Opposition Brief — Mantaline Corp. v. PPG Industries, Inc.

a Supreme Court, U.S.

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No. 00-620 WV 4 7 anny)"

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IN THE

Supreme Court of the United States”) ---——

MANTALINE CORPORATION,

Petitioner,

Vv.

PPG INDUSTRIES, INC. and

AMERICAN ARBITRATION ASSOCIATION,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF IN OPPOSITION FOR RESPONDENT

PPG INDUSTRIES, INC.

AMIE L. BRUGGEMAN BREADEN M. DOUTHETT

Counsel of Record ROETZEL & ANDRESS

THOMAS M. PARKER 1375 East Ninth Street

ROETZEL & ANDRESS” One Cleveland Center

222 South Main Street 10" Floor

Akron, Ohio 44038 Cleveland, Ohio 44114

(330) 376-2700 (216) 623-0150

Attorneys for Respondent

PPG Industries, Inc.

163528 @) Counsel Press LLC

(800) 274-3321 + (800) 359-6859

_

4

— |

i

QUESTIONS PRESENTED

1. Under Ohio law, does a contract for the sale of goods

contain an arbitration clause when the sole written offer

contains that clause and the offeree promptly accepts ‘the

offer and performs, without any objection to the offer’s

proposed terms, without any proposal for additional terms,

and without so much as suggesting a negotiation over the

terms of the contract.

2. Does Ohio Revised Code § 1302.10 apply when the .

offer expressly limits acceptance to the terms of the offer,

and the offeree accepts the offer without “stat[ing] terms

additional or different from those offered or agreed

upon... .” Ohio Rev. Code § 1302.10(A).

ii

STATEMENT PURSUANT TO RULE 29.6

Respondent, PPG Industries, Inc., has no parent

corporation and no publicly held company owns 10% or more

of its stock.

.

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TABLE OF CONTENTS

Ee ee re

Statement Pursuant to Rule 29.6 ...............

og aleis

Reasons for Denying the Writ .................

I.

The Opinion And Judgment Of The Court Of

Appeals Was, Properly, Premised Upon State

Se Gece o etea kha 64 645 60 08

II. The Court Of Appeals Did Not Address The

III.

Claimed Violation Of Petitioner’s Right To

Trial By Jury, Nor Is That Right Implicated

By The Sixth Circuit’s Judgment .........

The Court Of Appeals’ Decision Was

Consistent With Ohio Law, With The

Uniform Commercial Code, And Is Not In

Conflict With The Law Stated By The Fifth

es i eee ue

A. The Court Of Appeals Logically Applied

Ohio’s U.C.C. Statutes In A Manner

Consistent With The Courts That Have

Addressed The Issues Raised. .......

Page

10

iv

Contents

Page

B. There Is No Conflict Between The Sixth

Circuit Decision, Under Ohio State Law,

And The Fifth Circuit’s Axelson

So err rs eee ss ree 12

C. Even If There Was A Conflict Among

The Circuits Regarding The Substantive

Construction Of Two Different States’

Laws, Review By The Supreme Court

re eer re ere 13

SN os Si ae he es er oe ee ee 15

Vv

TABLE OF CITED AUTHORITIES

Page

Cases:

Alexander v. Buckeye Pipe Line Co., 53 Ohio St. 2d

241, 374 N.E.2d 146 (1978) ...........0c cee 8,9

Audio Visual Associates, Inc. v. Sharp Electronics

Corp., 210 F.3d 254 (4" Cir. 2000) ........... 11

Axelson, Inc. v. McEvoy-Willis, 7 F.3d 1230 (5® Cir.

SPE Acckuucneas tude ce wedces ves oeek 10, 12, 13

Bishop v. Wood, 426 U.S. 341 (1976) ........... 11

Eliason v. Henshaw, 17 U.S. 225 (1819) ......... 4

First Options of Chicago, Inc. v. Kaplan, 514 U.S.

Pe i ch uc Gre bate would Keweexwe won 5, 6,9

Gulf States Utilities Co. v. NEI Peebles Electric

Products, Inc., 819 F. Supp. 538 (M.D. La.

