In Re: Asbestos Litigation. Limited to Mary Anne Hudson v. International Paper Co.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE: ASBESTOS LITIGATION )
)
Limited to: )
MARY ANNE HUDSON )
Plaintiff, )
)
v. ) C.A. No. N14C-03-247 ASB
)
INTERNATIONAL PAPER )
COMPANY, et al., )
Defendants. )
Submitted: July 21, 2015
Decided: August 25, 2015
ORDER ON DEFENDANT INTERNATIONAL PAPER COMPANY’S
MOTION FOR REARGUMENT OF THE ORDER DENYING ITS
MOTION TO DISMISS
This 25th day of August, 2015, upon consideration of Defendant
International Paper Company’s (“International Paper”) Motion for Reargument
(D.I. 253) of this Court’s order denying International Paper’s motion to dismiss for
lack of personal jurisdiction (D.I. 246), Plaintiff Mary Anne Hudson’s response
thereto (D.I. 254), and the record in this matter, it appears to the Court that:
(1) A motion for reargument under Superior Court Civil Rule 59(e)
permits the Court to reconsider its findings of fact, conclusions of law, or
judgment. 1 “Delaware law places a heavy burden on a [party] seeking relief
pursuant to Rule 59.” 2 The moving party has the burden to demonstrate that the
Court must correct an error of law in or prevent manifest injustice deriving from its
judgment. 3 A Rule 59(e) application is not an avenue for the moving party to raise
new arguments or to rehash arguments already decided by the Court. 4 And such
motion will be denied unless the Court has “overlooked a controlling precedent or
legal principles,” or “has misapprehended the law or facts such as would have
changed the outcome of the underlying decision.” 5 Upon a Rule 59(e) reargument
1
Bd. of Managers of the Delaware Criminal Justice Info. Sys. v. Gannett Co., 2003 WL
1579170, at *1 (Del. Super. Ct. Jan. 17, 2003), aff’d in part, 840 A.2d 1232 (Del. 2003) (internal
quotations omitted); Cummings v. Jimmy’s Grille, 2000 WL 1211167, at *2 (Del. Super. Ct.
Aug. 9, 2000).
2
Kostyshyn v. Comm’rs of Bellefonte, 2007 WL 1241875, at *1 (Del. Super. Ct. Apr. 27,
2007).
3
See Hessler, Inc. v. Farrell, 260 A.2d 701, 702 (Del. 1969) (“manifest purpose of all Rule
59 motions is to afford the Trial Court an opportunity to correct errors”); Reid v. Hindt, 2008 WL
2943373, at *1 (Del. Super. Ct. July 31, 2008).
4
CNH Am., LLC v. Am. Cas. Co. of Reading, Pa., 2014 WL 1724844, at *1 (Del. Super.
Ct. Apr. 29, 2014); Reid, 2008 WL 2943373, at *1; Fisk Ventures, LLC v. Segal, 2008 WL
2721743, at *1 (Del. Ch. July 3, 2008) (“[R]elief under Rule 59 is available to prevent injustice –
not to offer a forum for disgruntled litigants to recast their losing arguments with new rhetoric.”)
(internal quotations and citations omitted).
5
Jackson v. Wallo, 2012 WL 6846548, at *2 (Del. Super. Ct. Dec. 26, 2012) (quoting
Lamourine v. Mazda Motor of Am., Inc., 2007 WL 3379048, at *1 (Del. Super. Ct. Sept. 24,
2007)).
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motion, the Court “will determine from the motion and answer whether reargument
will be granted.”6
(2) International Paper raises several grounds for reargument:
• The Court relied on “outdated and inconsistent” personal
jurisdiction precedent that International Paper claims is now
“superseded”7 by the United States Supreme Court decisions in
Goodyear Dunlop Tires Operations, S.A. v. Brown,8 and Daimler
AG v. Bauman;9
• The Court failed to consider Chipman, Ltd. v. Thomas B. Jeffrey
Co.;10
• The Court failed to consider the factual distinctions between the
present case and Sternberg v. O’Neil; 11 and
• The Court failed to address the constitutionality of Delaware’s
registration statute “coupled with its punitive fines for failure to
register” under the Commerce Clause of the United States
Constitution.12
(3) Ms. Hudson contends International Paper simply rehashes arguments
already presented to and rejected by the Court.
