author: ELFVIN, District Judge.

text:
    Donald A. LEVINGER, Individually and as Administrator of the Estate of Ursula H. Levinger, deceased, Barbara L. Levinger and David M. Levinger, on Behalf of themselves and all others similarly situated, Plaintiffs, v. SHEPARD NILES CRANE AND HOIST CORP., Vulcan, Inc., George T. Barton, Charles L. Brayton, Warren W. Clute, Jr., Herbert W. Gledhill, Jr., John S. Jackson, Chris F. Moersch, Jr., Harold H. Seymour, Hathaway Turner, James M. Underwood, Sr., Charles A. Winding, G.E. Anderson, Charles B. Baton, George D. Billock, J. Nevin Garber, Gerald N. Potts, H.S. Saxmon, Harold A. Stewart, John M. Titzel and Edward G. Nemanic, Defendants.
    No. CIV-77-144E.
    United States District Court, W.D. New York.
    Feb. 28, 1985.
    Robert S. Lesher, East Aurora, N.Y., for plaintiffs.
    Robert S. Conklin, Buffalo, N.Y., for defendants.
   MEMORANDUM and ORDER

ELFVIN, District Judge.

Presently before me in this action brought pursuant to sections 10(b) and 14 of the Securities Exchange Act of 1934 and the Securities and Exchange Commission’s Rule 10b-5 are plaintiffs’ motion for an order permitting further contacts with certain former shareholders of Shepard Niles Crane and Hoist Corp. (“Old Shepard”) and defendants’ cross-motion to dismiss this action on the grounds that the statute of limitations has expired and that the Complaint fails to state a claim upon which relief can be granted.

During 1971, Old Shepard merged into Shepcan Corporation, a subsidiary of the defendant Vulcan, Inc. The notice of a special meeting and an accompanying proxy statement were mailed to the shareholders of Old Shepard February 27, 1971. The shareholders meeting which approved the merger was held March 25, 1971 and the merger became effective as of March 31, 1971.

The Complaint was filed in this Court March 24, 1977 by Donald A. Levinger and the other named plaintiffs. They are shareholders of Old Shepard by reason of their being the distributees of Ursula H. Levinger, the late wife of Donald A. Levinger and a shareholder of record of Old Shepard.

On May 10, 1977 I sua sponte forbade communication by the parties with any actual or potential members of the proposed class hereto and their counsel without my express permission. After various discovery proceedings plaintiffs submitted a motion for class action certification November 28,1977. On February 8, 1978 I denied such certification on the ground of the inadequacy of representation for the class by the named plaintiffs who simultaneously were pursuing the remedy of appraisal in state court and thus apparently had interests which conflicted with those of the majority of former shareholders who had retained no appraisal rights. On June 29, 1978 I denied plaintiff’s motion for reconsideration of class action certification and, in the alternative, for certification to appeal from such denial. After reviewing various communications to this Court by both parties, on February 18, 1981 I concluded that plaintiffs were entitled to relief from my Order of May 10, 1977 and requested plaintiffs to submit a proposed form of written notice on which proposal oral arguments would be held. A notice to former shareholders was mailed July 15, 1982 by the Clerk of this Court. In order to follow up on the various responses, plaintiffs filed their motion January 10, 1984 for leave to contact the responding shareholders. Defendants filed their cross-motion January 23, 1984 to dismiss the Complaint.

Sections 10 and 14 of the Securities Exchange Act of 1934 prescribe no period of limitation for actions brought thereunder. In such a situation a federal court must apply the statute of limitation of the state wherein it sits which best effectuates the policy of the federal statute. See, e.g., IIT, an Intern. Inv. Trust v. Cornfeld, 619 F.2d 909, 928 (2d Cir.1980); Arneil v. Ramsey, 550 F.2d 774, 779 (2d Cir.1979); See also Ernst & Ernst v. Hochfelder, 425 U.S. 185, 210 fn. 29, 96 S.Ct. 1375, 1389 n. 29, 47 L.Ed.2d 668 (1976). The United States Court of Appeals for the Second Circuit looks to that limitation period for actions based upon common law fraud. IIT, an Intern. Inv. Trust v. Cornfeld, supra, at 928; Stull v. Bayard, 561 F.2d 429, 431 (2d Cir.1977), cert. denied, 434 U.S. 1035, 98 S.Ct. 769, 54 L.Ed.2d 783 (1978).

