I. FINDINGS OF FACT
1. Plaintiff is a 54 year old woman who underwent breast
augmentation surgery on July 13, 1970 receiving mammary
prostheses in both breasts. (Pl. Resp. ¶ 1;*fn1 Def. Ex. A).
Plaintiff is currently a resident of the State of Illinois and
was a resident of the state of Illinois at the time the
complaint was filed. (Def. Notice for Removal, ¶ 3).
2. BMS was created in 1988 after the merger of Bristol-Myers
and E.R. Squibb & Sons ("Squibb"). (Def. Brief p. 1). At the
time this action was commenced and at the present time, BMS was
a Delaware corporation with its principal place of business in
the State of New York. (Def. Notice of Removal, ¶ 4). Medical
Engineering Corporation d/b/a Surgitech ("MEC") was a Delaware
corporation with its principal place of business in the State of
Wisconsin both at the time this action was commenced and at the
present time. (Id. at ¶ 5).
B. Breast Implants
3. Plaintiff underwent surgery and was implanted with mammary
prostheses on July 13, 1970. (Pl. Resp. ¶ 1; Def. Ex. A). Dr.
Greenburg, the assisting surgeon, described the implants as
"Weck prostheses" in Plaintiffs chart. (Def.Ex. A). These
implants are at issue in this case.
4. On May 28, 1993, Plaintiff underwent surgery to remove both
prostheses and immediately received new saline implants to
replace those that were explanted. (Def.Ex. B). The 1993
implants are not at issue in this case.
5. Dr. Michael Middleton, MD, a radiologist at UC San Diego
and Plaintiffs product identification expert examined the
original implants. (Def.Ex. C). Dr. Middleton, in a report dated
April 22, 1997, concluded plaintiffs original prostheses were
most probably manufactured by Polyplastic Silicone Products,
Inc. ("Polyplastic"). (Id.).
6. Dr. Pierre Blais, an expert on the history and composition
of the breast implant industry, also examined Plaintiffs
original implants. (Def.Ex. D). In Dr. Blais' report dated March
1, 2001, he opined that Plaintiff received "Ashley" Natural Y
implants and also believed them to be manufactured by
Polyplastic. (Def.Ex. D). Dr. Blais also explained the
connection between Polyplastic and Week. In the late 1960's,
Polyplastic struck distribution agreements with Weck, who had
responsibility for labeling, marketing and post-market follow
up. (Def.Ex. D, p. 2). The implant was then known as the "Weck
Natural-Y Mammary Prosthesis." (Id.).
C. Corporate Time Line
7. At the time of the implant in 1970, Week was a wholly-owned
subsidiary of Standard International Corp. ("Standard").
(Def.Ex. D, p. 16).
8. On February 17, 1971, Squibb initiated the acquisition of
Weck from Standard, Weck's parent corporation. (Def. Ex. F; Def.
Ex. G). The parties to the Stock Agreement (Def.Ex. F) included
Squibb; Squibb Beech-Nut; ERS, Inc. (the "Squibb Subsidiary");
Weck; and Standard. (Def.Ex. F, p. 1).
9. On February 17, 1971, an Agreement and Plan of Merger
(Def.Ex. G) was entered into between the Squibb Subsidiary and
Weck providing for the merger of the Squibb Subsidiary with and
into Weck. (Def.Ex. G, p. 1).
10. On February 24, 1971, Squibb assigned its rights under the
Stock Agreement to Squibb Beech-Nut. (Pl.Ex. A).
11. The merger of the Squibb Subsidiary into Week became
finalized on May 26, 1971. (Def.Ex. G, p. 17-20). Thus, Week
became the wholly-owned subsidiary of Squibb.
12. In 1988, Bristol-Myers and Squibb merged creating BMS.
(Def. Brief p. 6).
13. In 1993, Week entered into an Asset Purchase Agreement
with Teleflex Incorporated ("Teleflex"). (Def.Ex. L).
14. Week continues to exist under the new name of EWI
Corporation ("EWI"); however, Teleflex operates Week's prior
business through a subsidiary known as Pilling-Weck. (Def.
Brief, p. 6; Def. Ex. I, J). Presently, EWI is duly incorporated
under the laws of the State of Delaware, is in good standing,
and has a legal corporate existence. (Def.Ex. K).