WY cn edhe ta wae Cee Re das bo ks 11

Haring v. Prosise, 462 U.S. 306 (1983) ......... 6, 11

J. Truett Payne Co., Inc. v. Chrysler Motors Corp.,

Pe Shee EEE ois HRN NO aS een oe 8

Litton Systems, Inc. v. Leviton Mfg. Co., Inc.,

be ee gl tO ee 11

vi

Cited Authorities

Mastrobuono v. Shearson Lehman Hutton, Inc.,

Re) ae ee en ae a

McJunkin Corp. v. Mechanicals, Inc., 888 F.2d 481

PN EE Ss sna o BA Sue uke Cake bw bas

New State Ice Co. v. Liebman, 285 U.S. 262 (1932)

2 ee hee SSO 2 eS Oe O.8 6 Go OE OSES £.O O'O 2 OD OS 6 OES OS

Perry v. Thomas, 482 U.S. 382 (1987) ..........

Pierson v. Dean, Witter, Reynolds, Inc., 742 F.2d

en SE oss ck a's we Oe ke Waa eke

Technographis, Inc. v. Mercer Corp., 777 F. Supp.

1214(M.D. Pa. 1991), aff'd, 26 F.3d 123 (3" Cir.

oe boa ak iat Weg iain ale wera & eee a ae

United States ex rel. Modern Electric, Inc. v. Ideal

Electronic Security Co., Inc., 81 F.3d 240

okay ak adda Mua e le

Universal Oil Products Co. v. 8.C.M. Corp., 313

P. cape. 903 (D. Comm. 1978) 2... ces sencess

Volt Information Sciences, Inc. v. Bd. of Trustees of

Leland Stanford Junior Univ., 489 U.S. 468

EAP ee ra ere ee red ere eee

Page

11

1]

vii

Cited Authorities

Page

Statutes:

Cee cv. Come 6 1908 G8 oki oc 14

Omse Rev. Code § 150200 ook vind 3,4

Onto Rev. Code § 1902.10 2... 5... ccc ccc nee passim

Rule:

United States Supreme Court Rule 10 ........... 5

Other Authorities:

McLaughlin, The Evolving Uniform Commercial

Code: From Infancy to Maturity to Old Age,

26 Loy. L.A. L. Rev. 691, 692 (1993) ......... 13,14

Restatement (Second) of Contracts § 26 ......... as

Restatement (Second) of Contracts § 30(1) ...... 4

|

STATEMENT OF THE CASE

At some time before January of 1986, Respondent PPG

Industries, Inc., a Pennsylvania corporation, asked several

companies, including Petitioner Mantaline Corporation, an

Ohio company, to provide it with a written quotation for the

supply of interior and exterior glazing gaskets for use by

PPG in the Security Life Center; an office building in Denver,

Colorado. PPG wanted those gaskets as part of its bid to

supply windows for the Security Life building.

PPG personnel testified at deposition that they probably

received Mantaline’s response to PPG’s request. Although

the original was not in the parties’ records, Mantaline’s

response was a standard quotation form which had several

pre-printed terms, including the terms:

This proposal is for immediate acceptance only

and is subject to change at any time before orders

are accepted by us. This proposal and our

acceptance of your orders, signed by a

representative of our Company, together with your

order, constitutes the entire contract between us.

(Petition for Writ of Certiorari Appendix at 98a). Both the

district court and the Court of Appeals held that, in light of

this terminology, Mantaline’s quotation form was not, under

Ohio law, a contractual offer; but was rather simply an

invitation to deal.

In January of 1986, PPG issued a purchase order to

Mantaline, asking it to supply the gaskets and related

materials described in the request for a written quotation, at

the price of $56,399.36. The purchase order was expressly

2

conditioned on the supplier’s (Mantaline’s) consent to all its

terms, and indicated that the supplier’s assent to the purchase

order’s terms “will be manifested by delivery of any portion of

the goods designated herein.””' The purchase order included both

an indemnity clause and an arbitration provision. Petitioner

Mantaline shipped the ordered goods without adding or

disclaiming any contract terms.

Because of damage caused to the windows when the gaskets

installed at the Security Life building leached sulfur, Security

Life sued PPG in the United States District Court for the

Southern District of Colorado. After that litigation was

concluded, PPG commenced arbitration proceedings seeking

indemnity, which prompted this lawsuit. Mantaline brought suit

in Ohio state court, seeking both a declaratory judgment over

the terms of the parties’ contract and an injunction enjoining

PPG from compelling arbitration. PPG removed the case to the

United States District Court for the Northern District of Ohio

on the basis of diversity jurisdiction.