New York’s Civil Practice Law and Rules (“CPLR”) has two separate relevant limitations periods:

“Except as provided in article 2 of the uniform commercial code * * *, where the time within which an action must be commenced is computed from the time when facts were discovered or from the time when facts could with reasonable diligence have been discovered, or from either of such times, the action must be commenced within two years after such actual or imputed discovery or within the period otherwise provided, computed from the time the cause of action accrued, whichever is longer.” CPLR § 203(f).
“The following actions must be commenced within six years:
“8. an action based upon fraud; the time within which the action must be commenced shall be computed from the time the plaintiff or the person under whom he claims discovered the fraud, or could with reasonable diligence have discovered it.” CPLR § 213.

“The combined effect of CPLR 213(8) and 203(f) thus is ‘two separately-timed and alternative limitations periods in the case of a delayed discovery: six years from accrual or two years from discovery whichever is longer.’ ” IIT, an Intern. Inv. Trust v. Comfeld, supra, at 928-929 (quoting from Hoff Research & Dev. Lab., Inc. v. Phillipine Nat. Bank, 426 F.2d 1023, 1026 (2d Cir.1970)).

All parties agree that the two-year period under section 203(f) has expired. Therefore, the alternative six-year period is the only limitation period with which this Court is concerned. In determining when the limitation period started to run, federal law controls. IIT, an Intern. Inv. Trust v. Comfeld, supra, at 929; Stull v. Bayard, supra, at 432; Arneil v. Ramsey, supra, at 780. The period is measured from “when the plaintiff suffers a loss as a result thereof, Sack v. Low, 478 F.2d 360, 365-66 (2d Cir.1973); i.e., when a plaintiff with assumed knowledge of the fraudulent wrong may assert a claim for relief. Barninger v. National Maritime Union, 372 F.Supp. 908, 913 (S.D.N.Y.1974).” Stull v. Bayard, supra, at 432.

Plaintiffs erroneously contend that the period of limitations began to run when the merger was consummated and that “the merger is the gravamen of the complaint.” However, the federal securities laws are concerned with the full and fair disclosure of accurate information. A failure to make such disclosure, if any, occurred when the proxy statement was issued. As was stated in Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1976), the essential purpose of the Securities Exchange Act is full and fair disclosure and, in the situation presented therein, the validity of the merger and the fairness of the merger price were a matter of state law.

A similar argument was made in Stull v. Bayard, supra, in which an action was brought under section 14(e) of the Securities Exchange Act of 1934 for allegedly fraudulent misstatements and omissions in a prospectus on a tender offer. The plaintiff therein contended that the cause of action for the six-year limitation period had accrued when the tender offer had expired rather than on the date the prospectus had been issued. The appellate court held that the issuance of the prospectus was the critical date—that is, when that plaintiff's right to seek legal relief had accrued.

“The federally created right upon which plaintiff bases his claim is the right to full disclosure of accurate information which would have helped him to decide whether to retain his stock or surrender it to the takeover bidder. Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 58 [95 S.Ct. 2069, 2075, 45 L.Ed.2d 12] * * * (1975). Appellant was deprived of this right on July 18, 1969, when the pool of information accessible to Piper [Aircraft Corporation] shareholders was muddied by Bangor Funta’s allegedly misleading prospectus.” Stull v. Bayard, supra, at 432.

