text:
    Douglas MILNER and Ann Milner, Plaintiffs, v. STEPAN CHEMICAL COMPANY, Defendant.
    Civ. A. No. 83-1803-C.
    United States District Court, D. Massachusetts.
    Dec. 28, 1984.

      Eugene R. Geary, Geary & Geary, Lowell, Mass., for plaintiffs.
    James L. Ackerman, Day, Berry & Howard, Boston, Mass., for defendant.
   MEMORANDUM

CAFFREY, Chief Judge.

This is a civil action brought by plaintiffs, Douglas and Ann Milner, residents of Massachusetts, against Stepan Chemical Company (Stepan), a corporation organized under the laws of the state of Delaware and having its principal place of business in Illinois. Douglas Milner, a former employee of Stepan, seeks damages for injury allegedly resulting from defendant’s intentional infliction of emotional distress. The matter comes before the Court on defendant’s motion to dismiss plaintiff Douglas Milner’s claims of intentional infliction of emotional distress for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Defendant asserts that these claims are barred by the Massachusetts Workmen’s Compensation Act, M.G.L. c. 152, § 1 et seq., which provides plaintiff’s exclusive remedy. Plaintiff contends, however, that the exclusivity provision of the Act does not apply to the type of injury which he alleges.

On August 13, 1980, while plaintiff was employed by Stepan at its Wilmington plant, he sustained a serious injury to his right hand in a job-related accident. He was immediately taken to Wilmington Health Center for treatment. When he returned to his workplace later that day, he was told by defendant’s area supervisor, Howard Moorman, to come to work the following day. Moorman further advised plaintiff that he should not report the injury as an industrial accident, in order to preserve the company’s safety record. The day after the accident, Moorman called plaintiff at his home and repeated these admonitions.

On August 19, 1980, plaintiff was admitted to Choate Hospital where he was to undergo surgery on his injured hand. While he was awaiting surgery, plaintiff received a telephone call from defendant’s maintenance supervisor, Richard Cantwell, who asked plaintiff to call in sick throughout the period of his hospitalization and not to report his injury as an industrial accident. After he was released from the hospital, plaintiff continued to receive telephone calls of this nature from both Moor-man and Cantwell. Plaintiff asserts that the conduct of these two men amounted to intentional infliction of emotional distress, as a result of which he experienced “great emotional distress and feelings of insecurity.” Complaint, First Cause of Act, 1111.

Three events which occurred during the fall of 1980 form the basis of the claims set forth in plaintiffs third cause of action. First, plaintiff filed a Workmen’s Compensation claim for the injury to his hand. Second, certain incidents took place which apparently caused Ronald McBrien, defendant’s Wilmington plant manager, to harbor feelings of animosity toward plaintiff. Finally, the defendant company was taken over by the Olin Corporation (“Olin”).

Near the end of September, plaintiff learned from defendant’s personnel manager that he would no longer receive medical insurance or other benefits to which, plaintiff alleges, his employment contract entitled him. Subsequently, plaintiff also received from the Olin Corporation a letter stating that he would not be made an Olin employee. The letter was signed by plant manager Ronald McBrien.

Plaintiff alleges that defendant denied him fringe benefits to which he was entitled in retaliation for plaintiff’s having filed a Workmen’s Compensation claim. Plaintiff also asserts that defendant “maliciously interfered with ... [plaintiffs’] ... prospective employment contract with the Olin Corporation.” Complaint, Third Cause of Action, ¶ 12. Plaintiff claims that each of these actions by defendant constituted intentional infliction of emotional distress. Complaint, Third Cause of Action, ¶ 12, 13.

The Massachusetts Workmen’s Compensation Act bars common law tort actions which seek damages for “personal injury arising out of and in the course of ... employment.” M.G.L. c. 152, § 26. Plaintiff asserts, however, that his claims for intentional infliction of emotional distress are not covered by the Act, because defendants’ conduct was not only intentional, but “outrageous,” and because this conduct occurred at times when plaintiff was not at work.

Plaintiff’s arguments have no merit. The Supreme Judicial Court of Massachusetts has stated unequivocally that an employee’s claim for personal injury resulting from an employer’s intentional infliction of emotional distress falls within the scope of the Workmen’s Compensation Act. Foley v. Polaroid Corp., 381 Mass. 545, 413 N.E.2d 711 (1980). See also Underwood v. Digital Equipment Corp., Inc., 576 F.Supp. 213, 217-18 (D.Mass.1983). The outrageousness of an employer’s actions plays no role in determining whether injury resulting from intentional infliction of emotional distress is covered by Workmen’s Compensation; the character of the employer’s conduct relates solely to the issue of whether the employer has, in fact, committed the tort of intentional infliction of emotional distress. See Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315 (1976).

Furthermore, the time and the place at which an injury occurs are not, as the plaintiff asserts, the sole determinants of whether the injured party is eligible to receive Workmen’s Compensation. Rather, the Act applies to any physical or mental injury which arises out of employment, regardless of the particular circumstances under which the injury took place. Foley, 381 Mass. at 545, 413 N.E.2d 711. Intentional infliction of emotional distress perpetrated by an employer is therefore compensable under the Act, because the essence of this tort is the right to be free from physical or mental injury. Workmen’s Compensation, however, does not cover damage resulting from torts, such as defamation or malicious prosecution, which are intended to protect against harm other than injury to the mind or body. Id. at 551-552, 413 N.E.2d 711. As the Supreme Judicial Court has noted, the key to whether the Workmen’s Compensation Act precludes “a common law right of action lies in the nature of the injury for which plaintiff makes claim, not the nature of the defendant’s act which the plaintiff alleges to have been responsible for that injury.” Id. at 553, 413 N.E.2d 711, quoting Gambrell v. Kansas City Chiefs Football Club, Inc., 562 S.W.2d 163, 168 (Mo.App.1978).

For these reasons, plaintiff, Douglas Milner’s claims for intentional infliction of emotional distress, set forth in the complaint’s first and third causes of action, should be dismissed. Plaintiff, however, may maintain his claim for tortious interference with economic relations, which he also asserts in his third cause of action.

Order accordingly.

      . M.G.L.'c. 152, § 24 provides in pertinent part: An employee shall be held to have waived his right of action at common law ... to recover damages for personal injuries if he shall not have given his employer, at the time of his contract of hire, written notice that he claimed such right...
      Plaintiff does not allege that he ever gave defendant notice of his intent to preserve his common law right of action.


source: Caselaw Access Project

author: CAFFREY, Chief Judge.

license: Public Domain

text:
    Michael L. DUKES, Petitioner, v. George VOSE, Jr., Respondent.
    Civ. A. No. 82-2644-C.
    United States District Court, D. Massachusetts.
    Dec. 28, 1984.
    Michael L. Dukes, pro se.
    Lawrence Ball, Boston, Mass., for petitioner.
    Martin E. Levin, Asst. Atty. Gen., Boston, Mass., for respondent.
   MEMORANDUM

CAFFREY, Chief Judge.

This is an amended petition for a writ of habeas corpus brought by Michael L. Dukes an inmate at MCI Concord against George Vose, Jr., superintendent of that State prison.

Plaintiff was convicted on November 29, 1973 in Hampden County Superior Court for burglary and larceny.. The case is now before the court on petitioner’s objections to a recommendation by Magistrate Codings that the amended petition be dismissed. The objections have been briefed by the parties and after hearing, I rule as follows:

Petitioner claims that he was denied the effective assistance of counsel because his attorney in State Court was appointed shortly before trial and because a mid trial request for a continuance was denied.

The State Court record shows that on November 28,1973 petitioner filed a motion which was allowed, asking that Attorney Louis H. Cohen be appointed as his counsel. Petitioner’s motion alleged that Mr. Cohen “has further done some investigation and is familiar with all the facts pertaining to it” (his case).

