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Praxair, Inc. v. General Insulation Co.

July 7, 2008

PRAXAIR, INC. PLAINTIFF,
v.
GENERAL INSULATION COMPANY, D&N INSULATION COMPANY, A DIVISION OF PETCO INSULATION CO., INC., AND SPECIALTY CONSTRUCTION BRANDS INC., DEFENDANTS.



The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge

DECISION and ORDER

JURISDICTION

This action was referred to the undersigned on November 8, 2007, by Honorable Richard J. Arcara. The matter is presently before the court on Plaintiff's motion to amend the complaint (Doc. No. 23), filed December 19, 2007, and Defendant D&N Insulation Company's motion to file an amended answer (Doc. No. 24), filed December 28, 2007.

BACKGROUND and FACTS*fn1

Plaintiff Praxair, Inc. ("Plaintiff" or "Praxair"), commenced this products liability action on October 9, 2007, alleging defective design and manufacture of Childers CP-35 mastic ("Childers CP-35"), an insulation coating product that Praxair used as a joint sealant in the insulation of the aluminum piping and vessels at Praxair's Cryogenic Testing Facility located in Building 105 in Tonawanda, New York. Complaint ¶ 1. According to Plaintiff, because Childers CP-35 contains chlorides, a fact of which Praxair was not initially aware, it is not suitable or safe for its intended purpose as a sealant for insulating piping and vessels, and it was foreseeable to Defendants that such use would result in damage to aluminum piping and vessels. Id.

Originally sued as Defendants were H.B.Fuller Company ("H.B. Fuller"), and General Insulation Company ("General Insulation") for negligent design and marketing of Childers CP-35, and D&N Insulation Company ("D&N"), for negligence and breach of contract based on D&N's specification of Childers CP-35 as a sealant for use on aluminum piping and vessels. Praxair also sought treble damages against H.B. Fuller for violation of § 1117 the Lanham Act, 15 U.S.C. § 1125(a), for false and misleading advertisements regarding Childers CP-35.

On November 5, 2007, H.B. Fuller moved (Doc. No. 9) ("H.B. Fuller's motion to dismiss"), to dismiss the Complaint on the basis that Praxair, as a consumer of Childers CP-35, rather than H.B. Fuller's competitor, lacked standing to sue H.B. Fuller under the Lanham Act, that Praxair's Lanham Act claim is the sole basis for federal jurisdiction in this case such that the dismissal of the Lanham Act claim would divest this court of subject matter jurisdiction under 28 U.S.C. § 1331, and that New York's economic loss doctrine bars Praxair's strict products liability and negligence claims. Attached to the motion is a Memorandum of Law Supporting H.B. Fuller Company's Motion to Dismiss Plaintiff's Complaint (Doc. No. 9-2) ("H.B. Fuller Memorandum").

On November 7, 2007, D&N filed an answer (Doc. No. 10), asserting a cross-claim for contribution and indemnification against H.B. Fuller and General Insulation. On November 27, 2007, H.B. Fuller moved to dismiss D&N's cross-claim (Doc. No. 16), for failure to state a claim, arguing that H.B. Fuller owed no duty to either Praxair or D&N. On December 18, 2007, General Insulation filed an answer (Doc. No. 20), asserting a cross-claim for contribution and indemnification against H.B. Fuller and D&N.

On December 23, 2007, Praxair filed the instant motion (Doc. No. 23) ("Plaintiff's motion"), seeking to dismiss H.B. Fuller's motion to dismiss, and to amend the Complaint. In particular, Praxair seeks to clarify allegations in the Complaint to establish standing under the Lanham Act and to demonstrate a tort duty existed on the part of H.B. Fuller to Plaintiff. Praxair also seeks to add as a Defendant H.B. Fuller's wholly-owned subsidiary Specialty Construction Brands, Inc. ("SCB"). Alternatively, should the court determine Praxair is without standing to assert a Lanham Act claim, Praxair seeks to discontinue the action against D&N, the non-diverse Defendant, without prejudice to refiling in New York State Supreme Court, so as to pursue the New York claims in this court against H.B. Fuller and General Insulation, as well as newly added SCB, based on diversity jurisdiction. Plaintiff's motion is supported by the attached Attorney Affirmation of Linda H. Joseph, Esq. (Doc. No. 23 - Attachment 1) ("Joseph Affirmation"), a Memorandum of Law (Doc. No. 23 - Attachment 2) ("Plaintiff's Memorandum"), the Proposed Amended Complaint (Joseph Affirmation Exh. A), the Alternative Proposed Amended Complaint (Joseph Affirmation Exh. B), and copies of the original Complaint (Joseph Affirmation Exh. C), and the Answers filed by D&N and General Insulation (Joseph Affirmation Exh. D).

On December 28, 2007, D&N moved (Doc. No. 24), to amend its answer to assert a cross-claim for breach of warranty against H.B. Fuller and General Insulation, and to clarify its factual allegations in support of D&N's existing cross-claim for contribution and indemnity against H.B. Fuller and General Insulation ("D&N's motion"). On December 28, 2007, D&N also filed an answer (Doc. No. 30) to General Insulation's cross-claim.

On January 4, 2008, H.B. Fuller filed a Reply Brief Supporting H.B. Fuller Company's Motion to Dismiss Plantiff's Complaint (Doc. No. 32) ("H.B. Fuller Reply"). On January 7, 2008, H.B. Fuller filed a motion (Doc. No. 33) to dismiss General Insulation's cross-claim.

On January 8, 2008, General Insulation filed the Affirmation of Ralph Cessario, Esq. in Opposition to Praxair's Cross Motion to Amend the Complaint and for Other Relief (Doc. No. 35) ("Cessario Affirmation"), and an answer (Doc. No. 37), to D&N's cross-claim.

On January 18, 2008, H.B. Fuller filed a Response in Opposition to Praxair Inc.'s Motion to Amend Its Complaint (Doc. No. 42) ("H.B. Fuller Response"). On January 25, 2008, Praxair filed Plaintiff's Reply Memorandum (Doc. No. 48) ("Plaintiff's Reply") in further support of Plaintiff's motion.

On February 5, 2008, Praxair and H.B. Fuller filed a joint motion (Doc. No. 51) to add H.B. Fuller's wholly-owned subsidiary SCB as a Defendant on the basis that SCB, rather than H.B. Fuller, manufactures and sells Childers CP-35. By Stipulation and Text Order filed April 24, 2008 (respectively, Doc. Nos. 53 and 54), all claims and causes of action asserted by Praxair, and Defendants General Insulation and D&N were dismissed, with prejudice, as against Defendant H.B. Fuller, which was then terminated as a Defendant. H.B. Fuller's wholly owned subsidiary, SCB, the admitted manufacturer and seller of Childers CP-35, was then substituted in H.B. Fuller's place as a party Defendant. Accordingly, on May 6, 2008, ...


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