In applying such analysis to the case at hand, I note that the plaintiff in Stull v. Bayard had argued that the damage wasn’t complete until the tender offer had expired whereas, the instant plaintiffs argue that the damage didn’t occur until the merger had been consummated. In fact, the damage occurred when the allegedly misleading proxy statement issued. The proxy statement was issued February 27, 1971, more than six years before the action was commenced on March 24, 1977, the six-year statute of limitation had expired by the latter date and this action is thus time-barred.

It is hereby ORDERED that defendants’ motion to dismiss is granted.

      . At page 7 of plaintiffs’ reply memorandum, it is conceded that the two-year period has run.

      . Plaintiffs’ reliance on Phillips v. Levie, 593 F.2d 459 (2d Cir.1979), is misplaced in that such involved a section 10(b) action for fraudulent retention of shares, a factual scenario quite distinguishable from that presented herein.


source: Caselaw Access Project

author: HASTINGS, District Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. VIOMAR CO., et al., Defendants.
    No. 82-455-Civ-Hastings.
    United States District Court, S.D. Florida.
    March 21, 1985.
    David H. Lichter, Asst. U.S. Atty., for plaintiff.
    James F. Gilbride, Miami, Fla., for defendant Wiesenberg.
    Carl A. Spatz, Miami, Fla., for defendant Towerbank Overseas, Inc.
    Guillermo Sostchin, Miami, Fla., for defendants Pavilion Auto Leasing & Rentals, Inc., Reina Gateno de Abadi & Moisés Abadi.
    Burton Engels, Miami, Fla., for defendant Santeiro.
   ORDER DENYING MOTION TO RELEASE PROPERTY FROM TEMPORARY RESTRAINING ORDER

HASTINGS, District Judge.

This cause is before the Court on movant Malka Wiesenberg’s Motion to Release Property From Temporary Restraining Order. The Court held an evidentiary hearing on this motion on March 11, 1985, and is of the opinion that the motion should be denied, for the reasons set forth below.

Factual Background

Movant, Malka Wiesenberg, is the daughter of Jose and Margarita Bejman. The Bejmans are federal fugitives from an indictment in the Southern District of Florida, Case No. 82-34-Cr-SMA, in which, along with several other defendants, they are charged with conspiracy to defraud the United States by failing to report voluminous currency transactions in excess of $10,000 and by failing to file the required Report of International Transportation of Currency of Monetary Instruments for transportation of currency in excess of $5,000 into the United States.

In connection with the transactions described in the indictment, the United States Customs Service and the Department of the Treasury assessed a civil penalty in the amount of $23,069,492.00 against the defendants jointly and severally in accordance with 31 U.S.C. § 1103 and issued a Notice of Civil Penalty against the defendants in that amount. Pursuant to the government’s filing of an action to reduce to judgment the civil penalty, this Court issued a Temporary Restraining Order on March 8, 1982, followed by an Order of Preliminary Injunction March 31, 1982.

That injunction in pertinent part restrained and enjoined the defendants from disposing, conveying or taking any other action with respect to all real and personal property within the defendants’ possession, custody or control, and/or in which the defendants have a legal or equitable interest. Included in that injunction were two properties described as follows:

Real and personal property located at 20401 N.E. 30th Avenue, Apartment 324 North Miami Beach, Florida owned by Jose and Margarita Bejman, his wife Real and personal property located at Lot 20 in Block 7 of Golden Isles, Section B according to the plat thereof recorded in Plat Book 43, Page 30 of the Public Records of Broward County, Florida, owned by Jose and Margarita Bejman, his wife

These two properties are owned free and clear by the Bejmans, who purchased them in 1979 and 1980, respectively. Movant filed her motion to have this property released from the Temporary Restraining Order because, according to movant, these two properties were allegedly conveyed to her approximately one (1) year prior to the entry of the Temporary Restraining Order and Order of Preliminary Injunction.

