Opposition Brief — Chromalloy Pharmaceutical, Inc. v. Boyer

1 Supreme Court, US

D FILED

§! |

No. 90-1817 JUN 26 31

OFfftr ur tHe CLERK

In The

Supreme Court of the United States

October Term, 1990

.

TENNECO RESINS, INC., :

Petitioner,

ROBERT J. BOYER, individually and as Executor of the

ESTATE OF MARSHA F. BOYER, deceased,

Respondent.

*

Petition For Writ Of Certiorari To The

Superior Court Of Pennsylvania

.

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

.

ANTHONY E. CREATO

(Counsel of Record)

MartTIN M. Krimsky

JerFREY D. HoFFERMAN

MesirRovV GELMAN JAFFE

CRAMER & JAMIESON

1735 Market Street

Philadelphia, PA 19103

(215) 994-1000

Attorneys for Respondent

- Robert J. Boyer

DATED: June 27, 1991

COCKLF LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Does the Due Process Clause permit the forum-

related contacts of a predecessor corporation to be attrib-

uted to its non-resident successor corporation for the

purposes of establishing in personam jurisdiction where:

(a) the successor derived financial benefit from

its predecessor’s forum related activity;

(b) the cause of action arises from the forum

related activity of the predecessor;

(c) the liability for the injury caused by the

predecessor’s forum related activity has been voluntarily

assumed by the successor;

(d) the successor knew or should have known

that the predecessor’s injury producing activity occurred

in the forum state; and

(e) the predecessor and successor knew or

should have known of the dangers associated with the

forum-related activity.

2. Whether this Court should issue a writ of cer-

tiorari to the Pennsylvania Superior Court with reference

to the Full Faith and Credit Clause issue presented where

Petitioner did not press, and the Superior Court did not

pass upon, the issue.

3. Does the Full Faith and Credit Clause of the

United States Constitution prevent application of Penn-

sylvania successor liability law to treat as a de facto

ii

QUESTIONS PRESENTED - Continued

merger a transaction between Delaware corporations

allegedly executed in accordance with Delaware’s sale-of-

assets statute where:

(a) current Delaware substantive law would

define the transaction as a de facto merger; and

(b) no judicial or statutory authority exists to

support application of the Full Faith and Credit Clause to

the factual context of this matter.

ili

PARTIES TO THE PROCEEDINGS

The parties to the proceedings below are the peti-

tioner Tenneco Resins, Inc. and the respondents Robert J.

Boyer, Sherrie Simmers, Robert A. Simmers, Robert S.

Simmers (a minor by his parents and natural guardians

Sherrie and Robert Simmers), Children’s Hospital of Phil-

adelphia, American Cyanamid Company, Tennessee Gas

Pipeline Company (formally known as Tenneco, Inc.),

Chromalloy Pharmaceutical, Inc., Forrest Pharmaceutical

Laboratories, Inc., Chromalloy American Corporation,

Eugene B. Spitz, M.D., C. Everett Koop, M.D., Heyden

Products Inc., Fellows Medical Manufacturing Company,

Inc., Radiology Dept. of Children’s Hospital of Phila-

delphia, Rovena Spencer, M.D., and Joseph Stokes, Jr.,

M.D.

iv

TABLE OF CONTENTS

Page

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IT PGi ss. ccc etka ess resieviesetasys 1

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Constitutional Provisions and Statutes Involved.... 2

I I I oo artis bw cliew'c cca n'v tv dea veces 2

Be a 8 eee ee 4

I. The Pennsylvania Superior Court Decision

Allowing the Exercise of Personal Jurisdiction

Over Petitioner is in Accordance with the Fun-

damental Requirements of Due Process as Set

kk Ae re eee 4

II. The Pennsylvania Superior Court Decision

Does Not Conflict With or Create Confusion

Among the Decisions of the Federal Courts of

CE 6 6 ark ee han ek SAE Y ok eae eeen UES o 9

Ill. A Writ of Certiorari should be Denied with

Reference to the Full Faith and Credit Clause

Issue Where Petitioner Did Not Press the Issue

and the Pennsylvania Superior Court Did Not

Re I i wie gb 0.2 10

IV. A Writ of Certiorari Should Be Denied With

Reference to the Full Faith and Credit Clause

Issue Where the Pennsylvania Superior Court

Decision is in Accord with Current Substantive

Delaware Law and There is No Judicial

Authority to Support Application of the Full

Faith and Credit Clause to the Factual Context

ee a rin eels wis ha 11

I atin rere tern ee lace loan Ge a Fa Sh ter 15

|

Vv

TABLE OF AUTHORITIES

Page

CAsEs:

