Burden v. JOHNSON & JOHNSON MEDICAL

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
April 19, 2006
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
______________________ Clerk

No. 04-20777
______________________

KATHY N. BURDEN, ET AL.,

Plaintiffs

versus

JOHNSON & JOHNSON MEDICAL, ET AL.,

Defendants

ANSELL HEALTHCARE PRODUCTS INC, formerly known as Ansell Inc,

formerly known as Ansell Perry Inc.; BECTON DICKINSON & CO;

Defendants - Cross-Defendants - Appellees

versus

OWENS & MINOR MEDICAL INC; OWENS & MINOR INC

Defendants - Cross-Claimants - Appellants

___________________________________________________

Appeal from the United States District Court for
the Southern District of Texas
___________________________________________________

Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:

This case involves an important question of state law which

the Texas courts have not as yet resolved. We therefore have

determined that our proper course, in this diversity jurisdiction

case in which we are to apply the law of the State of Texas, is to

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certify the central question in this matter to the Supreme Court of

Texas.

CERTIFICATE FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH

CIRCUIT TO THE SUPREME COURT OF TEXAS, PURSUANT TO THE TEXAS

CONSTITUTION ART. 5 § 3-C AND TEX. R. APP. P. 58. TO THE SUPREME

COURT OF TEXAS AND THE HONORABLE JUSTICES THEREOF:

I. STYLE OF THE CASE

The style of the case in which this certificate is made is

Kathy N. Burden, et al., Plaintiffs v. Johnson & Johnson Medical,

Inc., et al., Defendants, Ansell Healthcare Products, Inc.;

Becton Dickson & Co., Defendants-Cross-Defendants-Appellees,

Owens & Minor Medical Inc.; Owens & Minor, Inc., Defendants-

Cross-Claimants-Appellants, Case No. 04-20777, in the United

States Court of Appeals for the Fifth Circuit, on appeal from the

United States District Court for the Western District of Texas.

Federal jurisdiction is based on diversity of citizenship.

II. STATEMENT OF THE CASE

On January 21, 2000, Kathy Burden, a dental hygienist, and

members of her family filed a products liability action in Texas

state court, naming as defendants the present appellants,

appellees, and over thirty other entities. The Plaintiffs alleged

that Burden was injured by latex gloves manufactured and sold by

the named defendants. Appellants Owens & Minor, Inc. and Owens &

Minor Medical, Inc. (collectively, “Owens & Minor”) were sued as a

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distributor. Appellees Ansell Healthcare Products Inc. (“Ansell”)

and Becton, Dickinson and Company (“BD”) were sued as manufacturers

of the allegedly defective gloves. On March 6, 2000, Owens & Minor

sent letters to several of the defendant manufacturers requesting

that those manufacturers indemnify Owens & Minor pursuant to Texas

Civil Practice and Remedies §82.002, which requires a manufacturer

to “indemnify and hold harmless a seller against loss arising out

of a products liability action” excepting losses proven to have

been caused by the seller. For reasons that are disputed by the

parties, Owens & Minor was ultimately defended by its own outside

counsel.

The case was removed to the United States District Court for

the Southern District of Texas on May 3, 2000. It was subsequently

transferred to the United States District Court for the Eastern

District of Pennsylvania as part of the multidistrict litigation,

In re: Latex Glove Products Liability Litigation. At some point

during the proceedings, Owens & Minor filed cross-claims for

indemnity against several manufacturers in the case. Eventually,

the Plaintiffs voluntarily dismissed their claims against Owens &

Minor because they were unable to show that Owens & Minor had sold

any of the latex gloves that allegedly injured Burden. All other

defendants were dismissed for the same or similar reasons. There

was never a finding that any party was negligent or caused the

Plaintiffs’ alleged injuries. However, when the instant case was

remanded to the Southern District of Texas once the multidistrict

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litigation proceedings were complete, Owens & Minor pursued the

cross-claims for indemnity that it had brought against four of the

manufacturers, seeking to recover the costs it had incurred in

Burden. Owens & Minor subsequently settled with two of the

manufacturers, leaving claims for indemnity against only Ansell and

BD.

In response to Owens & Minor’s cross-claim, BD and Ansell both

moved for summary judgment on the adequacy of their offers to

indemnify Owens & Minor. BD argued that it properly had offered to

defend and indemnify Owens & Minor for claims arising out of the

sale of BD latex gloves. Likewise, Ansell maintained that it

appropriately had offered to defend and indemnify Owens & Minor for

claims related to Owens & Minor’s alleged sale of Ansell latex

gloves. Owens & Minor claimed that the offers made by Ansell and

BD were for a “partial limited defense” with conditions, rather

than the sort of full defense and indemnity allegedly required by

§82.002. The District Court rejected many of the arguments

presented by the manufacturers, yet ultimately granted BD’s and

Ansell’s motions for summary judgment, holding that both

manufacturers had offered to defend and indemnify Owens & Minor to

the satisfaction of their duties to Owens & Minor under §82.002.