The Evidence

In support of her motion, both movant and her husband, Jack Wiesenberg, testified that movant’s parents informed them at some unspecified time following their engagement in 1980 that they were going to give them the Golden Isles property and Apt. 324 as a wedding present. Movant and her husband testified that in April, 1981, they contacted an attorney, Mr. Jeffrey Augen, to prepare the necessary papers for transfer of the property. Claimants then introduced into evidence what purported to be a copy of letter from Mr. Augen stating that a warranty deed had been prepared with respect to the Golden Isles property, that the deed was enclosed, and that movant should have the deed signed by her parents and returned to the attorney’s office.

Movant testified that she sent “some legal documents” which she believed to be the warranty deeds to Colombia, South America, her parents’ residence. Although movant’s husband could not testify that he ever saw any warranty deeds after the time the Bejmans originally purchased the Golden Isles property in 1980, movant stated that she saw the documents after they were returned by her parents and that she forwarded them to Mr. Augen. Both movant and her husband testified that they never heard from Mr. Augen again, and the warranty deeds which allegedly were to pass title from the Bejmans to movant were never recorded.

Movant also offered into evidence two affidavits executed by her parents which, with respect to Apt. 324 and the Golden Isles property, stated as follows: “That it is our will as the legitimate parents of Malka, to favor her with a wedding gift.” These affidavits, which were not requested by the attorney in his letter, state they were executed on May 22, 1981, shortly after the warranty deeds were sent to Colombia. Movant, however, testified that they were not sent back to Florida with the documents; they were in fact not mailed to movant until 1982. Curiously, although the date of the notary’s signature on the document accompanying the affidavits— May 22, 1981—matches the date attested to by the Bejmans, the certification of the Consul of the United States is dated April 12, 1982, a year after movant claims she sent the warranty deeds to Colombia and after the issuance of the preliminary injunction in this case.

The Law

Under Florida law, the essential elements of a valid gift include: (1) donative intent by the donor (2) effective transfer and delivery; and (3) actual and implied acceptance by the donee. Green v. Green, 314 So.2d 801, 802 (Fla.Dist.Ct.App.1975). A claim that a gift has been made “must be sustained by clear and satisfactory evidence of every element.” Lowry v. Florida Nat’l Bank, 42 So.2d 368 (Fla.1949), quoting Garner v. Bemis, 81 Fla. 60, 87 So. 426, 428 (Fla.1921). See also Canova v. Florida Nat’l Bank, 60 So.2d 627 (Fla. 1952).

Considering these three elements in reverse order, this Court finds that movant has met the third element of the Green inquiry by demonstrating sufficient acceptance. The government conceded this point at the hearing, and movant’s actions in paying the taxes and maintenance on the properties are consistent with acceptance of a gift of the properties.

The other two elements, however, are more problematic. It is, of course, black letter law that title to land may not be transferred orally. See Watrous v. Morrison, 33 Fla. 261, 14 So. 805 (1894). The Florida Supreme Court has made it clear on numerous occasions that delivery of a warranty deed is not something to be treated lightly: “Delivery is an essential requisite of the execution of a deed conveying valid legal title. Without delivery, nothing passes to the grantee.” McCoy v. Love, 382 So.2d 647, 649 (Fla.1979). Indeed, the fact that the delivery is to take place between parent and child does not lessen the movant’s burden in this case: “Delivery of a deed is essential to the passing of title to the property intended to be conveyed to the grantee ... delivery is a indispensible to the validity of a deed between members of a family as between persons unrelated.” Janes v. Janes, 15 Fla. 716, 15 So.2d 677 (Fla.1943). Movant has not presented sufficient evidence to demonstrate that the warranty deeds were delivered. The letter from the attorney describes only one parcel of land for which a document was allegedly prepared. Moreover, given the absence of testimony from the donors that the deeds were actually sent and the absence of the deeds themselves, movant has not sufficiently established delivery of the deeds.

Alternatively, even if the affidavits from Colombia could in some way be considered sufficient to pass title, the delivery requirement would still not be met under Florida law. A deed must usually indicate a delivery date. In lieu of that, however, when the delivery date can be proved, the deed will take effect. See Douglass v. Tax Equities, Inc., 198 So. 5, 8 (Fla.1940). In this case, however, there was no testimony establishing the date on which the affidavits were delivered; movant’s testimony was simply that the affidavits were sent to her sometime in 1982.