The Superior Court trial began on November 29, 1973. Petitioner waived jury, and the trial judge elicited from petitioner a reaffirmation of his desire to have Mr. Cohen represent him and his desire to proceed jury-waived. Neither petitioner or Mr. Cohen claimed that Mr. Cohen had had insufficient time to prepare.

The State called six witnesses including the victim whose home had been burglarized. She identified petitioner, and his attorney cross-examined her extensively (Tr. pp. 118-141). After the recess which followed the close of the State’s evidence, Mr. Cohen moved for a continuance claiming that he expected the victim would not identify petitioner. The motion for a continuance was denied. Petitioner then called four witnesses including himself after which the Court found him guilty. It should be noted that he admitted driving the co-defendant to and from the victim’s house and also that he fled from police along with his co-defendants.

The Court of Appeals for this Circuit ruled that the mere fact that counsel had only a short time to prepare for trial is not enough to establish a 6th Amendment violation. Rastrom v. Robins, 440 F.2d 1251, 1254 (1st Cir. 1971), cert. denied, 404 U.S. 863, 92 S.Ct. 53, 30 L.Ed.2d 107 (1971). See also United States v. Cronic, — U.S. -, 104 S.Ct. 2039, 80 L.Ed.2d 657 (1984).

Finally in Strickland v. Washington, — U.S. -, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), Justice O’Connor made a comprehensive review of burdens which must be sustained by a petitioner who claims denial of the 6th Amendment right to effective assistance of counsel. In pertinent part she wrote:

“The benchmark for judging any claim of ineffectiveness must be whether counsel’s conduct so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result.”

Id. 104 S.Ct. at 2064.

She also observed that:

“A convicted defendant’s claim that counsel’s assistance was so defective as to require a reversal of a conviction or death sentence has two components. First, the defendant must show that counsel’s performance was deficient. This requires showing that counsel made errors, so serious that counsel was not functioning as the ‘counsel’ guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Unless a defendant makes both showings, it cannot be said that the conviction or death sentence resulted from a breakdown in the adversary process that renders the result unreliable.”

Id. at 2064.

Justice O’Connor also noted that:

“The proper measure of attorney performance remains simply reasonableness under prevailing professional norms.”

Id. at 2065.

She also pointed out that:

“Because of the difficulties inherent in making the evaluation, a court must indulge a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance; that is, the defendant must overcome the presumption that, under the circumstances, the challenged action ‘might be considered sound trial strategy.’ See Michel v. New York, supra, [350 U.S. 91] at 101 [76 S.Ct. 158 at 164, 100 L.Ed. 83]. There are countless ways to provide effective assistance in any given case. Even the best criminal defense attorneys would not defend a particular client in the same way. [Citation omitted]”

Id. at 2065-6.

She concluded with the observation that:

“The defendant must show that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.”

Id. at 2068.

I rule that a review of the State Court record shows that plaintiff’s alleged claims herein fall far short of the requirements spelled out in Strickland and accordingly, I rule that as recommended by the Magistrate, the petition for habeas corpus should be denied.

Order accordingly.


text:
    Darryl WILLIAMS, Shirley Simmons, William Simmons and Karmel Williams, Plaintiffs, v. The CITY OF BOSTON, Kevin H. White, David Finnegan, John O’Bryant, Kathleen Sullivan Alioto, John McDonough, Paul R. Tierney, Robert S. Wood, John Kelly, Ronald Spratting, John Doe, Robert Murphy, Richard Roe, Joseph M. Jordan, John O. Ridlon, Newman Flanagan, and Daniel C. Mullane, Defendants.
    Civ. A. No. 82-2844-C.
    United States District Court, D. Massachusetts.
    Dec. 28, 1984.

      Katherine S. McHugh, Edward J. Barshak, Natasha C. Lisman, Sugarman, Rogers, Barsak & Cohen, Boston, Mass., for plaintiffs.
    Thomas C. Cameron, DiMento & Sullivan, Boston, Mass., for defendant John McDonough.
    John E. Keenan, Jr., Driscoll, Keenan & Keenan, Worcester, Mass., for defendants Hugh Mullen and Mike Sheeran.
    Steven P. Perlmutter, Asst. Corp. Counsel, City of Boston Law Dept., Boston, Mass., for Spratting, Kelly, Murphy, for City of Boston, Kevin H. White, Jos. Jordan and John O’Bryant and Woods (city defendants).
    Roberta Thomas Brown, Asst. Atty. Gen., Chief, Torts Division, Boston, Mass., for defendants Mullane and Flanagan.
    Matthew E. Dwyer, Grady, Dumont & Dwyer, Boston, Mass., for defendant Hugh Mullen.
   MEMORANDUM

CAFFREY, Chief Judge.

This civil action seeks recovery of damages- because of the tragic and brutal shooting of a black Jamaica Plain High School student while participating in an interscholastic football game in Charles-town. Darryl Williams, the victim of the shooting has brought a civil rights action against the City of Boston, the former Mayor, the District Attorney, and members of the School Committee, as well as school and police officials. He alleges, inter alia, that the defendants knew or should have known that violent attacks on black athletes were likely to occur in the Charles-town section of Boston, that they failed to implement adequate security measures, and that he was shot and injured as a result, thereby depriving him of his constitutional rights. Other counts of the complaint allege that certain of the defendants engaged in a conspiracy to cover up the racial nature of the attack, thereby depriving Williams of other constitutional rights and inflicting emotional distress. Darryl’s mother, stepfather and sister join him as plaintiffs alleging deprivation of their constitutionally protected interests in Darryl as well as severe emotional distress. The case is before the court on the defendants’ motion to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

“A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff[s] can prove no set of facts in support of [their] claim which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Furthermore, all allegations contained in the challenged complaint must be taken as true and all reasonable inferences drawn in the plaintiffs favor. O’Brien v. DiGrazia, 544 F.2d 543, 545 (1st Cir.1976).

The Shooting Allegations

There are two essential elements to a 42 U.S.C. § 1983 action: (1) the plaintiff must allege and prove that the conduct complained of was committed by a person acting under color of state law; and (2) that this conduct deprived the plaintiff of rights, privileges or immunities secured by the constitution or Laws of the United States. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981). The conduct complained of in this case is the affirmative act of scheduling the game in Charlestown, a neighborhood allegedly known for racial hostility and violent crime, and the negative act consisting of the failure to promulgate or implement adequate safety measures to protect the participating athletes. Insofar as the defendants performed or failed to perform these acts in their capacities as school, city, or police officials, there is no doubt that they acted under color of law.

The second element, that there be deprivation of a federal right, presents a much more troublesome question. The plaintiffs argue that the defendants had a duty to provide a safe environment, that the failure to do so was causally related to Darryl Williams’ injury, and that because the defendants acted under color of state law the injury is cognizable under § 1983. This argument, although ingenious, suffers from several basic flaws.

The first flaw is the plaintiffs’ contention that breach of a tort duty necessarily gives rise to a § 1983 claim. That this is not the law is a principle well established and generally recognized. E.g. Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976) (defamation by state official not cognizable under § 1983); Baker v. McCollan, 443 U.S. 137, 99 S.Ct. 2689, 61 L.Ed.2d 433 (1979) (where due process requirements of the constitution are met, liability for a state tort is irrelevant); Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976) (medical malpractice does not become a constitutional violation merely because the victim is a prisoner). Therefore, the plaintiff does not avail himself of a civil rights remedy by his allegations that the defendants had common law or statutory duties to protect Darryl Williams. In order to state a claim under § 1983 a plaintiff must allege deprivation of a federal right. Paul v. Davis, 424 U.S. 693, 700, 96 S.Ct. 1155, 1160, 47 L.Ed.2d 405.

