ANSELL HEALTHCARE PRODUCTS INC., formerly known as Ansell Perry by kby12992

VIEWS: 62 PAGES: 58

									                           Case No. 04-20777

                     KATHY N. BURDEN, ET AL.,

                               Plaintiffs,

                                   V.

            JOHNSON & JOHNSON MEDICAL, ET AL.,

                              Defendants.


    ANSELL HEALTHCARE PRODUCTS INC., formerly known
      as Ansell Perry Inc.; BECTON, DICKINSON AND CO;

                 Defendants -Cross Defendants-Appellees,

   OWENS & MINOR MEDICAL, INC.; OWENS & MINOR, INC,

                 Defendants -Cross Claimants-Appellants


    On Appeal to the United States Court of Appeals, Fifth Circuit
from the United States District Court for the Southern District of Texas


         DEFENDANT-CROSS DEFENDANT -APPELLEE
        ANSELL HEALTHCARE PRODUCTS INC.' S BRIEF


Richard Michael Duffy               Gene F. Creely, II
Terry M. Hackett                    Texas State Bar 05060550
Gardner Carton & Douglas LLP        Cozen & O'Connor
191 N. Wacker Drive, Suite 3700     1221 McKinney, Suite 2900
Chicago, Illinois 60606             Houston, Texas 77010
(312) 569-1000                      (832) 214-3928
      TO THE HONORABLE FIFTH CIRCUIT COURT OF APPEALS

      Pursuant to the Federal Rules of Appellate Procedure, Appellee Ansell

Healthcare Products Inc. submits the following Response to Appellants' Brief:

                1. CERTIFICATE OF INTERESTED PARTIES

      The undersigned counsel of record certifies that the following listed persons

or entities, as described in the fourth sentence of Rule 28.2.1, have an interest in

the outcome of this case. These representations are made in order that the judges

of this Court may evaluate possible disqualification or recusal.

       1.    Ansell Healthcare Products Inc. ("Ansell") is a Cross-Defendant and

Appellee.

      2.     Ansell is an indirect wholly owned subsidiary of Ansell, Ltd., an

Australian publicly traded company.

      3.     Counsel for Ansell are Richard Michael Duffy and Terry M. Hackett,

of the law firm of Gardner Carton & Douglas LLP; and Gene F. Creely, II, of the

law firm of Cozen & O'Connor.

      4.     American Insurance Company, City Insurance Company, Home

Insurance Company, Royal Insurance Company, and Zurich Insurance Company

are the insurance carriers for Ansell.

      5.     Becton, Dickinson and Company (`BD") is a Cross-Defendant and

Appellee.



                                             11
      6.     Counsel for BD are Andrew W. Schwartz, Stuart M. Feinblatt and

Barry M. Epstein, of the law firm of Sills, Cummis, Epstein & Gross; and William

C. Dowdy, of the law firm of Strasburger & Price.

      7.     Travelers Insurance Company is, upon information and belief, the

insurance carrier for BD.

      8.     Owens & Minor, Inc. and Owens & Minor Medical, Inc. ("Owens &

Minor") are Cross-Claimants and Appellants.

      9.    Counsel for Owens & Minor are Robert F. Redmond, Jr. and William

W. Belt, Jr., of the law firm of Williams Mullen; and Michael R. Walzel, of the

law firm of Stevens, Baldo and Freeman, L.L.P.

      10.   Upon information and belief, Liberty Mutual Insurance Company,

CNA Insurance Company, Travelers Insurance Company and Nationwide

Insurance Company are the insurance carriers for Owens & Minor.




                                                     Hackett
                                            One of the Attorneys for Ansell




                                           ill
                                 II. PREAMBLE

                    Ansell's Response to Owens & Minor's Request for
          Certification to Texas Supreme Court and Request for Oral Argument.

A.    Certification to the Texas Supreme Court is Not Necessary.

      In its Preamble, Owens & Minor requests that the Court certify a particular

question to the Texas Supreme Court. The Texas Rules of Appellate Procedure

state that the Texas Supreme Court may answer certified questions from any

federal appellate court as follows:

      The Supreme Court of Texas may answer questions of law certified to
      it by any federal appellate court if the certifying court is presented
      with determinative questions of Texas law having no controlling
      Supreme Court precedent. The Supreme Court may decline to answer
      the question certified to it.

TEX. R. APP. P. 58.1. Ansell agrees with Owens & Minor's conceded position that

no controlling Texas Supreme Court authority holds § 82.002 to require a

manufacturer to indemnify a distributor for loss allegedly caused by another

manufacturer's product, as Owens & Minor claims in this case. Ansell does not

believe, however, that certification to the Texas Supreme Court is necessary in this

case. This question may be answered by a careful reading of the statute at issue, as

was correctly done by the District Court.

      Owens & Minor misinterprets § 82.001 et seq. of the Texas Civil Practice &

Remedies Code to require a manufacturer to indemnify a seller for losses unrelated



                                            iv
to the manufacturer's product. As is explained in detail in Ansell's accompanying

brief, the plain language of the statute obligates a manufacturer, such as Ansell, to

indemnify a seller, such as Owens & Minor, only for a loss arising from the

product which that manufacturer made and placed in the stream of commerce. It

does not require Ansell to indemnify Owens & Minor for a loss arising from

products that other manufacturers (Ansell's competitors in the marketplace) made

and placed in the stream of commerce. This position is evidenced by the language

of the statute and the statute's legislative history.

      Fitzgerald v. Advanced Spine Fixation Syst., 996 S.W.2d 864 (Tex. 1999),

which involved a certified question from this Court to the Texas Supreme Court,

decided different legal issues than the legal issue implicated in this case. In

Fitzgerald, a company called "Advanced Spine Fixation Systems" ("Advanced

Spine") manufactured a product called a spinal fixation device.          Id. at 865.

Plaintiffs claimed that they were personally injured by this spinal fixation device.

Plaintiffs sued Advanced Spine, the manufacturer of the device, and Fitzgerald, a

distributor of the device in general. Fitzgerald did not distribute the particular

device that allegedly injured the plaintiff. Id. Distributor Fitzgerald was dismissed

from plaintiffs' lawsuit because "he did not sell the particular device implanted in

the plaintiffs." Id. In that case, there was no dispute that there was only one

allegedly defective product that had been implanted in the plaintiff and that it was



                                                v
manufactured by Advanced Spine. Thus, Fitzgerald does not address the issue

whether a manufacturer of one product alleged to have injured a plaintiff must

indemnify the distributor for the products of other manufacturers alleged to have

injured the plaintiff. Owens & Minor attaches too great an importance to the

factual coincidence that, like the distributor in Fitzgerald, Owens & Minor did not

actually sell the product that allegedly injured the Plaintiff. This factual

coincidence simply does not bear upon the issue raised by this case - whether a

manufacturer (such as Ansell) must indemnify a seller (such as Owens & Minor)

for a loss arising from allegedly defective products of other manufacturers.

      Fitzgerald did not address this issue that Owens & Minor has imputed into

this case by its selective indemnity pursuits only against Ansell and BD. Because

the plain language of § 82.001 et seq. defines Ansell's indemnity obligation in

terms of its own product, this appeal may be answered by a careful reading of the

statute, without resort to a certified question.

      To the extent that this Court elects to certify any question, however, Owens

& Minor's proposed certified question does not address the overriding issue on the

appeal. Owens & Minor's proposed certified question focuses on the portion of

the District Court's opinion in which the Court found that Ansell's and BD's "own

defense is an implicit defense of Owens." An answer to Owens & Minor's




                                               vi
proposed certified question, which only addresses that basis for the Court's ruling,

will not resolve this case. The overriding issue to be resolved in this case is:

             Whether § 82.002 of the Texas Civil Practice and Remedies Code
             requires a manufacturer to indemnify and hold harmless a seller for a
             loss arising from a product that the manufacturer did not manufacture.

B.    Ansell's Request for Oral Argument
      Ansell believes oral argument will be helpful and, therefore, requests oral

argument.