Because this Court is of the opinion that movant has failed to prove delivery of title as required, the Court need not reach the issue of intent. The Court notes in passing, however, that the evidence presented did not sufficiently establish donative intent.

Moreover, although it is the movant who is attempting to have the property released from the injunction, she offered as evidence affidavits executed by her fugitive parents. In essence, Jose and Margarita Bejman attempted to come into court and testify by way of affidavit on their daughter’s behalf. This Court, however, is of the opinion that fugitives should not be able to avail themselves long-distance of federal judicial processes when the only apparent reason they do not appear in proper person before the Court is their fear criminal prosecution in this country. Cf. United States v. Forty-Five Thousand Nine Hundred Forty Dollars ($45,940) in United States Currency, 739 F.2d 792, 796-98 (2d Cir.1984) (fugitive not entitled to defend related civil forfeiture proceeding); Conforte v. Commissioner of Internal Revenue, 692 F.2d 587, 589-90 (9th Cir. 1982) (fugitive not entitled to prosecute appeal from civil judgment sustaining tax deficiencies and penalties); Doyle v. United States Department of Justice, 668 F.2d 1365, 1365-66 (D.C.Cir.1981) (fugitive could not use federal court to adjudicate his claim under Freedom of Information Act), cert. denied, 455 U.S. 1002, 102 S.Ct. 1636, 71 L.Ed.2d 870 (1982); Broadway v. City of Montgomery, 530 F.2d 657, 659 (5th Cir.1976) (fugitive not entitled to call on resources of appellate court for determination of his case on appeal). Thus, persons who willfully absent themselves from this Court’s jurisdiction will not be allowed to take advantage of or invoke this court’s processes, powers and sanctions for themselves or on behalf of others for one purpose while avoiding this Court’s jurisdiction for another purpose. As a result, this Court gives no effect to the affidavits of the fugitive Bejmans.

Based on the foregoing, this Court is of the opinion that movant’s motion should be denied.

Accordingly, its ORDERED:

That movant’s Motion to Release Property from Temporary Restraining Order is hereby denied.

      . 31 U.S.C. § 5316(a)(1) has recently been amended to raise the reporting requirement threshold from $5,000 to $10,000.

      . That section has been amended and is now codified at 31 U.S.C. § 5321.

      . Hereinafter referred to as “Apt. 324”.

      . Hereinafter referred to as the "Golden Isles property”.

      . Copies of the warranty deeds for both these properties were admitted into evidence.

      . Because this Court entered a preliminary injunction following the issuance of its Temporary Restraining Order, this motion is more properly considered as a motion to release property from the preliminary injunction.

      . This copy is of extremely poor quality, is unsigned, and bears no identifiable letterhead.

      . Apt. 324 was not mentioned in this letter.

      . Mr. Augen could not be located throughout the pendency of this motion.

      . Although movant implied that the property was to be transferred to her, her husband testified that he believed property was to be in both their names. The Bejmans’ affidavits are to the contrary.

      . Rule 902(3), Fed.R.Evid., requires that for purposes of self-authentication, foreign public documents must be finally certified by a foreign official. In this case, that official was the Consul of the United States.


author: FILIPPINE, District Judge.

text:
    Raymond F. WEHNER, et al., Plaintiffs, v. SYNTEX AGRIBUSINESS, INC., et al., Defendants.
    No. 83-642 C (2).
    United States District Court, E.D. Missouri, E.D.
    April 1, 1985.
    On Motion to Dismiss April 1, 1985.

