Opinion
C.A. No. 02C-12-091 HDR.
Submitted: March 16, 2004.
Decided: June 30, 2004.
Robert Jacobs, Esq. and David A. Arndt, Esq., Jacobs Crumplar, P.A., Wilmington, Delaware, for Plaintiffs.
Matthew P. Donelson, Esq. and Joel M. Doner, Esq., Wilbraham, Lawler Buba, P.C., Wilmington, Delaware for Defendant Airco, Inc.
James W. Semple, Esq., Morris, James, Hitchens Williams, LLP, Wilmington, Delaware for Defendant Air Products Chemicals, Inc.
Albert Manwaring, IV, Esq. and Joseph S. Naylor, Esq., Pepper Hamilton, LLP, Wilmington, Delaware for Defendant Allied Signal, Inc.
John L. Reed, Esq. and Gary W. Lipkin, Esq., Duane Morris, Wilmington, Delaware for Defendants American Chemistry Council, B.F. Goodrich Corp., Conoco Inc., The Dow Chemical Company, Epec Polymers Inc., ICI Americas, Inc., PPG Industries, Inc., Pactiv Corp., PolyOne Corporation, Shell Oil Co., Tenneco Inc., Tenneco Automotive, Inc., Union Carbide Corp., Uniroyal Inc. and Zeneca, Inc.
Michael P. Kelly, Esq., McCarter English, LLP, Wilmington, Delaware for Defendant Bayer CropScience Inc.
Randall E. Robbins, Esq., Ashby Geddes, Wilmington, Delaware for Defendant Borden Chemical, Inc.
Adam C. Balick, Esq., Balick Balick, Wilmington, Delaware for Defendant Bridgestone/Firestone, Inc.
John D. Balaguer, Esq. and William L. Doerler, Esq., White Williams, Wilmington, Delaware for Defendants Chevron USA Inc., Gulf Oil Corp. and Monsanto Company.
Frederick L. Cottrell, II, Esq. and Alyssa Schwartz, Esq., Richards, Layton Finger P.A., Wilmington, Delaware for Defendant Occidental Oxychem.
Jeffrey L. Moyer, Esq. and Anne Shea Gaza, Esq., Richards, Layton Finger P.A., Wilmington, Delaware for Defendant Formosa Plastics Corporation.
Somers S. Price, Jr., Esq. and W. Harding Drane, Jr., Esq., Potter, Anderson Corroon LLP, Wilmington, Delaware for Defendant Gencorp and Olin Corp.
Donald E. Reid, Esq., Morris, Nichols, Arsht Tunnell, Wilmington, Delaware for Defendant Georgia-Pacific Corp.
Kevin J. Connors, Esq., Marshall, Dennehey, Warner, Coleman Goggin, Wilmington, Delaware for Defendant The Goodyear Tire Rubber Company.
James P. Hall, Esq., Phillips, Goldman Spence, Wilmington, Delaware for Defendant Society of Plastics Industry, Inc.
Richard D. Allen, Esq., Morris, Nichols, Arsht Tunnell, for Defendant Westlake Vinyls Inc.
David C. Malatesta, Jr., Esq., Kent and McBride, P.C., Wilmington, Delaware, for Defendant Whittaker Corporation.
ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTIONS TO DISMISS
Now, therefore, for the reasons stated in the Opinion filed this date, IT IS ORDERED THAT:
1. Counts Two, Four, and Five of the Complaint filed by Richard V. and Sheri R. Anderson are dismissed as to Defendants The American Chemistry Council, Conoco, Inc., B.F. Goodrich Company, ICI Americas, Inc., PolyOne Corp., PPG Industries, Inc., Shell Oil Co., Uniroyal, Inc. and Zeneca, Inc.
2. In all other respects, the Defendants' motions to dismiss are denied.
OPINION UPON DEFENDANTS' MOTIONS TO DISMISS DENIED IN PART AND GRANTED IN PART
Plaintiff Richard V. Anderson and his wife, Sheri R. Anderson, have filed this civil action against Airco, Inc., and thirty-five other defendants. The Andersons seek compensatory and punitive damages for injuries allegedly sustained as a result of prolonged workplace exposure to vinyl chloride monomer ("VCM"), a chemical compound manufactured, marketed, and utilized by various representatives active in the polyvinyl industry.
The other defendants are as follows: Air Products and Chemicals, Inc.; Allied Signal, Inc.; The American Chemistry Council; Bayer Cropscience, Inc.; B.F. Goodrich Company; Borden Chemical, Inc.; Bridgestone/Firestone, Inc.; Chevron U.S.A., Inc.; Condea Vista Company; Conoco, Inc.; The Dow Chemical Company; Epec Polymers Inc.; Formosa Plastics Corporation; Gencorp; Georgia-Pacific Corporation; The Goodyear Tire and Rubber Company; Gulf Oil Corporation; ICI Americas, Inc.; Monsanto Company; Occidental Oxychem; Olin Corporation; Pactiv Corporation; Pantasote, Inc.; PolyOne Corporation; PPG Industries, Inc.; Sasol North America, Inc.; Shell Oil Company; Society of the Plastics Industry, Inc; Tenneco, Inc.; Tenneco Automotive, Inc.; Union Carbide Corporation; Uniroyal, Inc.; Westlake Vinyls, Inc.; Whittaker Corporation; and Zeneca, Inc.