6
Super. Ct. Civ. R. 59(e).
7
Def.’s Mot. Reargument at 2.
8
131 S. Ct. 2846 (2011).
9
134 S. Ct. 746 (2014).
10
251 U.S. 373 (1920).
11
550 A.2d 1105 (Del. 1988).
12
See Def.’s Mot. Reargument at 2, 2 n.1.
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(4) This Court relied, in part, on three Delaware federal district court
decisions that expressly addressed whether Sternberg was still good Delaware law
after Daimler and Goodyear.13 At the hearing, the Court understood the “overlay”
International Paper wanted to add to the Daimler analysis.14 But the Court found
the reasoning of the majority of the federal district court more persuasive: express
consent – by registering to do business in a state in accordance with state statutes –
remains a valid basis for personal jurisdiction.15 In the Court’s reading of Daimler,
the United States Supreme Court did, in fact, have “consent” in mind when issuing
13
See Novartis Pharm. Corp. v. Mylan Inc., 2015 WL 1246285 (D. Del. Mar. 16, 2015);
Forest Labs., Inc. v. Amneal Pharm. LLC, 2015 WL 880599 (D. Del. Feb. 26, 2015); Acorda
Therapeutics, Inc. v. Mylan Pharm. Inc., -- F.Supp.3d -- , 2015 WL 186833 (D. Del. Jan. 14,
2015); contra AstraZeneca AB v. Mylan Pharm. Inc., 72 F. Supp. 3d 549 (D. Del. 2014). See
also Hr’g Tr., July 9, 2015, at 39-41 (discussing district court cases):
The Court: [. . .] On the facts of the complaint here and what I
believe to be more persuasive decisions by the District of
Delaware, the fact is that Sternberg v. O’Neil still is good law here
in Delaware. I understand the overlay that the defendants wish to
place on it. [. . . ] Under Forest Labs [and] Sternberg, this Court
finds that International Paper in this particular circumstance has
expressly consented to personal jurisdiction in Delaware. . .
Id. at 40-41.
14
See Hr’g Tr., July 9, 2015, at 41. The Court appreciates International Paper’s argument
that, post-Daimler, the concept of consenting to a state’s jurisdiction by registering to do
business within that state – and nothing else – might be scrutinized for compliance with due
process requirements. See generally Tanya J. Monestier, Registration Statutes, General
Jurisdiction, and the Fallacy of Consent, 36 CARDOZO L. REV. 1343 (2015) (questioning the
validity of courts’ reliance on consent-based general jurisdiction arising from registering to do
business within state). Certainly, the law on this issue may be in flux. For instance, the Court
understands the issue is currently being briefed before the United States Court of Appeals for the
Third Circuit.
15
See supra note 13.
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that opinion but chose not to address its continued applicability in light of its
holding.16 International Paper essentially asks this Court to “‘overrule’ Supreme
Court precedent that the Supreme Court has not overruled.” 17 The Court finds
International Paper’s attempt to reargue this issue does not meet the standard under
Rule 59(e).
(5) International Paper also argues the Court overlooked its argument that
the present case is factually similar to Chipman. International Paper brought the
Chipman case to the Court’s attention for the first time at oral argument. 18 Even
still, this is not an area where the Court misapprehended the law or overlooked
controlling legal precedent. Chimpan involved the in-state service on a defendant
that had ceased doing business within New York, but that had not yet revoked its
registration to do business within New York.19 The Chipman Court treated that
16
Neither the Daimler nor the Goodyear Courts mention consent – International Paper
conceded as much. See Hr’g Tr., July 9, 2015, at 9, 30. But there is evidence that the Supreme
Court at least had consent in mind when ruling in those cases. See Daimler AG v. Bauman, 134
S. Ct. 746, 755-56 (2014) (“Our post-International Shoe opinions on general jurisdiction. . . are
few. ‘[The Court’s] 1952 decision in Perkins v. Benguet Consol. Mining Co. remains the
textbook case of general jurisdiction appropriately exercised over a foreign corporation that has
not consented to suit in the forum.’”) (emphasis added) (citing Goodyear Dunlop Tires
Operations, S.A. v. Brown, 131 S. Ct. 2846, 2856 (2011)).