In the district court, although the court held that Petitioner

Mantaline’s standard quotation form was not an offer, it

nonetheless contradicted PPG’s terms, supporting application

of Ohio Rev. Code § 1302.10(C), a portion of Ohio’s version

of U.C.C. 2-207, the “battle of the forms” provision. In so doing,

the district court relied upon a previous Sixth Circuit opinion

construing Ohio’s UCC sales provisions, McJunkin Corp. v.

1. The Appendix to the Petition does not contain the full text of

the PPG’s purchase order. Particularly, and peculiarly given the attention

directed to it by the Sixth Circuit, the Appendix does not contain the

fully capitalized condition which appeared on the face of the purchase

order, which stated “THIS PURCHASE ORDER IS EFFECTIVE AND

EXPRESSLY CONDITIONAL ON SUPPLIER’S ASSENT TO ALL

TERMS AND CONDITIONS IN THIS PURCHASE ORDER... .”

(See Sixth Circuit’s Opinion, Petition at 6a).

3

Mechanicals, Inc., 888 F.2d 481 (6" Cir. 1989). Inasmuch as

Ohio Rev. Code § 1302.10(C) provides, in part, that “the terms

of the particular contract consist of those terms on which the

writings of the parties agree”, the district court held that the

parties had not agreed to arbitrate, and granted summary

judgment in favor of Petitioner Mantaline.

On appeal, the Sixth Circuit reversed. The Circuit Court

found that inasmuch as there was but one offer, and inasmuch

as Petitioner Mantaline performed without any exception or

disclaimer to the terms of the offer, a contract was formed on

Respondent PPG’s terms; hardly a novel proposition.

In its discussion, the Sixth Circuit found that Section 1302.10(C)

“does not exist in isolation.” (Petition for Writ cf Certiorari

Appendix at 6a). The Court found that Ohio Rev. Code

§ 1302.09, U.C.C. 2-206, provides that performance constitutes

acceptance, and that 1302.10(C) must be read with the other

provisions of Section 1302.10, i.e. U.C.C. 2-207(1) and (2),

and its “battle of the forms” provisions only apply when

acceptance or confirmation of an offer is met with new or

additional terms; an event which did not occur in the PPG/

Mantaline transaction, but which did occur in the Sixth Circuit’s

prior McJunkin opinion. The court concluded:

Because PPG’s purchase order constituted the sole

“offer”, and Mantaline’s shipment of conforming

goods constituted an unqualified “acceptance” of the

offer, the resulting contract included the terms of

PPG’s purchase order providing for indemnification

and arbitration of disputes.

(Petition for Writ of Certiorari Appendix at 11a). The Circuit

Court consequently reversed the judgment of the district court

and remanded the case for further proceedings consistent with

its opinion.

4

REASONS FOR DENYING THE WRIT

The Court of Appeals’ opinion in this case was premised

upon three conclusions. First, Petitioner’s standard quotation —

form, by its equivocating reservation of final contract

approval, was simply an invitation to deal, without legal

effect under Ohio law. This is a basic conclusion of

traditional contract law. See Restatement (Second) of

Contracts § 26 (“A manifestation of willingness to enter into

a bargain is not an offer if the person to whom it is addressed

knows or has reason to know that the person making it does

not intend to conclude a bargain until he has made a further

manifestation of assent.”). Second, PPG’s order, which

expressly anticipated acceptance by performance, was

accepted by Petitioner’s performance which was not

accompanied by any objection or proposed additions to

PPG’s terms. Again, this comports with Ohio law, and the

common law generally. See Ohio Rev. Code § 1302.09(A)(2)

(“an order . . . shall be construed as inviting acceptance .. .

by prompt shipment of conforming or non-conforming

goods.”); Restatement (Second) of Contract § 30(1). Third,

the Court of Appeals held that the terms of the contract were

those of PPG’s offer, which was accepted by Petitioner’s

performance and that Petitioner’s failure to object to PPG’s

terms prevented application of Ohio Rev. Code § 1302.10.

