaintiff.
The evidence Plaintiff has introduced has established, at most, that BASF Corporation may have been aware of the 1993 animal study as early as 2001. This knowledge cannot create any duty on behalf of BASF Corporation prior to 2001. BASF Corporation does not have a duty to warn regarding information of which it is not itself aware. Illinois State Trust Co. v. Walker Mfg. Co., 73 Ill. App. 3d 585, 589, 392 N.E.2d 70, 73 (5th Dist. 1979). In addition, the fact that BASF Corporation may have been aware of the animal study after 2001, does not create a duty on behalf of BASF Corporation to warn other suppliers of diacetyl., or the customers of those suppliers See Hollywood Trucking, Inc. v. Watters, 385 Ill. App. 3d 237, 241-42, 895 N.E.2d 3, 7-8 (5th Dist. 2008). No duty exists without a direct or special relationship between the parties. Id. Accordingly, while BASF Corporation may have a duty to an individual who is directly exposed to its product, this duty is not so broad as to extend to anyone who uses, or comes into contact with, the same type of product sold by others. Smith v. Eli Lilly & Co., 137 Ill. 2d 222, 265-66, 560 N.E.2d 324, 343 (1990). Accordingly, without sustaining his burden of proving that he was exposed to BASF Corporation-supplied diacetyl, Plaintiff cannot establish that BASF Corporation owed him any duty, regardless of what information was contained in the 1993 animal study.
II. BASF CORPORATION IS ENTITLED TO A DIRECTED VERDICT ON PLAINTIFF'S CLAIM FOR NEGLIGENCE.
Plaintiff's negligence claim is based on BASF Corporation's alleged failure to warn Plaintiff of the possible hazards of diacetyl. A failure-to-warn claim requires a plaintiff to come forth with evidence showing:
1. the alleged tortfeasor had a duty to warn him of the hazards of the product;
2. the alleged tortfeasor failed to warn him of the hazards of the product; and
3. the alleged tortfeasor's failure to provide a warning to the plaintiff was the proximate cause of his injuries.
Nolan v. Weil-McLain, 232 Ill. 2d 416, 441, 910 N.E.2d 549, 562 (2009) ; Thacker v. UNR Indus., 151 Ill. 2d 343, 362-63, 603 N.E.2d 449, 458-59 (1992).
Plaintiff failed to introduce sufficient evidence to sustain his cause of action for negligence. Specifically, Plaintiff failed to present sufficient evidence that BASF Corporation had any duty to warn Plaintiff regarding diacetyl. Additionally, Plaintiff failed to establish that BASF Corporation knew or should have known that diacetyl presented a potential health hazard, and further failed to provide evidence that inadequate warnings were a proximate cause of Plaintiff's lung condition, i.e., that Plaintiff would have changed his conduct or that his lung condition would have been prevented had BASF Corporation modified its MSDS.
A. BASF Corporation Did Not Owe Plaintiff A Duty.
Plaintiff did not offer evidence sufficient to establish a duty owed to him by BASF Corporation. It is well-settled that a defendant cannot be held liable unless it owed a duty to the plaintiff and it breached that duty causing harm to the plaintiff. Bajwa v. Met. Life. Ins. Co., 208 Ill. 2d 414, 421, 804 N.E.2d 519, 526 (2004). The question of duty is one of law for the Court, particularly suited to resolution on directed verdict. Marshall v. City of Centralia, 143 Ill. 2d 1, 6, 570 N.E.2d 315, 317 (1991). In determining whether the defendant owes a duty to the plaintiff, the Court:
must determine whether there is a relationship between the parties requiring that a legal obligation be imposed upon one for the benefit of the other. The factors relevant to the court's imposition of a duty include the reasonable foreseeability of injury, the likelihood of such injury, the magnitude of guarding against the injury, and the consequences of placing that burden on the defendant.
Washington v. City of Chicago, 188 Ill. 2d 235, 238, 720 N.E.2d 1030, 1032-33 (1999) (internal citations omitted); Bajwa, 208 Ill. 2d at 421-22, 804 N.E.2d at 521.
The duty to warn arises only where the manufacturer knows or should know of the danger and where unequal knowledge exists on the part of the user. Illinois State Trust Co., 73 Ill. App. 3d at 589, 392 N.E.2d at 73. In order to find that the manufacturer should have known of the danger inherent in the product, it must be objectively reasonable to expect the user of the product to be injured in the manner in which the plaintiff was injured. Renfro v. Allied Indus. Equip. Corp., 155 Ill. App. 3d 140, 158, 507 N.E.2d 1215, 1228 (5th Dist. 1987). It is not enough that the injury was merely conceivable. Genast v. Illinois Power Co., 62 Ill. 2d 456, 466, 343 N.E.2d 465, 471 (1976).
