Schwartz v. Macrose Lumber & Trim Co., 50 Misc. 2d 547, 558, 270 N.Y.S.2d 875, 888 (N.Y. Sup. Ct. 1966), rev'd on other grounds, 29 A.D.2d 781, 287 N.Y.S.2d 706 (1968).
The text and commentary to Section 400 of the Restatement, as well as New York case law, all suggest that in New York the apparent manufacturer doctrine only applies to a seller of a chattel, or a party otherwise involved in the chain of distribution of a product. This conclusion, though not compelled by, is supported by Justice Crane's determination made on exactly this issue in the related cases pending in state court in King v. Eastman Kodak Co. See Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 18 L. Ed. 2d 886, 87 S. Ct. 1776 (1967) (decisions of lower state courts, though not controlling on state law issues, are to be given "proper regard" by federal courts).
There is no evidence or allegation that Kodak has been involved in the selling or distribution of Atex's keyboards. Accordingly, Kodak's motion for summary judgment is granted with regard to this claim.
Concerted Action Theory
"The theory of concerted action provides for joint and several liability on the part of all defendants having an understanding, express or tacit, to participate in a common plan or design to commit a tortious act." Rastelli v. Goodyear Tire & Rubber Co., 79 N.Y.2d 289, 295, 582 N.Y.S.2d 373, 375, 591 N.E.2d 222, 224 (1992) (citations omitted).
The plaintiffs contend that Kodak is liable under this theory because "at the very least, Kodak offered substantial assistance and encouragement to Atex in the production and/or marketing of its keyboards." (Mem. Opp. 13). They rely on documents showing that Kodak i) worked closely with Atex and other subsidiaries and sought to combine their strengths; ii) evaluated the ergonomics of three Atex keyboards in 1990; and iii) was aware that keyboards in general could contribute to a variety of repetitive stress injuries.
However, none of this tends to show that Kodak and Atex had "an understanding . . . to participate in a common plan or design to commit a tortious act." Rastelli, 79 N.Y.2d at 295, 582 N.Y.S.2d at 375, 591 N.E.2d at 224. There is no evidence that Kodak actually participated in the design or manufacture of the Atex keyboards which the plaintiffs allege caused them injury. In fact, the defendants have submitted three uncontested affidavits that Kodak was not so involved. (Peter Russell Supp. Aff. P 6; Frank Zaffino Aff. P 5; Lawrence Matteson Aff. P 6).
Plaintiffs' evidence of Kodak's more indirect connection with Atex's affairs does not support a concerted action claim. As discussed above in relation to the theory of alter ego liability, there was nothing improper about the general business relationship between Kodak and Atex. A failed effort to pierce the subsidiary's corporate veil cannot be converted into a successful concerted action claim. See Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 759 (7th Cir. 1989) ("direct participation" theory of liability "limited to situations in which the parent corporation's control over particular transactions is exercised in disregard of the separate corporate identity of the subsidiary").
Nor does Kodak's evaluation of the Atex keyboards establish that Kodak acted in tortious concert with Atex. "It is essential that each defendant charged with acting in concert have acted tortiously." Rastelli, 79 N.Y.2d at 295, 582 N.Y.S.2d at 375, 591 N.E.2d at 224. The plaintiffs have not alleged that Kodak's evaluation of the keyboards was performed negligently.
The plaintiffs also seem to contend that because Kodak was generally aware that use of keyboards could contribute to repetitive stress injuries, it acted tortiously either by failing to prevent Atex from manufacturing the keyboards, or by failing to warn the plaintiffs about the danger. However, absent a "special relationship" between Kodak and Atex, or Kodak and the plaintiffs, Kodak had no duty to control Atex's conduct to prevent harm to the plaintiffs. Restatement (Second) of Torts § 315 (1965). The parent/subsidiary relationship is not, without more, a "special relationship" in this sense, see In re Birmingham Asbestos Litig., 997 F.2d 827, 828 (11th Cir. 1993) (applying Alabama law), and no allegation has been made that there was such a relationship between Kodak and the plaintiffs.
Accordingly, Kodak's motion for summary judgment is granted with regard to this claim.
The plaintiffs also contend that Kodak is liable because Atex was Kodak's agent. This claim is based on a statement in an unidentified 1988 document issued by Electronic Pre-Press Systems, Inc. that it "served as Kodak's primary agent" to supply a variety of products and services to the printing and publishing industries, and on a statement in a 1990 Atex software manual that "Atex is an unincorporated division of Electronic Pre-Press Systems, Inc., a Kodak company."
It is true that principals are liable for the tortious acts of their agents. 3 N.Y. Jur. 2d, Liability for Torts of Agent §§ 253-257 (1980). However, the statements plaintiffs rely on are not evidence of an agent-principal relationship between Atex and Kodak. An agent's authority to act on behalf of a principal, whether actual or apparent, "depends on verbal or other acts by a principal which reasonably give an appearance of authority." Greene v. Hellman, 51 N.Y.2d 197, 204, 433 N.Y.S.2d 75, 80, 412 N.E.2d 1301, 1306 (1980) (emphasis added). The unauthorized representations of the agent do not bind the principal. See 2 N.Y. Jur. 2d, Limitations on Apparent Authority § 86 (1980). Since there is no evidence that Kodak authorized the statements plaintiffs rely on, the claim that Kodak is liable for Atex's conduct as its principal fails.
Kodak's motions for summary judgment in these actions are granted and plaintiffs' complaints against Kodak are dismissed. It is so ordered.
Dated: New York, New York
August 17, 1994
Morris E. Lasker