Again, the conclusion is not surprising; the terms of a contract

are those of the offer, accepted by the offeree. Since the

founding of the Republic, it has been “‘an undeniable principle

of the law of contracts” that acceptance without reservation

creates a contract “according to the terms in which the offer

was made.” Eliason v. Henshaw, 17 U.S. 225, 227 (1819).

The Sixth Circuit’s conclusions of law are in accord with a

host of authority, around the country, construing other state’s

versions of the U.C.C. See infra.

5

Given the foregoing facts and conclusions of law, the

Petition is without merit. This case does not involve an.

important question of federal law that has not been but should

be decided by the Court. Sup. Ct. R. 10(c). This case does

not turn on an important federal question which has been

decided by a state court of last resort in a manner conflicting

with another state court of last resort or federal courts of

appeal. Sup. Ct. R. 10(b). There is no argument that the lower

courts’ practice departed from the accepted and usual course

of judicial proceedings, or that the Sixth Circuit’s judgment

conflicts with a state court of last resort on an important

federal question. Sup. Ct. R. 10(a).

Rather, dissatisfied with the Court of Appeals’ clear cut

conclusions of basic Ohio contract law, Petitioner asserts

two issues for the Court’s review; the alleged deprivation of

its right to a jury trial and an alleged conflict, regarding the

application of state law, between the Sixth and Fifth Circuits.

The Petition betrays a misunderstanding of the law governing

contract formation, its effect on the rights of the parties, and

the role of the Uniform Commercial Code in our federal

System; points to which Respondent now turns.

I.

THE OPINION AND JUDGMENT OF THE COURT

OF APPEALS WAS, PROPERLY, PREMISED

UPON STATE LAW

As the Court has noted, when deciding whether the

parties have agreed to arbitrate, courts “should apply ordinary

state-law principles that govern the formation of contracts.”

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944

6

(1995). This is precisely what the lower courts did in this

case. As Petitioner noted in the Court of Appeals:

[t]he central issue in this case is whether the

District Court properly determined that Ohio

Revised Code § 1302.10(C) prevents ... PPG

Industries, Inc.’s . . . purchase order provisions,

which conflict with those contained in...

Mantaline Corporation’s quotation from

becoming the sole terms and conditions applicable

to their contract for the sale and purchase of

window gaskets.

(Petition for Writ of Certiorari Appendix at 59a). In other

words, the courts below interpreted Ohio law governing

contract formation to determine whether the parties had, by

their written terms and conduct, agreed to arbitrate. As the

Court has noted: “a challenge to state-law determinations

by the Court of Appeals will rarely constitute an appropriate

subject of this Court’s review.” Haring v. Prosise, 462 US.

306, 314 n.8 (1983).

Apparently, despite the fact that Petitioner has, as a

matter of law, entered into a contract calling for arbitration,

Petitioner believes that its standard quotation form illustrates

it had not consented to arbitration, and hence a conclusion

that it agreed to arbitrate conflicts with the Court’s opinions

in Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S.

52 (1995) and Volt Information Sciences, Inc. v. Bd. of

Trustees of Leland Stanford Junior Univ., 489 U.S. 468

(1989). These opinions, however, and the Federal Arbitration

Act itself, require an agreement to arbitrate, a matter decided

under state law of contract formation. Petitioner simply fails

to recognize the consequences of its actions. Under Ohio

7

law, by performing without objection, Petitioner accepted

the terms and conditions of PPG’s offer as forcefully and

fully as if it had signed an acceptance. It is hardly unusual

for a Court to find that conduct such as performance

manifests assent to a bargain. United States ex rel. Modern

Electric, Inc. v. Ideal Electronic Security Co., Inc., 81 F.3d

240, 244 (D.C. Cir. 1996) (“a purchase order may stand as

an offer with performance of its terms constituting acceptance

* * * [t]his principle is well-recognized, even outside District

of Columbia common law.”). Petitioner’s complaint to this

Court is simply one shared by every litigant who denies being

party to an arbitration agreement.

THE COURT OF APPEALS DID NOT ADDRESS THE

CLAIMED VIOLATION OF PETITIONER’S RIGHT TO

TRIAL BY JURY, NOR IS THAT RIGHT IMPLICATED

BY THE SIXTH CIRCUIT’S JUDGMENT

Apparently in an attempt to shoehorn a federal issue into

its state-law objections, Petitioner claims that the Sixth

Circuit’s determination that the contract includes an

arbitration clause deprives Petitioner of its constitutional

right to a jury trial. There are numerous logical and

procedural ¢ifficulties with Petitioner’s request for review

of this “issue”.