      Murry A. Marks, John Doskocil, St. Louis, Mo., Arnold Levin, Laurence S. Berman, and Alan Kanner, Philadelphia, Pa., for plaintiffs.
    F. Wm. McCalpin, Richard A. Ahrens, St. Louis, Mo., Hunton & Williams, Joseph M. Spivey III, Richmond, Va., Stephen D. Busey, James J. Taylor, Jr., Smith & Hulsey, Jacksonville, Fla., Robert L. Driscoll, Kansas City, Mo., Paul S. Brown, John J. Cole, St. Louis, Mo., George Weisz, New York City, W. Munro Roberts, Jr. and Ted L. Perryman, St. Louis, Mo., for defendants.
   MEMORANDUM AND ORDER

FILIPPINE, District Judge.

This matter is before the Court on the motion of Syntex Corporation (“Corporation”) to dismiss for lack of personal jurisdiction.

This is a private action for response costs brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601, et seq. Plaintiffs allege they have incurred compensable response costs as a result of their exposure to dioxin within the state of Missouri.

Corporation is a publicly owned life sciences and health care company. Syntex (U.S.A.) Inc. (“USA”) is the wholly owned American subsidiary of Corporation. USA in turn owns the stock of various subsidiaries, including Syntex Agribusiness (“Agribusiness”). Thus, Corporation owns USA, which owns Agribusiness.

Agribusiness is a separate entity and owns, in its own name, plants, property, and equipment located in Missouri and Iowa valued at $35,000,000. Corporation itself owns no real or personal property in Missouri; nor does it transact any business within this state. Agribusiness acquired the assets of a Missouri corporation called Hoffman-Taff, Inc. (“Old HT”). After this acquisition Agribusiness carried on the activities of Old HT. Plaintiff maintains that this Court has jurisdiction over Corporation because of Corporation’s relationship to the activities of Agribusiness. Plaintiff has also named Agribusiness as a defendant.

The initial issue with regard to the motion to dismiss is the proper law to be applied in determining the existence of personal jurisdiction over Corporation. This lawsuit is brought under CERCLA which does not authorize nationwide service of process. This Court looks to the provisions of Rule 4 of the Federal Rules of Civil Procedure in determining the manner in which this Court may exercise jurisdiction over Corporation. Rule 4(e) provides that, absent a statute authorizing nationwide service of process, a defendant may only be served under the circumstances and in the manner prescribed by a statute or rule of court of the state in which the district court sits. Thus, in order for this Court to exercise personal jurisdiction over Corporation, Corporation must be subject to the jurisdiction of the Missouri state courts. Amenability to service of process is controlled by state long arm statutes and the Fourteenth Amendment to the United States Constitution. DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1264-72 (5th Cir.1983); 4 C. Wright & A. Miller, Federal Practice and Procedure § 1075 at 312-13 (1969 & Supp. 1984); 2 J. Moore, J. Lucas, H. Fink & C. Thompson, Moore’s Federal Practice ¶¶ 4.32[1], 4.41—1[3] (1982). But see, A. vonMehren & D. Troutman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1123 n. 6 (1966) (critical of the view that Rule 4(e) adopts state provisions on amenability of process); Handley v. Indiana & Michigan Elec. Co., 732 F.2d 1265 (6th Cir.1984) (apparently holding that only statutory requirements of state service must be satisfied).

This Court must now determine whether Corporation is amenable to service of process under the laws of the state of Missouri as limited by the Fourteenth Amendment. Plaintiff seeks this Court to grasp Corporation within its jurisdictional reach under both the general service of process statute, R.S.Mo. § 506.150(3), and the long-arm statute, R.S.Mo. § 506 500 of the state of Missouri. Plaintiff grounds its prayer of this count on the ground that Agribusiness, a subsidiary of corporation, is subject to the jurisdiction of this Court. In support of this proposition plaintiff relies upon several district court opinions, e.g., Brunswick Corp. v. Suzuki Motor Co., 575 F.Supp. 1412 (E.D.Wis.1983); Hoffman v. United Telecommunications, Inc., 575 F.Supp. 1463 (D.Kan.1983); Energy Reserves Group, Inc. v. Superior Oil Co., 460 F.Supp. 483 (D.Kan.1978), that depart from the well settled rule that jurisdiction over a parent corporation based upon the activities of its subsidiary is proper only when the separate corporate existence of the subsidiary has been ignored by the parent. Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 635 (1925); Lakota Girl Scout Council, Inc. v. Havey Fund Raising Management, Inc., 519 F.2d 634 (8th Cir. 1975); Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902 (1st Cir.1980); Blount v. Peerless Chemicals (P.R.), Inc., 316 F.2d 695 (2d Cir.), cert. denied sub nom. Colbert v. Peerless Chemicals (P.R.), Inc., 375 U.S. 831, 84 S.Ct. 76, 11 L.Ed.2d 62 (1963). Plaintiff also argues that under the facts of this case Corporation has ignored the corporate separateness of itself and its wholly owned subsidiary Agribusiness.