Alaska Packing Association v. Industrial Accident

Commeiseion, 2P5 U.S. SSE (ISS)... 0 oo cee ceesess 13

Asahi Metal Industry Co. v. Superior Court, 480 U.S.

3°. Serr Ere eee rr kr rere ee 7

Bouley v. American Cyanamid, et al, 85-4368-Z, Slip

Op., 1987 WESTLAW 18738 (D. Mass. Oct. 21, —

Me nie Aen eras BP i ere Pee eee ee 14

Burger King v. Rudzewicz, 471 U.S. 462 (1985)....... 6, 7

Canada Southern R.R. Co. v. Gebhard, 109 U.S. 527

2 NP eT Pee peer Tre reer Tye Tere eee 1M,

City of Richmond v. Madison Management Group, 918

ee. oo kee | eer reer ee rere rer ee 9

Duris v. Erato Shipping, 684 F.2d 352 (6th Cir. 1982),

aff'd sub nom. Pallas Shipping Agency, Ltd. v.

eri, GA UB. a CR sc a vac casi cree res 6

Fehl v. S.W.C. Corp., 433 F.Supp 939 (D. Del. 1977) ..... 5

Hariton v. Arco Electronics, Inc., 41 Del. Ch. 74, 188

pe ee oe errs yer re arr 14

Heilbrunn v. Sun Chemical Corp., 38 Del. Ch. 321,

Fk Be. Be Perr rere ere ee 14

Hilineis v. Gates, 462 US. 213 (1963) -.........-.25.- 11

Knapp v. North American Rockwell, 506 F.2d 361 (3rd

Cir. 1974), cert. denied, 421 U.S. 965 (1975) ........ 13

Kulko v. Superior Court, 436 U.S. 84, reh’g denied,

438 U.S. 908 (1978)

vi

TABLE OF AUTHORITIES - Continued

Page

McGoldrick v. Compagnie Generale Transatlantique,

id 4 aap bb aed eine Bae aies-9 0% + 11

Order of United Commercial Travelers v. Wolfe, 331

ES er rere 11

Pacific Employers Ins. Co. v. Industrial Accident Com-

A 13

Perry v. Thomas, 482 U.S. 483 (1987)................. 11

Pink v. A.A.A. Highway Express, 314 U.S. 201

(1941), reh’g denied, 314 U.S. 716 (1942) ........... 12

Rush v. Savchuk, 444 U.S. 320 (1980)................ 7, 8

Sheppard, et al. v. A.C. & S. Co., Inc., et al, 484 A.2d

521 (Del. Sup. Ct. 1984), appeal denied sub nom.,

In re Asbestos Litigation, 497 A.2d 783 (1985) ...... 14

Sovereign v. Bolin, 305 U.S. 66 (1938) ............. 11, 12

Vachon v. New Hampshire, 414 U.S. 478 (1974)........ 10

Williams v. Bowman Livestock Equipment Company,

ee Be Be | Ee | | re 9

Wines v. Lake Havasu Boat Manufacturing, Inc., 846

Ng Se ee ere 10

World-Wide Volkswagen Corp. v. Woodson, 444 U.S.

as oc wn ae ke kee bo abw ask ad hess d See 7

STATUTES AND CONSTITUTIONAL PROVISIONS:

a cw blaks sede esas eu naeeienses 2

EES OO SE SI ee a ee ae

eee ON, EE suena naescsvsccuves 2

42 Pa. Cons. Stat. Ann. § 5301 (1990) ................ 2

Vii

TABLE OF AUTHORITIES - Continued

Page

42 Pa. Cons. Stat. Ann. § 5322 (1961) ................ 2

Det Gees ARM. 0. OB Z5t CIPGOP nw... cc eens cece 2

Del. Code Ann. tt. 6 & 271 CIGRR) ww. icc cee ecns 2

No. 90-1817

¢

In The

Supreme Court of the United States

October Term, 1990

.