A second flaw lies in plaintiff’s contention that a causal connection between an act of a state officer and injury to a person establishes a deprivation of a right cognizable under § 1983. The authority to which plaintiff cites, however, does not support this theory. See e.g. Monell v. Dept. of Social Services of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Clark v. Taylor, 710 F.2d 4 (1st Cir.1983); Fernandez v. Chardon, 681 F.2d 42 (1st Cir. 1982), cert. den., 459 U.S. 989, 103 S.Ct. 343, 74 L.Ed.2d 384 (1982). In the cited cases, causation is discussed only insofar as it defines the scope of supervisory liability, and not as a basis for finding a deprivation of federal rights. Id. In other words, causation may help identify a proper defendant but does not guarantee that the plaintiff has a viable claim. Fernandez, one of the cases which the plaintiffs misconstrue, expressly identifies causation as a factor on the first element of § 1983 analysis, i.e. whether the conduct was committed by a person acting under color of state law, and distinct from the deprivation issues. Supra at 55.

Furthermore, the plaintiffs erroneously argue that because the plaintiff’s injury was severe, and the defendants, as state officials, contributed to the happening of the injury, that the injury constitutes a deprivation of substantive due process. In this analysis, however, plaintiffs fail to come to terms with the fact that the shooting was not done under color of state law nor by a state officer. The most that can be alleged is that these officers shared some responsibility for planning or policy-making with regard to the football game and failed to provide the necessary security. Therefore, the complaint can survive defendants’ 12(b)(6) motions only if such responsibility and failure violates a constitutional right of the plaintiff.

In most circumstances there is no constitutional right to basic services such as adequate police protection. Martinez v. California, 444 U.S. 277, 100 S.Ct. 553, 62 L.Ed.2d 481 (1980); Jackson v. City of Joliet, 715 F.2d 1200 (7th Cir.1983); Bowers v. DeVito, 686 F.2d 616 (7th Cir.1982). Exceptional cases, where there is a right to adequate protection from third persons, arise where the state itself places the plaintiff in a position of danger. Most of these exceptional cases involve involuntary commitment to state custody in either a mental institution or a prison. E.g. Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983); Youngberg v. Romeo, 457 U.S. 307, 102 S.Ct. 2452, 73 L.Ed.2d 28 (1982); Clark v. Taylor, 710 F.2d 4 (1st Cir.1983); Withers v. Levine, 615 F.2d 158 (4th Cir.1980), cert. den., 449 U.S. 849, 101 S.Ct. 136, 66 L.Ed.2d 59 (1980); Redmond v. Baxley, 475 F.Supp. 1111 (E.D.Mich. 1979). Other cases imposing § 1983 liability involve circumstances where the state officer placed the victim in a position of peril, such as leaving two young children alone in a car by the roadside after arresting the operator. White v. Rochford, 592 F.2d 381 (7th Cir.1979). The common thread in all these cases is that the state placed an involuntary victim in peril and that injury by third persons or forces was forseeable. In other words, a civil rights remedy is available only where the injury is caused by government action, and not where it is caused by mere government inaction.

This distinction has its basis in the origins of the Fourteenth Amendment, which was intended to protect individual rights from state interference. The Court of Appeals for the Seventh Circuit stated this principle most succinctly: “The concern is with the use of state-created power to [harm] rather than the state’s failing to prevent [harm].” Jackson v. City of Joliet, 715 F.2d 1200, 1204. Thus, where a victim voluntarily places himself in peril and injury is caused by a third person, there is no due process right to protection or aid.

The circumstances attendant on Williams’ injury lack that degree of involuntariness on his part necessary to support § 1983 liability. Although Williams was under state compulsion to attend school, he was not required to attend any particular school, nor to participate in athletics, nor to travel to Charlestown for this particular game. Given the voluntary nature of Williams’ conduct', it is irrelevant to the civil rights analysis that defendants may have owed him a common law or statutory duty of care as alleged by the plaintiffs, the breach of which might support an action for tort.

In so ruling, I note that this case is inapposite to DiMarzo v. Cahill, 575 F.2d 15 (1st Cir.1978), cert. den., 439 U.S. 927, 99 S.Ct. 312, 58 L.Ed.2d 320 (1978), where a prison inmate brought an action against the Commissioner of Corrections complaining of unconstitutional conditions in a county jail. The Court of Appeals for the First Circuit held that the Commissioner was a proper defendant in the action because of his statutory duty to provide minimum standards of care and custody for inmates, id. 18. The violation of statutory duty, however, was not the origin of the constitutional deprivation. The Court of Appeals found the jail conditions themselves to be a violation of constitutional standards. The Commissioner’s statutory duty merely identified him as a proper defendant. In the present case, no independent constitutional violation has been alleged. Consequently, the allegations of statutory and common-law duties fail to establish § 1983 liability of the defendants to plaintiff.

A final group of cases which deserve mention insofar as they relate to this case concern the release of prisoners or mental patients who subsequently commit crimes. E.g. Martinez v. California, 444 U.S. 277, 100 S.Ct. 553, 62 L.Ed.2d 481 (1980); Bowers v. DeVito, 686 F.2d 616 (7th Cir.1982). Although the courts have generally found that the releasing authorities are not liable to the victims of such crimes under § 1983, plaintiff Williams purports to find support for his theory in Martinez. The Martinez court found that parole officers bore no § 1983 liability for the release of a sexually dangerous inmate who, five months later, murdered a fifteen year old girl, but reserved the question of whether a parole officer could ever “be deemed to ‘deprive’ someone of [a constitutional right] by action taken in connection with the release of a prisoner on parole.” 444 U.S. at 285, 100 S.Ct. at 559. The court identified two reasons why liability was not appropriate in Martinez: (1) the parole Board was not aware that the victim, as opposed to the public at large, faced any special danger, and (2) the decedents death was too remote a consequence to hold the parole officers responsible. Id.

Interesting though it may be to speculate on the direction which the United States Supreme Court may take in the wake of Martinez, I note that the factors identified by the Supreme Court as negating § 1983 liability in Martinez are also present in this case. Darryl Williams was no more foreseeable victim of harm than any other person in attendance at the football game. At oral argument counsel for the plaintiff conceded that if the bullet which struck Darryl Williams had gone across the playing field and hit a female student in the stands that, there would be no § 1983 liability on the defendants. Liability should not turn on the flight of an assassin’s bullet. Furthermore, as in Martinez, the causal connection between the defendants’ acts and the plaintiff’s injury is too tenuous to impose § 1983 liability. I therefore rule that Martinez cannot provide a basis for denial of the motion to dismiss.

The Conspiracy Allegations

The plaintiff also attempts to set forth a claim based on an alleged conspiracy to cover up the racial nature of the attack. The sparse case law in this area indicates that a conspiracy of silence, or filing of false statements, may be actionable under § 1983 where it results in deprivation of constitutional rights such as continued illegal confinement. Hampton v. Hanrahan, 600 F.2d 600 (7th Cir.1979); rev’d on other grounds, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980); Hampton v. City of Chicago, 484 F.2d 602 (7th Cir.1973). The focus should be on the consequences, not the existence of the allegedly false statements. Landrigan v. City of Warwick, 628 F.2d 736 (1st Cir.1980). Here, neither Williams nor his family has alleged a deprivation of any federal right as a result of the cover up. Furthermore, even if there were a state law duty to inform the plaintiffs of the truth, breach of this duty would not be cognizable in § 1983. Cloutier v. Town of Epping, 714 F.2d 1184, 1190 (1st Cir.1983). By the same token, the existence of a constitutionally protected interest in the company and companionship of a family member does not support a § 1983 suit absent some constitutionally impermissible deprivation of the interest by a defendant. Here, the defendants have not “caused” the injury to Darryl Williams within the contemplation of § 1983, and therefore cannot have caused a constitutional deprivation of his company to the other plaintiffs.

Because it appears beyond doubt that the plaintiffs can prove no set of facts which would entitle them to relief, Conley v. Gibson, supra, I rule that all Civil Rights counts in the complaint should be dismissed under Rule 12(b)(6), and in light of that ruling that the pendent state claims also should be dismissed.

