Document gD8qrLgv1nw4Oe6a5mQBVj2jN

FILE NAME: Asbestos Corp Ltd (ACL) DATE: 1999 DOC#: ACL019 DOCUMENT DESCRIPTION: Legal - Memo in Support of Motion to Dismiss UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK CELIA D. HALL, Administratrix o f the Estate of ROBERT H. HALL, Deceased, and Individually as the Surviving Spouse o f ROBERT H. HALL Plaintiff, vs. A.P. GREEN INDUSTRIES, INC., et al. Defendants. MEMORANDUM OF LAW SUBMITTED IN SUPPORT OF MOTION TO DISMISS AND TO REMAND ACTION TO STATE COURT Civil Action No. 99 CV-0732 S(M) Respectfully submitted, LIPSITZ & PONTERIO, LLC Nan L. Haynes, Esq. o f Counsel Attorneys for Plaintiffs 135 Delaware Avenue, Suite 506 Buffalo, NY 14202 (716) 849-0701 TABLE OF CONTENTS INTRODUCTION ............................................................................................................... 2 F A C T S .................................................................................................................................... 3 A R G U M EN T......................................................................................................................... 4 ACL IS NOT A FOREIGN STATE WITHIN THE MEANING OF THE F S IA ........................................................................... 4 CONCLUSION .................................................................................................................... 8 - i - TABLE OF AUTHORITIES Belgrade v. U.C.F. International Trading. Inc., et al.. 2 F.Supp. 2d 407 (S.D.N.Y. 1998) ................................................................................ 6 Braka v. Bancomer. S.A.. 589 F.Supp. 1465 (SDNY 1984), affirmed, 762 F.2d 222 (2d Cir. 1985) ........................................................................... 6 Caigilo International S.A. v. M/T Pavel Dybenko, 991 F.2d 1012 (2d Cir. 1993) ...........................................................................................6 Consorti v. Owens-Coming Fiberglas Corp. 86 N.Y.2d 449, 657 N.E. 2d 1301, 634N .Y .S.2d 18 (1995) ................................................................................................ 4,5 Gould. Inc, v. Pechinev Ugine Kuhlmann. 853 F.2d 445 (6th Cir. 1 9 8 8 )............................................................................................. 4 Morgan Guarantee Trust Company v. Republic o f Palau. 924 F.2d 1237 (2d Cir. 1991) ........................................................................................... 6 Straub v. A.P. Green Industries. Inc.. 38 F.3d 448 (9th Cir. 1 9 9 4 )................................................................................................5 - ii - INTRODUCTION This is an action for personal injuries allegedly caused by exposure to asbestos and asbestos-containing products. The plaintiffs claim exposure to defendants' asbestos and asbestos-containing products during the course o f their careers at the Durez Division o f Occidental Chemical Company (hereinafter "Durez"). Among the defendants is Asbestos Corporation, Ltd. (hereinafter "ACL"), a corporation that from 1955 until 1977 sold raw asbestos to Durez. The plaintiffs commenced this action by filing a complaint in New York State Supreme Court on August 19, 1999. Claiming to be a foreign state within the meaning of the Foreign Sovereign Immunities Act ("FSIA"), 28 USC 1603(a), defendant ACL removed the action to the United States District Court, Western District of New York by invoking the provisions o f 28 USC 1441(d), that provides for the removal o f "any civil action brought in a state court against a foreign state as defined in 1603(a)." This is a motion to dismiss and remand the action to New York State Supreme Court on the ground that ACL was not a foreign state at anytime relevant to this action. - 2 - FACTS ACL supplied raw asbestos to Durez from 1955 until 1977. See Affidavit of Nan L. Haynes, Esq., submitted in support o f plaintiffs' motion at paragraph "8". (Hereinafter affidavit o f Nan L. Haynes). By September, 1978, Durez had stopped using raw asbestos entirely. See affidavit o f Nan L. Haynes at paragraph "7". In 1981, four (4) years after Durez stopped purchasing asbestos from ACL, the Qubec government acquired indirect control of ACL. See affidavit o f Nan L. Haynes at paragraph "9". Prior to 198L^Oubec had no ownership-interest in or control of ACL. See affidavit of Nan L. Haynes at paragraph "10". It was not until 1986 that Qubec became the majority shareholder of ACL. See affidavit o f Nan L. Haynes at paragraph "11". Qubec sold 100% o f its shares in ACL to the Mazarin Corporation on September 5, 1992. See affidavit o f Nan L. Haynes at paragraph "12". Qubec has " 1, 1 had no ownership interest in ACL since it sold its shares to the Mazarin Corporation. See affidavit o f Nan L. Haynes at paragraph "13". - 3 - ARGUMENT ACL IS NOT A FOREIGN STATE WITHIN THE MEANING OF THE FSIA THE FSIA defines a foreign state as including "an agency or instrumentality of a foreign state", further defined as any entity "which is a separate legal person, corporate or otherwise, ...the majority of whose shares where other ownership interest is owned by a foreign state". 28 USC 1603(a)-(b). There are only two circumstances where courts have applied this definition o f a foreign state to a defendant corporation. The first approach requires that the corporation be owned by the foreign state at the time o f the events given rise to the action. Gould. Inc, v. Pechinev Ugine Kuhlmann. 