Plaintiff did not produce any evidence supporting an independent duty of BASF Corporation to warn him of the hazards of diacetyl. Thus, because BASF Corporation had no independent duty to warn Plaintiff of any hazards associated with diacetyl exposure, Plaintiff's negligence claim fails. Zakoff v, Chicago Transit Auth., 336 Ill. App. 3d 415, 421, 782 N.E.2d 873, 878 (1st Dist. 2002) (“[W]here no duty exists, summary judgment is proper because there is no proper recovery for plaintiff as a matter of law.”).
1. BASF Corporation Did Not Owe Plaintiff a Duty for Plaintiff's Exposure to Diacetyl Supplied by Other Companies.
If there is no relationship between the defendant and the plaintiff, there is no duty. Hollywood Trucking, 385 Ill. App. 3d at 241-42, 895 N.E.2d at 7-8 (trial court properly dismissed claim, finding no duty where there was no direct relationship or special relationship between plaintiff and defendant). Accordingly, BASF Corporation's duty to warn only applies to Plaintiff's exposure (if any) to BASF Corporation-supplied diacetyl. Smith, 137 Ill. 2d at 265-66, 560 N.E.2d at 343 (“the duty is not so broad as to extend to anyone who uses the type of drug manufactured by a defendant”); Lewis v. Lead Indus. Ass'n, Inc., 342 Ill. App. 3d 95, 103, 793 N.E.2d 869, 875 (1st Dist. 2003) (“The causation-in-fact element of a cause of action requires a plaintiff to establish a causative link between the tortuous acts of a specific defendant and the injuries for which recovery is sought.”).
Plaintiff's expert, Dr. Egilman, testified that BASF Corporation is responsible for Plaintiff's lung problems caused by exposure to diacetyl supplied by other companies before Mr. Solis's first possible BASF Corporation exposure. (8/2/10 Trial Tr. (Egilman) at 118-19.) This testimony is contrary to Illinois law, see Smith, 137 Ill. 2d at 265-66, 560 N.E.2d at 343, and cannot sustain Plaintiff's burden of proving that BASF Corporation owed Plaintiff any duty to warn him about diacetyl. Parker v. Ill. Masonic Warren Barr Pavilion, 299 Ill. App. 3d 495, 500, 701 N.E.2d 190, 194 (1st Dist. 1998). Plaintiff has the burden of proving that he was exposed to diacetyl supplied by BASF Corporation, and that BASF Corporation had a duty to warn him about that diacetyl exposure. Without presenting evidence establishing that he was exposed to BASF Corporation-supplied diacetyl, Plaintiff cannot rely on his exposure to diacetyl generally to create a duty owed by BASF Corporation.
Furthermore, it would be unreasonable to impose a duty to warn in a situation where the alleged tortfeasor would not have had the ability to communicate a warning to the plaintiff. “[A] person's duty can extend no further than the person's right, power and authority to implement it.” Turner v. N. Illinois Gas Co., --- N.E.2d ---, 2010 WL 1745258, at *7 (2d Dist. April 28, 2010). Thus, where the relationship between the plaintiff and the alleged tortfeasor is attenuated, and the burden and consequences of imposing a duty are significant, courts find that there is no duty as a matter of law. See, e.g., Bailey v. Edward Hines Lumber Co., 308 Ill. App. 3d 58, 59, 719 N.E.2d 178, 180 (1st Dist. 1999) (holding trade industry owed no duty to construction workers who rely on installation instructions it released to the industry); Kennedy v. Medtronic, Inc., 366 Ill. App. 3d 298, 307, 851 N.E.2d 778, 785-86 (1st Dist. 2006) (medical device manufacturer owed no duty to warn patient of dangers inherent in surgery when performed under certain conditions; it would be a significant burden to require manufacturer to monitor the conditions under which a doctor performs surgery); O'Hara v. Holy Cross Hosp., 137 Ill. 2d 332, 340, 561 N.E.2d 18, 21-22 (1990) (hospital does not have duty to protect nonpatient bystander from fainting while accompanying patient into emergency room; noting that while such an occurrence is reasonably foreseeable, the burden and consequences of guarding against it are “erroneous”). Consequently, because there was no relationship between Plaintiff and BASF Corporation that would have given it a reasonable opportunity to provide a warning to him when Plaintiff was exposed to diacetyl supplied by other companies, BASF Corporation had no duty to warn Plaintiff regarding those exposures.