In so doing, the District Court terminated the entire case.

Owens & Minor brings this appeal, arguing that the District

Court erroneously granted summary judgement in favor of Ansell and

BD. According to Owens & Minor, the District Court improperly

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concluded that a limited defense was all that was required under

§82.002, and that by defending themselves, the manufacturers had

adequately defended Owens & Minor. Owens & Minor requests that a

question on this issue be certified to the Texas Supreme Court.

Owens & Minor also argues that the District Court erred in

construing in favor of Ansell and BD allegedly disputed facts

regarding the letters exchanged between the parties. Ansell and BD

respond that Owens & Minor has misinterpreted the District Court’s

ruling. According to Ansell and BD, the District Court correctly

held that Ansell and BD fulfilled their indemnification obligation

because §82.002 only requires a manufacturer to indemnify a

distributor for claims related to the sale of that manufacturer’s

product. Further, Ansell and BD claim that the District Court did

not impermissibly grant summary judgment based upon disputed facts,

but rather correctly drew conclusions of law based upon the

undisputed facts presented in the letters. The parties have

stipulated that Owens & Minor is an innocent seller and that BD and

Ansell are manufacturers of the latex gloves at issue in this

appeal.

The Texas Supreme Court’s leading case interpreting §82.002 is

Fitzgerald v. Advanced Spine Fixation Systems, Inc, 996 S.W.2d 864

(Tex. 1999). In that case, the Texas Supreme Court answered the

following question certified to it by this Court: whether §82.002

requires a manufacturer to indemnify a distributor who was sued but

who did not actually sell the particular product alleged to have

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injured the plaintiff. In answering that question in the

affirmative, the Texas Supreme Court analyzed a manufacturer’s duty

under §82.002. The Court explained that §82.002 “is part of a

scheme to protect manufacturers as well as sellers of products.”

Id. at 868. The statute accomplishes this goal by “ensuring that

the relatively small seller need not fear litigation involving

problems that are really not in its control,” and by

“establish[ing] uniform rules of liability so that manufacturers

[can] make informed business decisions and plaintiffs [can]

understand their rights.” Id. at 868-69. The Court concluded that,

though §82.002's purpose is to benefit both manufacturers and

sellers, the legislature “gave preference to sellers with no

independent liability.” Id. at 869.

While the Texas Supreme Court in Fitzgerald gave considerable

guidance concerning how a court should approach questions regarding

§82.002 by looking to the consequences of certain interpretations

of §82.002 and ensuring that those interpretations are consistent

with the plain language of the statute and the legislative intent,

the issue presented in the instant case is beyond Fitzgerald. In

the case before us, neither the plain language of the statute nor

the legislative intent indicate the scope of the indemnification

and defense required by §82.002 in a situation in which it is

undisputed that the seller sold products made by the several

manufacturers sued, yet the seller has sought indemnification

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from less than all of those manufacturers. We note that the Texas

Court of Appeals has answered this question in Ansell Healthcare

Products, Inc. v. Owens & Minor, Inc., — S.W.3d —, 2006 WL 824236

(Tex.App.-Texarkana March 31, 2006), concluding that the

manufacturers’ limited offers to defend only their own products did

not fulfill their statutory indemnity duties under §82.002. While

Ansell Healthcare Products, is a well-written, sound opinion, we

cannot rely upon it because it is an unpublished, non-precedential

ruling. Furthermore, we believe that the central issue in this

case is better answered by the Texas Supreme Court. An answer to

this central issue is necessary for this Court to proceed in

resolving the remaining issues in this case regarding whether the

district court improperly resolved disputed factual issues in favor

of the moving parties.

III. QUESTION CERTIFIED

When a distributor sued in a products liability action

seeks indemnification from less than all of the manufacturers

implicated in the case, does a manufacturer fulfill its

obligation under Texas Civil Practice and Remedies §82.002 by

offering indemnification and defense for only the portion of the

distributor’s defense concerning the sale or alleged sale of that

specific manufacturer’s product, or must the manufacturer

indemnify and defend the distributor against all claims and then

seek contribution from the remaining manufacturers. We disclaim

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any intention or desire that the Supreme Court of Texas confine

its reply to the precise form or scope of the question certified.

The answer provided by the Supreme Court of Texas will determine

the issue on appeal in this case. The record in this case,

together with the copies of the parties’ briefs, is transmitted

herewith.

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