Order accordingly.


author: SHERMAN G. FINESILVER, Chief Judge.

text:
    GATES ENERGY PRODUCTS, INC., Plaintiff, v. YUASA BATTERY COMPANY, LTD. and Edward J. Morrison, Jr., d/b/a Western Alarm Supply Company, Defendants.
    Civ. A. No. 82-F-2088.
    United States District Court, D. Colorado.
    Sept. 9, 1983.

      John A. Mitchell, Leonard J. Santisi, Curtis, Morris & Safford, New York City, Robert H. Harry, Donald E. Phillipson, Davis, Graham & Stubbs, Denver, Colo., for plaintiff.
    John E. Kidd, Rory J. Radding, Pennie & Edmonds, New York City, William E. Murane, Hugh Q. Gottschalk, Holland & Hart, Denver, Colo., for defendants.
   ORDER

SHERMAN G. FINESILVER, Chief Judge.

IN THIS ACTION, the Plaintiff, Gates Energy Products, Inc. . (hereinafter “Gates”), seeks declaratory and injunctive relief, compensatory damages, and punitive damages in three allegedly distinct counts in Plaintiff’s Amended Complaint. In Count I, Gates seeks declaratory relief, punitive damages and compensatory damages to remedy Defendants’ alleged infringement of Gates’ United States Letters Patent No. 3,862,861 (hereinafter “the ‘861 patent”). In Count II, Gates seeks to recover the damages that it allegedly incurred as a result of Defendant Yuasa Battery Company’s (hereinafter “Yuasa”) alleged breach of an agreement with Plaintiff regarding the non-disclosure of trade secret technical know-how. In Count III, Gates requests that this Court enter a judgment declaring that Yuasa’s United States Letters Patent No. 4,216,280 (hereinafter “the ‘280 patent”) is invalid.

The matters now before the Court include: Defendant Yuasa’s motion to refer the parties to arbitration and to dismiss Count II of Plaintiffs Amended Complaint for lack of subject matter jurisdiction under Rule 12(b)(1) F.R.Civ.P.; Defendant Yuasa’s motion to dismiss Count III of the Amended Complaint for lack of subject matter jurisdiction under Rule 12(b)(1) F.R. Civ.P.; Defendant Yuasa’s motion to stay the need to answer, or, in the alternative, to enlarge its time to answer Count I under Rule 6(b) F.R.Civ.P.; Defendant Yuasa’s motion to strike all references to Count II under Rule 12(f) F.R.Civ.P. or, in the alternative, for a more definite statement of Count II under Rule 12(e) F.R.Civ.P.; and Plaintiff's motion under Rule 26(c) F.R. Civ.P. for a protective order quashing defendant Yuasa’s notice of deposition pending disposition of Yuasa’s motion to stay its Answer to Count I of the Amended Complaint.

These motions have been thoroughly briefed by the parties. Upon careful consideration of the briefs, affidavits, and other evidence submitted by the parties, the Court finds that Defendant Yuasa’s motion to refer the parties to arbitration and to dismiss Count II should be GRANTED; Yuasa’s motion to dismiss Count III should also be GRANTED; Yuasa’s motion to stay the need to answer or to enlarge the time to answer Count I should be DENIED; Yuasa’s motion to strike all references to Count II or for a more definite statement of Count II should also be DENIED; and Plaintiff’s motion for a protective order quashing defendant Yuasa’s notice of deposition should be DENIED.

I. Yuasa’s Motion to Dismiss and Refer Count II to Arbitration.

Yuasa and Gates entered into discussions in 1974 regarding the formation of a joint venture between the two companies under which sealed rechargeable lead-acid batteries would be marketed and/or manufactured. During the course of these discussions, Yuasa representatives were allegedly shown confidential trade secret technical know-how developed by Gates relative to its sealed maintenance-free lead-acid battery development. On October 8, 1975, Yuasa and Gates entered into a letter agreement (hereinafter “the letter agreement”) in which Yuasa acknowledged its duty to maintain in confidence the trade secret technical know-how disclosed to it by Gates. On May 8, 1978, Yuasa and Gates entered into a joint venture agreement which, according to Defendants, superseded the 1975 letter agreement. The Joint Venture Agreement specifies that Yuasa does not have the right to use any confidential information disclosed at any time by Gates to Yuasa. In addition, the Joint Venture Agreement provides for arbitration of any disputes which arise in connection with the Joint Venture Agreement.

In Count II of the Amended Complaint, Gates alleges that Yuasa disclosed confidential information which was provided to Yuasa by Gates, prior to the formation of their joint venture, in violation of the 1975 letter agreement. Yuasa contends that the issues disputed in Count II should be subject to arbitration under the Joint Venture Agreement.

The United States Supreme Court has recognized that there is a strong policy in favor of Court recognition and enforcement of international arbitration agreements. Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 2457 n. 15, 41 L.Ed.2d 270 (1974). In addition, if a Court is in doubt regarding whether a dispute requires arbitration, it has been held that the Court should resolve that doubt in favor of arbitration’ unless the Court can state with “positive assurance” that the dispute was not meant to be arbitrated. Seaboard Coastline Railroad Co. v. National Rail Passenger Corporation, 554 F.2d 657, 660 (5th Cir.1977). See also, In Re Oil Spill by the “Amocb Cadiz” off the Coast of France, 659 F.2d 789, 795 (7th Cir.1981).

A Court presented with a request to refer a dispute to arbitration pursuant to Chapter Two of the Federal Arbitration Act performs a very limited inquiry. It must resolve four preliminary questions: (1) Is there an agreement in writing to arbitrate the subject of the dispute; (2) Does the agreement provide for arbitration in the territory of a signatory of the Convention; (3) Does the agreement arise out of a legal relationship, whether contractual or not, which is considered as commercial; and (4) Is a party to the agreement not an American citizen, or does the commercial relationship have some reasonable relation with one of more foreign states. Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir.1982). If the Court resolves these questions in the affirmative, then it must order arbitration unless it finds the agreement “null and void, inoperative or incapable of being performed.” Ledee, supra at 187. Furthermore, it should be noted that the “null and void” exception is subject to a narrow interpretation:

Indeed, by acceding to and implementing the treaty, the federal government has insisted that not even the parochial interests of the nation may be the measure of interpretation. Rather, the clause must be interpreted to encompass only those situations — such as fraud, mistake, duress, and waiver — that can be applied neutrally on an international scale. I.T. A.D. Associates, Inc. v. Podar Brothers, 636 F.2d 75 (4th Cir.1981).

Ledee, supra at 187.

In the instant case, it is clear that at least three of the four “preliminary questions” discussed in Ledee must be answered in the affirmative. The Joint Venture Agreement entered into by Gates and Yuasa provides for arbitration in Japan of all disputes which arise in connection with the Agreement, and Japan is a signatory of the Convention. In addition, the arbitration clause of the Joint Venture Agreement arises out of a legal relationship which must be considered as commercial, and a party to the Agreement, Yuasa, is not an American citizen. The only dispute in the instant case regarding Yuasa’s motion to dismiss Count II and refer it to arbitration is whether the arbitration clause of the Joint Venture Agreement is a viable agreement in writing to arbitrate the issues that are alleged in Count II.

Therefore, if this Court determines that the Joint Venture Agreement is a viable agreement in writing between the parties to arbitrate the issues raised in Count II of the Plaintiffs Amended Complaint, then this Court must dismiss Count II and refer it to arbitration in Japan.

