Filed: Nov. 28, 2007
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 06-2242 WAYTEC ELECTRONICS CORPORATION, Plaintiff - Appellant, versus ROHM AND HAAS ELECTRONIC MATERIALS, LLC; NORTHERN LAMINATE SALES, INCORPORATED, d/b/a NLS Technologies, Defendants - Appellees. Appeal from the United States District Court for the Western District of Virginia, at Lynchburg. Samuel G. Wilson, District Judge. (6:05-cv-00024-sgw) Argued: November 2, 2007 Decided: November 28, 2007 Before MOTZ and GREGORY, Circ
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 06-2242 WAYTEC ELECTRONICS CORPORATION, Plaintiff - Appellant, versus ROHM AND HAAS ELECTRONIC MATERIALS, LLC; NORTHERN LAMINATE SALES, INCORPORATED, d/b/a NLS Technologies, Defendants - Appellees. Appeal from the United States District Court for the Western District of Virginia, at Lynchburg. Samuel G. Wilson, District Judge. (6:05-cv-00024-sgw) Argued: November 2, 2007 Decided: November 28, 2007 Before MOTZ and GREGORY, Circu..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-2242
WAYTEC ELECTRONICS CORPORATION,
Plaintiff - Appellant,
versus
ROHM AND HAAS ELECTRONIC MATERIALS, LLC;
NORTHERN LAMINATE SALES, INCORPORATED, d/b/a
NLS Technologies,
Defendants - Appellees.
Appeal from the United States District Court for the Western
District of Virginia, at Lynchburg. Samuel G. Wilson, District
Judge. (6:05-cv-00024-sgw)
Argued: November 2, 2007 Decided: November 28, 2007
Before MOTZ and GREGORY, Circuit Judges, and Claude M. HILTON,
Senior United States District Judge for the Eastern District of
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Frank Kenneth Friedman, WOODS ROGERS, P.L.C., Roanoke,
Virginia, for Appellant. William R. Rakes, Monica Taylor Monday,
GENTRY, LOCKE, RAKES & MOORE, Roanoke, Virginia, for Appellees. ON
BRIEF: Mark D. Loftis, James F. Douthat, WOODS ROGERS, P.L.C.,
Roanoke, Virginia, for Appellant. Victor S. Skaff, III, GENTRY,
LOCKE, RAKES & MOORE, Roanoke, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Waytec Electronics Corporation (“Waytec”), a manufacturer of
printed circuit boards, brought this action against the
manufacturer, Rohm and Haas Electronic Materials, LLC (“Rohm and
Haas”), and distributor, Northern Laminate Sales, Inc. (“NLS”), of
Copper Gleam PPR, a chemical solution used in the production of
circuit boards. Although Waytec used Copper Gleam PPR successfully
for a number of years, the company began to notice cracking in the
copper plating on some of its circuit boards in 2000 and 2001, and
executives attributed the problem to the use of Copper Gleam PPR.
Waytec sued Rohm and Haas and NLS, alleging fraud in the
inducement, breach of express and implied warranties, negligence,
and conspiracies to defraud and willfully injure Waytec through the
sale of the Copper Gleam PPR. The district court granted judgment
to Rohm and Haas and NLS; we affirm.
I.
To ensure the conductivity of its circuit boards, Waytec
employs an electrolytic copper plating process that results in the
addition of a layer of copper to the exposed surfaces and holes of
the circuit boards. That process entails immersing the boards in
a chemical bath and then sending an electric charge through the
bath to create a chemical reaction that causes copper deposits to
adhere to the surfaces of the boards. If the plating process
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produces copper deposits that are insufficiently thick, the plating
will crack during use. Those cracks destroy the circuit boards’
electrical conductivity and cause the boards to fail.
Prior to 1997, Waytec used a direct current process, in which
the electrical current flows in only one direction through the
chemical bath. In 1997, Robert Welch, who now serves as Waytec’s
Process Engineering Manager, elected to switch from the direct
current process to a pulse periodic reverse process, in which the
electric current flows in both directions. The pulse periodic
process requires a chemical product suitable for periodic pulse
applications; Waytec purchased Copper Gleam PPR for that purpose.*
From 1997 through 2000, Waytec experienced no difficulties with
Copper Gleam PPR.
In 2000, Waytec began to notice cracking in its circuit
boards, and, by 2001, customers started to complain about the
problem. The development of this problem coincided with changes in
Waytec’s manufacturing process; the company began to produce multi-
layered, rather than double-sided, boards and also reduced the
total volume of boards it was producing, decreasing the number of
units produced by forty to fifty percent. As a result of these
changes to its production process, Waytec left the tanks idle for
*
When Waytec implemented the pulse periodic reverse process in
1997, it purchased Copper Gleam PPR from Shipley Company. Shipley
acquired LeaRonal, Inc. in 1999, and the combined company was known
as Shipley/Rohm and Haas. In 2004, the company became Rohm and
Haas Electronic Materials.
