Mose Cohen & Sons, Et. Al. V. Newlon Metals, Inc., Et. Al.

Headnotes

H1: Civil Procedure > Jurisdiction > General Overview

Where a defendant asserts that the court lacks personal jurisdiction over him, the plaintiff has the burden to establish the court’s jurisdiction. In deciding the merits of that defense, the court may hear the matter on affidavits, depositions, interrogatories, or receive oral testimony. Matters of jurisdiction are very often not apparent on the face of the summons or complaint. If the court determines its jurisdiction without an evidentiary hearing, it must view allegations in the pleadings and documentary evidence in the light most favorable to the non-moving party. The court must resolve all reasonable competing inferences in favor of such a non-moving party. If the court holds no evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdiction to withstand the motion to dismiss. If the plaintiff produces evidence from which reasonable minds could find personal jurisdiction, the court must refuse dismissal, absent an evidentiary hearing. The court can conduct such an evidentiary hearing on the motion, at the trial, or at a separate trial on that defense. At the evidentiary hearing or the trial, the plaintiff still bears the burden of proving jurisdiction by a preponderance of the evidence. 

H2: Civil Procedure > Jurisdiction > General Overview

Civil Procedure > Jurisdiction > Minimum Contacts

A state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist “minimum contacts” between a defendant and the forum state. The concept of “minimum contacts” is a well-established United States constitutional requirement. The Due Process Clause of the Fourteenth Amendment limits the power of a state court to exert personal jurisdiction over a nonresident defendant. “The constitutional touchstone” of the determination of whether an exercise of personal jurisdiction comports with due process remains whether a defendant purposefully establishes “minimum contacts” in the forum state. Minimum contacts must have a basis in some act by which a defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. The test for minimum contacts is not susceptible to mechanical application; rather, the facts of each case must be weighed to determine whether the requisite affiliating circumstances are present. The Ohio Civil Rules and Ohio’s long-arm jurisdiction statute, Ohio Rev. Code Ann. § 2307.382(A), determine whether those circumstances are fulfilled.  

H3: Mergers & Acquisition Law > Liabilities & Rights of Successors > General Overiew

Mergers & Acquistions Law > Liabilities & Rights of Successors > Successor Liability Doctrine

The general rule of successor liability ensures that the purchaser of a corporation’s assets is not liable for the debts and obligations of the seller corporation.

H4: Mergers & Acquisition Law > Liabilities & Rights of Successors > General Overivew

Mergers & Acquisition Law > Liabilities & Rights of Successors > De Facto Mergers

Torts > Vicarious Liability > Corporations > Predecessor & Successor Corporations

A successor corporation may be held liable when (1) the buyer expressly or impliedly agrees to assume such liability; (2) the transaction amounts to a de facto consolidation or merger; (3) the buyer corporation is merely a continuation of the seller corporation; or (4) the transaction is entered into fraudulently for the purpose of escaping liability.

H5: Mergers & Acquisition Law > General Overivew

Mergers & Acquisition Law > General Business Considerations > General Overivew

Mergers & Acquisition Law > Liabilities & Rights of Successors > General Overivew

Mergers & Acquisition Law > Liabilities & Rights of Successors > De Facto Mergers

Torts > Vicarious Liability > Corporations > Predecessor & Successor Corporations

The general rule in products liability is that a successor corporation’s amenability to suit will depend on the nature of the transaction which gave rise to the change in ownership. Where the transfer is accomplished by means of a statutory merger or consolidation, the liability of the former corporation will be assumed by the new entity. Where there is merely a sale of a corporation’s assets, the buyer corporation is not liable for the seller corporation’s tortious conduct unless one of the following four exceptions applies: (1) the buyer expressly or impliedly agrees to assume such liability, (2) the transaction amounts to a de facto consolidation or merger, (3) the buyer corporation is merely a continuation of the seller corporation, or (4) the transaction is entered into fraudulently for the purpose of escaping liability. 

Summary of Case

Procedural Posture: Plaintiff seeks relief from Defendant for costs expended to do an environmental clean-up. Defendant filed a motion for summary judgment based on Ohio Civil Rule 12(B)(2), lack of jurisdiction, because Defendant is a foreign corporation with minimum contacts in Darke County. 

Overview: As part of a prior judgment, Plaintiffs paid $1.6 million to clean up a recycling facility in Darke county after there were issues with batteries cracking. Plaintiffs seeks to have Defendants reimburse part of the costs. Defendants claim that they are not the same company that Plaintiffs are seeking to indemnify.

Defendant Newlon Metal, Inc. claims that it was Newlon Metals Company, Inc. that provided batteries to the recycling facility in Darke county and not Newlon Metal, Inc. Plaintiffs wish for Defendants to be held liable under a successor-liability theory. The Court uses the 4th test from the Welco Industries case to find that the Defendant is a successor of Newlon Metals Company, Inc. 

Outcome:  The Court finds that Defendant is not entitled to the relief requested, because they are a successor, and the motion for dismissal is overruled.