Argued January 9, 2012
As Corrected August 25, 2014.
Petition for certiorari filed at, 01/16/2015
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Appeal from the United States District Court for the Eastern District of Wisconsin. No. 2:07-CV-00864 -- Rudolph T. Randa, Judge.
For Ernest Gibson, Plaintiff - Appellant: Peter G. Earle, Attorney, Law Office of Peter Earle, Llc, Milwaukee, WI; Fidelma L. Fitzpatrick, Attorney, Motley & Rice, Providence, RI.
For American Cyanamid Company, Defendant - Appellee: Elyse Echtman, Attorney, Orrick, Herrington & Sutcliffe, New York, NY; Beth Ermatinger Hanan, Attorney, Gass Weber Mullins Llc, Milwaukee, WI.
For Armstrong Containers Inc., Defendant - Appellee: Timothy A. Bascom, Attorney, Bascom, Budish & Ceman, S.C., Wauwatosa, WI.
For Ei DU Pont DE Nemours And Company, Defendant - Appellee: Paul E. Benson, Attorney, Michael Best & Friedrich Llp, Milwaukee, WI.
For Millenium Holdings Llc, Defendant - Appellee: Cortney G. Sylvester, Nilan, Johnson, Lewis PA, Minneapolis, MN.
For Nl Industries Inc., Defendant - Appellee: James T. Murray, Attorney, Peterson, Johnson & Murray SC, Milwaukee, WI.
For Atlantic Richfield Company, Defendant - Appellee: Anthony S. Baish, Attorney, Godfrey & Kahn S.C., Milwaukee, WI; Philip H. Curtis, Arnold & Porter, New York, NY.
For Sherwin Williams Company, Defendant - Appellee: Cheri L. McCourt, Attorney, Jeffrey K. Spoerk, Attorney, Quarles & Brady Llp, Milwaukee, WI; Brian J. Murray, Attorney, Jones Day, Chicago, IL.
Before FLAUM, KANNE, Circuit Judges, and CHANG, District Judge.[*]
Chang, District Judge.
The plaintiff, Ernest Gibson, filed suit in Wisconsin state court against former manufacturers of white lead carbonate pigments. This pigment was used, before the federal government banned it in the 1970s, in paints, including paints applied to residences. Gibson brings negligence and strict liability claims against the pigment manufacturers, but because he cannot identify which manufacturer made the white lead carbonate pigment that injured him, he relies on the " risk contribution" theory of tort liability fashioned by the Wisconsin Supreme Court. Thomas v. Mallett, 2005 WI 129, 285 Wis.2d 236, 701 N.W.2d 523, 564 (2005). Under the risk-contribution theory, plaintiffs are relieved of the traditional requirement to prove that a specific manufacturer caused the plaintiff's injury. The district court held that risk-contribution theory violates the substantive component of the Due Process Clause, and granted summary judgment in favor of the defendants. As we explain below, in light
of the broad deference that the Constitution grants to the development of state common law, risk-contribution theory survives substantive Due Process scrutiny, as well as the manufacturers' other constitutional challenges. We thus reverse the judgment and reinstate the plaintiff's case.
Because this is an appeal from the grant of summary judgment, we review the district court's decision de novo, meaning independently, and draw all reasonable inferences of fact in the non-movant's favor (here, Gibson). Bennett v. Roberts, 295 F.3d 687, 694 (7th Cir. 2002). As it turns out, the genuinely disputed facts are not material to the legal question presented by the appeal.
In 1997, Gibson and his family moved into a house in Milwaukee, Wisconsin. The house was built in 1919. Unfortunately, the paint applied to that house contained white lead carbonate pigment. In the late 1800s and in the 1900s, paint manufacturers valued white lead carbonate pigments for several reasons, including their strength, durability, flexibility, washability, brushability, and brightness. The white lead carbonate pigment poisoned Gibson, causing neurological defects, among other injuries. The paint was applied to Gibson's home sometime before 1978, which is when the Consumer Products Safety Commission banned paint makers from intentionally adding lead into residential paint.
Gibson is not able to identify which specific manufacturer made the white lead carbonate pigment that poisoned him. In Wisconsin state court, Gibson sued seven companies that either made white lead carbonate pigment or were successors-in-interest to companies that had made that type of pigment. Gibson alleged that he had been injured by the makers' negligence and their failure to warn about the dangers of white lead carbonate pigment. Those seven companies were not the only possible makers of white lead carbonate pigment, although they, along with a no-longer-in-business company, Eagle-Picher Industries, did comprise the primary producers of the pigment.
On the basis of diversity jurisdiction, the case was removed to federal court. The district court initially remanded the case back to state court because of a question over whether the amount-in-controversy minimum had been met. In state court, the parties engaged in discovery on the controversy-amount issue; afterwards, once again the case was removed to federal court. One manufacturer, Millennium Holdings LLC, was dismissed from the case after that defendant filed for bankruptcy (more on this below).
The remaining six pigment manufacturers are:
o American Cyanamid (made white lead pigments until 1972).
o Armstrong Containers (successor to MacGregor, which made white lead pigments until 1971).
o E.I. DuPont (made white lead pigments until 1924).
o NL Industries, Inc. (made white lead pigments, sold its lead paint and pigment business in 1976).
o Atlantic Richfield (successor to Anaconda, which made white lead pigments until 1946).
o Sherwin-Williams (made white lead pigments until 1947).