First, in the Sixth Circuit, the only discussion of a

violation of Petitioner’s jury trial right was the bare assertion,

in Peti‘toner’s appellate brief, that requiring arbitration would

violate Petitioner’s jury trial right under the United States

and Ohio Constitutions. (Petition for Writ of Certiorari

Appendix at 82a). Petitioner never discussed why such a

8

violation would occur, nor did the Sixth Circuit address this

assertion. There is good reason for the disregard of

Petitioner’s jury-trial argument: “the loss of the right to a

jury trial is a necessary and fairly obvious consequence of

an agreement to arbitrate.” Pierson v. Dean, Witter, Reynolds,

Inc., 742 F.2d 334, 339 (7" Cir. 1984). Petitioner improperly

asks this Court to review a phantom issue which received

no substantive attention from either the parties or the

courts below. See Perry v. Thomas, 482 U.S. 382, 492 (1987)

(“[w]e likewise decline to reach [plaintiff's] contention that

[defendants] lack ‘standing’ to enforce the agreement to

arbitrate any of these claims, since the courts below did not

address this alternative argument for refusing to ceinpel

arbitration.”). See also J. Truett Payne Co., Inc. v. Chrysler

Motors Corp., 451 U.S. 557, 568 (1981) (“We do not

ordinarily address for the first time in this Court an issue

which the Court of Appeals has not addressed... .”).

Moreover, even if the Court of Appeals had addressed the

issue of Petitioner’s jury trial right, and there was, in fact, a

record-based issue for the Court to review, the underlying

premise of Petitioner’s jury trial question is incorrect for

two reasons.

First, as noted above, the waiver of the right to a jury is

a necessary consequence of Petitioner’s agreement to

arbitrate. In accordance with black-letter law, the Sixth

Circuit found an agreement to arbitrate. A jury trial right is

no more or less implicated in this case than in every case in

which a party, over its objections, has been found to have

agreed to arbitration. Further, Petitioner would simply not

be entitled to a jury’s determination of whether it agreed to

arbitrate; under Ohio law the construction of written contracts

and instruments is a matter of law, the jury simply determines

breach. Alexander v. Buckeye Pipe Line Co., 53 Ohio St. 2d

9

241, 374 N.E.2d 146, 148 (1978). Plaintiff's alleged jury

trial right is, necessarily, subsumed within the state law

question decided by the Sixth Circuit.

Second, as this Court has mandated, the lower courts

determined whether the parties had agreed to arbitrate in

accordance with state law. First Options of Chicago, Inc. v.

Kaplan, 514 U.S. 938, 944 (1995). The lower courts did what

judges do every day — determine whether the parties had

reached a contract, and what the terms of that contract were.

Petitioner’s argument that its jury trial right is implicated

by the Circuit Court’s state law conclusion is nothing more

than an obvious attempt to alter state law for one reason alone

— an arbitration provision is contained within the agreement

at issue. Such an argument, of course, flies in the face of the

Federal Arbitration Act, and the cases decided thereunder,

wherein Congress and the federal courts have sought to

ameliorate vestigial judicial hostility to arbitration. As the

Court has noted:

[a] court may not, then, in assessing the rights of

litigants to enforce an arbitration agreement,

construe that agreement in a manner different

from that in which it otherwise construes

nonarbitration agreements under state law. Nor

may a court rely on the uniqueness of an

agreement to arbitrate as a basis for a state-law

holding that enforcement would be

unconscionable, for this would enable the court

to effect what we hold today the state legislature

cannot.

Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987).

10

Il.

THE COURT OF APPEALS’ DECISION WAS

CONSISTENT WITH OHIO LAW, WITH THE UNIFORM

COMMERCIAL CODE, AND IS NOT IN CONFLICT

WITH THE LAW STATED BY THE FIFTH CIRCUIT

Finally, Petitioner argues that the Sixth Circuit’s opinion

is a “judicial modification of § 2-207(3) of the Uniform

Commercial Code [and] conflicts with the ruling of the

Fifth Circuit Court of Appeals... .” (Petition for Writ of

Certiorari at 9). Petitioner’s argument is premised upon a

misunderstanding of the law of contract formation, the Fifth

Circuit’s holding in Axelson, Inc. v. McEvoy-Willis, 7 F.3d

1230 (5" Cir. 1993), and the role of the Uniform Commercial

Code in our federal common law system. Respondent will

address these three points in turn.