17
See Novartis, 2015 WL 1246285, at *3 (noting Daimler did not mention consent).
18
See Hr’g Tr., July 9, 2015, at 15-16.
19
Chipman, Ltd. v. Thomas B. Jeffrey Co., 251 U.S. 373, 378 (1920).
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case as one of “constructive presence in the state.”20 Turning to New York law,
the Court found New York lacked personal jurisdiction over the defendant.21
International Paper argues that under this case’s purportedly similar facts, this
Court should have applied Chipman’s ruling and dismissed the case for lack of
personal jurisdiction.22
(6) Chipman does not stand for the proposition that a state’s statute
conferring jurisdiction over a foreign corporation registered to do business in that
state is per se unconstitutional.23 In the ensuing near-century since Chipman was
20
Id.
21
Id. (“for light we must turn to New York decisions”).
22
See Hr’g Tr., July 9, 2015 at 15; Def.’s Mot. Reargument at 6.
23
See King v. Am. Family Mut. Ins. Co., 632 F.3d 570, 576 (9th Cir. 2011) (interpreting
Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917); Chipman,
and Robert Mitchell Furniture Co. v. Selden Breck Const. Co., 257 U.S. 213 (1921) to
“collectively stand for the proposition that federal courts must, subject to federal constitutional
restraints, look to state statutes and case law in order to determine whether a foreign corporation
is subject to personal jurisdiction in a given case because the corporation has appointed an agent
for service of process”). The Ninth Circuit interpreted Montana law to mean simply appointing
an agent for service of process “does not, standing alone, subject foreign corporations to
jurisdiction in Montana for acts performed outside of Montana, at least when the corporations
transact no business in the state.” Id. at 578.
International Paper relies on Burnham v. Superior Court of California, County of Marin,
for the proposition that the Supreme Court has abolished “legal fictions” – such as “consent and
presence” – in the personal jurisdiction context. See 495 U.S. 604 (1990); Def.’s Mot.
Reargument at 3. Yet, the Burnham Court itself noted:
[w]here. . . a jurisdictional principle is both firmly approved by
tradition and still favored, it is impossible to imagine what
standard we could appeal to for the judgment that it is ‘no longer
justified.’ . . . . The ‘contemporary notions of due process’
applicable to personal jurisdiction are the enduring ‘traditional
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decided, corporate defendants have consistently been considered to have consented
to a state’s jurisdiction through a registration statute. 24 This Court found (and still
finds) that Daimler does not foreclose a state registration statute from conferring
jurisdiction over a foreign corporation registered to do business in Delaware by
virtue of its express consent.25 International Paper does not meet its heavy burden
to demonstrate an error of law in need of correction or manifest injustice that must
be prevented. International Paper just restyles an argument it has already
presented.
notions of fair play and substantial justice’ established as the test
by International Shoe. By its very language, the test is satisfied if
a state court adheres to jurisdictional rules that are generally
applied and have always been applied in the United States.
Id. at 622-23. In fact, consent remains one of the traditional forms of establishing
personal jurisdiction. See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2787 (2011);
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985); Bane v. Netlink, Inc., 925 F.2d
637, 641 (3d Cir. 1991).
24
See Forest Labs., Inc. v. Amneal Pharm. LLC, 2015 WL 880599, at *10-11 (D. Del. Feb.
26, 2015) (discussing Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165 (1939),
Pennsylvania Fire, and Robert Mitchell); Cont’l Cas. Co. v. Am. Home Assurance Co., 61 F.
Supp. 2d 128, 129-30 (D. Del. 1999) (“Both the United States Supreme Court and the Supreme
Court of Delaware have held that a foreign corporation which authorizes an agent to receive
service of process in compliance with the requirements of a state registration statute has
consented to the exercise of personal jurisdiction in that state, even with regard to causes of
action that do not arise from events or transactions occurring within that state.”); Bane, 925 F.2d
at 641.
25
See, e.g., Forest Labs., 2015 WL 880599, at *10-11 (discussing Sternberg’s holding in
light of Supreme Court precedent stating courts should look to state statutes and interpretive case
law to determine the scope of consent to personal jurisdiction); Acorda Therapeutics, Inc. v.