TENNECO RESINS, INC.,

Petitioner,

ROBERT J. BOYER, individually and as Executor of the

ESTATE OF MARSHA F. BOYER, deceased,

Respondent.

*

Petition For Writ Of Certiorari To The

Superior Court Of Pennsylvania

. ‘.

RESPONDENT’S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

¢

Respondent Robert J. Boyer (“Boyer”) respectfully

opposes Petitioner’s writ of certiorari to review the judg-

- ment of the Superior Court of Pennsylvania in this case.

¢

OPINIONS BELOW

The opinion of the Pennsylvania Superior Court is

reported at 394 Pa. Super. 464, 576 A.2d 376 (1990) and is

reprinted in Petitioner’s Appendix (“Pet. App.”) at

A-1-27. The order of the Supreme Court of Pennsylvania

denying the petition for allocatur is reprinted at Pet. App.

A-29-30. The order of the Pennsylvania Court of Common

Pleas denying Petitioner’s challenge to jurisdiction and

certifying this issue for appeal is reprinted at Pet. App.

A-33 and Pet. App. A-35 respectively.

¢

STATEMENT OF JURISDICTION

Petitioner invokes this Court’s jurisdiction under 28

U.S.C. § 1257 (1988).

¢ —

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

The provisions of the United States Constitution

involved are the Due Process Clause of the Fourteenth

Amendment, U.S. Const. amend. XIV § 1, and the Full

Faith and Credit Clause, U.S. Const. art. IV, § 1 and are

set forth in Petitioner’s Brief at p. 2.

The Pennsylvania Statutes involved, 42 Pa. Cons.

Stat. Ann. §§ 5301 and 5322, are set forth at Pet. App.

A-36-40.

The Delaware Statutes involved, Del. Code Ann. tit. 8

§§ 251 and 271, are set forth at Pet. App. A-41-46.

+

STATEMENT OF THE CASE

Respondent, Robert J. Boyer, individually and as

Executor of the Estate of Marsha F. Boyer, deceased, filed

this wrongful death and survival action against Petitioner

Tenneco Resins, Inc., among other defendants. The action

arises from the 1949 administration of a highly dangerous

x-ray contrast medium, Thorotrast, to his wife, Marsha F.

Boyer. Marsha Boyer died on April 26, 1986 from a cancer

related illness caused by the 1949 Thorotrast injection.

Respondent hereby adopts the recitation and applica-

tion of facts set forth in the Pennsylvania Superior Court

opinion, Simmers v. American Cyanamid Co., et al. Pet. App.

at A-1-27. Petitioner inaccurately represents to this Court

that the Pennsylvania Superior Court allowed the exer-

cise of personal jurisdiction over it “merely” because the

substantive law of the forum “may impose liability” upon

Petitioner; therefore, Respondent raises the following

points relevant to the constitutional issue presented.

First, the Pennsylvania Superior Court specifically

found that, by the late 1940s, scientific literature warned

of the medical risk to humans inherent in the use of

Thorotrast, specifically warning of the increased risk of

cancer; and, that Petitioner, and Petitioner’s predecessor,

knew or should have known of the dangers. Pet. App. at

A-2-3, A-19, A-25-26.

Furthermore, the Superior Court found that Peti-

tioner derived financial benefit from its predecessor cor-

poration’s Thorotrast related commercial activity in the

forum state; and, that Petitioner had voluntarily assumed

its predecessor’s liabilities and had become the corporate

embodiment of its predecessor. Pet. App. at A-25, A-19,

A-17.