This Court declines to follow the dangerous innovations of the district courts relied upon by plaintiff. The law of corporations treats a parent and its subsidiary as two distinct and separate entities unless the parent and subsidiary act in a manner to destroy that separation. A court should walk with great caution when it is suggested that corporate separateness has two different meanings, one in the law of corporations and another in the law of jurisdiction. Drawing such a distinction serves no purpose and only results in confusion and uncertainty. This Court, thus, adheres to the well settled rule that the mere fact that a subsidiary does business within a state does not confer jurisdiction over its nonresident parent, even if that parent is the sole owner of the subsidiary. There is a presumption of corporate separateness that exists unless, from the evidence presented to the Court, the parent so controls the activities of the subsidiary that the latter is only a shell for the former. Lakota Girl Scout Council, 519 F.2d at 637. Moreover, “the fact that the parent may own all of the stock of the subsidiary and even maintain control incident to stock ownership does not justify ignoring the separateness of the two corporations.” Escude Cruz, 619 F.2d at 905.

In the case at bar the presumption of corporate separateness remains intact. Corporate separateness of a parent and its subsidiary is recognized, absent illegitimate purposes, unless:

(a) The business transactions, property, employees, bank and other accounts and records of the corporations are intermingled;
(b) The formalities of separate corporate procedures for each corporation are not observed (where the directors and officers of each corporation are common, separate meetings and delineation of the respective capacities in which the common directors and officers are acting should be observed);
(c) The corporation is inadequately financed as a separate unit from the point of view of meeting its normal obligations foreseeable in a business of its size and character, because of either initial inadequate financing or having its earnings drained off so as to keep it in a condition of financial dependency;
(d) The respective enterprises are not held out to the public as separate enterprises;
(e) The policies of the corporation are not directed to its own interests primarily but rather to those of the other corporation.

H. Henn & J. Alexander, Laws of Corporations § 148 at 355-56 (1983). Corporation and Agribusiness are and remain separate corporate entities. Agribusiness itself makes decisions regarding its business goals, annual budget, the terms and prices of the raw materials it buys, and the product it manufactures. Furthermore, Agribusiness raises its own capital, maintains and keeps separate books of account and financial records. Corporation, however, did approve the appointment and salary of Agribusiness’s top officers, guaranteed certain loans of Agribusiness, approved certain capital expenditures of Agribusiness and allowed Agribusiness employees to participate with Corporation employees in a joint investment and savings plan. These last activities, in the context of the entire record, are not sufficient for this Court to conclude that Agribusiness is a mere shell for Corporation. Rather the challenged activities of Corporation are simply normal activities incident to the parent’s ownership of the subsidiary and do not warrant ignoring the separateness of the two corporations. Escude Cruz, 619 F.2d at 905.

This Court lacks personal jurisdiction over Corporation. Corporation itself owns no property within the state of Missouri; nor transacts any business within this state. In addition, Corporation has not committed an act that would subject it to this Court’s jurisdiction by virtue of Missouri’s long-arm statute, R.S.Mo. § 506.-500. Furthermore, this Court’s jurisdiction over Agribusiness, a wholly owned subsidiary of Corporation, does not subject Corporation to the jurisdiction of this Court.