A majority of the defendants have filed motions to dismiss. Three motions to dismiss are before the Court and I will address each of these motions in this opinion. The first motion is a consolidated motion filed by Defendants The American Chemistry Council; Conoco Inc.; B.F. Goodrich Company; ICI Americas, Inc.; PolyOne Corporation; PPG Industries, Inc.; Shell Oil Company; Uniroyal, Inc.; and Zeneca, Inc. (collectively "Consolidated Defendants"). The two remaining motions to dismiss have been individually filed by Defendants Georgia-Pacific Corporation and the Society of the Plastics Industry, Inc. ("SPI").
In their pleadings, Consolidated Defendants have identified, among the others "ConocoPhillips Company" and "Goodrich Corporation" as moving defendants. In the interests of accuracy and consistency, the Court instead has followed the original case caption, which lists "Conoco, Inc.," and "B.F. Goodrich Company."
A joinder has been filed by Honeywell International Inc. who has not been identified in the caption of this case. No stipulation or motion has been filed to address the identification of Honeywell as a successor of Allied Signal, Inc. Pending any such amendment, I decline to address any joinder of Honeywell.
Georgia-Pacific is sued individually in Count Three, while SPI is named in Counts Four through Eight. Because Count Three raises issues unique to Georgia-Pacific, it is addressed separately from those raised by the other defendants in this opinion. SPI's contentions, however, do not warrant independent treatment, and thus are incorporated into Consolidated Defendants' motion to dismiss.
For the reasons set forth below, the motions are denied in part and granted in part. I first hold that federal law does not preempt the Andersons' state common law claims. The negligence claims in Counts One and Three are not subject to dismissal because the Andersons have pled with particularity each element of the common law tort of negligence. Similarly, because the Andersons have sufficiently alleged each element of the torts of conspiracy and aiding and abetting, Counts Six and Seven will not be dismissed. Count Eight, asserting a derivative cause of action for loss of consortium, therefore also survives the motions to dismiss.
Counts Two, Four, and Five, on the other hand, each fail to state a cause of action upon which relief may be granted. Count Two is dismissed because Delaware law applies to this case and a claim of strict products liability is not recognized here. Finally, Counts Four and Five which involve alleged fraud are dismissed because the Andersons have failed to allege with particularity facts showing reliance by Anderson or facts showing an intent by the moving defendants to induce action by him.
I. BACKGROUND
From 1986 to 1993, Plaintiff Richard V. Anderson was employed by the Georgia Gulf Corporation, a subsidiary of Georgia-Pacific and manufacturer and marketer of chlorovinyl products. In 2002, Anderson contracted glioblastoma multiform, a type of brain cancer, allegedly as a result of handling VCM compounds at the company's plant in New Castle, Delaware. In December 2002, Anderson, along with his wife, Sheri R. Anderson, filed suit against Consolidated Defendants, Georgia-Pacific, SPI (collectively "Defendants"), and others not involved in this motion, alleging eight instances of tortious conduct on the part of all defendants, who variously comprise suppliers, marketers, and manufacturers in the vinyl compound industry. Specifically, the Andersons allege: negligent failure to warn of the known hazards of VCM (Count One); strict products liability (Count Two); negligent and intentional failure of Georgia-Pacific individually to provide a safe workplace (Count Three); reckless failure to provide sufficient warning of the dangers of VCM (Count Four); fraudulent concealment and misrepresentation of the dangers of VCM (Count Five); conspiracy to commit fraud, misrepresentation, and fraudulent concealment of the dangers of VCM (Count Six); aiding and abetting the alleged fraudulent concealment (Count Seven); and loss of consortium (Count Eight).
The Complaint further groups all Defendants into two categories: (1) "Supplier Defendants" — Airco, Conoco, PolyOne, PPG, Shell, and Georgia-Pacific; and (2) "Non-Supplier Defendants" — Airco, American Chemistry Council, Conoco, Georgia-Pacific, B.F. Goodrich Company, ICI, PolyOne, PPG, Shell, SPI, Uniroyal, and Zeneca. The former are alleged to have supplied the VCM that Anderson handled at the Georgia Gulf plant. The Andersons accuse the Non-Supplier Defendants, referred to in the Complaint as "Conspiring Defendants," of conspiring to conceal the hazards of VCM. See Pl. Compl. ¶ 3, at 5 (Dec. 11, 2002).
The Andersons claim that Defendants collectively engaged in an industry-wide campaign to conceal the ill effects of VCM exposure, and that, in particular, Anderson's brain cancer was caused by his unprotected handling of this compound. Vinyl chloride monomer (C2H3CI) is a colorless gas used primarily in the production of polyvinyl chloride (PVC) homopolymer and copolymer resins, a construction-related material used in, among other applications, flooring and piping. A known carcinogen, several studies have linked prolonged exposure to VCM to various forms of cancer. The compound is also addressed in the Occupational Safety and Health Act of 1970 ("OSHA"), the Clean Air Act of 1970, and accompanying federal regulations.
See Vinyl Chloride Monomer, Georgia Gulf Product Information, available at http://www.ggc.com/docs /products/el/vcm_info.pdf (describing VCM's chemical properties and outlining its commercial applications) (last visited June 24, 2004).
Report on Carcinogens, Tenth Edition, U.S. Department of Health and Human Services, Public Health Service, National Toxicology Program (Dec. 2002), available at http://ehp. niehs.nih. gov/roc/tenth/profiles/s186viny.pdf. See also Kathleen M. Rest Nicholas A. Ashford, Regulation and Technological Options: The Case of Occupational Exposure to Formaldehyde, 1 HARV. J. LAW TEC. 63, 76-77 (1988) (recounting congressional and industrial response to the dangers of vinyl chloride and the latter's remedial actions) (last visited June 24, 2004).
29 U.S.C. § 651-678.
See 42 U.S.C. § 7412(b)(1) (providing list of "hazardous air pollutants," including vinyl chloride).