Finally, the Superior Court found that the due pro-

cess analysis relevant to the issue of personal jurisdiction,

and the requisite determination of fairness, cannot oper-

ate in a vacuum divorced from the law of successor

liability because the result would be absurd under the

facts of this case. Pet. App. A-11-16, A-25.

o

REASONS FOR DENYING WRIT

A writ of certiorari should be denied because the

Pennsylvania Superior Court’s decision is in accordance

with the fundamental requirements of due process as set

forth by this Court with reference to the assertion of

personal jurisdiction over a non-resident defendant.

Moreover, the Superior Court decision does not conflict

with or create confusion among the decisions of the Fed-

eral Courts of Appeals. A writ of certiorari should be

denied because Petitioner did not press, and the Pennsyl-

vania Superior Court did not decide or pass upon, the

Full Faith and Credit Clause issue presented here. Fur-

ther, Delaware substantive law is in accord with the

Pennsylvania Superior Court’s treatment of the underly-

ing legal issue.

I. The Pennsylvania Superior Court Decision Allow-

ing the Exercise of Personal Jurisdiction Over Peti-

tioner is in Accordance with the Fundamental

Requirements of Due Process as Set Forth by this

Court.

Petitioner asks this Court to review the decision

below because the Pennsylvania Superior Court did not

perform its jurisdictional analysis in a vacuum. Indeed,

the Superior Court acknowledged the analytic similarity

between substantive liability and personal jurisdiction

with reference to successor corporations. The Superior

Court did not, as Petitioner suggests, focus entirely on the

contacts of Petitioner’s predecessor. Rather, the Superior

Court focused upon the due process requirement of fair-

ness to the non-resident corporation, finding certain anal-

ogies between the law of jurisdiction and the law of

successor liability useful to determine whether the exer-

cise of personal jurisdictional over a non-resident suc-

cessor corporation comports with the fundamental

requirements of due process. The Superior Court quoted

with approval Judge Caleb Wright’s opinion in Fehl v.

S.W.C. Corp., 433 FSupp 939, 945 (D. Del. 1977), which

states:

Certain principles of the substantive law with

respect to the assumption by successor corpora-

tions of products liability are relevant to this

jurisdictional question . .. Common to the scope

of both jurisdiction and liability is the fairness

of making a corporation which enjoys the bene-

fit of business within the state [i.e. assets of its

p’edecessor derived from business within the

state] answerable in that jurisdiction for wrong-

doing associated with that business... . . The

rationale of the substantive liability cases . . . is

equally applicable to the problem of personal

jurisdiction.

Pet. App. at A-15 [citations omitted, emphasis in origi-

nal].

Crucial to the Superior Court’s decision was the fact

that Petitioner derived financial benefit from its prede-

cessor’s Thorotrast-related business in the forum, the fact

that the liabilities relating to the product were voluntarily

assumed, and the fact that Petitioner knew or should

have known the possible extent of any liabilities flowing

from the product line and where those liabilities may

exist. The Superior Court concluded that “the traditional

‘notions of fair play and substantial justice’ central to the

assertion of jurisdiction are in fact furthered by [this]

decision”. Pet. App. at A-26. The court specifically

rejected the wooden approach to jurisdictional inquiry

which Petitioner advances here. “Any other ruling would

allow corporations to immunize themselves by formal-

istically changing their titles”. Pet. App. at A-20 citing,

Duris v. Erato Shipping, 684 F.2d 352, 356 (6th Cir. 1982),

aff'd sub nom., Pallas Shipping Agency, Ltd. v. Duris, 461

U.S. 529 (1983).

The Pennsylvania Superior Court noted that the stan-

dards set forth in Burger King v. Rudzewicz, 471 U.S. 462,

474 (1985) are satisfied here because Petitioner’s conduct

and connection with the forum state were such that Peti-

tioner could reasonably anticipate being haled into Court

there. Pet. App. at A-25-26. The court’s decision thus falls

squarely within the reasoning of this Court with reference

to the issue of fairness:

[w]here [defendants] purposely derive benefit

from interstate activities it may well be unfair to

allow them to escape having to account in other

states for consequences that arise proximately

from such activities; the due process clause may

not readily be welded as a territorial shield to avoid

interstate obligations that have been voluntarily

assumed. And because modern transportation

and communications have made it much less

burdensome for a party sued to defend himself

in a State where he engages in economic activity,

it usually would not be unfair to subject him to

the burdens of litigating in another forum for

disputes relating to such activity.