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longer periods of time than it had previously. When production
resumed after such periods, Waytec engineers observed higher levels
of organic materials accumulating in the chemical solution, a
problem that experts in the field often link to cracking problems.
Shortly after Waytec began to experience the higher incidence
of cracking, representatives from Rohm and Haas and NLS traveled to
Waytec to help diagnose the cause of the problem and recommend ways
to prevent its occurrence in the future. These representatives
suggested that Waytec make a number of process improvements. Welch
followed their recommendation that he periodically treat the
chemical bath with carbon to remove the build-up of organic
products in the treatment solution. The Rohm and Haas and NLS
representatives also made several other suggestions, e.g., improve
quality control, use deionized water, and install new technology to
better regulate temperature in the chemical baths, but Waytec
declined to implement any of these proposals. At trial, Welch
acknowledged that a number of these operational controls were also
included as recommendations on the Copper Gleam PPR data sheets,
but he explained that he did not believe that all of the changes
were necessary at his particular facility. Welch also declined to
switch to a newer generation product recommended by Rohm and Haas
and NLS, citing concerns that the new product was more costly than
Copper Gleam PPR.
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By 2004, Waytec was the only one of Rohm and Haas’ customers
still using Copper Gleam PPR; others had switched to the newer
product. At this time, Rohm and Haas requested that Waytec
executives sign a waiver of liability if Waytec continued to use
the product without adopting the majority of Rohm and Haas’ process
improvement recommendations. Waytec executives refused to sign the
waiver. Instead, Welch selected another supplier for the chemical
bath product and began to switch from the pulse periodic reverse
process back to the direct current plating process Waytec had
employed prior to 1997. In order to convert to the new chemical
product and complete the transition to the direct current system,
Waytec cleaned the tanks that circulated the chemical solution
during the plating process. The copper plating ceased cracking
after Waytec made these changes. Both Welch and Kenneth Shirley,
the company’s current Chief Executive Officer, attribute the
cessation in cracking solely to Waytec’s use of a product other
than Copper Gleam PPR.
II.
Rohm and Haas and NLS moved for summary judgment on multiple
grounds, including that Waytec had no evidence of fraud or
causation and that Waytec had disclaimed all warranties except for
one, and with respect to that warranty, Rohm and Haas and NLS had
disclaimed all consequential and incidental damages. The district
5
court held the defendants’ motion under advisement and proceeded to
trial in stages; at the first stage, it required Waytec to prove
its fraud case with clear and convincing evidence. At the
conclusion of the first stage, the court found that Waytec had
failed to present scientifically reliable evidence that Copper
Gleam PPR caused Waytec’s cracking problems and also determined
that there was no evidence that either Rohm and Haas or NLS
fraudulently induced Waytec to purchase the Copper Gleam PPR.
Accordingly, the court granted the defendants’ motion for judgment
with respect to Waytec’s actual and constructive fraud claims and
dismissed Waytec’s breach of warranty claims. Waytec appeals.
Waytec asserts that the district court improperly exercised
jurisdiction over the case because Rohm and Haas and NLS did not
comply with the procedural requirements for removing the case from
state to federal court. Waytec next contends that the district
court abused its discretion in excluding evidence that other
circuit board manufacturers suffered similar cracking problems when
using Copper Gleam PPR and in striking the opinion testimony of
Waytec’s proffered experts. Finally, Waytec claims that the
district court erred in granting judgment as a matter of law on
Waytec’s actual fraud claim and summary judgment on Waytec’s
constructive fraud claim and dismissing Waytec’s breach of warranty
claims. Waytec contends that it met its evidentiary burdens by
demonstrating that Rohm and Haas and NLS concealed their knowledge
6
about defects in Copper Gleam PPR and intentionally provided Waytec
with faulty guidance about how to resolve its cracking problems.
We deal first with the removal issue and then consider Waytec’s
remaining arguments.
III.
Waytec contends that Rohm and Haas and NLS failed to comply
with the procedural requirements for removing this case from state
to federal court, because NLS never filed its own notice of removal
and Rohm and Haas did not file an electronic joint notice of
removal containing the signatures of attorneys for both Rohm and
Haas and NLS. See 28 U.S.C.A. § 1446(b); Administrative Procedures
for Filing, Signing, and Verifying Pleadings and Papers by
Electronic Means 12 (W.D. Va. rev. Jan. 2005) (local rule of
procedure). We need not determine whether removal was proper,
however, because any such procedural defect in the removal process
would not constitute grounds to vacate the district court’s
judgment and remand the case to state court.
In Caterpillar Inc. v. Lewis,
519 U.S. 61, 73, 77-78 (1996),
the Supreme Court held that after a district court has allowed a
case to be removed to federal court, the mere fact that “removal
did not comply with statutory prescriptions” does not require that
the appellate court vacate the lower court judgment and remand the
case to state court. The Court explained that “[o]nce a diversity
7
case has been tried in federal court, with rules of decision
supplied by state law . . . considerations of finality, efficiency,
and economy become overwhelming.”