See 29 C.F.R. § 1910. 1017 (regulating exposure limits, medical surveillance, signs and labels, and other aspects of the production of vinyl chloride).
The Andersons originally filed this action in Superior Court, Defendants removed the case in January 2003 to the United States District Court for the District of Delaware, claiming questions of federal law predominated the Andersons' complaint. In an Order dated July 28, 2003, the District Court remanded the case to this Court. Defendants then filed the pending motions to dismiss.
See 28 U.S.C. § 1441.
Anderson v. Airco, Inc., 2003 U.S. Dist. LEXIS 13765 (D. Del.).
II. STANDARD OF REVIEW
A Rule 12(b)(6) motion to dismiss requires the Court to determine whether the plaintiff may recover under any reasonably conceivable set of circumstances susceptible to proof under the complaint. Dismissal is warranted where the plaintiff has failed to plead facts supporting an element of the claim, or that under no reasonable interpretation of the facts alleged could the complaint state a claim for which relief might be granted. Although the trial court need not "accept every strained interpretation of the allegations[,]" a plaintiff is "entitled to all reasonable inferences that logically flow from the face of the complaint." As a general rule, vagueness and lack of detail are insufficient grounds for dismissal.
Evans v. Perillo, 2000 Del. Super. LEXIS 243, at *5-6.
Id.
Malpiede v. Townson, 780 A.2d 1075, 1083 (Del. 2000).
Evans, 2000 Del. Super. LEXIS 243, at *6.
Special rules of pleading apply to claims of fraud, negligence, or mistake under Delaware Civil Rule 9(b). A complaint alleging fraud, negligence, or mistake must state with particularity the showing the condition of mind. In the fraud context, a plaintiff must refer to the time, place, and contents of the false representations, as well as the identity of and benefit to the person making the alleged misrepresentations. To sufficiently plead negligence, a defendant must be put on notice of what duty was breached, who breached it, the breaching act, and the party upon whom the act was performed.
SUPER. CT. CIV. R. 9(b).
Nutt v. A.C. S., Inc., 466 A.2d 18 (Del.Super.Ct. 1983); see also Autrey v. Chemtrust Industries Corp., 362 F. Supp. 1085, 1092, 1093 (D. Del. 1973).
Myer v. Dyer, 542 A.2d 802 (Del.Super.Ct. 1987).
III. CONSOLIDATED DEFENDANTS' MOTION TO DISMISS A. Preemption
Consolidated Defendants first claim that federal workplace safety laws preempt all of the Andersons' allegations of misconduct. They argue that their cause of action comprises, in essence, a claim of inadequate warnings, a subject specifically addressed by federal law. In response, the Andersons contend that the federal safety legislation is not meant to supercede all state tort law. According to the Andersons, their claims are grounded in state common law and do not implicate any federal regulatory scheme.OSHA is designed to remedy the "substantial burden" that "personal injuries and illnesses arising out of work situations impose [on] interstate commerce in terms of lost production, wage loss, medical expenses, and disability compensation payments." In regulating workplace safety, Congress sought, inter alia, to encourage states "to assume the fullest responsibility for the administration and enforcement of their occupational safety and health laws [. . ., and] to improve the administration and enforcement . . ." of such laws. Workplace standards for vinyl chloride are controlled generally through the Hazard Communication Standard ("HCS"), and directly by way of other federal regulations. Because federal law regulates this aspect of VCM handling, any state labeling law to the contrary is unenforceable.
29 U.S.C. § 651[(a)] (no subsection designation in original).
Id. § 651(b)(11).
29 C.F.R. § 1910.1200 (ensuring that the "hazards of all chemicals produced or imported are evaluated, and that information concerning their hazards is transmitted to employers and employees.").
See id. § 1910. 1017(l) (regulating signs and labeling of vinyl chloride operations).
See generally Gade v. National Solid Wastes Management Assoc., 505 U.S. 88, 96-97 (1992); Ferdinand S. Tinio, Annotation, Pre-emptive Effect of Occupational Safety and Health Act of 1970 and Standards Issued Thereunder, 88 A.L.R. Fed. 833 (2004). See also Manufacturers Assoc. of Tri-County v. Knepper, 801 F.2d 130 (3d. Cir. 1986) (holding that HCS preempts Pennsylvania hazardous-substance outreach-program regulation to the extent it applied to disclosure of workplace hazards in manufacturing sector); New Jersey State Chamber of Commerce v. Hughey, 774 F.2d 587 (3d. Cir. 1985) (preempting state statute mandating disclosure of substances that may pose environmental hazards).
In determining whether a state action is preempted by the federal law, the Court must look to the congressional intent behind the federal provisions in issue. As the District Court noted in its remand order in this case, the traditional police powers of the states will not be superceded by a federal act absent a "clear and manifest purpose of Congress" to do so. In the context of OSHA, Congress has expressly saved two areas from federal preemption. First, Congress directed that:
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 208 (1985).
Anderson v. Airco, 2003 U.S. Dist. LEXIS 13765, at *5, quoting Wisconsin Public Intervenor v. Mortier, 501 U.S. 597, 605 (1991).
See Gade, 505 U.S. at 96-97.
[n]othing in this Act shall be construed to supersede or in any manner affect any workmen's compensation law or to enlarge or diminish or affect in any other manner the common law or statutory rights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employees arising out of, or in the course of, employment.
Congress also noted that the Act does not "prevent any State agency or court from asserting jurisdiction under State law over any occupational safety or health issue with respect to which no standard is in effect."
Id. § 667(a).