471 U.S. at 473-474 [citations omitted; emphasis sup-

plied].

In each case before this Court where due process

issues were raised as a result of the exercise of personal

jurisdiction over a non-resident defendant, the benefits

derived by the non-resident defendant from the forum

related activity have been analyzed to determine whether

the exercise of personal jurisdiction withstands due pro-

cess analysis. Accord, World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 299 (1980) (financial benefit to

defendant from attenuated or collateral relation to the

forum will not support jurisdiction if benefits do not stem

from a constitutionally cognizable contact with the

forum); Burger King, 471 U.S. at 479-480 (jurisdiction

proper where non-resident deliberately reached out and

negotiated with Florida corporation for the purchase of a

long term franchise and the benefits that would derive

from affiliation with a nationwide organization); Asahi

Metal Industry Co. v. Superior Court, 480 U.S. 102, 112-113

(1987) (mere awareness or foreseeability as the basis for

the exercise of personal jurisdiction exceeds the limits of

Due Process Clause); Kulko v. Superior Court, 436 U.S. 84,

95, reh’g denied 438 U.S. 908 (1978) (jurisdiction improper

where financial benefit to non-resident resulted not from

activity in forum state but from child’s absence from

defendant’s home state).

As set forth above, the Superior Court analyzed the

due process issue presented in accordance with the stan-

dards set forth by this Court. Petitioner attempts to dis-

tract this Court from the analysis embodied in the

Superior Court’s decision by arguing that the decision

improperly based jurisdiction on a contract unrelated to

the forum. Petitioner cites Rush v. Savchuk, 444 U.S. 320

(1980), in support of its contention. However, this Court's

decision in Rush is inapposite and lends absolutely no

support to Petitioner’s argument.

In Rush, no nexus existed between the forum, the

injury and the contacts of the defendant. Moreover, the

non-resident defendant derived no financial benefit from

the forum contact. Here, Petitioner derived financial ben-

efit from the forum-related contacts of its corporate pre-

decessor and the injury arises from the predecessor’s

activity in the forum. Thus, the 1963 Agreement whereby

Petitioner assumed the liabilities for the actions of its

predecessor, need not demonstrate sufficient ties to the

forum because the contract implicitly provided for ihe

assumption of liabilities wherever they accrue. Pet App.

at A-17. The contractual assumption of liabilities would

lose legal force if, as Petitioner suggests, the Due Process

Clause required any contract assuming liabilities be a

contract with sufficient ties to the forum for purposes of

exercising in personam jurisdiction over the entity which

assumed the liabilities. Accordingly, the Superior Court's

interpretation of the 1963 Agreement, for purposes of

analyzing the successor liability and jurisdictional issues

presented, does not require an examination of the Agree-

ment’s “contacts” with the forum.

The Pennsylvania Superior Court exercised jurisdic-

tion over Petitioner in such a manner so as to satisfy the

Due Process Clause; therefore, this Court must decline to

issue a writ of certiorari to the lower court.

II. The Pennsylvania Superior Court’s Decision Does

Not Conflict With or Create Confusion Among the

Decisions of the Federal Courts of Appeals.

The Pennsylvania Superior Court decision is consis-

tent with the decisions of the Federal Courts of Appeals.

In Williams v. Bowman Livestock Equipment Company,

927 F.2d 1128 (10th Cir. 1991), the Tenth Circuit Court of

Appeals expressly adopted the holding of the Pennsylvania

Superior Court, finding that a corporation’s contacts with

a forum may be imputed to its successor if forum law

would hold the successor liable for the actions of its

predecessor. Id. at 1132 citing, City of Richmond v. Madison

Management Group, 918 F.2d 438, 454 (4th Cir. 1990). The

court in Williams declined to exercise personal jurisdic-

tion over the non-resident defendant only because appli-

cation of Oklahoma law would not impose successor

liability under the facts of that case.