                                             vii
                                   III. TABLE OF CONTENTS

I.      CERTIFICATE OF INTERESTED PARTIES ............................................. ii

II.     PREAMBLE ................................................................................................. iv
        A.  Certification to the Texas Supreme Court is Not Necessary .............. iv
        B.  Ansell's Request for Oral Argument ................................................. vii

III.    TABLE OF CONTENTS ............................................................................ viii

IV.     TABLE OF AUTHORITIES .......................................................................... i

V.      JURISDICTIONAL STATEMENT .............................................................. ii

VI. STATEMENT OF THE ISSUE PRESENTED FOR REVIEW .................. iii

VII.    STATEMENT OF THE CASE ..................................................................... 1
        A.  The Nature of the Case ........................................................................ 1
        B.  Course of the Proceeding ..................................................................... 2
        C.  The Disposition Below .................. ...................................................... 4

VIII. STATEMENT OF FACTS ....................................... ..................................... 8

IX.     SUMMARY OF THE ARGUMENT .......................................................... 11

X.     ARGUMENT ............................................................................................... 13
       A.  The District Court Correctly Found That. Ansell Is Not
           Required to Indemnify Owens & Minor for Losses Arising
           from Products that Ansell Did Not Manufacture .............................. 13
           1.    In 1993, the Texas Legislature changed the common law
                 on indemnity ............................................................................ 13
           2.    The Texas Supreme Court has not addressed the statutory
                 definition of "manufacturer." .................................................. 13
           3.    The rules of statutory construction mandate that § 82.002
                 not be expanded beyond its plain language to require
                 Ansell to indemnify Owens & Minor for products that
                 Ansell did not make or sell ...................................................... 17
                 a.     The language of the statute limits a manufacturer's
                        indemnity obligation to its own product ....................... 18
                 b.     Legislative History ........................................................ 26


                                                            viii
                         C. Purpose of the Statute ................................................... 27
                            (i)   Ansell cannot remedy defects in other
                                  manufacturers' products ..................................... 28
                            (ii)  Imposing joint and several liability is
                                  contrary to the purpose of the statute ................. 28
                     d.     Consequences of Owens & Minor's proposed
                            construction ................................................................... 32
       B.      There Is No Disputed Fact Question That Ansell Agreed to
               Defend, and Defended, Its Product ................................................... 34
       C.      The District Court Correctly Determined That All of Owens &
               Minor's Fees Were Unnecessary ....................................................... 39

XI.    CONCLUSION ............................................................................................41

XII.   CERTIFICATE OF SERVICE .................................................................... 43

XIII. CERTIFICATE OF COMPLIANCE ........................................................... 44




                                                          ix
                                   IV. TABLE OF AUTHORITIES


        Cases

Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d 882 (5th Cir. 1991) ........................... 6,8

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ..................................... 35,37

Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812,
   (Tex. 1997) .......................................................................................................... 39

Aviation Office ofAm. Inc. v. Alexander & Alexander, Inc.,
   751 S.W.2d 179 (Tex. 1988) ............................................................................... 13

Boyett v. Keene Corp., 815 F. Supp. 204 (E.D. Tex. 1993) .............................. 30,31

Byers v. Dallas Morning News, Inc., 209 F.3d 419 (5th Cir. 2000) ....................... 35

Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ....................................................... 35

Covert Chevrolet Oldsmobile, Inc. v. General Motors Corp.,
  No. 05-00-01170-cv, 2001 WL 950274 (Tex. App.-Dallas Aug. 21, 2001) ...... 25

Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) .................................. 18

Dutcher v. Owens, 647 S.W.2d 948 (Tex. 1983) .................................................... 17

Fitzgerald v. Advanced Spine Fixation Syst., 996 S.W.2d 864 (Tex. 1999) ... passim

Freeman Fin. Inv. Co. v. Toyota Motor Corp., 109 S.W.3d 29
   (Tex. App.-Dallas 2003) ..................................................................................... 25

Freightliner Corp. v. Ruan Leasing Co., 6 S.W.3d 726
   (Tex. App.-Austin 1999), affd, 44 S.W.3d 86 (Tex. 2001) .......................... 24,28

Hill v. U.S. Fidelity and Guaranty Co., 428 F.2d 112 (5th Cir. 1970) ................... 14

Jackson v. Freightliner Corp., 938 F.2d 40 (5th Cir. 1991) ................................... 13




                                                                 X
King v. Order of United Commercial Travelers ofAm., 333 U.S. 153 (1948)....... 14

Landers v. E. Texas Salt Water Disposal Co.,
  248 S.W.2d 731 (Tex. 1952) ......................................................................... 30,31

Meritor Automotive, Inc. v. Ruan Leasing Company,
 44 S.W.3d 86 Tex. 2001                                                                                        passim

Oasis Oil Corp. v. Koch Refining Co., L.P., 60 S.W.3d 248
  (Tex. App.-Corpus Christi 2001) .................................................................. 28,31

Sanmina Corp. v. Banctec USA, Inc., No. 01-11094,
  2004 WL 442677 (5th Cir. Mar. 11, 2004) ......................................................... 38

Satterfield v. Satterfield, 448 S.W.2d 456 (Tex. 1969) .......................................... 17

Scott Paper Co. v. Adair Truck & Equip. Co., 542 F.2d 1257 (5`h Cir. 1976) ....... 37

Smith v. Sewell, 858 S.W.2d 350 (Tex. 1993) ........................................................ 17

Steak & Ale of Texas, Inc., 62 S.W.3d, 898 (Tex. App.-Ft. Worth 2002) .............. 17

         Statutes

Tex. Civ. Prac. & Rem. Code § 82.001 et seq................................................. passim

Tex. Civ. Prac. & Rem. Code § 82.002(b) .............................................................. 33

Tex. Civ. Prac. & Rem. Code § 82. 002(g) .............................................................. 22

Tex. Civ. Prac. & Rem. Code § 33 .017 (2003) ....................................................... 32

Tex. Gov't Code § 312.006(b) ................................................................................. 18

Fed. R. App. Pro. 28(b) ........................................................................................... xii

Tex. R. App. P. 58.1 ................................................................................................. iv




                                                                xi
        Other Authorities

Robert A. Sachs, Product Liability Reform and Seller Liability: A Proposal for
  Change, 55 Baylor L. Rev. 1031 (2003) ............................................................. 34
Transcript of House Committee on State Affairs, Tape 1, 73rd
  Legislature, February 15, 1993 ........................................................................... 26

Transcript of House Floor Debate, Tape 15, 73rd Legislature,
   February 22, 1993 ............................................................................................... 27




                                                              Xii
                              V. JURISDICTIONAL STATEMENT

Pursuant to Fed. R. App. Pro. 28(b), Ansell does not submit any additional

         jurisdictional statement.




                                            X111
       VI. STATEMENT OF THE ISSUE PRESENTED FOR REVIEW

      1.    Whether the District Court correctly found that Ansell is not required

to indemnify Owens & Minor under § 82.002 of the Texas Civil Practice and

Remedies Code for a loss arising from products Ansell did not manufacture or

place in the stream of commerce.




                                         xiv
                        VII. STATEMENT OF THE CASE

A. The Nature of the Case
      This case involves Owens & Minor's failed attempt to recover from Ansell

and BD all of its unnecessary attorneys' fees and costs in defending a product

liability lawsuit in which Plaintiffs' alleged injury from products made by a dozen

different manufacturers and distributed by Owens & Minor. Owens & Minor is

seeking this recovery pursuant to § 82.002 of the Texas Civil Practice and

Remedies Code.

      Section 82.002 establishes a new distinct statutory duty not recognized under

the common law.       Fitzgerald, 996 S.W.2d at 866. Specifically, the statute

"requires a manufacturer who allegedly produced the defective product, to

indemnify certain sellers for reasonable products liability litigation costs except for

those costs due to the seller's own fault." Id. at 867. The statute does not provide

for indemnity from a manufacturer for losses arising from products that the

manufacturer did not make or place in the stream of commerce. Owens & Minor

has abused the statute by pursuing its indemnity claim against Ansell and BD when

there were several other manufacturers named in Plaintiffs' Petition.

      The fundamental question presented by this case is whether the statute

requires Ansell to indemnify Owens & Minor for losses arising from products that

Ansell did not manufacture. The District Court found that Ansell fully discharged



                                              1
its statutory duty to Owens & Minor under § 82.002 when it offered to defend

Owens & Minor in this case for any claims relating to Ansell products. ROA p.

1036. The District Court also found that all of Owens & Minor's fees were

unnecessary because Ansell defended its product.

B.    Course of the Proceeding
      On February 11, 2001, Kathy N. Burden, a dental hygienist, and three

members of her family (collectively, "Plaintiffs") filed a lawsuit against thirty-

seven named defendants. ROA pp. 865-7. In that lawsuit, Ms. Burden alleged that

she was injured by latex-containing gloves manufactured, designed, distributed,

sold and/or placed into the stream of commerce by all of the thirty-seven named

Defendants. ROA pp. 343-367. The case was removed to the U.S. District Court

for the Southern District of Texas. ROA p. 865. After the case was removed, it

was transferred to the U.S. District Court for the Eastern District of Pennsylvania,

where it became part of a multidistrict litigation proceeding (the "MDL

Proceeding"). ROA p. 865.

      As part of the MDL Proceeding, Owens & Minor adopted a "Master Cross-

Claim." ROA p. 692. Owens & Minor's adoption of the Master Cross-Claim

operated to preserve Owens & Minor's cross-claim for contribution and indemnity

against all Defendants named in Plaintiffs' Petition in this case to the extent that

Owens & Minor may be held liable to the Plaintiffs. ROA p. 695. Thereafter,



                                            2
Plaintiffs voluntarily dismissed their claims against Owens & Minor. ROA pp.

487, 865. The Order of dismissal was signed by the Judge on January 31, 2002,

and "entered" by the Clerk of the Court on February 5, 2002 in the MDL

Proceeding. When Plaintiffs voluntarily dismissed Owens & Minor, it ceased to

have any potential liability to the Plaintiffs. Therefore, it could not seek any

recovery against any defendant under the Master Cross-Claim. ROA p. 695.