A. The Scope of the Arbitration Clause.

Paragraph 16.9 of the Joint Venture Agreement states, in pertinent part, that “YUASA shall not have any right at any time to use for its own benefit any confidential information disclosed at any time by GATES to the Company and/or YUASA...” Paragraph 16.13 of the Joint Venture Agreement provides for arbitration of all disputes which may arise in relation to the Joint Venture Agreement:

All disputes, controversies, or differences which may arise between the parties hereof, out of or in relation to or in connection with this agreement, or the breach thereof, shall be finally settled by arbitration pursuant to Japan-American Trade Arbitration Agreement of September 16, 1952, by which each party hereto is bound. Such arbitration shall be held in Japan and conducted in the English language. .

Therefore, on its face, the Joint Venture Agreement provides for arbitration of any disputes which arise regarding Yuasa’s use of confidential information disclosed to it by Gates.

Plaintiff has presented several arguments in support of its contention that the arbitration agreement does not encompass the issues disputed in Count II of the Amended Complaint. Initially, Plaintiff argues that Paragraph 16.9 of the Joint Venture Agreement was intended to apply only to information that was disclosed by Gates after the parties entered into the Joint Venture Agreement. However, where the terms of a contract are clear, the intent of the parties must be ascertained from the contract itself. Harrison Western Corp. v. Gulf Oil Co., 662 F.2d 690, 695 (10th Cir.1981); Metropolitan Paving Co. v. City of Aurora, Colorado, 449 F.2d 177 (10th Cir.1971). In the instant case, the pertinent language of Paragraph 16.9 is clear: “YUASA shall not have any right ... to use ... any confidential information disclosed at any time by GATES ... to YUASA.” [Emphasis Supplied] In our view, the clear import of this language is to prohibit Yuasa from using confidential information obtained even before the parties entered into the Joint Venture Agreement.

This conclusion is supported by the fact that the Joint Venture Agreement superseded the agreement which controlled the use of information which was disclosed by Gates to Yuasa prior to the formation of the Joint Venture Agreement. As noted above, Yuasa acknowledged its duty to maintain in confidence the trade secret technical know-how disclosed to it by Gates in a letter agreement entered into by the parties in 1975. Further, the first sentence of that letter agreement indicates that the agreement was related to the formation of the joint venture between Gates and Yuasa:

Gates Energy Products, Inc. (GEP) and Yuasa Battery Company, Ltd. (YUASA) have expressed interest in evaluating the possibility of forming a joint venture or other cooperative program under which sealed rechargeable lead-acid batteries would be marketed and/or manufactured.

Paragraph 16.1 of the Joint Venture Agreement, in pertinent part, states that the Joint Venture Agreement supersedes prior agreements entered into by the parties with respect to the matters referred to in the Joint Venture Agreement:

This Agreement and the attachments listed below set forth the entire understanding between the parties and supersedes all agreements previously entered into by them with respect to the matters referred to herein.

Therefore, the Court finds that the Joint Venture Agreement superseded the October 8, 1975 letter agreement, and the Joint Venture Agreement constitutes the only agreement between the parties regarding the use of information disclosed by Gates to Yuasa. Accordingly, the Court finds that any dispute regarding disclosed information is subject to arbitration regardless of when the information was disclosed.

Plaintiff also argues that Paragraph 16.13 of the Joint Venture Agreement (hereinafter “the arbitration clause”) does not encompass the issues involved in Count II of the. Amended Complaint because Count II does not allege that Yuasa used confidential information for its own benefit. As noted above, Paragraph 16.9 of the Joint Venture Agreement states in pertinent part that “Yuasa shall not have any right ... to use for its own benefit any confidential information disclosed at any time by Gates.” Plaintiff contends that it never alleged in Count II that Yuasa used the information for its own benefit; rather, Plaintiff claims it only alleged that it was injured by Yuasa’s disclosure of the information in its patent application in Japan. The Court can not accept this argument. The Court finds that Yuasa applied for the patent in Japan for its own benefit; therefore, Paragraph 16.9 applies to such a use of confidential information, and any dispute regarding that use is subject to arbitration under the Joint Venture Agreement.

Therefore, this Court finds that the issues involved in Count II of Plaintiff’s Amended Complaint are within the scope of the arbitration clause of the Joint Venture Agreement.

B. The Viability of the Joint Venture Agreement.

Plaintiff has argued that Count II of the Amended Complaint is not subject to arbitration under paragraph 16.13 of the Joint Venture Agreement because the Joint Venture Agreement was terminated on April 10, 1981. However, Plaintiff’s claim is based on events which occurred prior to the termination of the Joint Venture Agreement; therefore, disputes regarding those events should still be subject to arbitration. See, Becker Autoradio v. Becker Autoradiowerk GmbH 585 F.2d 39 (3rd Cir.1978); Zenol, Inc. v. Carblox, Ltd., 334 F.Supp. 866, 868-69 (W.D.Pa.1971), aff'd, 474 F.2d 1338 (3rd Cir.1973).

Plaintiff, citing the Uniform Commercial Code, 1973 C.R.S. § 4-2-106(3), also contends that any obligation to arbitrate was an executory obligation which was discharged upon the termination of the Joint Venture Agreement. However, the Federal Arbitration Act established that an arbitration clause in a contract creates substantive rights and that such a clause is not purely remedial. Standard Magnesium Corporation v. Fuchs, 251 F.2d 455, 458 (10th Cir.1957). Therefore, if one assumes that the Uniform Commercial Code is applicable in this situation, Yuasa’s right to arbitrate would survive termination of the Joint Venture Agreement because § 4-2-106(3) provides that “any right based on prior breach or performance survives.”

Therefore, this Court finds that the arbitration clause of the Joint Venture Agreement is a viable written agreement between the parties to arbitrate the issues contained in Count II of the Plaintiff’s Amended Complaint. Accordingly, Count II of the Amended Complaint is hereby dismissed, and referred to arbitration pursuant to the arbitration clause of the Joint Venture Agreement.

II. Yuasa’s Motion to Dismiss Count III.

A plaintiff has the obligation to allege in his complaint the facts essential to show that the Court has subject matter jurisdiction over the matter in dispute. If Plaintiff’s allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof. McNutt v. General Motors Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785 (1936); Land v. Dollar, 330 U.S. 731, 735, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947).

The Declaratory Judgment Act, 28 U.S.C. § 2201, provides that federal courts may issue declaratory judgments only in cases of actual controversy. This requirement is “a jurisdictional prerequisite of constitutional dimension.” International Harvester Co. v. Deere & Company, 623 F.2d 1207, 1210 (7th Cir.1980); Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir.1979); Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937).

An actual controversy exists in the context of an action seeking a declaratory judgment of patent invalidity only if tbe plaintiff discloses conduct on the part of the defendant that makes reasonable the plaintiff’s apprehension that it will face an infringement suit or the threat of one if it commences or continues the activity in question. International Harvester Co., supra, 1211. See, Grafon Corp., supra, 783; Super Products Corp. v. D.P. Way Corp. 546 F.2d 748, 753 (7th Cir.1976).

In the instant case, affidavits submitted by Yuasa support Yuasa’s contention that it did not engage in conduct that would result in any reasonable apprehension by the Plaintiff that Plaintiff will face an infringement suit or the threat of one if it continues to produce and sell its batteries. The affidavits submitted by Yuasa state that Yuasa has never threatened Gates or any of its customers or anyone else with infringement of the ’280 patent by Gates’ use of separator material in batteries it manufacture^ and sells. In addition, the affidavits state that-Yuasa has never asserted the ’280 patent against Gates, its customers, or anyone else, nor has Yuasa requested or required Gates or any of its customers or anyone else to obtain a license under the ’280 patent to manufacture, sell or use Gates’ batteries which incorporate the separator material. Furthermore, the affidavits indicate that Gates has never asked for any royalties or any payment as tribute to the ’280 patent from Gates, its customers or anyone else, and Gates has never advised or complained to Yuasa that Gates’ ability to sell its batteries has been adversely affected by the issuance of the ’280 patent or that issuance of the patent has caused Gates to modify its manufacture, sale or use of its batteries so as to impair its ability to make any future sales. These portions of the affidavits submitted by Yuasa have not been disputed by Gates.

