United States District Court, E.D. Washington
ORDER GRANTING DEFENDANT MIPRO US'S MOTION FOR
SUMMARY JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR
ROSANNA MALOUF PETERSON UNITED STATES DISTRICT JUDGE.
THE COURT are cross-motions for summary judgment. Plaintiffs
move for partial summary judgment against Defendant Mipro
U.S. regarding successor liability. ECF No. 46. Defendants
Mipro US, Inc., Maxx Health, Inc., and Maxx Orthopedics, Inc.
(collectively, “Defendants”) move for summary
judgment on liability grounds. ECF No. 51. The Court has
heard the parties' arguments, reviewed the relevant
pleadings, and is fully informed.
Lisa and Travis Gentle filed this suit against a number of
companies alleging state law claims including negligence,
breach of express warranty, breach of implied warranty of
merchantability, breach of implied warranty of fitness,
negligent misrepresentation, and fraud. ECF No. 1 at 8-14.
Plaintiffs argue that Defendants are liable as
“manufacturers” under RCW 7.72.030, as
“sellers” under RCW 7.72.040, and under the
doctrines of successor liability, res ipsa loquitor,
acting in concert, agency, and vicarious liability. ECF No. 1
at 10-16. The Court has subject matter jurisdiction over this
matter pursuant to diversity jurisdiction under 28 U.S.C.
allege that Mr. Gentle received a surgically implanted M-Cor
Modular Hip System (“M-Cor Hip System”) in
January 2009. ECF No. 46 at 2. It is undisputed that
Defendants did not manufacture Mr. Gentle's hip implant.
Plaintiffs further allege that, as part of a bankruptcy asset
liquidation, the manufacturer of Mr. Gentle's M-Cor Hip
System, Defendant Portland Orthopaedics (“Portland
Ortho”), sold the rights to manufacture the M-Cor Hip
System to Mipro Ortho Pte. Ltd. (“Mipro Ortho”).
Id. Defendants conceded at oral argument that
Defendant Mipro U.S. (“Mipro US”) acquired
substantially all the assets associated with the M-Cor Hip
System product line (“M-Cor product line”) from
Mipro Ortho. The following chart indicates the transactions
involving these corporations:
(original manufacturer of M-Cor Hip System)
entered into bankruptcy on 12/2/2008 and continues its
corporate existence operating as PLD Corporation
Mipro Ortho Pte. Ltd.
(a corporation based in Singapore)
purchased certain assets including the M-Cor Hip System
product line from Portland Ortho bankruptcy receivers and
entered into a Subsidiary Operating Agreement with Mipro
Ortho Pte. Ltd. and became the spec manufacturer of record
for the M-Cor Hip System product line in the United States
from April 2009 until December 2015
Court ordered the parties to brief the threshold issue of
whether Defendants are liable for the alleged defects of the
M-Cor Hip System under the product line theory exception of
the successor liability doctrine. ECF No. 45. Plaintiffs
allege that Mipro U.S. is liable as a successor to Portland
Ortho under the product line theory exception to successor
liability, because Mipro U.S. manufactured and distributed
the M-Cor product line under the same trade name and design
that Portland Ortho had used, “profiting off of the
product line's goodwill.” ECF No. 46 at 2. Mipro
U.S. denies that it has successor liability under any theory
and moves for summary judgment in its favor. ECF No. 51 at
Maxx Health, Inc., and Maxx Orthopedics, Inc., also move for
summary judgment, arguing that they are not liable under the
successor liability theory. Id. at 3. Plaintiffs
conceded at oral argument that Defendants Maxx Health, Inc.,
and Maxx Orthopedics, Inc., are not liable under any theory.
Therefore, the Court dismisses with prejudice all of
Plaintiffs' claims against Defendants Maxx Health, Inc.,
and Maxx Orthopedics, Inc.
Standard for Summary Judgment
may grant summary judgment where “there is no genuine
dispute as to any material fact” of a party's prima
facie case, and the moving party is entitled to judgment as a
matter of law. Celotex Corp. v. Catrett, 477 U.S.
317, 322-33 (1986); see also Fed. R. Civ. P. 56(c).
A genuine issue of material fact exists if sufficient
evidence supports the claimed factual dispute, requiring
“a jury or judge to resolve the parties' differing
versions of the truth at trial.” T.W. Elec. Serv.,
Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626,
630 (9th Cir. 1987). “A key purpose of summary judgment
‘is to isolate and dispose of factually unsupported
claims.'” Id. (citing Celotex,
477 U.S at 324).
moving party bears the burden of showing the absence of a
genuine issue of material fact, or in the alternative, the
moving party may discharge this burden by showing that there
is an absence of evidence to support the nonmoving
party's prima facie case. See Celotex, 477 U.S.
at 325. The burden then shifts to the nonmoving party to set
forth specific facts showing a genuine issue for trial.
See Id. at 324. The nonmoving party “may not
rest on mere allegations, but must by [its] own affidavits,
or by the depositions, answers to interrogatories, and
admissions on file designate specific facts showing that
there is a genuine issue for trial.” Id. The
Court will not infer evidence that does not exist in the
record. See Lujan v. National Wildlife Federation,
497 U.S. 871, 888-89 (1990) (court will not presume missing
facts). However, the Court will “view the evidence in
the light most favorable” to the nonmoving party.
Newmaker v. City of Fortuna, 842 F.3d 1108, 1111
(9th Cir. 2016). “[A]ll justifiable inferences are to
be drawn in his favor.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).
of Successor Liability to Defendant Mipro US,
allege that Defendant Mipro U.S. should be liable for
Plaintiff's alleged injuries under the Washington state
product line exception of the doctrine of successor
liability. ECF No. 46. Mipro U.S. contends that none of the
successor liability exceptions applies in this case and,
thus, that it should not be held liable for Mr. Gentle's
M-Cor Hip System failure. ECF No. 51.
traditional common law successor liability rule in Washington
is that “a corporation purchasing the assets of another
corporation does not, by reason of the purchase assets,
become liable for the debts and liabilities of the selling
corporation.” Martin v. Abbott Labs., 689 P.2d
368, 384 (Wash. 1984). Washington recognizes four common law
exceptions to the rule that an asset purchaser is not liable
for the seller's debts. Id.
common law exceptions include sales where: (1) the purchaser
expressly or impliedly agrees to assume the obligations of
the predecessor; (2) the transaction amounts to a
consolidation or merger; (3) the purchasing corporation is
merely a continuation of the predecessor; or (4) the
transaction is fraudulent and intended to escape liability.
Id. Mipro U.S. asserts that none of the four
traditional exceptions is applicable to Mipro U.S. in the
present matter, ECF No. 51 at 7, and Plaintiffs concede that
no evidence supports the application of any of the four
traditional exceptions to Mipro US. ECF No. 46 at 3. However,
Washington recognizes ...