       On June 30, 2003, Owens & Minor moved for partial summary judgment on

an as-of-then-unasserted claim for statutory indemnity. ROA pp. 770-788. On

July 1, 2003, the District Court entered an order dismissing Owens & Minor's

summary judgment motion without prejudice. Ansell Record Excerpts, Tab 1,

ROA p. 568. The Court gave Owens & Minor until July 14, 2003 to file a cross-

claim, and Cross-Defendants until July 17, 2003 to answer that cross-claim. Id.

Owens & Minor filed its Cross-Claim asserting a claim for statutory indemnity

against Ansell, BD, Smith & Nephew AHP, Inc., and Safeskin Corporation

("Cross-Defendants"). ROA pp. 789-794. On July 17, 2003, Ansell filed an

Answer to Owens & Minor's newly filed statutory indemnity claim. ROA pp. 808-

813.

       In the July 1, 2003 Order, the Court also ordered the parties to file a "joint

stipulation of facts." ROA p. 568. The parties filed a Joint Stipulation of Facts on

August 1, 2003. ROA pp. 829-868. On August 11, 2003, Ansell and other Cross-



                                             3
Defendants moved for summary judgment on Owens & Minor's cross-claim for

statutory indemnity. ROA pp. 869-887. Owens & Minor responded to those

summary judgment motions and also filed a motion to re-urge its previously

dismissed partial summary judgment motion. ROA pp. 963-985. The Court

conducted a hearing on the pending summary judgment motions on September 2,

2003.

C.      The Disposition Below

        Plaintiffs eventually dismissed all of their claims against all of the

Defendants. ROA pp. 1042-3. Pursuant to an Opinion on Indemnity dated August

3, 2004, and entered on August 4, 2004, the District Court granted Ansell's Motion

for Summary Judgment against Owens & Minor. ROA pp. 1035-1042. It also

granted BD's Motion for Summary Judgment against Owens & Minor. Id. The

District Court found that all of Owens & Minor's fees and costs "were unnecessary

because the manufacturers offered to defend it according to their obligation under

the law." ROA p. 1035.

        This finding as to Ansell is based upon letters exchanged between counsel

for Owens & Minor and Ansell. On March 6, 2000, Owens & Minor sent a letter

to several, but not all, of the Defendants named in Plaintiffs' pleadings asking all

of these Defendants to come in and defend Owens & Minor in the case. ROA pp.

711-12. Ansell responded to that letter by stating that it was committed to



                                            4
defending any claims relating to its product, but that it could not defend Owens &

Minor with respect to distribution of other manufacturers' natural rubber latex

gloves. ROA p. 870. The District Court correctly found that this offer complied

with § 82.002, and therefore granted Ansell's Motion for Summary Judgment.

ROA p. 1036. The District Court also found that Ansell's defense of its product

was an implicit defense of Owens & Minor. ROA p. 1036.

       On September 2, 2003, the District Court held oral argument on the pending

summary judgment motions. Owens & Minor has improperly taken some of the

Court's comments during that oral argument out of context to misstate the Court's

holdings. Owens & Minor states that "[t]he District Court concluded that (in his

own words) BD and Ansell's `limited, partial, half-hearted defense' was all that

was required under § 82.002." (Owens & Minor Brief, p. 6, citing Transcript p.

18, Ins 20-22.) The District Court did not make any such finding in its written

Opinion on Indemnity issued on August 3, 2004. Nowhere in that opinion does the

District Court conclude that Ansell and BD provided a "limited, partial, half-

hearted defense." Since the District Court did not make a factual finding in its

opinion that any offer of defense was "limited, partial, half-hearted," it is improper

for Owens & Minor to state that the District Court made such a conclusion and to

seek reversal of the District Court's decision based upon a finding that was never




                                             5
made.' See Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d 882 (5"' Cir. 1991). (the

Court found that on an appeal from a bench trial, the relevant findings for appeal

are contained in the court's finding of fact, not in statements from the bench. The

court stated that "idle remarks of the court during trial do not implicate the rights

of the parties as much as the court's final decision." Id. at 893.)

        In its Opinion on Indemnity, the District Court correctly identified the reality

of the factual situation presented by this case. Owens & Minor tendered its

defense to numerous manufacturers, asking all of them to come in and defend

Owens & Minor. ROA pp. 711-12. As the District Court correctly noted, Ansell

responded appropriately by saying it would defend its products, but could not

defend Owens & Minor "with respect to distribution of other manufacturers'

natural rubber latex gloves." ROA p. 870. The District Court also noted that

Owens & Minor had reasonable alternatives to avoid duplicating fees. ROA

pp. 1035-6.

       On August 5, 2004, Owens & Minor filed a motion pursuant to Rule 60 of

the Federal Rules of Civil Procedure, attempting to vacate the final judgment

against it. ROA pp. 1267-1275. On August 24, 2004, the District Court signed an

Order denying Owens & Minor's Motion to Vacate the final judgment. ROA



'      To the extent that this Court considers the district court's reference to BD as providing a
"limited, partial, half-hearted defense," Ansell notes that the district court did not make such
comments in regard to Ansell.


                                                    6
p. 1299. Owens & Minor has not appealed the Court's denial of the Rule 60

Motion. ROA p. 1302.




                                      7
                          VIII. STATEMENT OF FACTS

       Ansell, Owens & Minor and thirty-five other defendants were named in a

Petition in state court filed on January 21, 2000 by Kathy N. Burden and three of

her family members. ROA pp. 343-368. In that Petition, Plaintiffs alleged that

Ms. Burden was injured by exposure to various latex-containing gloves

manufactured, designed, distributed, sold and/or placed in the stream of commerce

by the named defendants. Id.

       On March 6, 2000, Owens & Minor, through its outside counsel (Robert

Redmond), sent a letter to twelve outside counsel for manufacturers of latex

gloves. ROA pp. 711-12. In that letter, Owens & Minor's counsel asks that each

one of the manufacturers "come in and defend Owens & Minor, Inc. and its related

entities in the Burden case." ROA p. 711. By a letter dated March 24, 2000,

Ansell, through its outside counsel (Luis Berrones), responded to Owens &

Minor's tender stating, inter alia:

      While Ansell is committed to defending any claims relating to its
      latex gloves in accordance with its contractual obligations, Ansell
      cannot defend Owens & Minor, Inc. with respect to distribution of
      other manufacturers' natural rubber latex gloves.

ROA p. 870. Owens & Minor never responded to Ansell's March 24, 2000 letter.

Rather, Owens & Minor's outside counsel (Robert Redmond) appeared and

defended Owens & Minor in this lawsuit arising out of its alleged sale of numerous

latex gloves made by numerous different manufacturers. As it had committed to


                                           8
do, Ansell retained counsel who appeared and defended claims relating to latex

gloves that were allegedly manufactured by Ansell. ROA pp. 250-254. Ansell

defended its product regardless of who distributed the Ansell gloves.

      On May 3, 2000, this case was removed to federal court. ROA p. 865. This

case was then transferred to the U.S. District Court for the Eastern District of

Pennsylvania on June 15, 2000, where it became part of a multidistrict litigation, In

re: Latex Glove Products Liability Litigation,        Case No. 1148 (the MDL

Proceeding). ROA p. 865. As it was apparent that many defendants had been

improperly joined in many of the hundreds of latex glove products liability cases

coordinated in the MDL Proceeding, the Judge handling the MDL Proceeding,

with assistance of lead counsel, developed what became known as the "Bright-Line

Dismissal" procedure to facilitate early and inexpensive dismissal of improperly

joined defendants. Because Plaintiffs could not show that Owens & Minor sold

any latex gloves to any of Ms. Burden's places of employment under this Bright-

Line Dismissal procedure, Plaintiffs voluntarily dismissed their claims against

Owens & Minor and several other defendants. ROA p. 487.

      On February 24, 2003, this case was remanded back to the U.S. District

Court for the Southern District of Texas, and the case was reopened on March 17,

2003. ROA p. 865. On June 30, 2003, the Court held a status conference relating

to the status of Owens & Minor's cross-claims against certain manufacturers.



                                             9
ROA pp. 864-5. At that conference, Owens & Minor stated that, even though it

had been previously dismissed from the case, it was nonetheless pursuing cross-

claims for indemnity against Ansell, BD, Smith & Nephew AHP, Inc. and Safeskin

Corporation, and it obtained leave to file a cross-claim against these four Cross-

Defendants. ROA p. 864. Owens & Minor also stipulated that it was not pursuing

indemnity against any other manufacturers. ROA p. 863. Accordingly, the

District Court dismissed the following manufacturers which had previously not

been dismissed: Johnson and Johnson Medical; London International Group,

Regent Medical Division; ACH, Inc.; Microflex Corporation; Tillotson Healthcare

Corporation; and Henry Schein, Inc. ROA p. 864. Owens & Minor subsequently

settled its indemnity claim with Safeskin Corporation and Smith & Nephew AHP,

Inc. ROA pp. 1024, 1031-1033. Owens & Minor then continued with its pursuit

of 100% of its costs from Ansell and BD, only two of the manufacturers named in

Plaintiffs' pleadings.