In support of their argument, Consolidated Defendants point to numerous decisions from a variety of jurisdictions detailing the extent that state warning laws have been preempted by regulations issued under OSHA's authority. Unlike the claims in these cases, however, the Andersons have raised here a theory of tortious conduct based on common law principles of negligence and fraud. By directing that OSHA shall not be construed to "enlarge or diminish . . . the common law . . . rights, duties, or liabilities of employers and employees . . .," Congress signaled an intent to leave state law tort actions intact. Because the Andersons' inadequate warning claims are grounded in tort law, not administrative labeling requirements, OSHA does not preempt any count of the complaint.
See, e.g., United Steelworkers v. Auchter, 763 F.2d 728 (3d. Cir. 1985) (discussing preemptive effect of HazCom Standard on state hazard disclosure laws in manufacturing sector); In re Wireless Tel. Radio Frequency Emissions Prods. Liab. Litig., 248 F. Supp.2d 452, 461 (D. Md. 2003) (noting that congressional intent controls determination of preemptive effect).
Cf. Aetna v. Davila, No. 02-1845, ___ U.S. ___ (June 21, 2004), 2004 U.S. LEXIS 4571 (holding federal retirement insurance legislation preempts similar state statute because of congressional intent to furnish private remedy exclusively in federal courts).
Cf. Papas v. Upjohn Co., 985 F.2d 516, 518 (11th Cir. 1993) (preempting state law defective labeling action under federal insecticide legislation's labeling and packaging standards); Hawkins v. Leslie's Pool Mart, Inc., 184 F.3d 244, 251 (3d. Cir. 1999) (rejecting state action that sought labeling "different from that approved by the EPA. . . ." under same federal insecticide legislation).
Furthermore, Consolidated Defendants' present claim that the "preemption doctrine requires dismissal of this state-law tort action" is identical to the federal jurisdiction argument raised in the U.S. District Court. In its remand order, the U.S. District Court expressly held that the Andersons' claims are not preempted by the labeling standards of OSHA. The Consolidated Defendants thus failed to establish "either that federal law creates the cause of action or that the plaintiff's right to relief reasonably depends on resolution of a substantial question of federal law." Therefore, it necessarily follows that the federal legislation does not preempt the Andersons' state-law claims.
Def. Mot. to Dismiss, at 5.
Anderson, 2003 U.S. Dist. LEXIS 13765, at *6-7 (" The Court finds that the state tort laws at issue have not been preempted by the HazCom Standard or the VCM warning and labeling standard.").
Elf Aquitaine, Inc. v. Placid Oil Co., 624 F. Supp. 994, 997 (D. Del. 1985).
B. Negligent Failure to Warn
Separately, the Supplier Defendants contend that the Andersons' negligence claims in Count One must be dismissed because Anderson has failed to establish a causal link between his injuries and any particular defendant's activity. According to the Supplier Defendants, the Complaint fails to inculpate the particular defendants that manufactured or supplied the VCM that allegedly caused Anderson's condition.
The Andersons disagree, emphasizing that the Complaint establishes each supplier has the duty to provide VCM in a manner that ensures its subsequent safe handling. The Supplier Defendants breached this duty, according to the Andersons, by failing to provide sufficient information regarding proper handling procedures and by actively concealing this information from them.
The parties cite several cases for their respective positions. In Money v. Manville Corporation Asbestos Disease Compensation Fund, several employees of Delmarva Power and Light filed suit against various manufacturers of asbestos products, alleging a number of torts, including negligence. After the close of the plaintiffs' evidence, the Superior Court granted a directed verdict in favor of the manufacturers. Specifically, the Court held that, in the absence of expert medical testimony "providing a direct nexus between the defendants' asbestos products and plaintiffs' asbestos-related injuries," the plaintiffs had failed to establish a prima facie case on the issue of causation.
596 A.2d 1372 (Del. 1991).
Id. at 1374 (recounting the Superior Court's reasoning).
Similarly, in Lipscomb v. Champlain Cable Corporation, the Superior Court granted summary judgment in favor of an asbestos manufacturer. According to the Court, the plaintiff-employee failed to establish a proper "product nexus" — the "factual connection in space and time between a particular plaintiff and a particular defendant's product." The employer in Lipscomb handled two types of piping, only one of which contained asbestos. Because he failed to offer any evidence as to which particular pipe he handled, the Court found that Lipscomb could not prove causation.
Lipscomb v. Champlain Cable Corp., 1988 Del. Super. LEXIS 338 (adopting Master's Report).
Id. at *1. See also Nutt v. A.C. S. Co., 517 A.2d 690, 692 (Del.Super.Ct. 1986) (analyzing product nexus in the summary judgment context, and holding that a plaintiff must offer "some evidence that not only was a particular defendant's asbestos containing product present at the job site, but also that the plaintiff was in proximity to that product at the time it was being used.") (citing In re Asbestos Litigation, 509 A.2d 1116 (Del.Super.Ct. 1986)).
Id. at *6. For the same reasons, the Court also found an insufficient causal link between Lipscomb's asbestos-related injury and the claim that he handled "unknown sheets of asbestos paper." See id.
Finally, in Threadgill v. Manville Corporation Asbestos Disease Compensation Fund, another asbestos-exposure case, the Delaware District Court denied a motion for a new trial after a jury returned a verdict in favor of the defendant asbestos manufacturer. There the District Court noted that "the jury was free to conclude on this record that plaintiffs had failed to establish [a] product nexus" because there was no evidence "explicitly placing Mr. Threadgill in proximity to Manville's asbestoscontaining products at the time those products were being used." Because the plaintiff's case was "entirely circumstantial," the District Court refused to disturb the jury's verdict.