853 F.2d 445 (6th Cir. 1988). The New York Court of Appeals has clearly held that in a latent injury case involving asbestos exposure, the tortious injury occurs at exposure. Consorti v. Owens-Corning Fiberglas Corn. 86 N.Y.2d 449, 657 N.E. 2d 1301, 634 N.Y.S.2d 18 (1995). The Consorti Court summarized the law o f New York as follows: "Thus, through succeeding generations of Judges composing this Court, over some 60 years, the Schmidt rule fixing the occurrence of tortious injury as the date when the toxic substance invades or is introduced into the body has been reconsidered and reaffirmed, despite - importunings that adoption of a medical date-of-injury standard would achieve more just results. Nothing has been presented here to warrant departure from Schmidt and the resulting destabilizing o f what is now a settled, certain principle of New - 4 - York tort law. It follows that, as a matter o f law, Mr. Consortia tortious injury occurred when he was exposed to and inhaled asbestos during the 1960'sF...1. Consorti, 86 N.Y.2d at 454, 657 N.E. 2d at 1301, 634 N.Y.S.2d at 20. {emphasis added) The last year any o f the plaintiffs could possibly have been exposed to raw asbestos supplied by ACL was 1978. By September, 1978, Durez had stopped using raw asbestos entirely. See affidavit o f Nan L. Haynes at paragraph "7". Durez bought no asbestos from ACL after 1977. See affidavit o f Nan L. Haynes at paragraph "8". It was not until four (4) years after Durez stopped buying raw asbestos from ACL that Qubec acquired any interest or control o f ACL. See affidavit o f Nan L. Haynes at paragraph "9". And it was not until nine (9) years after Durez stopped buying ACL's raw asbestos that Qubec became the majority shareholder of ACL. See affidavit of Nan L. Haynes at paragraph "11". Therefore, at no time during the events giving rise to this action was ACL a foreign state. ACL's claim that it is a foreign state must fall under this first approach. The second approach requires that the corporation be owned by the foreign state when the complaint is filed. See for example, Straub v. A.P. Green Industries, Inc.. 38 F.3d 448 (9th Cir. 1994). Qubec divested itself o f all ownership interest in ACL in 1992. See affidavit of Nan L. Haynes at paragraph "12". The present action was filed seven (7) years later. See affidavit o f Nan L. Haynes at paragraph "14". - 5 - ACL's claim that it is a foreign state must also fall under the second and only other approach. The question of which of these two periods a defendant corporation must be owned by a foreign state in order to qualify as a foreign state within the meaning of the FSIA has not been answered definitively by the Second Circuit. Belgrade v. U.C.F. International Trading. Inc., et al,, 2 F.Supp. 2d 407, 412 (S.D.N.Y. 1998), citing Caisilo International S.A. v. M/T Pavel Dybenko. 991 F.2d 1012, 1015-16 (2d Cir. 1993); c f Morgan Guaranty Trust Company v. Republic o f Palau, 924 F.2d 1237 (2d Cir. 1991); and Braka v. Bancomer. S.A.. 589 F.Supp. 1465, 1469 (S.D.N.Y. 1984), affirmed, 762 F.2d 222 (2d Cir. 1985). In Belgrade, the Court held that the "correct approach under the FSIA is to ask whether the underlying conduct took place on the foreign state's watch, even if the state is no longer in control o f the party by the time o f the lawsuit, or alternatively whether the defendant is currently a foreign state, regardless o f its status at the time o f the underlying conduct." Belgrade at 414. The Court in Belgrade reasoned that the presence o f a party which is a foreign sovereign at the time o f suit is relevant because it directly implicates the FSIA's purpose of channeling lawsuits against foreign sovereigns into the federal courts. It also reasoned that the FSIA 's policies are implicated when a party was owned by foreign sovereign at the time of the underlying conduct because in such a case the conduct and potential liability of the foreign sovereign are the subject of judicial scrutiny which implicates the dignity of the foreign sovereign. Belgrade at 413. - 6 - It would not further the purposes o f the FSIA for this Court to find that ACL is a foreign state. The legal proceedings in no way impinge on Qubec's sovereignty. This is not a lawsuit against a foreign state because ACL is currently owned by the Mazarin Corporation - not Qubec. The evidence o f ACL's liability in no way relates to the activity o f a foreign state because all the underlying conduct took place prior to the time Qubec acquired any ownership interest in ACL. ACL's request is unprecedented. In researching the case law on the time for determining whether an entity is a foreign state for purposes o f the FSIA, counsel found no cases in which a defendant claimed the status merely because some time after the underlying conduct, but before the filing of the complaint, the defendant happened to be owned by a sovereign state. ACL's removal is without factual and legal support. - 7 - CONCLUSION ACL was at no time relevant to this action a foreign state as defined by the FSIA. This Court therefore lacks jurisdiction over the action and should be remanded to New York State Supreme Court. Respectfully Submitted, LIPSITZ & PONTERIO, LLC h _ nsel Attorneys for Plaintiff 135 Delaware Avenue, Suite 506 Buffalo, NY 14202-2410 (716) 849-0701 To: Edward J. O 'Connor, Esq. Bouvier, O 'Connor Attorneys for Defendant Asbestos Corporation, Ltd. 1400 Main Place Tower Buffalo, NY 14202-3714 (716) 856-1344 cc: All Counsel of Record 8 -