                                          10
                      IX. SUMMARY OF THE ARGUMENT

       The District Court correctly granted summary judgment for Ansell and

against Owens & Minor because Ansell fulfilled its statutory obligation to Owens

& Minor when it offered to defend, and did defend, its own product. Under the

plain language of the statute, Ansell's indemnity obligations apply to the product it

makes and places in the stream of commerce. As Ansell does not make or place in

the stream of commerce latex gloves from other manufacturers, it cannot have any

indemnity obligation flowing from those products. By offering to defend Owens &

Minor for claims against Ansell gloves, and defending Ansell gloves, it fully

satisfied its obligations under the statute.

      Owens & Minor attempts to create an indemnity obligation not contained in

the statute for situations the legislature did not intend. Owens & Minor seeks to

hold Ansell responsible for the indemnity obligations of every manufacturer named

in Plaintiffs' Petition. Owens & Minor's interpretation would lead to an absurd

result as it would expand a manufacturer's exposure to liability for losses,

including judgments, arising from products that it did not manufacture. Owens &

Minor is abusing the statute by seeking indemnity for all of its defense costs from

two arbitrarily targeted manufacturers, Ansell and Becton Dickinson.

      The District Court did not improperly resolve any disputed fact question,

such that its summary judgment decision should be overturned. This case was



                                               11
heard on summary judgment based upon a set of stipulated facts agreed upon by all

parties and additional facts submitted by various parties. Owens & Minor's issue

with the District Court's application of Ansell's March 24, 2000 letter to Owens &

Minor's counsel setting forth Ansell's position on defending other manufacturers'

products is not a disputed fact. There are no factual disputes as to whether the

letter was sent, received, or its language. The only issue is whether Ansell

complied with its obligation to Owens & Minor under the law. The District Court

determined as a matter of law that Ansell's response to Owens & Minor's tender in

which Ansell agreed to defend Owens & Minor for claims relating to Ansell's

products discharged its statutory indemnification obligation to Owens & Minor.

The District Court did not commit any error in making this finding, and the

summary judgment in favor of Ansell and against Owens & Minor should be

affirmed.

      Finally, the District Court correctly determined that Owens & Minor's fees

and costs were unnecessary because Ansell offered to defend Owens & Minor for

selling Ansell products and Ansell did defend its products. The District Court

noted that Owens & Minor had several reasonable alternatives to avoid duplicating

fees that it elected not to pursue. ROA pp. 1035-6. Any fees that Owens & Minor

incurred in the defense of an Ansell product were duplicative and unnecessary.




                                           12
                                 X. ARGUMENT

A.     The District Court Correctly Found That Ansell Is Not Required to
       Indemnify Owens & Minor for Losses Arising from Products that Ansell
       Did Not Manufacture.

       1.    In 1993, the Texas Legislature changed the common law on
             indemnity.

      Prior to the adoption of the Product Liability Act, a distributor defendant,

just like a manufacturing defendant, had to pay its attorneys' fees and costs of

defending itself in a lawsuit. Under the common law, a distributor defendant could

receive indemnity from that manufacturer for the judgment entered against the

distributor only if the distributor were held vicariously liable in a products liability

case for selling a defective product. Jackson v. Freightliner Corp., 938 F.2d 40, 42

(5th Cir. 1991) (citing Aviation Office of Am. Inc. v. Alexander & Alexander Inc.,

751 S.W.2d 179, 180 (Tex. 1988)). In 1993, the Texas legislature passed a bill to

change the common law rule, which now appears at § 82.001, et seq., of the Texas

Civil Practice & Remedies Code.

      2.     The Texas Supreme Court has not addressed the statutory definition of
             "manufacturer."

      Since it was adopted in 1993, there has not been a single reported or

unreported case that addressed the fundamental issue presented by this case -

whether § 82.002 requires a manufacturer (such as Ansell) to indemnify a seller

(such as Owens & Minor) for a loss arising from products that the manufacturer




                                              13
did not manufacture or place in the stream of commerce.2

        The first time the Texas Supreme Court addressed how to apply the new

indemnity rights of § 82.001, et seq., was in Fitzgerald v. Advanced Spine Fixation

Systems, 996 S.W.2d 864 (Tex. 1999). That case provides little guidance on how

the Court should resolve the issue presented by this appeal. Fitzgerald involved

one product manufactured by one manufacturer and several distributors, only one

of whom supplied the product in question. The court in Fitzgerald decided that the

manufacturer of the allegedly defective product had to indemnify the seller despite

the fact that the seller was outside the chain of distribution of the allegedly

defective product. Id. at 865. In making that determination, the court looked at the

definition of "seller" in the statute and concluded there was no "chain of

distribution" requirement. 996 S.W.2d at 867. That decision has no, or little,



2       Owens & Minor also repeatedly refers to other cases in which it obtained partial
summary judgment and one case in which it obtained a verdict after trial as part of its campaign
to arbitrarily hold Ansell and BD responsible for all of its defense costs. Owens & Minor's
repeated citations and discussions of these trial court decisions are inappropriate. This Court has
held that "[a] final decision of a state trial court is not binding on the federal courts as a final
expression of the state law." Hill v. U.S. Fidelity and Guaranty Co., 428 F.2d 112, 114 (5th Cir.
1970) (citing King v. Order of United Commercial Travelers of Am., 333 U.S. 153, 160-61
(1948)). It is further inappropriate for Owens & Minor to continually bring up these decisions to
this Court, as the Court does not have a complete record from those cases upon which to evaluate
those cases. If it did have the complete record, it could see that those decisions were erroneous
and should be overturned. The precarious nature of those decisions is emphasized by the
pleadings from Owens & Minor, Inc., et al. v. Ansell Healthcare Products Inc., Cause No. 00-
C0099A-102, in the 102nd District Court of Bowie County, Texas ("McCabe"). As Judge Miller
recognized by his cover letter sending out his decision in that case, he was unclear how to apply
§ 82.002 in the multiple manufacturer situation and was preparing a record for the Appellate
Court so that "the Court of Appeals can explain to us the intent of the Legislature of Texas."
ROA p. 1293.


                                                    14
relevance to the issue in this appeal. First, Ansell is not disputing that Owens &

Minor, as a wholesaler of latex gloves, is a "seller" under the statute. Second, the

District Court, in rendering its opinion, recognized the existence of Fitzgerald and

correctly stated the court's holding in that case. ROA p. 1041. The District Court

did not grant summary judgment in favor of Ansell because of the lack of Owens

& Minor's sales of Ansell products in this case. As noted above, that factual

coincidence, that neither Owens & Minor nor the seller in Fitzgerald sold the

product at issue, is entirely irrelevant to the issue in this case. In fact, the District

Court, in discussing Fitzgerald, found that Owens & Minor did not have to prove

that Owens & Minor was in the chain of distribution. ROA p. 1037-8.

      In Meritor Automotive, Inc. v. Ruan Leasing Company, 44 S.W.3d 86 (Tex.

2001), the Texas Supreme Court once again decided an issue involving § 82.001 et

seq. that has little bearing on the issue in this appeal. In Meritor, the court decided

"whether the seller's reasonable cost to defend an unsuccessful negligence claim

asserted independently of the products liability claim, is properly included as part

of the `loss arising out of a products liability action,' so that it is within the

manufacturer's indemnity duty." Id. at 87. The Court found that such costs were

included and that a manufacturer could not invoke the independent liability

exception without establishing that the seller's conduct "caused" the loss. Id. at

91. Ansell has not argued, and the Court did not find, that any allegations of



                                              15
independent negligence on the part of Owens & Minor limited Ansell's indemnity

duty. Therefore, the applicability of the "independent liability exception" and the

holding in Meritor have no applicability to the issue in this appeal.

      Owens & Minor incorrectly extrapolates from the court's holding in Meritor

that Ansell bears some sort of burden of proof on the question of statutory

interpretation implicated by Owens & Minor in this case. Owens & Minor states

that "Meritor explicitly states that § 82.002 compels a `presumption of indemnity

to the seller' that can only be rebutted `by proof that the seller was independently

liable for the plaintiff's injury."' (Owens & Minor Brief, p. 26.) The court in

Meritor did not "explicitly" state a presumption of indemnity as Owens & Minor

contends. Rather, it was summarizing the Appellate Court's holding in that case

based upon the Appellate Court's application of Fitzgerald. The court further went

on to say that "[e]ven though both parties rely heavily on Fitzgerald, that decision

does not control the present case." Id. at 89. Furthermore, neither Meritor nor any

of the other cases has shifted, or even addressed, the burden of proof on a question

of statutory construction. The "burden" on a defendant is to prove a seller's

independent negligence if it is invoking that exception. Ansell is not invoking the

independent negligence exception and therefore has no "burden of proof."

      The seller retains the burden to prove that it was a seller, that defendant is

the appropriate manufacturer, and that the seller's fees were reasonable. The



                                            16
decision in Meritor is instructive, however, in that it discusses how a court is to

interpret § 82.001 et seq. When the guidance of the Texas Supreme Court on how

to interpret a statute is followed, it is clear that under the plain language of

§ 82.002, et seq., Ansell has no indemnity obligations for a loss arising from

products it did not make.

      3.     The rules of statutory construction mandate that § 82.002 not be
             expanded beyond its plain language to require Ansell to indemnify
             Owens & Minor for products that Ansell did not make or sell.