Threadgill v. Manville Corp. Asbestos Disease Compensation Fund, 1990 U.S. Dist. LEXIS 19083 (D. Del.).
Id. at *8.
Id.
I find that all three cases are distinguishable, at this stage of the proceeding. Initially, I note that I must review the Complaint to determine whether under any reasonable interpretation of the facts alleged could the Andersons state a claim, and if so, whether each element of the negligence claim is properly pled. Money, Lipscomb, and Threadgill were decided at the directed verdict, summary judgment, and post-trial stages of litigation, respectively. In each case, discovery was complete or at least commenced, and in one a verdict had been returned. All three are similar, moreover, in that the plaintiffs had an opportunity to present at least part of their evidence in countering their opponents' attacks. Here, the Court is reviewing only the sufficiency of the Complaint.
Substantively, Count One of the Complaint alleges that the "supplier defendants were negligent in that they did not give any warning of the hazards known to them," promoted "representations that denied and underestimated the harm of VCM," and failed to conduct "scientific and medical tests to examine and eliminate the hazards of the products they sold, manufactured, and distributed. . . ." Through this language, the Andersons have sufficiently alleged the four elements of a negligence action: duty (here, the obligation to warn), the breaching party (the supplier defendants, who are specifically named at the outset of the Complaint), the breaching act (failing to warn), and the injured party (Anderson). In the Complaint, the Andersons need not prove proximate cause because they need not prove their case at this stage of litigation. Accordingly, dismissal at this stage is inappropriate.
Pl. Compl. ¶ 11.
C. Strict Products Liability
Count Two of the Complaint asserts a claim of strict products liability against the Supplier Defendants, alleging that the VCM Anderson was exposed to was "defective and unreasonably dangerous" by virtue of its toxicity and carcinogenicity. The Supplier Defendants, according to the Andersons, are strictly liable for Anderson's injuries because of their failure to warn of such dangers. In response, the Supplier Defendants maintain that Delaware does not recognize a strict tort liability in causes of action based on the sale of goods.
Id. ¶ 13.
In Cline v. Prowler Industries of Maryland, the Delaware Supreme Court expressly rejected the doctrine of strict tort liability in the sales context. Concerned that it "would be engaging in impermissible judicial legislation," the Court held that Delaware's version of the Uniform Commercial Code preempted any strict liability claim. The Andersons, however, claim that Delaware law does not apply to their claim, asserting instead that the "places where the tortious conduct leading to injury occurred were in the states where the [Supplier] Defendants caused their literature to be created and in the States where [they] had their various meetings."
418 A.2d 968 (Del. 1980); see also LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069, 1071 (3d. Cir. 1996) (contrasting Pennsylvania and Delaware products liability jurisprudence).
6 Del. C. § 1-101, et seq.
Cline, 418 A.2d at 974. See also Anita Berstein, The New-Tort Centrifuge, 49 DEPAUL L. REV. 413, 425 (1999) (comparing the historical rise of strict liability in tort with the subsequent UCC scheme that "codif[ied] the law of warranties, disclaimers, and third-party beneficiaries.").
Pl. Resp. at 27.
In determining which jurisdiction's law applies to a cause of action sounding in tort, Delaware courts follow the tenets of the Restatement (Second) of Conflict of Laws. Section 145 provides: "[T]he rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in [Section 6]." Whether a significant relationship attaches to a particular jurisdiction depends upon seven policy considerations enumerated in Section 6:
See Travelers Indem. Co. v. Lake, 594 A.2d 38 (Del. 1991). See also Symeon C. Symeonides, The Judicial Acceptance of the Second Conflicts Restatement: A Mixed Blessing, 56 MD. L. REV. 1248, 1252, t.1 (1997) (surveying the forty-one jurisdictions, including Delaware, that have abandoned the lex loci delicti rule for tort conflicts).
RESTATEMENT (SECOND) OF CONFLICT OF LAWS, § 145(1).
(1) the needs of the interstate and international systems;
(2) the relevant policies of the forum;
(3) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue;
(4) the protection of justified expectations;
(5) the basic policies underlying the particular field of law;
(6) certainty, predictability and uniformity of result; and
(7) ease in the determination and application of the law to be applied. Furthermore, Section 145 lists the following relational and geographic contacts a court should consider when applying the above factors:
Id. § 6; see also Lake, 594 A.2d at 47.
(a) the place where the injury occurred;
(b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and
(d) the place where the relationship, if any, between the parties is centered.
RESTATEMENT, supra n. 41, § 145(2).
The Restatement, in addition to these wide-ranging considerations, provides a specific framework for personal injury actions:
[I]n an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in [the Section 6 policy considerations] to the occurrence and the parties, in which event the local law of the other state will be applied.
Id. § 146.
Thus, where the tortious conduct and injury occur in different jurisdictions, the state that has the most significant relationship to the action is generally the one in which the plaintiff was injured.
Id. § 146 cmt. e. In choosing which laws to apply, Courts favored the situs of injury well before the first Restatement's adoption in 1934. See, e.g., Cameron v. Vandergriff, 13 S.W. 1092 (Ark. 1890); Le Forest v. Tolman, 117 Mass. 109 (1875) (" [T]he act which is the cause of the injury and the foundation of the action must at least be actionable or punishable by the law of the place in which it is done, if not also by the law of the place in which redress is sought.") (citing Smith v. Condry, 42 U.S. 28 (1843)). But cf. Ehrenzweig, The Place of Acting in Intentional Multistate Torts, 36 MINN. L. REV. 1 (1951) (favoring the application of local law of state where conduct occurred); Rheinstein, The Place of Wrong, 19 TULANE L. REV. 4 (1944) (advocating the same).