In City of Richmond v. Madison Management Group,

supra, the United States Court of Appeals for the Fourth

Circuit also expressly adopted the Pennsylvania Superior

Court’s holding and cited the Superior Court for the

proposition that “the great weight of persuasive authority

permits imputation of a predecessor's actions upon its suc-

cessor whenever forum law would hold the successor liable for

its predecessor's actions.” Id. at 454 [emphasis supplied];

Pet. App. at A-14.

The court in City of Richmond noted that “the whole-

someness of that rule is apparent on its face. Every corpo-

ration who puts out a lousy product like was done here

would avoid all consequences of it by just reforming in

10

some other jurisdiction and avoiding any accountability

on it.” Id. at 455.

Similarly, in Wines v. Lake Havasu Boat Manufacturing,

Inc., 846 F.2d 40 (8th Cir. 1988), the court declined to

exercise personal jurisdiction only because the court

found that the “successor” corporation had purchased

certain assets from the predecessor but did not assume

any liabilities. As stated above, here Petitioner volun-

tarily assumed liability for the injuries caused by its

predecessor’s forum related activity.

Because the Pennsylvania Superior Court’s decision

does not conflict with the decisions of the Federal Courts

of Appeal, Petitioner’s Writ of Certiorari should be

denied.

III. A Writ of Certiorari should be Denied with Refer-

ence to the Full Faith and Credit Clause Issue

Where Petitioner Did Not Press the Issue and the

Pennsylvania Superior Court Did Not Decide the

Issue

This Court should decline to issue a writ of certiorari

to the Pennsylvania Superior Court with reference to the

Full Faith and Credit Clause issue presented because

Petitioner did not press the issue in the lower court, nor

did the court address or decide the issue. Indeed, the only

reference to the argument Petitioner advances here is

found in a single footnote in Petitioner’s brief to the

Superior Court.

Although this Court possesses the discretion to enter-

tain issues not pressed or passed upon in the lower court,

Vachon v. New Hampshire, 414 U.S. 478, 479 n. 3 (1974),

11

“due regard for the appropriate relationship of this Court

to state courts, demands that those courts be given an

opportunity to consider the constitutionality of [the issue

presented]”. Illinois v. Gates, 462 U.S. 213, 221 (1983)

citing, McGoldrick v. Compagnie Generale Transatlantique,

309 U.S. 430, 434-435 (1940). See also, Perry v. Thomas, 482

U.S. 483, 492 (1987) (Court refused to consider several

issues because court below did not address or decide

issues presented).

Therefore, this Court should decline to issue a writ of

certiorari to the Superior Court of Pennsylvania because

the Superior Court has not had the opportunity to

address or decide the Full Faith and Credit Clause issue

Petitioner presents here.

IV. A Writ of Certiorari Should Be Denied With Refer-

ence to the Full Faith and Credit Clause Issue

Where the Pennsylvania Superior Court Decision

is in Accord With Current Substantive Delaware

Law and There is No Judicial Authority to Support

Application of the Full Faith and Credit Clause to

the Factual Context of This Matter

Petitioner asserts that the Superior Court’s reliance

on a de facto merger theory of successor liability fails to

give force to the Full Faith and Credit Clause of the

United States Constitution, U.S. Const. Art. IV § 1. Peti-

tioner cites Order of United Commercial Travelers v. Wolfe,

331 U.S. 586 (1947), Sovereign Corp. v. Bolin, 305 U.S. 66

(1938) and Canada Southern R.R. Co. v. Gebhard, 109 U.S.

527 (1883) for the untenable proposition that adherence to

the Delaware statutory scheme “discharges it from lia-

bility . . . everywhere”. Petitioner’s Brief at p. 10 citing,

12

Canada Southern R.R. Co. v. Gebhard, 109 U.S. at 538.

Petitioner’s rather disingenuous argument completely

ignores the subject matter, narrowness and limited appli-

cation of the very cases it cites.

All of the decisions of this Court cited by Petitioner

deal with fraternal society benefit contracts and the

enforceability of limitation periods set forth therein. As

Justice Roberts noted in Sovereign v. Bolin, supra, 305 US.

at 75:

Entry into membership of an incorporated bene-

ficiary society is more than a contract; it is enter-

ing into a complex and abiding relation and the

rights of membership are governed by the law

of the state of incorporation.