      Chapter 82 of the Texas Civil Practice and Remedies Code created new

indemnity rights for sellers named as defendants in a product liability lawsuit.

Fitzgerald, 996 S.W.2d at 866. This statute creates a liability not known at

common law, i.e. liability to a manufacturer based only upon allegations of a

product defect in a plaintiff's Petition, not based upon proof. The Texas Supreme

Court has stated that "[i]f a statute creates a liability that was unknown to the

common law, or deprives a person of a common law right, the statute will be

strictly construed in the sense that it will not be extended beyond its plain meaning

or applied to cases not clearly within its purview." Smith v. Sewell, 858 S.W.2d

350, 354 (Tex. 1993) (citing Dutcher v. Owens, 647 S.W.2d 948, 951 (Tex. 1983);

Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex. 1969).) See also Steak & Ale

of Texas, Inc., 62 S.W.3d, 898, 906 (Tex. App.-Ft. Worth 2002) (Court cited Smith

v. Sewell for proposition that statute creating liability unknown at common law



                                            17
should not be extended beyond plain meaning.) but cf Tex. Gov't Code

§ 312.006(b) ("The common law rule requiring strict construction of statutes in

derogation of the common law does not apply to the Revised Statutes.")

      In Meritor, the Texas Supreme Court affirmed that in construing a statute,

the primary aim is to give effect to the legislature's intent. Meritor, 44 S.W.3d at

89; see also Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 383 (Tex. 2000).

When determining legislative intent, a court must look to the language of the

statute, its legislative history, the objective sought and the consequences that would

flow from alternate constructions. Meritor, 44 S.W.3d at 89. Application of these

rules of construction reveals that the legislature did not intend Ansell to have

indemnity liability to Owens & Minor for losses from products that Ansell did not

manufacture.

                   a.     The language of the statute limits a manufacturer's
                          indemnity obligation to its own product.

      In interpreting a statute, the court must start with the language of the statute.

Meritor, 44 S.W.3d at 89. When construing the statute, a court must look at the

entire statute and not a single section in isolation. Fitzgerald, 996 S.W.2d at 866.

An examination of all of Chapter 82 clarifies that a manufacturer's indemnity

obligation is limited to the product that the manufacturer made and placed in the

stream of commerce.

      Owens & Minor seeks indemnity under § 82.002(a), which states as follows:


                                             18
      (a) A manufacturer shall indemnify and hold harmless a seller against
      loss arising out of a products liability action, except for any loss
      caused by the seller's negligence, intentional misconduct, or other act
      or omission, such as negligently modifying or altering the product, for
      which the seller is independently liable.

TEX. Crv. PRAC. & REM., § 82.002(a). Thus, § 82.002(a) requires a "manufacturer"

to provide indemnity to a "seller" for a "loss" arising out of "products liability

actions."

      The definition of "product liability action" and "manufacturer" in § 82.001

limits that duty to the manufacturer's own product. The definition of "loss" also

renders Owens & Minor's attempted expansion of the indemnity obligation of §

82.002 absurd.

      "Products liability action" is defined in terms of a "product," as follows:

      (2)    "Products liability action" means any action against a
      manufacturer or seller for recovery of damages arising out of personal
      injury, death, or property damage allegedly caused by a defective
      product whether the action is based in strict tort liability, strict
      products liability, negligence, misrepresentation, breach of express or
      implied warranty, or any other theory or combination of theories.

Id. at § 82.001(2) (emphasis added.)

      A "manufacturer" is defined as the entity that made the allegedly defective

product and placed that product in the stream of commerce, as follows:

      (4) "Manufacturer" means a person who is a designer, formulator,
      constructor, rebuilder, fabricator, producer, compounder, processor, or
      assembler of any product or any component part thereof and who
      places the product or any component part thereof in the stream of
      commerce.


                                             19
Id. at § 82.001(4). (emphasis added.) Ansell makes Ansell gloves and places

Ansell gloves in the stream of commerce. Ansell does not make other

manufacturers' gloves and does not place those other manufacturers' gloves in the

stream of commerce. Ansell's liability under § 82.002 is, therefore, limited to the

Ansell product and does not extend to losses from product liability actions

regarding allegedly defective products that it did not manufacture or place in the

stream of commerce.

       In its opening brief, Owens & Minor repeatedly discussed the exception in

§ 82.002(a) relating to a seller's "independent negligence". While that exception is

not at issue because the District Court did not base its holding on any negligence

on the part of Owens & Minor, the existence of the exception is instructive, as it

limits a manufacturer's indemnity obligation to its product. The section states that

a seller cannot receive indemnity if the seller negligently modified or altered "the

product." The "innocence" of a seller is therefore manufacturer and product-

specific.

       In this case, Plaintiff Kathy Burden alleges she was injured by exposure to

thousands of products (gloves) made by numerous different manufacturers. Owens

& Minor's "innocence" depends on its relationship with each different product.

For example, Owens & Minor could have been found "independently liable" to the

plaintiff for altering an Ansell product but not a Johnson & Johnson product. In

                                            20
that case, Owens & Minor could not seek indemnity for its losses relating to the

Johnson & Johnson product, but possibly could recover its loss for defending the

Ansell product. Thus, Owens & Minor's right to recover its losses will depend on

its relationship with that manufacturer and that manufacturer's own product.

       Another section of the statute that clarifies that the indemnity obligation is

limited to a particular manufacturer's product is the notice provision in § 82.002(f),

which states as follows:

       (f) A seller eligible for indemnification under this section shall give
       reasonable notice to the manufacturer of a product claimed in a
       petition or complaint to be defective, unless the manufacturer has
       been served as a party or otherwise has actual notice of the action.

Id. at § 82.002(f). By imposing a duty on the seller to provide notice to the

manufacturer of the claimed defective product, the legislature recognized the

individual nature of each product and each manufacturer. In this case, there were

numerous manufacturers named as defendants in Plaintiff's Complaint.3 Each

manufacturer of each claimed defective product has to receive notice. Owens &

Minor would have the Court judicially amend the statute such that only one of the

manufacturers need receive notice and then allow Owens & Minor to seek

indemnity from only that manufacturer. If one manufacturer did not receive


3 Owens & Minor filed its indemnity action against the following four manufacturers:
Ansell, Becton Dickinson, Smith & Nephew AHP and Safeskin Corporation. It also stipulated
that the following were manufacturers: Johnson & Johnson, London/Regent, ACH, Microflex,
Tillotson and Henry Schein. ROA p. 864. It also tendered its defense to twelve outside counsel
for different entities that it considered manufacturers. ROA pp. 711-12.

                                                 21
notice, the others cannot be held liable for that manufacturer's indemnity

obligation.

      Meritor also instructs that "courts should not assign a meaning to a provision

that would be inconsistent with other provisions of the act." Meritor, 44 S.W.3d at

90 (citation omitted). In Fitzgerald, the Court stated that its "construction of the

plain language of Section 82.002(a) must avoid absurd results if the language will

allow."       Fitzgerald,   996 S.W.2d at 864. Owens & Minor's expansive

interpretation of "manufacturer" is inconsistent with other provisions of § 82.002

and would lead to absurd results. Section 82.002(g) states as follows:

      (g) A seller is entitled to recover from the manufacturer court costs
      and other reasonable expenses, reasonable attorney fees, and any
      reasonable damages incurred by the seller to enforce the seller's right
      to indemnification under this section.

TEX. Crv. PRAc. & REM. Code § 82.002(g). Holding a manufacturer liable beyond

its own product would lead to an absurd result under this section. Under Owens &

Minor's interpretation of "manufacturer," each "manufacturer" named in Plaintiff's

Complaint is 100% liable to Owens & Minor. A consistent application of Owens

& Minor's definition of "manufacturer" would allow it to recover its attorneys'

fees under 82.002(g) from one manufacturer, for pursuing its indemnity claims

against a separate manufacturer. For example, in this case, under Owens &

Minor's theory, it could recover from Baxter, another manufacturer named in

Plaintiffs' Petition, all of its fees and costs for pursuing Ansell and BD for


                                           22
indemnity. This is an absurd result that Fitzgerald prohibits. Requiring one

manufacturer to have indemnity obligation for another manufacturer's product or

actions renders §§ 82.002(a) and 82.002(g) inherently inconsistent and thus Owens

& Minor's theory must be an erroneous interpretation of the statute.

      As discussed above, the District Court's opinion is consistent with the plain

language of § 82.001 et seq. Owens & Minor argues that "[t]hree Texas Courts of

Appeal ... have expressly rejected the `partial limited defense"' exception adopted

by the District Court." (Owens & Minor Brief, p. 27.) The initial problem with

Owens & Minor's argument is that the District Court did not create a "partial

limited defense" exception.         The District Court correctly set forth the

manufacturer's obligation under the statute as follows:

      The manufacturers' offers to defend Owens were reasonable and
      fulfilled their duties under the law. A manufacturer's statutory
      responsibility to sellers begins when it is notified that the seller is a
      defendant in an action for liability for the manufacturer's product.
      The duty exists even if it is proven later that the plaintiff did not get
      the product from the seller. See Fitzgerald, 996 S.W.2d at 869. The
      manufacturer must defend the seller until it - or the seller - is no
      longer in the case, either by dismissal, nonsuit, settlement or
      adjudication.