The Andersons claim that the Supplier Defendants' actions outside of Delaware resulted in a national deception of VCM workers. They contend that these interstate activities, in turn, engendered a significant relationship to the locus of production, i.e., production and marketing decisions made in Kentucky, Louisiana, and Texas led directly to Anderson's condition. In this case, the alleged injury occurred in Delaware at Anderson's place of employment. Similarly, the Supplier Defendants delivered VCM to the Georgia Gulf plant in Delaware. Even assuming arguendo that some wrongful conduct occurred at the site of production, this fact is outweighed by the subsequent interactions between the parties and events in Delaware. I am persuaded that Delaware has the most significant relationship to the occurrence at issue and the parties in this case. Because Delaware law applies and does not recognize a claim of strict products liability, Count Two of the Complaint must be dismissed.
See RESTATEMENT, supra n. 41, § 146 cmt. ("The local law of the state where the personal injury occurred is most likely to be applied when the injured person has a settled relationship to that state. . . .").
D. Fraud
The remainder of the Complaint alleges an industry-sponsored campaign to mislead the public about the health effects of vinyl chloride exposure. Count Four, titled "Recklessness and Conduct of Defendants," sets out a broad time line of events concerning the Non-Supplier Defendants and their activities within the vinyl chloride industry. The Andersons allege that these parties agreed, over a span of thirty years, to make public false statements regarding VCM through several industry-wide agreements. Specifically, the Andersons recount meetings concerning SD-56, a vinyl chloride safety data sheet promulgated by the Manufacturing Chemists Association ("MCA") in 1953, as well as medical and experimental worker testing allegedly designed to conceal the carcinogenicity and other effects of vinyl chloride exposure. According to the Andersons, these actions "caused inaccurate and insufficient information regarding [vinyl chloride] to be available and but for this, [Anderson] would not have been injured."
Count Three, asserting a claim solely against Georgia-Pacific, is addressed in Section IV, infra.
Pl. Compl. ¶ 76, at 42.
Count Five, titled "Fraud of the Defendants," alleges that an MCA-sponsored epidemiological study of the vinyl chloride industry, commissioned in 1966, was compromised by various activities of the Non-Supplier Defendants. Stemming from "improper sponsor influence," the value of "delay . . . to the vinyl chloride industry," and a dearth of "public [and] governmental interest in the hazards posed by . . . vinyl chloride monomer," the study was repeatedly delayed and ultimately voted down by an MCA committee attended by representatives of various Non-Supplier Defendants. Because the MCA and the Non-Supplier Defendants "specifically voted not to spend any money at all on trying to find the cause of the disease in the future," Anderson contends he relied on "faulty" information which ultimately caused his injury.
Id. ¶ 77, at 42.
The Andersons claim that present at this meeting were the agents of "at least" Olin Corporation, Union Carbide Corporation, 3M, DuPont, Dow Chemical Company, and Uniroyal, Inc.
Id. ¶ 90, at 47-48.
Delaware's fraud jurisprudence requires that a plaintiff allege: (1) a false representation, usually one of fact, that was made by the defendant; (2) with knowledge or belief of its falsity or with reckless indifference to the truth; (3) with an intent to induce action or inaction; (4) plaintiff's response is taken in justifiable reliance on the representation; and (5) an injury results from such reliance. Relatedly, these elements also comprise a claim of fraudulent concealment, except that a plaintiff must allege a deliberate concealment by the defendant. Failure to allege any of the elements warrants dismissal of the claim.
See, e.g., Stephenson v. Capano Development, Inc., 462 A.2d 1069, 1074 (Del. 1983) (recounting fraud's elements at common law and discussing each requirement in depth); see generally PROSSER AND KEETON ON THE LAW OF TORTS 725, 728 (5th ed. 1984).
Nicolet v. Nutt, 525 A.2d 146, 149 (Del. 1987) (citing Stephenson, 462 A.2d at 1074).
Zerby v. Allied Signal Inc., 2001 Del. Super. LEXIS 16 (dismissing fraud and other claims against defendant vinyl chloride manufacturers).
Although Rule 12(b)(6) "should not be read to impose a requirement that certain magic words be repeated throughout a Complaint," Rule 9(b) requires that the circumstances constituting fraud be alleged with particularity. This requirement serves to allow defendants to prepare an effective response and defense, eliminate complaints "filed as a pretext for discovery," and to protect defendants from "unfounded charges of wrong-doing" injurious to their "reputation and goodwill."
Snyder v. Butcher Co., 1992 Del. Super. LEXIS 362, at *19.
SUPER CT. CIV. R. 9(b) (directing that fraud be alleged with "particularity").
C.V. One v. Resources Group, 1982 Del. Super. LEXIS 943.
In their Complaint, the Andersons fail to state how the Non-Supplier Defendants intended Anderson to act or refrain from acting. Similarly, the Complaint does not indicate any reliance on a specific representation made by the Non-Supplier Defendants. The Andersons can only allege a general reliance, based solely on information sources promulgated throughout the industry. Although the Complaint specifies the time, place, and contents of the alleged false representations involving several, but not all, of the Non-Supplier Defendants, within the vinyl chloride industry, there is no allegation of any representation to Anderson directly or indirectly as an employee of any Non-Supplier Defendant or of a company supplied with such defendants products. General allegations of fraud are insufficient. Consistent with this Court's ruling in Zerby, I hold that Counts Four and Five fail to state a cause of action.