15. At the time Plaintiff received her implants, Week was not
a subsidiary of Squibb, Squibb Beech-nut, Bristol-Myers, or any
related company. (Pl.Resp. ¶¶ 4). Furthermore, any liability of
these entities arises from the actions of Week in distributing
and selling the original implants. (Pl.Resp. ¶¶ 3).
D. Stock Agreement
16. On February 17, 1971, Squibb, Squibb Beech-Nut, the Squibb
Subsidiary, Week, and Standard entered into a Stock Agreement
setting forth representations, warranties, and agreements which
each of these respective corporations made in connection with
the merger of the Squibb Subsidiary and Weck. (Def.Ex. F, p. 2).
17. In the Stock Agreement, Week agreed between the date of
the agreement, February 17, 1971, and the effective date, May
26, 1971, it would not, without the consent of Squibb, incur or
become subject to "any indebtedness, liability or obligation
except current liabilities and obligations incurred in the
ordinary course of business." (Def.Ex. F, p. 8).
18. Weck further agreed it received no notice of, or otherwise
had "any reason to believe that there exists, any claim or
threatened claim of any such liability or obligation" (referring
to failure / alleged failure of a product to conform to
specifications, contract terms, or satisfying warranty and
negligence). (Id. at 21).
19. Standard agreed, if notified by Squibb, Squibb Beech-Nut,
or the Squibb Subsidiary, in writing with in two years from the
effective date, the following:
[I]f Weck or any consolidated subsidiary shall be
liable for or shall discharge or pay any claim,
liability or obligation or alleged liability or
obligation of any nature whatsoever . . .
attributable to the period prior to the Effective
Date, or if it shall otherwise breach any
representation or warranty to, or agreement with,
Squibb Beech-Nut, Squibb or the Squibb Subsidiary,
Standard will transfer to Squibb Beech-Nut on demand
such number of shares of Squibb Beech-Nut Common
Stock . . . as shall be worth 100% of (or, if
Standard shall not own sufficient shares of Squibb
BeechNut Common Stock for such purposes, Standard
will transfer to Squibb BeechNut on demand cash in an
amount equal to) (i) the amount of such claim,
liability or obligation or the amount of the loss to
Weck, Squibb or Squibb Beech-Nut in connection with
such breach and (ii) all the expenses (including
legal and accounting fees and expenses) incurred by
Weck, Squibb or Squibb Beech-Nut in connection
therewith, all net of tax benefit if any.
(Id. at 46-47).
E. Agreement and Plan of Merger
20. The Squibb Subsidiary and Weck entered into a separate
Agreement and Plan of Merger (Def.Ex. G) providing for the
merger of the Squibb Subsidiary with
and into Week. (Def.Ex. G, p. 1). The Squibb Subsidiary and Weck
were referred to as the "Constituent Corporations." (Id.) The
name of the "Surviving Corporation" continued to be Edward Weck
& Company, Inc. ("Weck"). (Id. at 3). Furthermore, the
Agreement and Plan of Merger provided
[T]he identity, existence, purposes, powers, objects,
franchises, privileges, rights and immunities of Weck
shall continue in effect and unimpaired by the
merger, and the corporate franchises, existence and
rights of the Squibb Subsidiary shall be merged into
Weck and Weck shall, as the Surviving Corporation,
be fully vested therewith. The separate existence and
corporate organization of the Squibb Subsidiary . . .
shall cease when the merger shall become effective.
(Id.) (Emphasis added).
21. The manner and basis of converting or exchanging shares of
stock was as follows: Each share of Common Stock, par value $1
per share, of the Squibb Subsidiary was converted into one share
of Common Stock, par value $1 per share, of the Surviving
Corporation. (Id. at 5). Each share of Common Stock, par value
10¢ per share, of Weck was exchanged for 0.252 of a share of
Common Stock, par value $1 per share, of Squibb Beech-Nut.
(Id. at 5).
22. The Agreement and Plan of Merger further stated the
Surviving Corporation, Weck, would be
[L]iable for all debts, liabilities, obligations,
duties and penalties of each of the Constituent
Corporations, and all said debts, liabilities,
obligations, duties and penalties shall thenceforth
attach to the Surviving Corporation and may be
enforced against it to the same extent as if said
debts, liabilities, obligations, duties and penalties
had been incurred or contracted by it.
(Id. at 10).