Opinion
Civil Action No. 01-2109, Section "K" (4)
February 25, 2002
MINUTE ENTRY
Before the Court is Jeffery Dahlberg's Rule 12(b)(6) Motion for Dismissal (Doc. No. 3). Jeffery Dahlberg ("Dahlberg") seeks dismissal of claims against him personally for (1) interest, attorney's fees and performance under a day Work Drilling Contract between Nabors Drilling U.S.A. L.P. ("Nabors") and Twister Exploration, L.L.C. ("Twister"); (2) damages for tortious interference with that contract; and (3) damages under the Louisiana Unfair Trade Practice Act. Having reviewed the pleadings, memoranda and the relevant law, the Court finds some merit in the motion.
Background
Nabors contends that on or about November 26, 2000, Twister, through its corporate officer, Dahlberg, entered into a written Domestic Daywork Drilling Contract ("Contract") with Nabors, pertaining to wells that were to be drilled using Nabors Rig 313. Drilling commenced on February 8, 2001. On April 19, 2001, Nabors alleges that Dahlberg solicited information from Nabors' employees pertaining to alleged defalcations by Nabors with respect to the drilling and/or workover operations. On April 20, 2001, Dahlberg, on behalf of Twister, notified Nabors of his intention to cease drilling operations due to "alleged `irreparable harm' caused by Nabors Rig 313 and its personnel. Nabors then filed an Oil and Gas Lien on Twister's well and brought the instant suit. Nabors contents that "Dahlberg's actions, including the attempted solicitation of drunken statements from Nabors' employees with the intent to avoid Twister's obligations under the Contract were actionable under Texas and Louisiana law for tortious interference with a contract an/or tortious interference with a business relationship." (Nabor's Opposition at 2)
Standard of Review Under Rule 12(b)(6)
A court may dismiss a claim for "failure to state a claim upon which relief can be granted" pursuant to Fed.R.Civ.Pro. 12(b)(6). In considering a Rule 12(b)(6) motion, the court must accept plaintiffs factual allegations as true and view them in the light most favorable to the plaintiff. Cinel v. Connick, 15 F.3d 1338, 1341 (5th Cir.), cert.denied, 513 U.S. 868, 115 S.Ct. 189, 130 L.Ed.2d 122 (1994). Though the Court may not look beyond the pleadings, Id., the court may take into account matters of public record, orders, items appearing on the record of the case and exhibits attached to the complaint. 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1356 (2d ed. 1987). A court should not dismiss a complaint pursuant to Rule 12(b)(6) unless it appears "beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claim which would entitled him to relief." Blackburn v. City of Marshall, 42 F.3d 925 (5th Cir. 1995),citing, Conley v. Gibson, 355 U.S. 41, 44-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In addition, with respect to the heightened pleading burden required under Fed.R.Civ.P. 9(b) with respect to allegations of fraud or mistake "[a]lthough a court may dismiss the claim, it should not do so without granting leave to amend, unless the defect is simply incurable or the plaintiff has failed to plead with particularity after being afforded repeated opportunities to do so." Hart v. Bayer Corp., 199 F.3d 239, 248, n. 6 (5th Cir. 2000). The Court will now analyze the claims presented.
Contract Claims
The parties agree that with respect to the Contract and plaintiff's claim for breach thereof, Dahlberg was acting as an agent of Twister at the time the parties entered into the Contract, and that Dahlberg's liability does not arise out of Twister's nonperformance or breach of the Contract. As he was not a party to the contract he cannot be held liable for these damages. Thus, the motion will be granted with respect to the contract claims.
Tortious Interference With the Contract
The first issue is whether Texas law, as the law of the contract, or Louisiana law, as the law of the state in which the alleged tortious interference occurred applies. The Court finds that Louisiana law will apply considering the language found at La. Civ. Code art. 3543 which states:
Issues pertaining to standards of conduct and safety are governed by the law of the state in which the conduct that caused the injury occurred, if the injury occurred in that state or in another state whose law did not provide for a higher standard of conduct.
In all other cases, those issues are governed by the law of the state in which the injury occurred, provided that the person whose conduct caused the injury should have foreseen its occurrence in that state.
The preceding paragraph does not apply to cases in which the conduct that cause the injury occurred in this state and was caused by a person who was domiciled in, or had another significant connection with, this state. These cases are governed by the law of this state.
La. Civ. Code art. 3543. Here, it is undisputed that the tortfeasor's actions occurred in Louisiana, and the resulting injury occurred in Louisiana. Support for the loci of the injury can be found in the fact that a Louisiana Oil and Gas Lien was filed against the well in question which is located in Louisiana. Indeed Comment (c) to the article further provides that "[. . . when both] the wrongful conduct and the resulting injury occur in the same state, this Article calls for the application of the law of that state." La. Civ. Code art 3543, Comment (c).
The application of Louisiana law is further supported in the Revision Comments. In the Revision Comments, the redactors stated:
Relation to Article 3542. Although derived from the general principles of Article 3542, the rules contained in this Article prevail over Article 3542 because they are more specific.
Revision Comment (b) to La. Civ. Code art. 3543.
Tortious Interference with Contractual Relations
A cause of action for intentional interference with contractual relations was recognized in a limited fashion by the Supreme Court of Louisiana in 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La. 1989) and to date the holding has been "restricted to the precise cause of action it explicates: that is a situation involving a corporation, an officer of the corporation, and a contract between the corporation and a third party." Egorov, Pughinsky, Afanasiev Juring v. Terriberry, Carroll Yancey, 1998 WL 483483, *3 (E.D.La. Aug. 14, 1998), citingGreat Southwest Fire Ins. Co. v. CNA Ins. Cos., 557 So.2d 966 (La. 1990); Kite v. Gus Kaplan, Inc., 708 So.2d 473 (La.App. 3d Cir. 1998);Colbert v. B.F.Carvin Const. Co., 600 So.2d 719 (La: App. 5th Cir. 1992); Durand v. McGaw, 635 So.2d 409 (La.App. 4th Cir. 1994).
