By Georgia D. Koutouzos, J.D.
Lawsuit asserted that two companies had made the at-issue product, which conflicted with purchase orders, invoices, and the complaint in parallel litigation against the product supplier.
A sister company of the manufacturer of an allegedly defective welding torch was entitled to dismissal of products liability claims against it by a man who had been injured in a flashback explosion, an Ohio federal court ruled. The injured man’s complaint had misidentified the sister company as the corporate parent of the torch’s manufacturer, the court found, concluding that amendment of the complaint to correctly name the parent company was futile because he had failed to allege a factual basis required under Ohio law for piercing the corporate veil (Zhou v. Lincoln Electric Co., May 15, 2020, Barrett, M.).
A welder at a shipbuilding company was welding frames and brackets for structural support in a ship’s void tank when an explosion occurred, injuring him severely. At the time of the explosion, he was using a welding torch that had been designed and manufactured by J.W. Harris Co., Inc., d/b/a Harris Products Group.
The cause of the explosion was a "flashback" that occurred inside of the welding torch—a known hazard of welding torches (flashbacks occur when a flame is propagated back into the torch and ignites the fuel source, resulting in an explosion). A common way to prevent flashbacks is via a flashback arrestor that prevents a flame from reaching the fuel source, but the Harris torch used by the welder at the time of the explosion had been designed and sold without an arrestor; instead, it had a "Flash Guard" 88-6CVTL reverse flow check valve, which was not capable of suppressing a flashback flame from reaching the fuel source. Harris designs, manufactures, and sells flashback arrestors for its welding torches, but they are available at an additional cost.
The injured man and his wife filed suit against Harris and another company, Lincoln Electric Co., alleging, among other things, causes of action against both entities under the Ohio Products Liability Act for defective design, defective manufacturing, inadequate warning, and misrepresentation. Lincoln Electric moved to dismiss all claims asserted against it, arguing that the injured man mistakenly alleged that it was Harris’s parent company and that, regardless, parent companies only can be held liable under Ohio law for the torts of their subsidiaries if there is a basis for piercing the corporate veil, which the injured man failed to allege.
Substitution of correct parent company. As a preliminary matter, Lincoln Electric asked the court to take judicial notice that the company was not the parent of Harris. Rather, Lincoln Electric Holdings, Inc. is the parent of both Lincoln Electric Co. and Harris. Thus, Lincoln Electric Co. is a sister company of Harris. In that regard, the injured man was not allowed to amend his complaint to substitute Lincoln Electric Holdings, Inc. as the correct parent company because any such amendment would be futile inasmuch as he had alleged no factual basis for piercing the corporate veil.
Identity of product manufacturer. In his complaint, the injured man asserted identical claims against both Harris and Lincoln Electric Co., i.e., that both companies had manufactured the at-issue welding torch that caused his injuries. This was not possible, however, the court said, noting that it was not required to accept as true inconsistent factual allegations concerning the identity of the product’s manufacturer. The injured man did not allege alternative theories of recovery, but, rather, "clashing factual assertions" as to which entity was liable for manufacturing the welding torch.
In a parallel suit in Rhode Island against the company that supplied the at-issue welding torch, the injured man identified the torch as a "Harris Products welding torch." Thus, when read in connection with the purchase orders and invoices attached to the complaint in the case at bar and the memoranda filed in connection with the dismissal motion, the allegation in the Rhode Island litigation allowed the plausible inference that Harris Products, and not Lincoln Electric, had manufactured the welding torch. To rule otherwise would allow the injured man to make clashing factual assertions in the instant case, and then contradict those clashing assertions in a different case. Accordingly, the injured man’s claims against Lincoln Electric Co. were dismissed with prejudice, and the product liability suit in Ohio could proceed only against J.W. Harris Co., Inc.
The case is No. 1:20-cv-00018.
Attorneys: Zachary M. Mandell (Mandell, Boisclair & Mandell, Ltd.) for Jiangbo Zhou and Yinu Wang. Jeffrey W. DeBeer (Squire Patton Boggs) for Lincoln Electric Co. and J.W. Harris Co., Inc.
Companies: Lincoln Electric Co.; J.W. Harris Co., Inc.
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