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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SUZANNE CHRISTIAN v. MINNESOTA MINING & MANUFACTURING COMPANY : : Civil Action No. DKC 98-371 :

JOAN HARRIS v. MINNESOTA MINING & MANUFACTURING COMPANY

: : Civil Action No. S 97-3107 :

MARY BYWATER v. MINNESOTA MINING & MANUFACTURING COMPANY

: : Civil Action No. AW 97-3887 :

BRENDA STRICKLAND v. MINNESOTA MINING & MANUFACTURING COMPANY

: : Civil Action No. PJM 97-3791 :

MEMORANDUM OPINION These products liability actions brought by Suzanne

Christian, Joan Harris, Mary Bywater, and Brenda Strickland ("Plaintiffs"), against Minnesota Mining & Manufacturing Company ("3M") 1 have been consolidated for resolution of 3M's pending

1

Plaintiffs'

claims

against

all

other

Defendants were (continued...)

motion

for

summary

judgment.

The

issues

have

been

fully

briefed, and no hearing is deemed necessary.

Local Rule 105.6.

For the following reasons, the court shall GRANT Defendant's motion for summary judgment. I. Background These cases involve silicone breast implants. 2 Donald

McGhan an engineer, and some of his colleagues incorporated McGhan Medical Corporation ("McGhan I") on November 20, 1974 for the express goal of marketing silicone breast implants. In June

of 1977, 3M acquired all assets of McGhan I and transferred them to a newly created subsidiary of 3M, also named McGhan Medical

(...continued) dismissed on January 10, 2000. See Paper No. 12. These are a subset of the hundreds of breast implant cases consolidated for pretrial management and administration and at least the sixth time the liability of 3M has been resolved. In the first, Felker v. McGhan Medical Corp. (In re Minnesota Breast Implant Litig.), 36 F.Supp.2d 863 (D.Minn. 1998), the United States District Court for the District of Minnesota confronted issues identical to the ones currently before this court. The undersigned is very grateful for the thorough analysis provided by Chief Judge Magnuson and relies heavily on it in the disposition of this case. See also, Defendant's Exhibit 1, McConkey and McKonkey v. McGhan Medical Corp., et. al., No. 3:98-CV-003 (E.D. Tenn. June 6, 2000); Defendant's Exhibit 2, Almonte, et. al. v. Minn., Mining, & Manf. Co., No. 97-0613ML et.al., (D.R.I., September 25, 2000); Plaintiffs' Exhibit 43, Beck vs. McGhan Medical Corp., et. al, No. 921107793, (Cir. Ct. of Or., March 1, 1994); Defendant's Supplemental Exhibit A, Healy v. McGhan Medical Corporation, et. al., No. 97-5320 (Mass. Super. Ct., December 26, 2000). 2
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Corporation ("McGhan II").

In 1980, 3M merged McGhan II with

its existing Surgical Products Division. While 3M manufactured and sold breast implants, it became aware of problems patients experienced stemming from the

products. capsular

Often, the implants increased patient risks for contracture (formation of scar tissue through

fibrosis), gel bleed (liquid silicone leaking outside of the intact shell of the implant), silent rupture (rupture which is not immediately detected), migration of leaked silicone away from the breasts, and inflammation. 3M also found itself the

defendant in several lawsuits because of alleged problems with the implants. In 1984, anticipating future tort liability, 3M

sold its silicone breast implant product line. Founders of McGhan I in combination with other investors bought 3M's product line and formed McGhan Medical Corporation ("McGhan III"). implant business. McGhan III paid $5.5 million for 3M's breast However, $2.75 million of this purchase price

was paid by promissory note, payable within three years of closing. At the time of divestiture, 3M also issued a press

release to the general public stating, "[t]he business was sold because it was not consistent with the Division's future growth targets . . . We feel the new owners have the ability to

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continue 3M's strong quality orientation and service support to the business." Plaintiffs' Ex. 34.

Additionally, as a part of the purchase agreement, 3M agreed to provide transitional services consisting of sterilization, managerial, and computer services. 3M also became McGhan's

landlord because it retained the leasehold on the property where the implants were manufactured. Even though 3M provided

transitional services and leased McGhan III facilities, McGhan III operated the breast implant business on its own. McGhan III had separate corporate identities with 3M and distinct

officers, directors, and employees. Shortly thereafter, in 1985, McGhan III became a whollyowned subsidiary of First American Corporation (later renamed "INAMED"), a publicly-held corporation. INAMED defaulted on the 3M

loan it had acquired through its purchase of McGhan III. initially agreed to restructure the loan, but

subsequently

threatened INAMED with litigation when it again defaulted on the loan. Plaintiffs underwent breast implant surgery at different times between 1988 and 1992. The implants in each situation It is

were manufactured, shipped, and sold by McGhan III.

undisputed that the implants used in each of the four surgeries 4

were

manufactured

by

McGhan

III

long

after

3M's

1984

divestiture. II. Summary Judgment Standard A motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.

P. 56(c); Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). other words, if there clearly exist factual issues In

"that

properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," then summary judgment is inappropriate. Anderson, 477 U.S. at 250;

see also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir. 1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir. 1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950). The moving party bears the burden of Fed.

showing that there is no genuine issue of material fact.