ROA pp. 1036. This holding is consistent with all of the appellate court cases in

that it recognizes the following:

      • A manufacturer's statutory responsibility to seller begins when it is
           notified that the seller is a defendant in an action for liability for the
           manufacturer's product.


                                            23
      •      The duty exists even if it is proven later that the plaintiff did not get
             the product from the seller.

ROA p. 1036 (emphasis added). The District Court correctly interpreted the

statute to provide that "[t]he manufacturer must defend the seller until it - or the

seller - is no longer in the case, either by dismissal, nonsuit, settlement, or

adjudication." ROA p. 1036. In other words, the District Court found that Ansell

had to defend Owens & Minor for Ansell products. Once Owens & Minor could

no longer have liability for any Ansell product, Ansell no longer had to defend

Owens & Minor. This finding did not create a "partial limited defense." Rather,

the District Court simply declined to expand § 82.002 beyond its plain language to

extend a manufacturer's indemnity obligation beyond a loss arising from that

manufacturer's product.

      The District Court's decision is consistent with the appellate court cases that

Owens & Minor discusses. Owens & Minor incorrectly states that in Freightliner

Corp. v. Ruan Leasing Co., 6 S.W.3d 726 (Tex. App.-Austin 1999), aff d, 44

S.W.3d 86 (Tex. 2001), "the Texas Court of Appeals in Austin rejected the exact

`partial limited defense' exception proposed by Ansell and BD and adopted by the

District Court." (Owens & Minor Brief, p. 28.) In Freightliner, the manufacturers

attempted to limit their defense to exclude a defense of independent negligence by

the seller. Freightliner, 6 S.W.3d at 730-31. Ansell's offer to defend had no such

limitations and therefore is not the "exact" exception discussed in Meritor. Rather,


                                            24
Ansell correctly stated that it could not defend Owens & Minor for distributing

other manufacturers' products. Neither the Appellate Court in Freightliner, nor the

Texas Supreme Court in Meritor, discussed whether a manufacturer's duty to

defend applies to claims based upon other manufacturers' products.

      Freeman Fin. Inv. Co. v. Toyota Motor Corp., 109 S.W.3d 29, 34 (Tex.

App.-Dallas 2003), pet. denied, another case relied upon by Owens & Minor, is

also not on point. Toyota tried to limit its defense to exclude the independent

negligence claim against the seller, inconsistent with Meritor. Ansell made no

such limitation in its offer, as discussed above.

      Similarly, in Covert Chevrolet Oldsmobile, Inc. v. General Motors Corp.,

No. 05-00-01170-cv, 2001 WL 950274 (Tex. App.-Dallas Aug. 21, 2001) (not

designated for publication), General Motors argued that it did not have to

indemnify the seller for its defense of a claim of negligence against the seller. Id.

at 3. For that case to have any real analogy to this case, there would have had to

have been an issue of whether General Motors' indemnification obligation

extended to a seller for claims arising out of the seller's distribution of cars made

by other auto makers. There was no such issue addressed in that case or any of the

other cases upon which Owens & Minor relies.




                                              25
                       b.      Legislative History.4

        An interpretation of the statute making indemnification manufacturer-

specific is also supported by the legislative history of the statute. In describing the

Bill at the public hearing on February 15, 1993, Representative Seidlits, Chair of

House State Affairs Committee, explained that the Legislature was making a

manufacturer responsible for the products that it sold and placed in the stream of

commerce:

       The next section is the manufacturer's duty to indemnify. ... If I'm a
       hardware store owner and XYZ corporation manufacturers a certain
       type of machinery equipment and they send it, all I do is put it out on
       the floor and sell it, should I be held liable? Well, there was some
       discussion on defining terms of innocent sellers. Some venue
       questions came up. Those things are kind of out the window on this
       bill and we are going at it from the viewpoint that if I
       manufacture a product that ultimately I'm responsible for that
       product and a seller downstream in the chain of commerce should
       not be held responsible unless he in some way alters, changes, does
       something to the product to place him in the liability stream. And if
       the seller is brought into litigation, that manufacturer has the duty
       to indemnify him for cost including attorneys' fees, etcetera.

Transcript of House Committee on State Affairs, Tape 1, 73rd Legislature,

February 15, 1993, Ansell Record Excerpts, Tab 2.                             (emphasis added.)


4        In its Appendix, Owens & Minor attached a portion of the legislative history of the Bill
that is now at § 82.001 et seq. and asks the Court to take judicial notice of it. Ansell believes that
the legislative history is important, but that it must be considered in its entirety. -Owens & Minor
provides the Court with the discussion from the Senate Economic Development Committee. It
did not include any transcripts of the discussions of this Bill from the House. Enclosed in
Ansell's Record Excerpts, at Tab 2, are the portions of the discussion of this Bill in the House
Committee on State Affairs on February 15, 2003, and the House floor debate on February 22,
2003. Similar to Owens & Minor, Ansell requests that this Court take judicial notice of this
portion of the legislative history.


                                                     26
Representative Seidlits, in the House debate on February 22, 1993, once again

explained that § 82.002 was envisioned to make a manufacturer responsible for its

own product, as follows:

       Another important aspect of it that I feel is the manufacturer's duty to
       indemnify. If I am a retailer and I am selling a product, I don't do
       anything to the product except put it on my showroom floor and sell it
       to a consumer. Then if I am sued because of a manufacturing defect
       in that manufacturing product, then I am entitled to
       indemnification.

Transcript of House Floor Debate, Tape 15, 73rd Legislature, February 22, 1993,

Ansell Record Excerpts, Tab 2. As indicated by Representative Seidlits'

comments, the purpose of the Indemnity Section of the Bill was to hold a

manufacturer responsible for the product it manufactured. The legislative history

does not indicate the legislature ever intended for a manufacturer to be responsible

for indemnity for a product that it did not manufacture.

                    C.     Purpose of the Statute.

      Making Ansell responsible for losses for products that it did not manufacture

is also contrary to the purpose of the statute as it cannot remedy defects in other

manufacturers' products. Owens & Minor's attempts to interject joint and several

liability into the statute is also inconsistent with the purpose of the statute.




                                               27
                           (i)    Ansell cannot remedy defects in other
                                  manufacturers' products.

      As Owens & Minor concedes in its brief, the purpose of the statute is as

follows:

      The statute protects innocent sellers; it places primary liability on
      manufacturers, who are usually in a better position to recognize
      and remedy defects.

(Owens & Minor Brief, p. 35) (citing Oasis Oil Corp. v. Koch Refining Co., L.P.,

60 S.W.3d 248, 253 (Tex. App.-Corpus Christi 2001)), pet. denied; see also

Freightliner, 6 S.W.3d 726 (Tex. App.-Austin 1999). Placing an indemnity

obligation on Ansell for products that it does not make does not serve this purpose.

Ansell can recognize and remedy defects in its own products, but cannot recognize

or remedy defects in products it does not manufacture. If a Baxter glove is

defective, it is Baxter's responsibility to remedy that defect, not Ansell's.

      Similarly, Ansell also cannot defend Owens & Minor for products made by

other manufacturers. It does not have access to other manufacturers' personal or

internal documents, including highly confidential manufacturing documents and

information that is necessary to properly defend a product liability case.

                           (ii)   Imposing joint and several liability is contrary to
                                  the purpose of the statute.

      In Fitzgerald, the Court described another purpose of § 82.002 as follows:

      Viewed in context, section 82.002 is a part of a scheme to protect
      manufacturers as well as sellers of products. First, the new law


                                              28
       ensured that the relatively small seller need not fear litigation
       involving problems that are really not in its control. Second, it
       established uniform rules of liability so that manufacturers could
       make informed business decisions and plaintiffs could understand
       their rights. The Legislature sought to protect both manufacturers and
       sellers, but gave preference to sellers with no independent liability.

996 S.W.2d at 868-69. These purposes and objectives are served by not expanding

a manufacturer's indemnity obligations to other manufacturers' products.

       Requiring Ansell to indemnify Owens & Minor for Owens & Minor's "loss"

in defending a product that Ansell did not manufacture provides no protection to

Ansell and does not provide certainty under the law. Under Owens & Minor's

theory, Ansell is required to indemnify Owens & Minor for all losses, including

judgments, simply because a plaintiff alleges that Ansell and several other

manufacturers made defective products. As a manufacturer, Ansell has no

certainty as to the potential scope of its indemnity obligation. Under Owens &

Minor's misinterpretation of § 82.002, Ansell's indemnity exposure continues after

it is dismissed from a case as long as there is the potential that a product that

Ansell did not make is defective. Ansell has no protection or certainty in this

situation.

       Ansell also has no protection because Owens & Minor is seeking to hold

Ansell jointly and severally liable for all of its fees without any right to

contribution. Joint and several liability is a tort concept that has no applicability to

a statutory indemnity case. The Texas Supreme Court recognized joint and several

                                              29
liability in Landers v. E. Texas Salt Water Disposal Co., 248 S.W.2d 731 (Tex.