The Court will, therefore, grant the motion of Corporation to dismiss for lack of personal jurisdiction. In addition the Court will lift its order staying discovery on the merits.

Accordingly,

IT IS HEREBY ORDERED that the motion of Syntex Corporation to dismiss for lack of personal jurisdiction be and is GRANTED.

IT IS FURTHER ORDERED that plaintiff’s complaint against Syntex Corporation be and is DISMISSED without prejudice.

IT IS FURTHER ORDERED that this Court’s order of September 15, 1983, relating to discovery be and is VACATED.

ON MOTION TO DISMISS

This matter is before the Court on the motion of the defendants Northeastern Pharmaceutical and Chemical Company, Inc., Edwin Michaels, John Lee, and Milton Turkel (“NEPACO, et al.”) to dismiss the cross-claim of defendant Independent Petrochemical Corporation (“IPC”).

This is a private action for response costs brought pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”), codified at 42 U.S.C. §§ 9601-9657. Plaintiffs seek to recover allowable response costs under 42 U.S.C. § 9607 incurred by them as a result of their exposure to the chemical agent commonly called dioxin. Defendant IPC has filed a cross-claim against NEPACO, et al. pursuant to Rule 13(g) of the Federal Rules of Civil Procedure. IPC in its cross-claim seeks idemnification or contribution for all amounts, or such part thereof as this Court finds equitable, that may be adjudged to be due to plaintiff from IPC in this action. NEPACO, et al. has moved to dismiss this cross-claim asserting that CERCLA does not allow contribution. The basis for this assertion by NEPACO, et al. rests upon their belief that Missouri law governs this action and their further belief that Missouri law does not allow for either contribution or indemnity among joint tortfeasors.

Because this action is based upon a federal statute, it is federal law that must determine the existence of contribution under CERCLA. See, e.g., Northwest Airlines v. Transport Workers Union, 451 U.S. 77, 90, 101 S.Ct. 1571, 1580, 67 L.Ed.2d 750 (1981); Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 638, 101 S.Ct. 2061, 2065, 68 L.Ed.2d 500 (1981). The Court will look to the terms of the statute in determining whether a right to contribution exists. CERCLA implicitly recognizes a right to contribution. Title 42 of the United States Code § 9607(e)(2) provides:

Nothing in this title ... shall bar a cause of action that an owner or operator or any other person subject to liability under this section, or a guarantor, has or would have, by reason of subrogation or otherwise against any person.

A provision similar to the above-quoted section was included in the House version of what became CERCLA. H.R.7020, 96th Cong., 2d Sess., U.S.Code Cong. & Admin. News 1980, p. 6119. Representative Gore in speaking about the House version stated that any defendant who paid all the response costs to a plaintiff “would then have the right to go against the other ‘non-apportioned’ defendants for contribution....” 126 Cong.Ree. 26, 785 (1980) (statement by Rep. Gore). In addition, the Justice Department has interpreted § 9607(e)(2) as allowing for contribution among joint tortfeasors. 126 Cong.Ree. 31, 966 (1980). Furthermore, both reported case law, United States v. Chem-Dyne Corp., 572 F.Supp. 802, 807 n. 3 (S.D.Ohio 1983) and scholarly commentary, Note, The Right to Contribution for Response Costs under CERCLA, 60 Notre Dame Law. 345, 361 (1985); Comment, Generator Liability under Superfund for Clean-Up of Abandoned Hazardous Waste Dumpsites, 130 U.Pa.L.Rev. 1229, 1266 n. 184 (1982), support the view that 42 U.S.C. § 9607(e) provides for contribution. Thus, this Court rules that CERCLA allows contribution among joint tortfeasors and will deny the motion to dismiss the cross-claim of IPC.

Accordingly,

IT IS HEREBY ORDERED that the motion of Northeastern Chemical and Pharmaceutical and Chemical Company, Inc., Edwin Michaels, John Lee, and Milton Turkel to dismiss the cross-claim of Independent Petrochemical Corporation be and is DENIED.