A. THE COURT OF APPEALS LOGICALLY

APPLIED OHIO’S U.C.C. STATUTES IN A

MANNER CONSISTENT WITH THE COURTS

THAT HAVE ADDRESSED THE ISSUES RAISED.

As the Sixth Circuit noted, Petitioner reads Ohio Rev.

Code § 1302.10(C) [U.C.C. 2-207(3)] “in isolation”.

(Petition for Writ of Certiorari Appendix at 6a). Petitioner

suggests that so long as there are any conflicting “writings”,

combined with performance, Article 2 of the U.C.C. demands

that the terms of the sales contract are limited to those to

which the parties’ writings agree. For obvious reasons, the

Sixth Circuit rejected this argument — under the very terms

of the U.C.C. (and, for that matter, the common law), a

written offer can be accepted by performance. A true “battle

of the forms” occurs when the “expression of acceptance or

11

written confirmation . . . states terms additional or different

from those offered or agreed.” Ohio Rev Code § 1302.10(A)

[U.€.C. 2-207(1)]. This is the very purpose of the Section

— under the common law an acceptance containing differing

terms constituted a counter-offer. Petitioner’s problem is that

it whole-heartedly accepted PPG’s offer; there was no

counter-offer to invoke a battle-of-the-forms.

As the Court has noted: “[i]t is our practice to

accept a reasonable construction of state law by the Court of

Appeals ‘even if an examination of the state-law issue

without such guidance might have justified a different

conclusion.’ ” Haring v. Prosise, 462 U.S. 306, 314 (1983)

(quoting Bishop v. Wood, 426 U.S. 341, 346 (1976)).

It goes without saying that the Sixth Circuit’s approach

to Ohio Rev. Code § 1302.10 is entirely reasonable.

Indeed, it is consistent with the opinions of other federal

courts interpreting other states’ versions of U.C.C. 2-207.

See, e.g., Litton Systems, Inc. v. Leviton Mfg. Co., Inc.,

15 F.3d 790, 784 (8" Cir. 1994) (applying Minnesota law);

Gulf States Utilities Co. v. NEI Peebles Electric Products,

Inc., 819 F. Supp. 538 (M.D. La. 1993) (applying California

law); Technographis, Inc. v. Mercer Corp., 777 F. Supp.

1214 (M.D. Pa. 1991), aff'd, 26 F.3d 123 (3" Cir. 1994)

(applying Pennsylvania law). See also Audio Visual

Associates, Inc. v. Sharp Electronics Corp., 210 F.3d 254,

259 (4" Cir. 2000) (applying Maryland law). In fact, for at

least thirty years, federal courts, applying the U.C.C., have

found arbitration clauses to be included in sales contracts

under the precise facts presented here: price quotation,

followed by purchase order containing arbitration clause,

followed by performance without objection to the

purchase order’s terms. See Universal Oil Products Co. v.

S.C.M. Corp., 313 F. Supp. 905 (D. Conn. 1970) (applying

12

Connecticut law). Despite this logical consistency of

approach, Petitioner nonetheless argues both that the Fifth

Circuit’s Axelson opinion is to the contrary and that such a

contrary conclusion warrants the attention of the United

States Supreme Court. Both arguments suffer in several

respects.

B. THERE IS NO CONFLICT BETWEEN THE SIXTH

CIRCUIT DECISION, UNDER OHIO STATE LAW,

AND THE FIFTH CIRCUIT’S AXELSON OPINION.

The Fifth Circuit’s opinion in Axelson certainly is not

contrary to the Sixth Circuit’s conclusions in this case —

a fact specifically noted by the Sixth Circuit itself. (Petition

for Writ of Certiorari Appendix at 10a). Despite the fact that

the Fifth Circuit applied Texas law in its case, Petitioner

cannot point to one statement of law in Axelson which

contradicts the Sixth Circuit’s judgment in this case.