1952). In Landers, the court was addressing the procedural requirements for

pleading a claim of joint and several liability among alleged tortfeasors. In

recognizing joint and several liability, the Texas Supreme Court stated as follows:

      Where the tortious acts of two or more wrongdoers join to produce
      an indivisible injury, that is, an injury which from its nature cannot be
      apportioned with reasonable certainty to the individual wrongdoers,
      all of the wrongdoers will be held jointly and severally liable for the
      entire damages and the injured party may proceed to judgment against
      any one separately or against all in one suit.

Id. at 734 (emphasis added). However, it is undisputed that Ansell is not a

"wrongdoer" in this case. Ansell is no more a wrongdoer than Owens & Minor is a

wrongdoer. Ansell simply had the misfortune of being named in a lawsuit by

Plaintiffs, and then the further misfortune to be arbitrarily targeted by Owens &

Minor for indemnification for loss arising from other manufacturers' products.

Ansell has not found any Texas authority applying joint and several liability to a

statutory indemnity claim.

      Ansell has found authority, however, that rejects joint and several liability

when liability is imposed without any finding of fault. See Boyett v. Keene Corp.,

815 F. Supp. 204 (E.D. Tex. 1993). In Boyett, the court considered whether

defendants could be jointly and severally liable under a "Jones Act" claim

challenging the seaworthiness of a vessel. Id. at 209. The court found that because

a Jones Act claim is a form of liability not based upon traditional notions of fault,

                                            30
and is a "wholly different character than liability for common law negligence,"

there could be no joint liability. Id at 210. Similarly, § 82.002 is not based upon

traditional notions of fault; and, thus, there can be no joint and several liability.

      In applying § 82.002, the Texas courts have held as follows:

      First, the traditional notion of causation is not an element of the
      seller's statutory claim for indemnity. Instead of proving either
      proximate or producing causation in the traditional manner, a claimant
      need only prove that it is a statutory seller which suffered a qualifying
      loss in a products liability action as defined by statute and that the
      defendant qualifies as a statutory manufacturer.

Oasis Oil, 60 S.W.3d at 255; see also Meritor, 44 S.W.3d at 90-91 (the court also

held that proof of a product defect is not an element of a seller's claim for statutory

indemnity.) Because § 82.002 does not even require a finding of proximate cause,

there cannot be joint and several liability.

       In Landers, the court held that joint and several liability can only be

imposed where the "tortious acts of two or more wrongdoers join to produce an

indivisible injury." Landers, 248 S.W.2d at 734. The injury in this case (Owens &

Minor's defense costs) is simply not the result of "tortuous acts of two or more

wrongdoers." In that case, the parties who injured Owens & Minor are Plaintiffs,

who sued Owens & Minor without a factual basis for doing so. In any event,

Ansell was not a wrongdoer, and its acts did not join to produce Owens & Minor's

defense costs.




                                               31
       Joint and several liability is also inappropriate because there is no

mechanism to apportion any damage award among the multiple manufacturers

from which Owens & Minor could have sought indemnity. The standards for

apportioning tort liability are set forth in Chapter 33 of the Texas Civil Practice

and Remedies Code. That apportionment scheme apportions liability based upon

relative fault. As Owens & Minor points out in its opening brief, nothing in

Chapter 33 "shall be construed to affect any right of indemnity granted by any

statute by contract or by common law." TEx. Civ. PxAC. & REM. CODE Code

§ 33.017 (2003). That Section therefore confirms that the legislature never

intended a single manufacturer to be jointly and severally liable for another

manufacturer's indemnity obligation, as it took this statutory liability out of the

apportionment scheme.

                   d.     Consequences of Owens & Minor's proposed
                          construction.

       Owens & Minor construes the statute to require Ansell to indemnify Owens

& Minor for loss occasioned by gloves that Ansell did not manufacture. In

Fitzgerald, the court stated that the "construction of the plain language of Section

82.002(a) must avoid absurd results if the language will allow." 996 S.W.2d at

867.

       Requiring Ansell to indemnify Owens & Minor for a "loss" from products

that Ansell did not manufacture is absurd when fully considered. A "loss" under


                                            32
§ 82.002(b) includes court costs and other reasonable expenses, reasonable

attorneys' fees and any reasonable damages. TEX. CIV. PRAC. & REM. § 82.002(b).

The statute also provided for indemnity from "reasonable damages," i.e.,

judgments. Under Owens & Minor's incorrect statutory interpretation, Ansell

would be liable for Owens & Minor's defense costs and any judgments entered

against Owens & Minor after an Ansell dismissal and after Owens & Minor could

not have any liability for distributing Ansell's product. Consider the following

hypothetical: that Ansell was dismissed early on and that Plaintiffs proceeded to

trial against Owens & Minor and Safeskin on the theory that Plaintiff was injured

by a defective Safeskin glove that Owens & Minor sold. Plaintiffs obtained a

substantial verdict against Owens & Minor and Safeskin because Safeskin's gloves

were defective. Also, assume there was no finding of independent liability on the

part of Owens & Minor. Owens & Minor's application of the statute would allow

it to obtain indemnity from Ansell for its defense costs and the judgment based

upon the defect in the Safeskin product and ignore Safeskin. Such an application is

the absurd result prohibited by Fitzgerald.

      The consequence of Owens & Minor's proposed construction would also

sanction its abuse of § 82.002. Owens & Minor's aggressive pursuit of Ansell and

BD for all of its fees has led to an abuse of § 82.002 that the legislature could not

have intended. As one commentator recently noted, § 82.002 provides the



                                              33
potential for abuse by sellers. Robert A. Sachs, Product Liability Reform and

Seller Liability: A Proposal for Change, 55 BAYLOR L. REV. 1031 (2003). The

commentator noted that "there is a potential for abuse by a seller or seller's counsel

who, knowing that whatever expenses and fees are incurred will be reimbursed by

the manufacturer, may choose not to attempt early release from independent claims

that could be resolved promptly by summary judgment." Id. at 1062. Owens &

Minor has abused the statute in a slightly different way. It has selected two

manufacturers, Ansell and BD, against which it is seeking all of its indemnity. As

Owens & Minor repeatedly points out, this is not the only case in which Owens &

Minor is pursuing indemnity from these two manufacturers. Based upon its

interpretation of § 82.002 that Ansell and BD are each 100% liable for all of its

fees and costs, Owens & Minor is relentlessly pursuing these claims without

compromising, insisting that these two manufacturers pay all of Owens & Minor's

fees and costs. While not part of the record, Owens & Minor has accumulated very

substantial fees in improperly and steadfastly demanding that Ansell and BD pay

Owens & Minor all of its fees for all of the similarly situated cases. These

activities by Owens & Minor are an abuse of § 82.002 that should not be tolerated.

B.    There Is No Disputed Fact Question That Ansell Agreed to Defend, and
      Defended, Its Product.

      This court may properly grant summary judgment "when the pleadings and

evidence on file show that there is no genuine issue as to any material fact and that


                                             34
the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c);

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party moving for

summary judgment "must merely demonstrate an absence of evidentiary support in

the record for the non-movant's case." Byers v. Dallas Morning News, Inc., 209

F.3d 4195 424 (5t'' Cir. 2000). Conversely, the nonmoving party must come

forward with "specific facts showing that there is a genuine issue for trial."

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

      Owens & Minor has failed to come forward with specific facts showing that

there is a genuine issue of fact for trial as to Ansell's actions in this case. It has

also failed to come forward with any evidence that it had any reasonable or

necessary attorneys' fees. Owens & Minor concedes that it sent a letter to Ansell

on March 6, 2000 requesting that Ansell and several others provide a defense in the

Burden case. (Owens & Minor Appendix, Ex. 8, ROA pp. 711-12.) Ansell

responded to that letter with its own letter, dated March 24, 2000, which explicitly

stated that it was "committed to defending any claims relating to its products."

ROA pp. 869-70. Ansell's only concern was as to the procedure by which it could

defend Owens & Minor against claims relating to its own products, while avoiding

the unwarranted expense and impossibility of defending claims relating to other

manufacturers' products over which it had no knowledge or control.




                                             35
      To that end, Ansell's letter clearly stated that it would defend its product and

abide by any arrangement agreed to by the manufacturers' and distributors' groups

in the MDL. Alternatively, Ansell's letter stated that it would "individually

discuss whether there is a procedure or method whereby Ansell Healthcare

Products, Inc. may defend its product with respect to claims being made against

Owens & Minor as a result of Owens & Minor Inc.'s sale of Ansell Healthcare

Products, Inc.'s natural rubber latex gloves." ROA pp. 869-870.

      Ansell's letter also requested Owens & Minor to contact Ansell if it did not

agree with this course of action, thereby giving Owens & Minor a chance to

propose a solution to this problem inherent in Owens & Minor's tender in this case.

Owens & Minor did not respond to the letter. Further, it has yet to offer any

alternative to the offer of defense, and defense, provided by Ansell that would not

also require Ansell to indemnify it for a loss arising from the products of other

manufacturers. Rather, Owens & Minor's only argument is that Ansell did not

agree to indemnify it for all loss, including loss arising from other manufacturers'

products. Such an argument is a legal one, based upon Owens & Minor's

interpretation of § 82.002 and does not create a genuine issue of material fact so as

to preclude summary judgment. As a result, Owens & Minor has not satisfied its

burden of proof by putting forth specific facts to demonstrate a genuine issue for

trial. The letters clearly show that Ansell offered a defense of its own products and



                                            36
Owens & Minor has not refuted that fact. The only dispute then, revolves around

the legal effect of Ansell's offer to defend, and defense of, its product. As

established supra, Ansell's indemnity obligation only applies to its product.