See Pl. Compl. ¶ 91, at 48 (Anderson "relied on the information available to him when he worked at the [Georgia Gulf plant] and as a result of the misinformation . . . was injured.") (emphasis added); id. ¶ 99, at 50 (Anderson "was made aware of the levels of VCM that were allegedly safe as published by [the Non-Supplier] defendants. He was made aware of a low risk of only liver cancer at the levels of his exposure and relied on this information to his detriment.") (emphasis added).
Zerby, 2001 Del. Super. LEXIS 16, at *20-21 (" The fact, if it is a fact, that the non-supplier defendants fraudulently concealed or misrepresented the dangers of vinyl chloride with the intent to deceive and mislead and to be relied upon by Ms. Zerby and persons like Ms. Zerby whose employment responsibilities exposed them to vinyl chloride, does not state a cause of action where plaintiff was not employed by defendant or a company supplied with defendant's products.") (quotation marks omitted).
See Strasburger v. Mars, Inc., 83 A.2d 101, 104 (Del. 1951).
2001 Del. Super. LEXIS 16.
E. Conspiracy and Aiding and Abetting
Counts Six, "Conspirac[y] to Commit Fraud and Misrepresentation and Concealment by All Defendants," and Seven, "Aiding and Abetting," reiterate the fraud narrative in Count Five, specifically linking both the Supplier and Non-Supplier Defendants to the industry events concerning VCM safety. Although the Andersons cannot maintain their fraud claims, their conspiracy and aiding and abetting allegations are viable.
Nicolet v. Nutt, a conspiracy action stemming from asbestos-related injuries, holds that:
if competent medical evidence as to the dangers of asbestos was intentionally misrepresented and suppressed in order to cause plaintiffs to remain ignorant thereof, coupled with proof that such suppression caused injury to a plaintiff, the alleged tort [of conspiracy] is established.
Nicolet v. Nutt, 525 A.2d 146, 148 (Del. 1987).
This reasoning has been adopted in the vinyl chloride context. Accordingly, if proved, the Andersons would be entitled to relief under the Complaint.
Zerby, 2001 Del. Super. LEXIS 16, at *24 (holding that if non-suppliers of vinyl chloride "conspired with the suppliers to misrepresent and suppress vinyl chloride's dangers, all the conspirators, including the non-supplier conspirators, can be held liable.").
As to aiding and abetting, the Restatement provides:
For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he . . . knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself. . . .
RESTATEMENT (SECOND) OF TORTS, § 876(b), adopted by Patton v. Simone, 1992 Del. Super. LEXIS 316.
In alleging that the Non-Supplier Defendants deliberately plotted to conceal the health risks surrounding VCM exposure, the Andersons have sufficiently pled the three elements that comprise aiding and abetting: tortious conduct, knowledge, and substantial assistance. As to the first element, the Complaint sufficiently alleges negligence as the underlying wrong supporting the derivative conspiracy and aiding and abetting claims. In addition, in setting forth its litany of conspiratorial events and accusing the Non-Supplier Defendants of designing and implementing a comprehensive plan of secrecy, the Complaint adequately alleges the latter two elements of aiding and abetting. Accordingly, Count Seven will not be dismissed under Rule 12(b)(6).
Patton, 1992 Del. Super. LEXIS 316, at *22.
See Nutt v. A.C. S. Co., 517 A.2d 690, 694 (Del.Super.Ct. 1986) ("Civil conspiracy is not an independent cause of action in Delaware, but requires an underlying wrong which would be actionable absent the conspiracy."); Phoenix Canada Oil Co. v. Texaco, Inc., 455 F. Supp. 749, 752 (D. Del. 1978), aff'd 595 F.2d 1213 (3d. Cir. 1979).
F. Loss of Consortium
Count Eight asserts a claim on behalf of Mrs. Anderson for damages due to loss of consortium. Because the negligence and conspiracy counts remain, the consortium claim survives as well.
See Jones v. Elliott, 551 A.2d 62, 64-65 (Del. 1988); Lacy v. G.D. Searle Co., 484 A.2d 527 (Del.Super.Ct. 1984).
IV. GEORGIA-PACIFIC'S MOTION TO DISMISS
The Complaint's third count alleges that Georgia-Pacific, as parent company of Anderson's employer, Georgia Gulf, negligently or intentionally exposed Anderson to unsafe levels of VCM "as a result of the manufacturing facilities Georgia-Pacific designed and controlled and provided to Georgia Gulf. . . ." Because the company governed the "health and safety" and "[d]isclosures of medical effects of VCM" at Georgia Gulf "through about 1986," Georgia-Pacific "caused [Anderson] to be exposed to high levels of VCM. . . ."Georgia-Pacific seeks dismissal on several grounds. First, it takes issue with the timing alleged in the complaint. Specifically, Georgia-Pacific notes that Anderson was employed by Georgia Gulf's predecessor, Ethyl Corporation, for several months in 1983, thus making his employment allegations inaccurate. Since it did not purchase Ethyl's plant until late 1983, Georgia-Pacific insists it could not have controlled the dissemination of information regarding VCM, and therefore cannot be held liable for Anderson's injuries. For the years Anderson was employed by Georgia Gulf, Georgia-Pacific contends that Delaware's workers' compensation laws bar any direct claim against it. The company also argues that the Andersons' claims are general and conclusory, devoid of the factual circumstances surrounding Georgia-Pacific's control of Georgia Gulf.
See 19 Del. C. § 2304.
The purpose of the workers' compensation law is to give an injured employee "a prompt and sure means of receiving compensation and medical care without subjecting that worker to the hazards and delays of a lawsuit." Compensation for injuries sustained in the course of employment is thus controlled solely by this statutory scheme, "regardless of the question of negligence and to the exclusion of all other rights and remedies."