Because Gibson could not identify which of these manufacturers made the white
lead carbonate pigment that poisoned him, he had to rely on a theory of tort liability fashioned by the Wisconsin Supreme Court in Thomas v. Mallett, 701 N.W.2d 523, 564 (2005). As discussed in more detail below, Thomas held that a plaintiff who brings a white lead carbonate pigment case does not bear the traditional burden of proving that a particular lead-pigment manufacturer caused the plaintiff's injury. Instead, so long as a plaintiff makes a prima facie showing that the manufacturer produced or marketed white lead carbonate pigment sometime during the house's existence, then the burden is on each manufacturer to prove that it did not produce or market white lead carbonate pigment either during the house's existence or in the geographical market where the house is located. If there are no records (or no longer any records) to prove the manufacturer's defense, then the defense fails.
Atlantic Richfield Corporation (better known as ARCO) moved for summary judgment, arguing that Thomas 's liability framework violates the Constitution. ARCO presented various constitutional arguments, including that the risk-contribution theory of liability violates the Due Process Clause. The district court granted summary judgment for ARCO, and then followed-up with summary judgment for the other five remaining defendants. R.39, R. 107. Gibson appeals.
Before addressing the merits of the dispute, first we must ensure, as in all cases, that there is subject matter jurisdiction over the case in the district court, as well as appellate jurisdiction over the appeal. On the question of subject matter jurisdiction, Gibson's opening brief disclaimed knowledge about the citizenship of one of the former defendants in the case, Millennium Holdings LLC. As discussed in the next section, Millennium Holdings has been dismissed from the case in the district court. But at the time of the complaint's removal (the second time around) to federal court, Millennium Holdings was a named defendant and its citizenship had to be evaluated for diversity of citizenship. So we ordered the parties to file jurisdictional memoranda.
In response, the manufacturer-defendants filed an affidavit executed by a Millennium Holdings officer, Regina Lee. Lee was the Secretary and Treasurer of Millennium Holdings. In the affidavit, Lee averred that Millennium Holdings is a Delaware limited liability company, with only one member, Millennium America, Inc. That corporation was incorporated in Delaware and had its principal place of business there. So Millennium Holdings LLC was, for purposes of diversity jurisdiction, a citizen of Delaware. The plaintiffs (Gibson and his guardian) were citizens of Wisconsin, as was Milwaukee County, a party that had been realigned to be a plaintiff. Accordingly, there was complete diversity at the time of the filing of the notice of removal.
Against this, Gibson argues that Lee's affidavit should not be considered because Millennium Holdings had filed an answer to the complaint, and the answer had stated that Millennium Holdings was a Delaware corporation with its principal place of business in Texas. But the answer does not undermine diversity jurisdiction. First, even if Millennium Holdings was bound by the characterization of citizenship in the answer, then there still would be complete diversity, with only Wisconsin citizens on the plaintiffs' side of the litigation and only non-Wisconsin citizens on the other side. More importantly, where subject matter jurisdiction turns on actual facts, the pleadings are not the end-all
of determining the facts. Indeed, " [d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." 28 U.S.C. § 1653. We have previously permitted jurisdictional statements to be filed on appeal to fix defective allegations. E.g., Thomas v. Guardsmark, LLC, 487 F.3d 531, 533-34 (7th Cir. 2007); Tylka v. Gerber Products Co., 211 F.3d 445, 448 (7th Cir. 2000). Accordingly, we consider the notice of removal to be amended by the defendants' filing of Lee's affidavit, which establishes that Millennium Holdings' citizenship does not undermine complete diversity. Diversity jurisdiction was the proper basis for subject matter jurisdiction over the case.
In addition to subject matter jurisdiction over the case, we also must ensure that there is jurisdiction over the appeal, whether or not the parties raise the issue. Wingerter v. Chester Quarry Co., 185 F.3d 657, 660 (7th Cir. 1998) (per curiam). Here, the only question is whether there is a final, appealable decision in the district court in light of the fact that Millennium Holdings was dismissed from the case " without prejudice." Specifically, after Millennium Holdings filed for bankruptcy in the Southern District of New York, the district court and the parties treated Millennium Holdings as if it was no longer a party to the case. When the district court entered a final judgment under Federal Rule of Civil Procedure 58(a), the district court stated that the " claims against Millennium Holdings LLC are dismissed without prejudice because it is in Chapter 11 bankruptcy." The district court then stated, on the judgment, " This action is hereby dismissed." By the time of the entry of the judgment in the district court, the bankruptcy court had already discharged Gibson's claim in the bankruptcy proceeding by confirming a plan of reorganization.
This procedural posture renders the judgment entered by the district court a final, appealable decision under 28 U.S.C. § 1291. When the district court issued its summary judgment decisions, there was nothing more for the district court to do with the lawsuit, which is the hallmark of a final decision. " A district court's decision is final if 'the district court has finished with the case.'" Minnesota Life Ins. Co. v. Kagan, 724 F.3d 843, 847 (7th Cir. 2013) (quoting Chase Manhattan Mortg. Corp. v. Moore, 446 F.3d 725, 726 (7th Cir. 2006)). In a similar prior decision, we concluded that, in a case where two of the four defendants had filed for bankruptcy but had not been formally dismissed from the case in the district court, the judgment of the district court with regard to the remaining defendants was still a final decision, for purposes of appellate jurisdiction, because any pursuit of the particular claims " will be pursued if at all in the bankruptcy court." Dimmitt & Owens Financial, Inc. v. United States, 787 F.2d 1186, 1190 (1986).
The finality of the judgment in this case distinguishes our situation from Willhelm v. Eastern Airlines, Inc., 927 F.2d 971, 972 (7th Cir. 1991). There, the plaintiff filed suit against two defendants; one of the defendants filed for bankruptcy, and the other defendant won a motion to dismiss with prejudice for failure to state a claim. Id. at 972. The plaintiff sought to appeal the dismissal for failure to state a claim, but the district court had not dismissed the entirety of the action. Instead, the district court had entered an order stating that the plaintiff could either file his claim in the bankruptcy proceeding or move the bankruptcy court to lift the automatic stay and thereby reopen the ...