      Owens & Minor argues that summary judgment is inappropriate where

documents are susceptible to more than one interpretation, relying upon           Scott

Paper Co. v. Adair Truck & Equip. Co. 542 F.2d 1257 (5th Cir. 1976). However,

Scott Paper involves a situation where the only evidence offered to show that the

parties intended a secured promissory note to be payment of a lien, was a single

bookkeeping entry designating the note as such. Id. at 1260. The court reversed

the grant of summary judgment stating that "issues involving state of mind and

intent are not well suited to disposition by summary judgment, since much depends

upon the credibility of witnesses testifying as to their own states of mind, and

assessing credibility is a delicate matter best left to the fact finder." Id. (citation

omitted). However, in the instant case, the evidence of Ansell's offer of defense,

namely its letter, is not a mere entry in a book devoid of context. Rather, Ansell's

letter specifically states the manner in which it would defend Owen & Minor in

relation to Ansell's product. Ansell's letter solicited Owens & Minor's alternative

.proposal should it believe Ansell's proposal to be inadequate. Owens & Minor has

offered no evidence to dispute the clearly stated propositions in Ansell's letter, but




                                             37
rather attacks the legal sufficiency of Ansell's offer of defense based on its

erroneous interpretation of § 82.002.

      Owens & Minor also argues that summary judgment was not proper in this

case because the District Court engaged in a "fair reading" of the letters at issue.

Without the benefit of logic or supporting case law, Owens & Minor states by

doing so, the District Court "implicitly concedes" that (1) the letters are disputed;

and (2) the letters are at least susceptible to differing interpretations. (Owens &

Minor's Brief, p. 51.) In fact, the letters are not disputed. Further, the only

"differing interpretations" relates to the legal effect of the letters as to Ansell's

statutory indemnity obligation and not as to the actual meaning of any part of the

letters. Owens & Minor identifies no specific words in the letters that it contends

are ambiguous, require extrinsic evidence to properly interpret or otherwise raise

any real factual dispute.

      This Court is also entitled to rely on a fair reading of a document to

determine the legal sufficiency of a claim where there is no genuine issue of

material fact. In Sanmina Corp. v. Banctec USA, Inc., No. 01-11094, 2004 WL

442677 (5th Cir. Mar. 11, 2004) (not designated for publication) (Ansell Record

Excerpts, Tab 3), this Court relied upon a "fair reading" of an acknowledgement

form on the back of a purchase order to determine that as a matter of law,

attorney's fees were not proper. Id. at * 2. Likewise, in the instant case, the Court



                                            38
relied upon a "fair reading" of Ansell's letter to conclude that Ansell discharged its

duties under the statute. Owens & Minor identifies no ambiguity in any language

contained in Ansell's letter offering to provide a defense in relation to its product.

Owens & Minor's only and repeated argument is an attack on the legal sufficiency

of the defense offered by Ansell by the unambiguous language in its letter. Such

an attack does not raise a genuine issue of material fact and therefore did not

preclude the District Court from relying on a fair reading of the letters.

C.    The District Court Correctly Determined That All of Owens & Minor's Fees
      Were Unnecessary.

      Owens & Minor's final point of error is that the Court could not determine

the reasonableness of Owens & Minor's fees without an analysis of the eight-factor

test set forth in Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812,

818-19 (Tex. 1997). (Owens & Minor Brief, p. 57.) Owens & Minor's argument

is based upon a misunderstanding of the Court's ruling. The District Court held as

follows:

      A fair reading of the letters shows that the manufacturers were willing
      to defend Owens until it was proven that Burden did not use their
      gloves. Their offers met their obligations under the law. In addition,
      their own defense is an implicit defense of Owens. Its fees and costs
      were unnecessary because the manufacturers' offers of defense were
      adequate. The manufacturers do not have to indemnify Owens.

      In addition, Owens could have accepted the offers without
      compromising its defense. It could have tendered its defense with a
      reservation of rights, like the manufacturers' offers to defend. It also
      could have negotiated a monitoring fee with the manufacturers to


                                              39
      ensure that they were properly defending its interests. If the
      manufacturers' defense was unreasonable or there was a conflict,
      Owens could have moved to substitute counsel and sought indemnity.
      Both alternatives are reasonable ways for Owens to avoid duplicating
      fees.

ROA pp. 1035-36. The Court held that Ansell met its obligation under § 82.002 in

two ways. First, it offered to defend Owens & Minor for distributing Ansell

products. Second, Ansell's defense of its own products was "an implicit defense of

Owens." There was no need to discuss the Andersen factors because the Court

concluded that Owens & Minor could not have any necessary fees in that

circumstance as a matter of law.

      As is established above, Ansell's indemnity obligation applies to its own

product. By defending its own product, Ansell made any expense Owens & Minor

incurred in defending Ansell's product unnecessarily duplicative and therefore

unnecessary. Owens & Minor presented no evidence that it incurred any fees in

defending any negligence claims against it. Owens & Minor states that "[t]he

reasonableness and necessity of fees is a fact issue and no evidence was presented

by any parry on the reasonableness or necessity of Owens & Minor's fees because

Owens & Minor had moved for partial summary judgment on liability only."

(Owens & Minor Brief, p. 56.) Owens & Minor misstates the procedural history of

the case. Owens & Minor originally moved for partial summary judgment on June

305 2003. ROA pp. 770-788. On July 1, 2003, the Court entered an Order



                                          40
dismissing that motion without prejudice. Ansell Record Excerpts, Tab 1, ROA

p. 568. Ansell then moved for summary judgment, arguing that all of Owens &

Minor's fees were incurred unnecessarily. ROA pp. 869-870. As Owens & Minor

concedes, it did not present any evidence of the reasonableness or necessity of its

fees in response to this motion. (Owens & Minor Brief, p. 56.) Therefore, there is

no fact question raised as to the necessity of Owens & Minor's fees, and the

District Court's ruling should be upheld.

                               XI. CONCLUSION

      The District Court correctly granted Ansell's Motion for Summary

Judgment. The District Court found that Owens & Minor's costs were

"unnecessary because the manufacturers offered to defend it according to their

obligations under the law." ROA p. 1035. The District Court also found that

Ansell's defense of its own product was an "implicit defense of Owens & Minor."

ROA p. 1036. Ansell's defense of its product rendered Owens & Minor's fees and

costs duplicative and unnecessary. The District Court's findings are consistent

with § 82.001 et seq. as Ansell's indemnification obligation is limited to its losses

arising from an Ansell product.

      To the extent that Owens & Minor incurred losses arising from other

manufacturers' products, it should have sought indemnification from those other

manufacturers. The way for Owens & Minor to recover full indemnity is for it to



                                            41
pursue all of the manufacturers named in Plaintiffs' Petition. For reasons it refuses

to explain, Owens & Minor elected not to pursue all the manufacturers. Instead,

Owens & Minor has arbitrarily targeted Ansell and Becton Dickinson for all of its

indemnification. The statute does not allow for this type of abuse and the District

Court's decision should be affirmed.

                                   Respectfully Submitted,



                                       Y:
                                        Terry H kett
                                        Attornor Ansell Healthcare Products Inc.




                                            42
                       XII. CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the above and foregoing

Defendant-Cross Defendant-Appellee Ansell Healthcare Products Inc.'s Brief and

a computer disk containing a PDF version of Ansell's brief, and the separately

bound Records Excerpts, has been forwarded to the Clerk of the Court via Federal

Express for delivery within three calendar days, and to counsel listed below by

Federal Express, on this 28th day of February, 2005.

      Robert F. Redmond, Jr.                      Andrew Schwartz
      William W. Belt, Jr.                        Sills, Cummis, Epstein & Gross
      Williams Mullen                             One Riverfront Plaza
      Two James Center                            Newark, New Jersey 07102
      1021 E. Cary St.
      Richmond, Virginia 23219

      Michael R. Walzel                            Trey Dowdy
      Stevens, Baldo & Freeman, L.L.P.             Strasburger & Price, L.L.P.
      550 Fannin, Suite 700                        901 Main St., Suite 4300
      Beaumont, Texas 77701                        Dallas, Texas 75202

      Counsel for Owens & Minor, Inc.             Counsel for Becton, Dickinson
      and Owens & Minor Medical, Inc.             and Company




                                           43
                         XIII. CERTIFICATE OF COMPLIANCE

       1.       This brief complies with the type-volume limitation of Fed. R. App. P.

32(a)(7)(B) because this brief contains 9,757 words, excluding the parts of the

brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

      2.        This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this

brief was prepared in proportionally spaced typeface using Microsoft Word in 14

font (12 font for footnote text) and Times New Roman.




Terry        ckett
Attorney for Ansell Healthcare Products Inc.
Dated: February 28, 2005




      CH02/ 22368149.1




                                             44

								
To top