Mylan Pharm. Inc., -- F.Supp.3d -- , 2015 WL 186833, at *8 (D. Del. Jan. 14, 2015) (“Even after
International Shoe, assessing whether a corporation may be held to have consented to the
personal jurisdiction of the courts of a particular state is a matter to be determined by
examination of the law of that state.”).
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(7) International Paper next argues the Court overlooked what it claims
are distinguishing facts in Sternberg. At oral argument, International Paper
claimed Sternberg was “potentially distinguishable here in that International Paper
registered to do business in 2013.”26 It then constructed an argument that if
International Paper was winding down its business by then, this case’s facts are
similar to those in Chipman.27 To the Court, the salient facts in Sternberg are:
defendant was a foreign corporation with a principal place of business outside of
Delaware; it had registered to do business in Delaware; and it appointed an agent
for service of process in Delaware. 28 This Court fully addressed these facts and
their applicability to this case in its ruling. To the extent International Paper
attempts to rehash this argument by casting Sternberg as having dissimilar
operative facts, the Court finds this is a new argument improperly raised on
reargument.
(8) International Paper finally claims the Court failed to address its
argument that the Delaware Registration Statute “likely violates the Commerce
Clause of the [United States] Constitution.” 29 It is tempting for the Court to afford
26
Hr’g Tr., July 9, 2015, at 13.
27
Id. at 14-16.
28
Sternberg v. O’Neil, 550 A.2d 1105, 1107 (Del. 1988) (defendant was a foreign
corporation registered to do business in Delaware under 8 Del. C. § 371).
29
See Def.’s Mot. Reargument at 2 (emphasis added).
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this argument the same effort and consideration this complaining party has.30
While asking this Court now to declare a more than century-old state statute31
violative of the federal constitution, International Paper: failed to raise the
argument when briefing its motion to dismiss; addressed it only in response to a
question from the Court; 32 and now relegates it to a barely readable footnote
(purportedly “due to page limitations”) in an attempt to preserve it.33 This is
hardly the advocacy of a strong case that the Court must correct an error of law or
prevent injustice. And so, the Court finds this argument does not meet the standard
for Rule 59(e).
30
International Paper relegates this argument to one sentence and a microscopic footnote.
See id. at 2, 2 n.1 (noting International Paper “is not waiving th[e] argument [“that Delaware’s
registration statute . . . likely violates the Commerce Clause of the Constitution”] but does not
re-address that argument in its motion for reargument “due to page limitations”).
31
See Model Heating Co. v. Magarity, 81 A. 394 (Del. 1911) (discussing origins and
existence of Delaware’s foreign corporation registration statutes back to, at least, 1893).
32
Hr’g Tr., July 9, 2015, at 11-12:
[Defendant’s Counsel]: Your Honor, I still believe that both the
legislature and the state court is bound by, is constrained by due
process. [. . .] [A] statute with the language that’s in the Delaware
statute for a registered agent, if that constitutes express[] consent,
then that gives rise to the exorbitant scope of general personal
jurisdiction across the country that is explicitly rejected by the
Court in Daimler. [. . .]
The Court: And you’re asking me to hold the statute to be
unconstitutional?
[Defense Counsel]: I am, Your Honor, under the new Supreme
Court precedent of Daimler and Goodyear.
33
See Def.’s Mot. Reargument at 2.
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(9) The Court finds that International Paper moves the Court to reconsider
certain conclusions of law by reconstituting arguments already presented and
raising arguments that could have been properly raised in the briefing or at the
hearing in this matter. 34 This is not appropriate under Rule 59(e). Because
International Paper fails to meet its heavy burden of demonstrating a need to
correct an error of law or to prevent manifest injustice, the Motion for Reargument
is DENIED.
IT IS SO ORDERED.
/s/ Paul R. Wallace
PAUL R. WALLACE, JUDGE
Original to Prothonotary
cc: All counsel via File & Serve
34
See CNH Am., LLC v. Am. Cas. Co. of Reading, Pa., 2014 WL 1724844, at *1 (Del.
Super. Ct. Apr. 29, 2014).
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