Gates has made several arguments in support of its contention that an actual controversy exists in the instant case. Initially, Gates argues that it need not make a substantial showing of real and reasonable apprehension of action by Yuasa because it is engaged in the manufacture and sale of batteries which may infringe the patent owned by Yuasa. Although it may be true that there is less of a possibility that the Court will be asked to render an advisory opinion when the Plaintiff is an actual manufacturer .of a product that may infringe the patent owned by another, the Plaintiff must still demonstrate that conduct of the Defendant is the cause of some reasonable apprehension in order for the Court to have subject matter jurisdiction. See International Harvester Co., supra.

Gates also argues that a controversy exists in this case because Yuasa defended opposition proceedings brought by Gates against Yuasa’s patent applications in Japan and West Germany. Although there is some dispute regarding whether those patent applications involved the counterparts to the ’280 patent, the Court finds that defending against such opposition does not constitute sufficient controversy to form the basis of subject matter jurisdiction in the instant case. It has been held that even where a plaintiff had initiated oppositions in foreign countries and had been sued for infringement of a defendant’s foreign counterpart patent, there was no actual controversy sufficient to form the basis of subject matter jurisdiction. Dr. Beck & Co. GmbH v. General Electric Company, 210 F.Supp. 86, 92 (S.D.N.Y. 1962), aff'd, 317 F.2d 588 (2nd Cir.1963). In addition, by analogy, this Court has held that opposition to the issuance of a trademark does not give rise to an actual controversy. Wuv’s International v. Love’s Enterprises, Inc., 200 U.S.P.Q. 273, 275 (D.Colo.1978), aff'd, No. 80-2309 (10th Cir. Mar. 21, 1983). Therefore, Yuasa’s defense of an opposition proceeding brought by Gates does not constitute conduct that makes reasonable the Plaintiff's apprehension that it will face an infringement suit or the threat of one if it continues its activity.

Plaintiff, citing Cummings v. Moore, 202 F.2d 145 (10th Cir.1953) and Honeywell Inc. v. Sperry Rand Corp., 180 U.S.P.Q. 673 (D.Minn.1973), also argues that a controversy exists in this case because of Plaintiff’s allegations regarding the derivation of Yuasa’s ’280 patent. However, both of those cases involved situations in which the Defendant had engaged in some form of overt conduct which resulted in Plaintiff’s reasonable apprehension. In Cummings, supra, the Patentee contacted Plaintiff's customers and told them that Plaintiff was infringing its patent. In Honeywell, supra, the Patentee had brought an infringement suit against the Plaintiff in a different U.S. District Court. Therefore, this Court finds that in the absence of some form of overt conduct on the part of the Defendant allegations regarding the derivation of a Defendant’s patent is insufficient to form the basis of an actual controversy necessary to give the Court jurisdiction under the Declaratory Judgment Act.

Gates also contends that a justiciable controversy exists in this case because of its potential liability resulting from its obligation to indemnify its customers against patent infringement under the U.C.C., 1973 C.R.S. § 4-2-312(3). However, to affect Gates’ warranty obligations, a customer must first notify and alert Gates that a claim of infringement of the ’280 patent has been made against the customer. U.C.C. 1973 C.R.S. § 4-2-607(3)(b). As noted above, it is undisputed that Yuasa has never contacted any of Gates’ customers regarding an infringement of the ’280 patent. In the absence of such a contact, or some other form of conduct on the part of Yuasa, no actionable controversy exists such as is necessary for this Court to have jurisdiction under the Declaratory Judgment Act.

Given our decision to dismiss Count III of Plaintiff’s Complaint for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure, it is not necessary to consider whether Count III should be dismissed for failure to state a claim under Rule 12(b)(6). The Court’s decision should not be interpreted as a decision on the merits of plaintiff’s claim; rather, this Court is forced to dismiss Count III because there is not a justiciable controversy regarding Count III at this time.

III. Other Motions.

Yuasa’s motion to strike all references to Count II under Rule 12(f) F.R. Civ.P. is hereby DENIED. References in Gates’ Amended Complaint regarding disclosures by Gates to Yuasa of confidential matters, and references in the allegations to events leading up to and during the Joint Venture, may prove to be relevant to Plaintiff’s claim of patent infringement under Count I of the Amended Complaint. Therefore, Yuasa’s motion to strike is premature at this time, and the motion is hereby DENIED without prejudice.

Plaintiff’s motion under Rule 26(c) for a protective order quashing Defendant’s notice of deposition pending disposition of Defendant’s motion to stay its answer to Count I, to the extent it is still viable, is hereby DENIED.

Defendant’s motion to enlarge the time to answer Count I of Plaintiff’s Amended Complaint is hereby DENIED, and Defendant is directed to file its Answer to Count I of the Amended Complaint by the close of business on September 19, 1983.

ORDER

For the reasons stated above, Defendant Yuasa’s motion to refer the parties to arbitration and to dismiss Count II of Plaintiff’s Amended Complaint for lack of subject matter jurisdiction under Rule 12(b)(1) is hereby GRANTED.

Defendant Yuasa’s motion to dismiss Count III of Plaintiff’s Amended Complaint for lack of subject matter jurisdiction under Rule 12(b)(1) F.R.Civ.P. is also GRANTED.

Defendant Yuasa’s motions to enlarge its time to answer Count I under Rule 6(b) F.R.Civ.P. and to strike all references to Count II under Rule 12(f) F.R.Civ.P. are hereby DENIED.

Plaintiff’s motion under Rule 26(c) for a protective order quashing Defendant’s notice of deposition pending disposition of Defendant’s motion to stay its answer to Count I, to the extent it is still viable, is hereby DENIED.

      . 9 U.S.C. § 201 et seq. (1970).


author: DONALD E. O’BRIEN, District Judge.

text:
    John P. HANLON and Shirley Ann Hanlon, Plaintiffs, v. JOHNS-MANVILLE SALES CORPORATION, et al., Defendants. Frank J. GIBBONS and Helen Gibbons, Plaintiffs, v. JOHNS-MANVILLE SALES CORPORATION, et al., Defendants.
    Nos. C 80-4072, C 80-4097.
    United States District Court, N.D. Iowa, W.D.
    Jan. 24, 1984.
    Richard H. Middleton, Jr., Savannah, Ga., Ronald L. Motley, Barnwell, S.C., Harry H. Smith, Sioux City, Iowa, for plaintiffs.
    Robert E. Beebe, Sioux City, Iowa, for Johns-Manville Sales Corp.
    T.M. Whicher, Daniel T. Cutler, Sioux City, Iowa, for Celotex Corp.
    James W. Redmond, Marvin F. Heidman, Sioux City, Iowa, for Owens-Coming Fibreglass.
    Roy M. Irish, James A. Lorentzen, Des Moines, Iowa, for Fibreboard Corp.
    Terrence A. Hopkins, Thomas J. Logan, Des Moines, Iowa, for Unarco Industries.
    E. Ralph Walker, William W. Schwarz, Des Moines, Iowa, for GAF Corp.
    Kenneth Sacks, Council Bluffs, Iowa, John A. Rickerson, Omaha, Neb., for Armstrong World Ind.
    Michael Figenshaw, Des Moines, Iowa, for Raybestos-Manhatton.
    Milton A. Katskee, Omaha, Neb., David F. McCann, Council Bluffs, Iowa, for Nicolet Industries.
    James M. Cosgrove, Lawrence D. Kudej, Sioux City, Iowa, for Forty-Eight Insulation.
    John R. Timmermier, Omaha, Neb., John M. Burns, Council Bluffs, Iowa, for EaglePicher Industries.