R. Civ. P. 56(c); Pulliam, 810 F.2d at 1286 (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979)). When ruling on a motion for summary judgment, the court must draw all reasonable inferences in favor of and construe the facts in the light most favorable to the non-moving party. 5

Tinsley v. First Union Nat'l Bank, 155 F.3d 435, 437 (4th Cir. 1998). A party who bears the burden of proof on a particular

claim must factually support each element of his or her claim. "[A] complete failure of proof concerning an essential element . . . necessarily renders all other facts immaterial." 477 U.S. at 323. party will have Celotex,

Thus, on those issues on which the nonmoving the burden of proof, it is his or her

responsibility to confront the motion for summary judgment with an affidavit or other similar evidence. 256. In Celotex, the Supreme Court stated: In cases like the instant one, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." Such a motion, whether or not accompanied by affidavits, will be "made and supported as provided in this rule," and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324. However, "`a mere scintilla of Barwick v. Anderson, 477 U.S. at

evidence is not enough to create a fact issue.'"

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Celotex Corp., 736 F.2d 946, 958-59 (4 th Cir. 1984) (quoting Seago v. North Carolina Theatres, Inc. , 42 F.R.D. 627, 632 (E.D.N.C. 1966), aff'd, 388 F.2d 987 (4th Cir. 1967)). There

must be "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is

merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50

(citations omitted). III. Analysis The record clearly reflects that McGhan III manufactured and sold breast implants to Plaintiffs. contest this point. In fact, Plaintiffs do not

Rather, they assert that 3M possessed an

unlawful objective in transferring its breast implants product line to McGhan III, an allegedly sham corporation.3 contend that McGhan III shielded 3M from Plaintiffs while

liability

allowing it to reap profits from the sales of breast implants. To support this assertion, Plaintiffs point to the facts that 3M served as landlord of the property, accepted promissory notes as

Plaintiffs claim that McGhan III was woefully underfunded precisely so that 3M could avoid liability. However, at the time Plaintiffs received their breast implants, McGhan III had become a subsidiary of INAMED a publicly-owned company with assets of over $13 million in 1988, nearly $26 million in 1990, $25 million in 1991, and $29 million in 1992. See Paper No. 22, Reiskin Moving Aff., Exhibits 15-18. 7

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payment, and provided transitional services to McGhan III, as evidence of 3M's control. However, 3M and McGhan III were

independent companies with separate officers, directors, and employees. promptly Moreover, any control 3M exerted over McGhan III ended in 1985, when INAMED, a publicly-traded

corporation, purchased McGhan III.

In fact, at the time each of

the plaintiffs' McGhan III breast implants were sold, McGhan III was a wholly-owned subsidiary of INAMED. Plaintiffs

specifically point out that Donald McGhan served as the ultimate decisionmaker at INAMED. However, even assuming McGhan's

influence at INAMED, the record does not contain any evidence to substantiate the idea that 3M controlled Donald McGhan. Because

Plaintiffs have not established that 3M exerted any control over Donald McGhan, they are unable to demonstrate that 3M managed operations for either INAMED or McGhan III. Although McGhan III occupied the same office space and factory space vacated by 3M upon the sale of the business, there is no evidence that this reflected 3M's control over McGhan III. Additionally, Plaintiffs have not provided any authority to establish that 3M is liable simply because McGhan III occupied 3M's former office and factory space.

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Furthermore,

Plaintiffs

argue

that

3M's

acceptance

of

promissory notes and loan of money to McGhan III suffices as evidence to impose liability on 3M for the actions and products of McGhan III. To the contrary, a creditor does not incur

liability from a borrower's actions due simply to its creditor status. See Athey Prods. Corp. v. Harris Bank Roselle, 89 F.3d

430, 435 (7th Cir. 1996)(lending money in accordance with a loan agreement is insufficient to create a legal duty for the lender to make disclosures about the borrower); Hazeltine Corp. v.

General Elec. Co., 19 F.Supp. 898, 903 (D. Md. 1937) (lending of money even in large amounts by one corporation to another does not alone make lender liable for acts of the borrower).

Additionally, there is no evidence that 3M forgave the debt owed by McGhan III. In fact quite to the contrary, 3M threatened to

sue INAMED, after the company repeatedly defaulted on the loan.

Moreover,

Plaintiffs

highlight

the

managerial,

sterilization, and computer services provided by 3M to McGhan III as evidence of 3M's control. not extend indefinitely.4 These transition services did

In fact, any services provided by 3M

4

Plaintiffs' also contend that further evidence of 3M's (continued...) 9

ceased long before McGhan III manufactured and sold the breast implants Plaintiffs received. Thus, there is no evidence

supporting the notion 3M controlled McGhan III and consequently, should be found liable for McGhan III's actions and products. Having concluded that 3M and McGhan III are not different names for the same company but rather distinct corporate

entities, the court will now analyze each of the Plaintiff's claims5 within the context of Maryland law, which all parties Plaintiffs assert numerous claims in their

agree applies.

respective Complaints and in the First Amended Master Complaint.6

(...continued) control over McGhan III was the fact that 3M continued to buy raw materials from McGhan III. However, the raw materials were unrelated to the manufacture of breast implants as 3M had divested its line to McGhan III. Additionally, 3M European subsidiaries continued to distribute breast implants. Since none of the Plaintiffs' breast implants were manufactured by 3M, not even a 3M European subsidiary, this is simply not relevant to the case at hand. Plaintiffs do not oppose summary judgment on their claims for breach of warranty, breach of the UCC and applicable state law counterparts, negligence per se, false advertising, fraudulent concealment, res ipsa loquitur, common plan to prevent public awareness, market share, negligent infliction of emotional distress, fear of future product failure, participation in, or supervision of, joint ventures and/or parent/subsidiary relationships, invalidity of indemnification agreements, collateral estoppel, and res judicata, the Lanham Act, and the Magnuson-Moss Act. Accordingly, summary judgment on those claims will be entered in favor of Defendant.
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The First Amended Complaint was filed in In re: Silicone (continued...) 10

A. Strict Products Liability Plaintiffs are alleging that 3M should be found strictly liable for the injuries they suffered from their McGhan IIImanufactured breast implants, pursuant to

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