Id. at 75. Accordingly,
although an appellate court must vacate a district court judgment
when a “jurisdictional defect remains uncured” at the end of a
proceeding, the appellate court is not similarly required to vacate
the judgment below when the asserted error is merely procedural.
Id. at 77. Rather, “[t]he procedural requirements for removal
remain enforceable [only] by the federal trial court judges to whom
those requirements are directly addressed.”
Id. The Court
reasoned that, “[t]o wipe out the adjudication postjudgment, and
return [such a case] to state court[,] . . . would impose an
exorbitant cost on our dual court system, a cost incompatible with
the fair and unprotracted administration of justice.”
Id.
We have held that failure of all defendants to properly join
in removal proceedings is merely a procedural defect, not a
jurisdictional one. See Payne ex rel. Estate of Calzada v. Brake,
439 F.3d 198, 203 (4th Cir. 2006). The asserted procedural error
in this case, which arises from NLS’s failure to file its own
notice of removal and Rohm and Haas’ failure to file an electronic
joint notice of removal containing the signatures of both
defendants, does not overcome the “considerations of finality,
efficiency, and economy” held by the Supreme Court to be paramount.
See
Caterpillar, 519 U.S. at 75. Such error, if it exists, does
8
not supply sufficient grounds to vacate the judgment of the
district court and remand this case to state court. See
id. at 77.
Accordingly, we turn to Waytec’s remaining arguments.
IV.
Prior to trial, Rohm and Haas and NLS moved in limine to
exclude evidence that other circuit board manufacturers experienced
cracking problems similar to those that occurred at Waytec when
they used Copper Gleam PPR. The district court provisionally
granted the defendants’ motion, finding that the danger that the
evidence would confuse the issues or mislead the jury substantially
outweighed its probative value. See Fed. R. Evid. 403. The court
reasoned that proof that cracking occurred at other facilities, and
that Rohm and Haas settled some of the complaints lodged by other
circuit board manufacturers, did not demonstrate that Copper Gleam
PPR caused the cracking at Waytec. The court also noted that
Federal Rule of Evidence 408 prohibited admission of evidence of
the settlements, because the claims underlying those settlements
were never adjudicated, and Rohm and Haas disputed the validity of
those claims.
At trial, the court also excluded the expert opinions of the
two Waytec witnesses who testified that Copper Gleam PPR caused
Waytec’s cracking problems. The court determined, pursuant to its
role as a “gatekeeper” responsible for ensuring the relevance and
9
reliability of scientific testimony, “that Waytec presented no
scientifically reliable evidence that Copper Gleam rather than its
own process or other external factors caused the cracking it sought
to attribute to Copper Gleam.” See Daubert v. Merrell Dow Pharms.,
Inc.,
509 U.S. 579, 589 (1993); Kumho Tire Co. v. Carmichael,
526
U.S. 137, 157 (1999). Because Waytec’s experts failed “to take
serious account of other potential causes,” Westberry v. Gislaved
Gummi AB,
178 F.3d 257, 265 (4th Cir. 1999), or “offer an
explanation for why the proffered alternative cause[s] w[ere] not
the sole cause” of the problem, Cooper v. Smith & Nephew, Inc.,
259
F.3d 194, 202 (4th Cir. 2001) (citing
Westberry, 178 F.3d at 265-
66), the district court determined that the experts’ opinions on
causation lacked sufficient reliability and so would not be
admitted into evidence.
At the conclusion of the first stage of the trial, the court
found that Waytec failed to carry its burden of proof that Copper
Gleam PPR caused the problems in its manufacturing process.
Waytec’s failure to prove causation doomed its fraud claims. The
court additionally observed that the fraud claims also failed
because Waytec had not demonstrated that representatives of Rohm
and Haas and NLS had either made a false representation to Waytec
about Copper Gleam PPR or intended to mislead Waytec. Nor had
Waytec demonstrated that it detrimentally relied on representations
by Rohm and Haas or NLS. Because the court found that Waytec
10
failed to prove that Rohm and Haas and NLS fraudulently induced
Waytec to enter into contracts for the sale of Copper Gleam PPR,
the court also dismissed Waytec’s breach of warranty claims.
Having had the benefit of oral argument and briefing from the
parties, and after carefully reviewing the record, we conclude that
the district court did not abuse its discretion in excluding either
the “similar incidents” evidence or the challenged expert
testimony. We also find that the district court did not err in
granting judgment as a matter of law to Rohm and Haas and NLS on
Waytec’s fraud claims and in dismissing Waytec’s breach of warranty
claims. Accordingly, we affirm those rulings on the basis of the
district court’s well-reasoned opinion.
V.
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.
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