The reason for this lack of contradictory terms is that the

Axelson panel examined three possible resolutions of an

alleged battle of forms question, which arise under facts much

more convoluted and strikingly different than those involved

here.

In brief, Axelson involved a seller’s quotation that did

not contain a damage limitation provision, followed by the

buyer’s letter of intent that did not contain the damage

limitation provision at issue, followed by the commencement

of the seller’s performance, followed, at last and three months

later, by the buyer’s “official” purchase order, which

contained the objectionable damage limitation provision at

issue.

13

The Fifth Circuit addressed three possible alternatives:

(1) the quotation was an offer that was accepted by a letter _

of intent, (2) the letter of intent was an offer that was accepted

by the seller, or (3) that the conduct of the parties recognized

the contract — the approach presumably appealing to

Petitioner in this case. The Fifth Circuit found no need to

adopt any approach, and expressly made its holding

“[a]lternatively”, because “[rJegardless of which of the above

approaches we take, the result is the same.” Axelson, 7 F.3d

at 1231, 1234 (5" Cir. 1993). Petitioner has neglected to

inform the Court of an important point: one of the Fifth

Circuit’s alternative approaches in Axelson, based on

contractual offer and acceptance, was entirely consistent with

the reasoning of the Sixth Circuit and other courts.

C. EVEN IF THERE WAS A CONFLICT AMONG THE

CIRCUITS REGARDING THE SUBSTANTIVE

CONSTRUCTION OF TWO DIFFERENT STATES’

LAWS, REVIEW BY THE SUPREME COURT IS

INAPPROPRIATE.

Finally, the Petition ignores a basic premise of our

federal system. Even if the Fifth Circuit’s Axelson opinion

was contrary to the Sixth Circuit’s opinion in this case, such

a divergence of opinion is the expected (and some would

argue preferable) result of our federal system. The Uniform

Commercial Code is not a federal law, but is the product of

a joint effort by the American Law Institute and the National

Conference of Commissioners on Uniform State Laws.

Despite its name, the U.C.C. is certainly not uniform:

“every state has modified the official text of the U.C.C. in

one way or another.” McLaughlin, The Evolving Uniform

Commercial Code: From Infancy to Maturity to Old Age,

26 Loy. L.A. L. Rev. 691, 692 (1993).

14

Moreover, even if the state legislatures had enacted an

identical Code and had renounced both their own independent

amendments and the numerous subsequent revisions and

amendments proposed by the U.C.C.’s academic authors, the

U.C.C. was and is still destined for common law divergence

of application. The Act itself provides for common law

supplementation of its terms, Ohio Rev. Code § 1301.03

[U.C.C. 1-103] and, significantly for our purposes,

“does not define key terms such as ‘offer’, ‘acceptance’ and

‘possession’, thus requiring courts to utilize common-law

definitions of these terms when applying the Code.”

McLaughlin, The Evolving Uniform Commercial Code:

From Infancy to Maturity to Old Age, 26 Loy. L.A. L. Rev.

691, 692 (1993). In short, from its beginning, the U.C.C.

would inevitably be subject to change by fifty legislatures

and would inevitably be subject to interpretation by fifty state

court systems and the various federal courts exercising

diversity jurisdiction.

Contrary to the Petitioner’s implicit suggestion, a bit of

State law divergence, even if it existed, is not necessarily a

bad thing. This is “one of the happy incidents of the federal

system”; the laboratory of the law. New State Ice Co. v.

Liebman, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).

The Petition asks for the remarkable from this Court — the

exercise of its jurisdiction to resolve a phantom conflict

between one court’s construction of a Texas state law and

another court’s construction of an Ohio state law.

15

CONCLUSION

For all of the foregoing reasons, Respondent respectfully

requests that this Honorable Court deny the Petition.

Respectfully submitted,

AMIE L. BRUGGEMAN

Counsel of Record

THOMAS M. PARKER

ROETZEL & ANDRESS

222 South Main Street

Akron, Ohio 44038

(330) 376-2700

BREADEN M. DouTHETT

ROETZEL & ANDRESS

1375 East Ninth Street

One Cleveland Center

10 Floor

Cleveland, Ohio 44114

(216) 623-0150

Attorneys for Respondent

PPG Industries, Inc.