      Emmet Tinley, Council Bluffs, Iowa, for Keene Corp.
    Mayer Kanter, Sioux City, Iowa, Timothy J. Walker, Jaki K. Samuelson, Des Moines, Iowa, for H.K. Porter Co.
    Ronald A. Riley, Des Moines, Iowa, for Pittsburgh-Corning.
    Ronald A. Riley, Des Moines, Iowa, for Combustion Engineering.
    Paul J. Yaneff, Sioux City, Iowa, for Amatex Corp.
    Philip Willson, Council Bluffs, Iowa, for Garlock Inc.
    T.M. Whicher, Daniel T. Cutler, Sioux City, Iowa, for Carey Canada.
    J. Patrick Ryan, N. Richard Willia, Sioux City, Iowa, for LaVelle Industries.
    Thomas A. Finley, Des Moines, Iowa, for Rhopac Inc.
    Michael P. Cavel, Omaha, Neb., Daniel C. Galvin, Sioux City, Iowa, for Rock Wool Mfg.
    Daryl L. Hecht, David R. Crary, Sioux City, Iowa, for Henning Asbestos & Packing.
    Robert W. Green, Sioux City, Iowa, for U.S. Mineral Products.
    Mayer Kanter, Sioux City, Iowa, Robert Fanter, Des Moines, Iowa, for Standard Asbestos Mfg. & Insulation.
    David J. Blair, Sioux City, Iowa, for A C & S.
    Paul W. Deck, Jr., William G. Deck, Sioux City, Iowa, for Ryder Industries.
   ORDER

DONALD E. O’BRIEN, District Judge.

This matter comes before the Court on a motion for partial summary judgment filed by Defendant Celotex on August 31, 1983. The motion asks that the plaintiffs’ claims for punitive damages in the above-named actions be stricken and states three separate grounds in support. The motion was joined in its entirety by Defendant Keene on September 6, 1983 and by Defendant GAF on September 8, 1983. Paragraphs 1 and 2 only of the motion were joined by Defendant Fibreboard on September 12, 1983. Finally, ¶¶ 2 and 3 of the Celotex motion were joined by Defendant Raymark (filing a separate brief) on October 24, 1983, and by Defendant Owens-Corning on October 18, 1983. As previously stated, these defendants all request that the plaintiffs’ claims for punitive damages be stricken from the pleadings. A hearing was held in Sioux City, Iowa on December 19, 1983. At this hearing, several motions besides those specified above were discussed. This Order, however, will deal only with those motions filed by the above specified defendants asking that the plaintiffs’ claims for punitive damages be struck from the pleadings. After carefully considering the arguments of counsel made at the hearing and in their briefs, the Court finds that the motions to strike the plaintiffs’ claims for punitive damages should, at this stage of the litigation, be denied, with the possibility for reconsideration upon presentment to this Court by defendants of further support for their motions, as will be discussed herein.

I. Punitive Damages Against Successor Corporations

The Defendant Celotex has presented to the Court evidence by way of affidavits and exhibits demonstrating that it is the successor corporation to a firm that it alleges manufactured and/or sold the products or a portion of the products that the plaintiffs in this action now claim to have been defective. Celotex argues that because it is not the corporation responsible for the sale or manufacture of these products, it should not be held responsible for punitive damages in a products liability action even if it can be held liable for the actual damages that may have been suffered by the plaintiffs. In support of this position, Celotex cites the Court to several Iowa cases concerning punitive damages, including Briner v. Hyslop, 337 N.W.2d 858 (Iowa 1983). In Briner, the Iowa Supreme Court held that a corporation may be subjected to punitive damages for the acts of an employee only if the acts were authorized by the corporation, if the employee was unfit and the principal reckless in employing or retaining him, if the employee was acting in a managerial capacity and within the scope of his employment, or if the corporation ratified or approved the act of the employee. Id., at 866. Celotex argues that it cannot be held liable for punitive damages in this situation because none of the tests set forth in Briner for the imposition of punitive damages can be satisfied.

Assuming the allegations made in the motion to be true, this Court agrees that the test for the imposition of punitive damages in Iowa as to the Defendant Celotex cannot be satisfied, as no employees or agents of Celotex were involved. The issue presented by this motion, however, is not whether Celotex itself committed any act through its officers or employees through which it may be subjected to punitive damages. Rather, the question involved is whether liability for punitive damages can be transposed from a predecessor corporation to its successor.

The general rule is that a corporation that purchases the assets of another corporation will not be held responsible for the liabilities of the selling corporation. 15 W. Fletcher, Cyclopedia of the Law of Private Corporations, §§ 7122, 7123 (Revised Permanent Ed.1973 & Supp.). Four exceptions to that rule are recognized in Iowa law: (1) Where there is an express agreement to assume liability; (2) where there is a consolidation or merger; (3) where the purchasing corporation is a “mere continuation” of the selling corporation; and (4) where the transaction is fraudulent. Nelson v. Pampered Beef-Midwest, Inc., 298 N.W.2d 281, 287 (Iowa 1980). Appendix 1 in Exhibit B, attached to the Celotex motion for partial summary judgment, is a copy of a merger agreement between Celotex and Panacon Corporation. Panacon is alleged by Celotex to be the predecessor corporation from which it, Celotex, acquired potential liability to the plaintiffs. Section 11 of the merger agreement provides in part that “all debts, liabilities and duties of Panacon shall upon the effective date of the merger attach to Celotex and may be enforced against it to the same extent as if such debt, liabilities and duties had been incurred or contracted by Celotex.” It is, therefore, apparent from the material provided by Celotex that the transaction between it and Panacon met at least two of the above recognized exceptions to the nonliability rule in that there was an express agreement to assume all liability and the transaction constituted a merger between two corporations.

Celotex further argues that the goals of imposing punitive damages as articulated by the Iowa Supreme Court would not be met by imposing such liability on Celotex in this case. Specifically, Celotex argues that part of the justification for punitive damages in Iowa is a desire to punish offenders for their outrageous acts. See Briner v. Hyslop, supra, 337 N.W.2d, at 866-67. Celotex argues that it would be pointless to impose punitive damages on it in this situation as it performed no acts for which it should be punished. The Iowa Supreme Court, however, has also stated that general deterrence to others is an alternative justification for punitive damages. Id., at 865. In the present case, the plaintiffs have alleged that an act was done so outrageous in nature that punitive damages should be imposed. It is true that this act was not performed by the Defendant Celotex but by its predecessor corporation now combined with Celotex through a merger. The imposition of punitive damages on Celotex would be for the act of its predecessor and would stand as an example to others, thus meeting the goal of general deterrence expressed by the Iowa Supreme Court. This Court finds the arguments of Celotex against imposing punitive damages on a successor corporation to be unpersuasive.

In support of this ruling, the Court has found limited but unanimous authority. In Western Resources Life Ins. Co. v. Gerhardt, 553 S.W.2d 783, 787 (Tex.Civ.App. 1977), it was held that a successor corporation that is in large part a continuation of the predecessor assumes liability for all tort claims against the predecessor, including exemplary damages. In Investors Preferred Life Ins. Co. v. Abraham, 375 F.2d 291, 295 (10th Cir.1967), punitive damages were allowed against a successor corporation when it was found that the successor took over the business and assumed the liabilities of the predecessor. In Thomas v. E. J. Korvette, Inc., 329 F.Supp. 1163, 1169-70 (E.D.Pa.1971), it was held that a successor corporation which has acquired all the assets of an ongoing business has assumed responsibility for outstanding tort claims, including exemplary damages. Finally, in Moran v. Johns-Manville Sales Corp., 691 F.2d 811, 816 (6th Cir.1982), it was pointed out that in a jurisdiction that bases the imposition of punitive damages on general. deterrence, as does Iowa in part, the fact that the defendant has ceased the offending conduct is irrelevant, as the exemplary damages may be used as a future deterrence to others. This Court finds, therefore, that the status of Celotex as a successor corporation does not prevent it from being subjected to punitive damages for the acts of its predecessors in the manufacture and/or sale of defective products.

