Yoder v. Honeywell, Inc.

104 F.3d 1215, 1997 U.S. App. LEXIS 253, 1997 WL 9955
Court of Appeals for the Tenth Circuit·Decided January 8, 1997·No. 95-1464·Published·Cited by 102 cases

Opinion

LOGAN, Circuit Judge.

Plaintiffs Regina M. and Lester L. Yoder appeal the district court’s dismissal of their products liability action against defendants Honeywell Inc. (Honeywell) and Bull HN Information Systems, Inc. (Bull). Regina Yoder allegedly suffered repetitive stress injuries as a result of using defective computer keyboards while employed at United Airlines in Denver, Colorado. Plaintiffs assert that summary judgment was improper because material issues of fact remain as to whether (1) Bull was the alter ego or instrumentality of its parent Honeywell, and (2) Honeywell was a manufacturer or apparent manufacturer under Colorado law and Restatement (Second) of Torts § 400. Plaintiffs, also argue that the trial court erred in dismissing plaintiffs’ action against defendant Bull as barred by the statute of limitations.

I

Numerous plaintiffs, including the Yoders, originally filed suit in December 1992 in the Eastern District of New York against Honeywell and other computer keyboard manufacturers. In April 1994 that court severed the Yoder plaintiffs’ ease, as permitted by Fed.R.Civ.P. 21, and transferred it to the United States District Court for the District of Colorado. See 28 U.S.C. § 1404. Honeywell was the only defendant at that time.

Honeywell’s first answer filed in January 1993 denied in general terms plaintiffs’ alie- *1219 gations that Honeywell manufactured the keyboards at issue. In August 1994, shortly after the transfer of venue, in a scheduling/planning conference Honeywell more specifically made the identity of the manufacturer an issue. On December 7, 1994, Honeywell and plaintiffs jointly inspected the keyboards used at the reservation center where Regina Yoder had worked. Honeywell then formally notified plaintiffs on February 2, 1995, that Honeywell Information Systems Inc., a subsidiary of Honeywell now known as Bull HN Information Systems, Inc., manufactured the keyboards. Plaintiffs moved on March 5, 1995, to join as a party defendant Bull HN Information Systems, Inc., f/k/a/ Honeywell Bull, Inc. and f/k/a Honeywell Information Systems, Inc. The predecessors of Bull HN Information Systems, Inc. also include Incoterm Corporation; we refer to these entities collectively as Bull. In plaintiffs’ amended complaint they alleged that Honeywell and/or Bull manufactured the keyboard equipment and asserted that Bull and its predecessors were alter egos or in-strumentalities of Honeywell.

The district court granted Honeywell’s motion for summary judgment. The court first found that Honeywell was not liable to plaintiffs as a manufacturer of the keyboards. Yoder v. Honeywell Inc., 900 F.Supp. 240, 242 (D.Colo.1995). The district court noted that

None of the ... keyboards examined bore trademarks identifying the manufacturer on the front of the keyboard enclosures. Each of the seven keyboards had labels bearing a trademark on the bottom of the keyboard enclosures. Three of the keyboards bore the trademark name Inco-term and four bore the Honeywell trademark. Based on [a former Honeywell employee’s] examination of the keyboards he determined that the keyboards were not manufactured by Honeywell. Plaintiffs have made no showing that a genuine issue of fact exists that Honeywell manufactured, sold, or distributed any computer keyboard alleged to be defective.

Id. at 242 (citations omitted). The district court then declined to interpret Colorado products liability law to impose liability on a corporation that provides a trademark for a product under an “apparent manufacturer” theory. Id. at 246. The court also found that plaintiffs failed to establish that genuine issues of material fact remained whether to pierce Bull’s corporate veil to hold the parent, Honeywell, liable. Finally, the district court granted Bull's motion to dismiss, finding that plaintiffs’ claim was time-barred.

II

Plaintiffs first assert that summary judgment 1 in favor of Honeywell was improper. We review an order granting summary judgment de novo. Farthing v. City of Shawnee, Kan., 39 F.3d 1131, 1134 (10th Cir.1994).

Because this is,a diversity action, we first determine which state law to apply. The choice of law is determined by the conflict of laws rules of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). The district court stated that Colorado law would apply as the law of the forum state, apparently overlooking that this case originated in the Eastern District of New York. “The rule is settled that when a district court grants a venue change pursuant to 28 U.S.C. § 1404, the transferee court is obligated to apply the law of the state in which the transferor court sits.” Benne v. International Business Machines Corp., 87 F.3d 419, 423 (10th Cir.1996) (citing Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 820, 11 L.Ed.2d 945 (1964) (rule applies whether defendant or plaintiff initiates change of venue)). In this case, therefore, New York choice of law rules apply.

New York employs an “interest analysis” test, which requires application of *1220 the substantive law of the state which has the greatest interest in the litigation. Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 491 N.Y.S.2d 90, 95, 480 N.E.2d 679, 684 (1985). But before applying this test, New York courts determine whether an actual conflict in the substantive law exists. Defendant Honeywell asserts that the specific substantive tort law of all states with a significant interest in this litigation—Colorado, Delaware and Minnesota 2 —require that plaintiffs prove a defendant was the manufacturer (or is liable as an apparent manufacturer) of the product. Thus, defendants assert there is no conflict, and we should apply Colorado law on the tort liability claims. If a potential conflict does exist, Colorado, as plaintiffs’ domiciliary and the place where Regina Yoder received the injury, would seem to have the greatest interest in the outcome, see Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 70, 286 N.E.2d 454, 458 (1972). But see Hadar v. Concordia Yacht Builders, Inc., 886 F.Supp. 1082, 1093-94 (S.D.N.Y.1995) (state where product manufactured'has large stake in governing liability of manufacturers in its territory). Therefore, we look to Colorado for the applicable substantive tort'law.

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Yoder v. Honeywell, Inc., 104 F.3d 1215, 1997 U.S. App. LEXIS 253, 1997 WL 9955 (10th Cir. 1997).

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