Here, Respondent is not a party to any agreement

with Petitioner regarding the rights, obligations and lia-

bilities between the parties. Indeed, the Pennsylvania

Superior Court decision to apply the substantive law of

Pennsylvania to the issue of successor liability falls

squarely within the policy of this Court with reference to

application of the Full Faith and Credit Clause. Accord,

Pink v. A.A.A. Highway Express, 314 U.S. 201, 211 (1941),

reh’g denied, 314 U.S. 716 (1942) (recognizing and allowing

state to interpret legal effect of insurance policy upon

residents where residents may defend on the ground that

they were never stockholders of insolvent mutual insur-

ance company). Moreover, the Delaware statutory scheme

which Petitioner seeks to apply to this case contemplates

purely contractual relationships. The subject matter of

this action sounds in tort, not contract. As this Court

noted in Pink v. A.A.A.:

13

Like, but more cogent, reasons may call for the

restriction of the full faith and credit clause as

the instrument for controlling the law and pol-

icy of one state, with respect to its domestic

affairs, by the statutory command of another.

Id. at 211 [emphasis supplied]. Accord, Pacific Employers

Ins. Co. v. Industrial Accident Commission, 306 U.S. 493,

502-505 (1939) (in workers compensation action, state of

place of injury free to apply its own law to exclusion of

law of state of employer and employee); Alaska Packing

Association v. Industrial Accident Commission, 294 U.S. 532,

544-550 (1935) (in workers compensation action, state of

employer and employee free to apply its own law to injury

rather than law of state where injury occurred).

As demonstrated above, the Full Faith and Credit

Clause does not require a state to substitute for its own

law the conflicting law of another state, especially where,

as here, the cause of action sounds in tort, not contract.

“[T]he philosophy of the Pennsylvania Courts [is] that

questions of an injured party’s rights to seek recovery are

to be resolved by an analysis of public policy consider-

ations rather than by mere procrustean application of

formalities”. Knapp v. North American Rockwell, 506 F.2d

361, 369 (3rd Cir. 1974), cert. denied, 421 U.S. 965 (1975).

Petitioner has advanced no authority for application of

the Full Faith and Credit Clause here.

Even if this Court were to accept and apply Peti-

tioner’s strained interpretation of the Full Faith and

Credit Clause to the facts of this matter, the Delaware

state court decisions cited by Petitioner for the proposi-

tion that Delaware courts would refuse to consider the

14

subject transaction as a de facto merger are not control-

ling. Subsequent Delaware case law has brought Dela-

ware in line with modern principles of successor liability

law. Sheppard, et al. v. A.C. & S. Co., Inc., et al., 484 A.2d

521, 524-525 (Del. Sup. Ct. 1984), appeal denied sub nom., In

Re: Asbestos Litigation, 497 A.2d 783 (1985). See also, Bouley

v. American Cyanamid, et al., 85-4368-Z, Slip Op., 1987

WESTLAW 18738 (D. Mass. Oct. 21, 1987); (specifically

rejecting the argument Petitioner advances here, and

acknowledging that Hariton v. Arco Electronics, Inc., 41

Del. Ch. 74, 188 A.2d 123 (1963) and Heilbrunn v. Sun

Chemical Corp., 38 Del. Ch. 321, 150 A.2d 755 (1959) do not

lend support to Petitioner’s argument because “more

recent Delaware cases have recognized that Delaware law

accords with recognized principles of successor liability

law”).

For all of the foregoing reasons, this Court should

deny to issue a writ of certiorari to the Pennsylvania

Superior Court with reference to the Full Faith and Credit

Clause issue.

15

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari to the Superior Court of Pennsylvania should

be denied.

Respectfully submitted,

ANTHONY CREATO

(Counsel of Record)

JerFREY D. HOFFERMAN

Mesirov GELMAN JAFFE

CRAMER & JAMIESON

1735 Market Street

Philadelphia, PA 19103

(215) 994-1000

Attorneys for Respondent

Robert ]. Boyer