This section of the Celotex motion discussed above has been joined by Defendants Keene, GAF, Fibreboard, and Ray-mark. These defendants have not, however, supported their assertions that they are successor corporations by the filing of affidavits or other supplementary material as required by rule 56 of the Federal Rules of Civil Procedure. Their motions must, therefore, also be denied to the extent they rely on 111 of the Celotex motion. This Court’s ruling on the motion of Celotex should not be construed as a holding that all successor corporations must be subject to punitive damages for the acts of their predecessors, nor may it be viewed as a comment on the law of successor liability in general for the State of Iowa as it affects these defendants. Without further input, however, this Court is unable to properly consider the motions of those defendants that have joined in 111 of the Celotex motion and, therefore, those motions will be denied to the extent they rely on If 1.

II. Multiple Claims for Exemplary Damages

The next two arguments made by Celotex are based upon the assertion that Celotex and several other defendants in these actions are currently defending a large number of civil suits across the country engendered by the same products that are the subject of the present actions before this Court. Celotex argues first that punitive damages are inappropriate in multijurisdictional/multiclaimant litigation in that the defendants are exposed to the possibility of overkill and exhaustion of corporate assets when subjected to a very large number of civil suits involving essentially the same claims. To support this argument, Celotex has provided the Court with an affidavit from Robert W. Emerton, III, Assistant Vice President of the Celotex Corporation, stating that Celotex was the. named defendant in excess of 10,000 lawsuits nationwide alleging asbestos related personal injuries. The second argument made by Celotex in relation to its large exposure to civil suits is that punitive damage awards against it in such a large number of cases would be an improper burden on commerce under Article I, § 8, of the United States Constitution; would violate the due process rights of Celotex under the Fifth and Fourteenth Amendments to the United States Constitution; and would constitute, in effect, criminal sanctions against Celotex requiring various constitutional protections.

The Court has examined the authorities cited by Celotex in support of its position that multiple claims for punitive damages should not be allowed in cases such as this. The Court must agree that the authorities cited raise serious questions concerning the constitutionality and the social desirability of imposing upon a single defendant liability for such a large number of punitive damage claims so as to threaten the defendant’s corporate existence. The Court would note in particular Judge Friendly’s examination of the issue in Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832 (2d Cir.1967). In Roginsky, Judge Friendly pointed out that “[t]he legal difficulties engendered by claims for punitive damages on the part of hundreds of plaintiffs are staggering.” Id,., at 839. The Court of Appeals for the Second Circuit went on to say, however, that it knew “of no principle whereby the first punitive award exhausts all claims for punitive damages and would thus preclude future judgments.” Id. Therefore, while recognizing the gravity of the problem, the Second Circuit was unable to resolve the issue and, in fact, decided the case before it on alternative grounds.

More convincing authority for the position of Celotex is provided in the case of Globus v. Law Research Service, Inc., 418 F.2d 1276 (2d Cir.1969), cert. denied, 397 U.S. 913, 90 S.Ct. 913, 25 L.Ed.2d 93 (1970), also cited in the defendant’s brief. In Globus, the Court of Appeals for the Second Circuit held that § 17(a) of the Securities Act of 1933, while providing a private cause of action against security underwriters, did not allow the recovery of punitive damages in such actions. Of primary importance to the Court of Appeals in reaching its decision was the possibility that a single underwriter could be exposed to an unreasonable amount of punitive damage claims due to the fact that every person who reads the underwriter’s prospectus could conceivably claim injury. Id., at 1285. The Globus case, however, may go too far to be of benefit to the defendants in the present case. The Globus court held that punitive damages were never recoverable upon the claims before it, without regard to the number of plaintiffs involved. Celotex and the other defendants in the present case, however, do not argue that punitive damages may never be recovered in a personal injury case but, rather, only that in cases involving multiple claimants in multiple jurisdictions should punitive damages be limited. Even the court in Globus expressed doubt as to the validity of a rule that would provide a windfall to certain litigants and deny the same recovery to others. Id., at 1285-86. This Court feels, therefore, that the defendants have provided no direct authority for the position that they are asking this Court to take on the issue of punitive damages.

The plaintiffs cite the Court to the case of Moran v. Johns-Manville Sales Corp., 691 F.2d 811 (6th Cir.1982), a case also involving asbestos related personal injuries. The Court of Appeals for the Sixth Circuit, while recognizing the difficulties presented by multiple punitive damage claims against a single defendant, refused to limit punitive damages in the case before it on the grounds that such action is better left for the state or federal legislature. Id., at 817. The defendants respond by pointing out that Moran interpreted Ohio law, suggesting that Iowa law contains significant differences that weigh in favor of the defendants’ position.

The Court finds that, while the defendants’ arguments on this very difficult question are not without merit, it has not been demonstrated to the Court that any of the defendants have actually been subjected to sufficient punitive damage judgments so as to justify the limitation of such damages in the present cases. See generally, In re Federal Skywalk Cases, 680 F.2d 1175, 1182 (8th Cir.1982) (possibility of multiple exemplary damage claims too speculative to qualify the assets that would pay such claims as a limited fund for purposes of federal interpleader). The parties have indicated that a small number of punitive damage judgments have been handed down but that a number of these judgments have been appealed or settled. Without convincing evidence that these defendants have actually been subjected to judgments for punitive damages that in fact threaten their corporate existence, this Court finds it impossible to take the unprecedented step advocated by the defendants to deny these personal injury plaintiffs any opportunity to recover exemplary damages.

This ruling must not be construed as this Court’s final position on the merits of the defendants’ arguments. The justification ascribed for the allowance of punitive damages is that they serve as punishment to the wrongdoer and as a deterrent to others; compensation of the victim is not a purpose. Briner v. Hyslop, 337 N.W.2d 858, 865 (Iowa 1983). If it can be conclusively demonstrated to this Court that any defendant in this action has been subjected to judgments for punitive damages to such a degree that further awards would not promote the goals of such damages in Iowa, this Court may reconsider this ruling in light of such circumstances. This does not mean, however, that the Court’s ruling would necessarily be different should such circumstances be presented, but only that the Court would be willing to reconsider upon the revelation of new or additional facts. The Court is aware of the admonition made in Moran, supra, that this area is more properly left to legislatures. While agreeing with this position in a general sense, the Court also feels it is a duty of the judicial system to modify the common law where it is “varied by custom, not founded in reason, or not consonant to the genius and manners of the people.” Goetzman v. Wichern, 327 N.W.2d 742, 751 (Iowa 1983). The Court will, therefore, deny for the present time these motions to strike the plaintiff's claims for punitive damages based upon the possibility of multiple judgments, with leave for the defendants to reassert the motions at trial.

IT IS THEREFORE ORDERED that the motion for partial summary judgment filed by Defendant Celotex on August 31, 1983 in the above-named cases and joined by Defendant Keene on September 6, 1983; Defendant GAF on September 8, 1983; Defendant Fibreboard on September 12, 1983; Defendant Owens-Corning on October 18, 1983; and Defendant Raymark on October 24, 1983, be denied.

      . For a similar treatment of the issue, see Maxey v. Freightliner Corp., 450 F.Supp. 955, 962-63 (N.D.Texas 1978), aff'd, 623 F.2d 395 (5th Cir. 1980), modified, 665 F.2d 1367 (5th Cir.1982).

      . For a similar ruling, see de Haas v. Empire Petroleum Co., 435 F.2d 1223, 1231-32 (10th Cir.1970).

      . At page 4 of the Affidavit of Dennis R. LaFiura attached to the Motion for Partial Summary Judgment filed by Raymark Industries that raises the identical issues contained in ¶¶ 2 and 3 of the Celotex motion, it is indicated that Raymark has been subjected to four judgments for exemplary damages totaling $649,000. Two of these judgments have been appealed and one has been settled, leaving a single judgment of $1,000 for exemplary damages standing without challenge.