To recover under this cause of action, a plaintiff must allege and prove:
(1) the existence of a contract or a legally protected interest between the plaintiff and the corporation;
(2) the corporate officer's knowledge of the contract;
(3) the officer's intentional inducement or causation of the corporation to breach the contract or his intentional rendition of its performance impossible or more burdensome;
(4) absence of justification on the part of the officer;
(5) causation of damages to the plaintiff by the breach of contract or difficulty of its performance brought about by the officer.Spurney, 538 So.2d at 234.
Dahlberg contends that Nabors has not alleged facts to support one of the essential elements — the absence of justification on the part of the officer. Nabors contends this position is unjustified as it has alleged that Mr. Dahlberg "intentionally and unjustifiably interfered with the contractual relationship between Nabors and Twister." (Complaint, ¶ 21).
The court in Spurney explained the necessary wrongdoing on the part of the corporate officer for this cause of action to arise:
Referring to these basic principles, we conclude that, in the light of modern empirical considerations and the objective of delictual law, an officer of a corporation owes an obligation to a third person having a contractual relationship with the corporation to refrain from acts intentionally causing the company to breach the contract or to make performance more burdensome, difficult or impossible or of less value to the one entitled to performance, unless the officer has reasonable justification for his conduct. The officer's action is justified, and he is entitled to a privilege of immunity, if he acted within the scope of his corporate authority and in the reasonable belief that his action was for the benefit of the corporation.
Thus, an officer is privileged to induce the corporation to violate a contractual relation, or make its performance more burdensome, provided that the officer does not exceed the scope of his authority or knowingly commit acts that are adverse to the interest of his corporation. Where officers knowingly and intentionally act against the best interest of the corporation or outside the scope of their authority, they can be held liable by the party whose contract right has been damaged.Spurney, 538 So.2d at 231.
The allegations of Dahlberg's action being unjustified are conclusory with no factual underpinnings. However, at this stage of the proceedings, the Court finds that it should give leave to plaintiff to amend to state with specificity how Dahlberg's action were unjustified.
Unfair Trade Practices
Dahlberg also seeks the dismissal of the allegations of violations of the Louisiana Unfair Trade Practices Act. La. Rev, stat. 51:1401 et seq. As this Court recently noted in Global Marine Shipping (No. 10) Limited v. Finning Int'l Inc., 2002 WL 126932 (E.D.La. Jan. 29, 2002):
As so eloquently stated by the court in KFC Ventures, L.L.C. v. Metairie Med. Equip. Leasing Corp., 2000 WL 1252596 (E.D. La. Sept. 1, 2002) (Barbier, J.):
Louisiana's Unfair Trade Practices and Consumer Protection Law of LUTPA as it is often called, grants a private right of action for the recovery of damages to "any person who suffers any ascertainable loss . . . as a result of the use or employment by another person of an unfair or deceptive method, act, or practice declared unlawful by R.S. 51:1405." La. R.S. 51:1409. A "person" includes a natural person, corporation, or any other legal entity. Id. § 1402(8).KFC at *2. While this broad definition would apparently grant a right of action to a large number of plaintiffs, the Louisiana courts differ as to whether business consumers have a right of action. Id. (citing Jarrell v. Carter, 577 So.2d 120, 124 (La.App. 1st Cir. 1991); Capitol House Preservation Co. v. Perryman Consultants. Inc., 725 So.2d 523, 530 (La.App. 1st Cir. 1998) as allowing such actions and National Gypsum Co. v. Ace Wholesale, Inc. 738 So.2d 128 (La.App. 5th Cir. 1999); Thibaut v. Thibaut, 607 So.2d 587, 607 (La.App. 1st Cir. 1992) as precluding such actions). The Louisiana Supreme Court has not spoken on the issue.KFC at *2.
However, the United States Court of Appeals for the Fifth Circuit has made its own Erie determination as to the scope of the private right of action permitted under this statute, and it has consistently denied a right of action to "business consumers." Id. and cases cited therein. In Orthopedic Snorts Injury Clinic v. Wang Laboratories, Inc., 922 F.2d 220 (5th Cir 1991), the court held specifically that LUTPA "only applied to consumer transactions, `the subject of which transaction is primarily intended for personal, family, or household use.'" Id . citing Wang, 922 F.2d at 226.
This court is constrained to follow a circuit court precedent containing Erie predictions unless "a subsequent state court decision or statutory amendment render[s] the Fifth Circuit's prior decision clearly wrong." Batts v. Tow-Motor Forklift Co., 66 F.3d 743, 747 (5th Cir. 1995), cert. denied, 116 S.Ct. 1851 (1966); Potomac Ins. Co. v. Woods, 1996 WL 450687 (E.D. Tex. July 22, 1996); see also, KFC, at *2; Hamilton v. Business Partners, Inc., 938 F. Supp. 370 (E.D.La. 1996). There is no such state court decision of which the Court is aware.Id. (emphasis added). Thus, because Dahlberg is neither a competitor or a consumer for the purposes of LUTPA, this cause of action must be dismissed. Accordingly,
IT IS ORDERED that the Motion to Dismiss is GRANTED with respect to the breach of contract claims and the Louisiana Unfair Trade Practices Act claim and DENIED with respect to the tortious interference with contract claim.
IT IS FURTHER ORDERED that plaintiff shall file an amended complaint with respect to the tortious interference with contract claim by March 18, 2002.