Frank C. Sparks Co. v. Huber Baking Co., 96 A.2d 456 (Del. 1953).
The viability of the Andersons' cause of action against Georgia-Pacific, as parent company to Anderson's direct employer, Georgia Gulf, thus turns on the relationship of the parties within the meaning of the workers' compensation laws. The term employer is defined as "all those who employ others unless they are excluded from the application of this chapter by any provision of" the workers' compensation laws. The definition of employee, a term that has "probably produced more reported cases than any definition of status in the modern history of law," is conceptually more problematic.
3 ARTHUR LARSON LEX K. LARSON, LARSON'S WORKERS' COMPENSATION LAW § 60.01 (2003). See also Harris v. Seiavitch, 9 A.2d 375 (Pa. 1939); RESTATEMENT OF AGENCY (SECOND) § 220 (defining "servant" as a "person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control.").
Courts generally follow the common-law distinction between employee and independent contractor. In Delaware, the four elements of the test are: (1) who hired the employee; (2) who may discharge the employee; (3) who pays the employee's wages; and (4) who has the power to control the conduct of the employee when he is performing the particular job in question. Although the rules are firmly established, their application to the numerous circumstances that may arise under them remains elusive. But however nuanced the application of the rule is, it is well-settled that where one is determined to be an employee, the workers' compensation laws preempt any common-law remedy against the employer for personal injury.
See RESTATEMENT OF AGENCY (SECOND) § 220(2) (listing factors for consideration).
Lester C. Newton Trucking Co. v. Neal, 204 A.2d 393, 395 (Del. 1964); Hering v. Central Grain, 1999 Del. Super. LEXIS 156; see also White v. Gulf Oil Corp., 406 A.2d 48 (Del. 1979) (holding that statutory definitions in workers' compensations laws do not abrogate common-law concepts governing employer-employee relationship).
See, e.g., Murray's Case, 154 A. 352, 354 (Me. 1931) ("No hard and fast rule can be made as to when one undertaking to do work for another is an independent contractor or an employee within the meaning of a Workmen's Compensation Act, but each case must be determined on its own facts.").
Powell v. Interstate Vendaway, Inc., 300 A.2d 241 (Del.Super.Ct. 1972).
On a motion to dismiss, the Court need not "blindly accept as true all allegations, nor must it draw all inferences from them in plaintiffs' favor unless they are reasonable. . . ." In determining whether the Andersons would be entitled to relief under any "any set of facts that might be shown to exist consistent with the well-pleaded allegations in the complaint," the Court must be satisfied that the Complaint contains more than conclusory and generalized accusations. The Andersons contend that Georgia-Pacific controlled the operations, including the safety protocols, of the plant in which Anderson worked. When taken in the context of the Complaint's broad allegations of negligence against the Supplier Defendants, Count Three inculpates Georgia-Pacific, as owner and controller of Georgia Gulf, in the negligent failure of the Supplier Defendants to provide a safe working environment. If true, Georgia-Pacific could be considered Anderson's employer, or as a dual-employer concurrent with Georgia Gulf. But under the workers' compensation exclusionary provisions, this state of affairs would disallow any claim for personal injury against Georgia-Pacific.
Grobow v. Perot, 539 A.2d 180, 187 (Del. 1988), overruled on other grounds, Brehm v. Eisner, 746 A.2d 244 (Del. 2000).
In re Tri-Star Pictures, 634 A.2d 319 (Del. 1993).
Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135 (Del. 1997); Grobow, 539 A.2d at 187.
Loden v. Getty Oil Co., 316 A.2d 214, 216 (Del.Super.Ct. 1974), citing 1A LARSON'S WORKERS' COMPENSATION LAW 839, § 48.40 (recognizing dual-employment relationships for purpose of workers' compensation).
See 19 Del. C. § 2304.
For Georgia-Pacific to be immune from suit by virtue of this principle, however, the Court must find that Anderson is in fact an employee of the parent company. Delaware law recognizes the individuality of corporate entities. Moreover, the fact that two corporations have a common central management and control does not override or negate the separate identity of the corporations. Thus, whether Anderson can be considered an "employee" of Georgia-Pacific is controlled by the four employment criteria set forth in Neal. At this stage of litigation, however, the details of Anderson's relationship, if any, with Georgia-Pacific are insufficiently developed to warrant analysis under this test. As the Complaint serves only a notice function, in this context, the Andersons need not prove their case within it. The allegations in Count Three therefore provide little factual guidance for the Court in determining, for example, who hired Anderson or from which accounts his pay is drawn. On the present record, application of the Neal test is premature. Accordingly, dismissal of Count Three is unwarranted at this stage of litigation.
Stauffer v. Standard Breads, Inc., 178 A.2d 311 (Del.Ch. 1962), aff'd 187 A.2d 78 (Del. 1962).
Skouras v. Admiralty Enterprises, Inc., 386 A.2d 674 (Del.Ch. 1978).
Cf. Jordan v. E.I. du Pont De Nemours Co., 1986 Del. Super. LEXIS 1371, at *2 (Del.Super.Ct. 1986) (discussing details of "working relationship" between defendants contractor and subcontractor and analyzing parties' relationship under Neal); Loden, 316 A.2d 214 (examining employment relationship in the context of Neal).
V. CONCLUSION
As to Counts One, Three, Six, Seven, and Eight, the Defendants' motions to dismiss are DENIED. As to Counts Two, Four and Five, Defendants' motions to dismiss are GRANTED. An order will be entered consistent with this opinion.