for a number of years as a "distinct, albeit meager, entity." Id.; see also Diaz v. South Bend Lathe, Inc., 707 F. Supp. 97, 102-03 (E.D.N.Y. 1989) (same); Parra v. Production Mach. Co., 611 F. Supp. 221, 224 (E.D.N.Y. 1985) (same).
Plaintiff also argues that New York courts would impose liability based on two other theories. In cases where one business has acquired the assets of another, the first theory, as explained in Turner v. Bituminous Cas. Co., 397 Mich. 406, 244 N.W.2d 873 (1976), entails a "balancing approach, where there has been a basic 'continuity of the enterprise' of the seller corporation." Schumacher, 441 N.Y.S.2d at 440. The Schumacher court declined to adopt the Turner theory, however, noting that the facts of Schumacher did not "manifest continuity of corporate responsibility, such as continuity of management, key personnel, and physical location. . . ." Id.
The second theory is the "product line" exception, first adopted in Ray v. Alad Corp., 19 Cal. 3d 22, 560 P.2d 3, 136 Cal. Rptr. 574 (1977). Like the Turner theory, the product line exception implicates continuity of enterprise. However, the product line exception goes further, specifically setting forth the following policy considerations: "the availability of remedies for the injured plaintiff as well as the fairness of requiring the successor to assume a responsibility for defective products." Schumacher, 464 N.Y.S.2d at 440. In Schumacher, The New York Court of Appeals declined to adopt the product line exception, noting that unlike in Ray, the putative predecessor corporation in Schumacher did not dissolve shortly after the sale of the allegedly defective equipment and that the same personnel did not continue to produce the same equipment under the same corporate name. Id. at 440-41.
Plaintiff argues that because the instant case presents continuity of location and product, and some continuity of management, New York would adopt either the Turner or the Ray approach. One New York court has taken up this invitation. See Salvati v. Blaw-Knox Food Corporation, 130 Misc. 2d 626, 497 N.Y.S.2d 242, 247 (Sup. Ct. 1985) (adopting the Turner approach); but see Radziul v. Hooper, 125 Misc. 2d 362, 479 N.Y.S.2d 324, 326 (Sup. Ct. 1984) (rejecting both Turner and Ray). In the instant case, only the physical location of the two companies shows continuity; the management, the personnel and the name of the "successor corporation" all show significant change from its "predecessor." Moreover, Clifton Fluid did not acquire the assets of Clifton Hydraulic. Under these facts, this Court finds that New York would not expand its current view of successor liability and Clifton Fluid cannot be held liable for the torts of Clifton Hydraulic. See Santa Maria v. Owens-Illinois, Inc., 808 F.2d 848, 858-60 (1st Cir. 1986) (applying New York law); Wensing v. Paris Indus.--New York, 158 A.D.2d 164, 558 N.Y.S.2d 692, 694 (3d Dep't 1990).
B. New Jersey Law on Liability of Successor Corporations
Like New York, New Jersey once followed the traditional rule regarding successor liability. See McKee v. Harris-Seybold Co., 109 N.J. Super. 555, 264 A.2d 98 (1970), aff'd 118 N.J. Super. 480, 288 A.2d 585 (App. Div. 1972). However, in Ramirez v. Amsted Industries, 86 N.J. 332, 431 A.2d 811 (1981), the New Jersey Supreme Court adopted California's product line exception to successor liability.
Ramirez makes a sweeping change, abandoning the traditional rule as placing "unwarranted emphasis on the form rather than the practical effect of a particular corporate transaction." Ramirez, 431 A.2d at 815. Instead, Ramirez emphasizes the need for plaintiffs to recover for their injuries. Id. at 816 (the "narrow application of the [traditional] approach to successor liability is indeed inconsistent with the developing principles of strict products liability and unresponsive to the interests of persons injured by defective products in the stream of commerce").
Ramirez holds that courts should look at whether the new corporation continued producing the defective product, as well as three fairness factors discussed in Ray: (1) the virtual destruction of the plaintiff's remedies against the original manufacturer caused by the successor's acquisition of the business; (2) the successor's ability to assume the original manufacturer's risk-spreading role; and (3) the fairness of requiring the successor to assume responsibility for defective products as a burden necessarily attached to the original manufacturer's good will being enjoyed by the successor in the continued operation of the business. Ramirez, 431 A.2d at 819 (citing Ray, 19 Cal.3d at 31).
Subsequently, New Jersey courts interpreting Ramirez have imposed liability on successor corporations based on policy factors, even when all the Ramirez factors were not present. See, e.g., Nieves v. Bruno Sherman Corp., 86 N.J. 361, 431 A.2d 826 (Sup. Ct. New Jersey 1981) (imposing liability on an intermediate successor corporation); Pacius v. Thermtroll Corp., 259 N.J. Super. 51, 611 A.2d 153, (Super. Ct. 1992) (imposing liability on a successor corporation despite the fact that it did not continue manufacturing the allegedly defective product). However, this Court is not aware of any New Jersey case applying successor liability where the alleged successor corporation did not formally acquire the assets of the predecessor corporation and exploit its goodwill. See Pacius, 611 A.2d at 157-58.
The facts of the instant case do not call for the application of Ramirez. In Plaintiff's favor, Clifton Fluid produces the same product at the same location as Clifton Hydraulic and because Clifton Hydraulic has been dissolved, Plaintiff is without a remedy if there is no successor corporation liability. However, Clifton Fluid has neither acquired Clifton Hydraulic's assets nor taken its good will. Therefore Clifton Fluid should not be required to provide Plaintiff with a remedy for his injuries.
C. Choice of Law
Given that the issue of successor liability does not turn out differently under New York or New Jersey law, a true conflict does not exist and this Court need not determine which state's law applies.
For the aforementioned reasons, Clifton Fluid's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure is granted.
LEONARD D. WEXLER
UNITED STATES DISTRICT JUDGE
Dated: Hauppauge, New York
September 15, 1993