Tyler et al v. Chesapeake Applachia, Llc et al

REPLY BRIEF re Joint MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

M.D. Pa.July 25, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA TIMOTHY TYLER, et al., Plaintiffs, v. CHESAPEAKE APPALACHIA, L.L.C., et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) No. 3:16-cv-00456-MEM REPLY BRIEF IN SUPPORT OF CHESAPEAKE DEFENDANTS’ JOINT MOTION TO DISMISS Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 1 of 30 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ................................................................................... iii INTRODUCTION ..................................................................................................... 1 ARGUMENT ............................................................................................................. 2 I. Plaintiffs Should Not Be Permitted to Bring a Class Action of Opt-Outs ................................................................................................ 2 II. Plaintiffs’ Duplicative, Overreaching Claims Must be Dismissed ....... 5 A. Plaintiffs’ Claim for Breach of the Implied Duty of Good Faith and Fair Dealing Fails ........................................................ 5 B. Plaintiffs Have No Support for Their Oil and Gas Lease Act Claim .................................................................................... 6 C. Plaintiffs Have Not Stated a Claim for Money Had and Received ...................................................................................... 7 D. Plaintiffs’ Unjust Enrichment Claim Fails.................................. 9 E. Plaintiffs’ Claims for Injunctive and Declaratory Relief Are Not Cognizable .................................................................. 10 i. Pennsylvania Does Not Recognize Plaintiffs’ Version of the Prudent Operator Duty ............................ 10 ii. Plaintiffs Do Not Adequately Allege That Defendants Are Subject to or Breached a Duty Not to “Commit Waste” ........................................................ 13 F. Plaintiffs’ Alleged “Mutual Benefit” Covenant Does Not Exist........................................................................................... 16 G. Plaintiffs Have Not Alleged a Claim of Intentional Interference ............................................................................... 18 H. Plaintiffs’ Claim for Accounting Either Does Not Apply or Is Moot ...................................................................................... 19 Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 2 of 30 - ii - III. The Mowrys Failed to Satisfy a Condition Precedent and Should Be Dismissed ....................................................................................... 20 CONCLUSION ........................................................................................................ 21 Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 3 of 30 - iii - TABLE OF AUTHORITIES CASES Page(s) Am. Paper & Pulp Co. v. Denenberg, 132 F. Supp. 802 (E.D. Pa. 1955) ....................................................................... 21 Ansoumana v. Gristede’s Operating Corp., 201 F.R.D. 81 (S.D.N.Y.2001) ......................................................................... 4, 5 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................ 18 Bell v. Cheswick Generating Station, No. 12-929, 2015 WL 401443 (W.D. Pa. Jan. 28, 2015) ..................................... 4 Borough of Lansdale, Pa. v. PP&L, Inc., No. 02-8012, 2006 WL 859431 (E.D. Pa. Mar. 31, 2006) ................................. 20 Colgan v. Forest Oil Co., 45 A. 119 (Pa. 1899) ..................................................................................... 11-12 D.A. Hill Co. v. CleveTrust Realty Investors, 573 A.2d 1005 (Pa. 1990) ..................................................................................... 9 Damiano v. Scranton Sch. Dist., 135 F. Supp. 3d 255 (M.D. Pa. 2015) ................................................................. 10 First Nat’l Bank of Monongahela City v. Carroll Twp., Washington Cty., 27 A.2d 527 (Pa. Super. Ct. 1942) ................................................................ 7, 8-9 Giannone v. Ayne Inst., 290 F. Supp. 2d 553 (E.D. Pa. 2003) .................................................................... 7 Haft v. United States Steel Corp., 499 A.2d 676 (Pa. Super. Ct. 1985) .................................................................... 19 Hague v. Wheeler, 27 A. 714 (Pa. 1893) ........................................................................................... 15 Highfield Co. v. Kirk, 93 A. 815 (Pa. 1915) ........................................................................................... 12 Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 4 of 30 - iv - Jacobs v. CNG Transmission Corp., 332 F. Supp. 2d 759 (W.D. Pa. 2004)............................................... 13, 14, 15, 16 Jacobs v. CNG Transmission Corp., 772 A.2d 445 (Pa. 2001) ..................................................................................... 12 Johnson v. Nextel Commc’ns, Inc., 293 F.R.D. 660 (S.D.N.Y. 2013) .......................................................................... 4 Kilmer v. Elexco Land Servs., Inc., 990 A.2d 1147 (Pa. 2010) ..................................................................................... 7 Meehan v. Cheltenham Twp., 189 A.2d 593 (Pa. 1963) ....................................................................................... 9 Merrill Iron & Steel, Inc. v. Blaine Constr. Corp., No. 14-221, 2014 WL 2993774 (W.D. Pa. July 2, 2014) ..................................... 9 Neuhard v. Range Res.-Appalachia, LLC, 29 F. Supp. 3d 461 (M.D. Pa. 2014) ............................................................. 14, 15 Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1988) ............................................................................... 10 Post v. Hartford Life & Accident Ins. Co., No. 02-1917, 2002 WL 31741470 (E.D. Pa. Dec. 6, 2002) ................................. 7 Proper v. Crawford County Correctional Facility, No. 06-279, 2010 WL 3829640 (W.D. Pa. Sept. 24, 2010) ................................. 6 Ray v. W. Pa. Nat. Gas Co., 20 A. 1065 (Pa. 1891) ......................................................................................... 16 Smith v. Steckman Ridge, LP, 590 F. App’x 189 (3d Cir. 2014) ........................................................................ 17 Springfield Twp. v. Mellon PSFS Bank, 889 A.2d 1184 (Pa. 2005) ..................................................................................... 8 Stewart v. SWEPI, LP, 918 F. Supp. 2d 333 (M.D. Pa. 2013) ................................................................... 5 Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 5 of 30 - v - T.W. Phillips Gas & Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. 2012) ........................................................................... 11, 12, 17 Ware v. Idaho State Tax Comm’n, 567 P.2d 423 (Idaho 1977) ................................................................................. 21 Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178 (M.D. Pa. 2008) .......................................................................... 3 In re WorldCom, Inc. Sec. Litig., No. 02-5119, 2006 WL 2709855 (S.D.N.Y. Sept. 22, 2006) ........................... 4, 5 STATUTES, RULES & REGULATIONS M.D. Pa. L.R. 7.6 ..................................................................................................... 17 OTHER AUTHORITIES 1-5 Bruce M. Kramer & Patrick H. Martin, The Law of Pooling and Unitization (3d ed. 1989) .................................................................................... 14 5-8 Williams & Meyers, Oil and Gas Law ........................................................ 11, 14 Thomas Smith & Elizabeth Williams, 6 CYCLOPEDIA OF FED. PROC. (3d ed.) ......... 4 Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 6 of 30 INTRODUCTION In the pending Demchak class action, 1 Chesapeake Appalachia, L.L.C. (“CALLC”) reached an agreement with Pennsylvania landowners to resolve claims regarding the precise royalty provision at issue here. Dissatisfied with that settlement, Plaintiffs did not object, but rather, opted out as is their right. What they did next, however, is not permitted by law. After opting out, Plaintiffs filed the Complaint here, proposing a duplicative class and asserting a myriad of deficient quasi-contractual claims all designed to disguise the overlap with Demchak and the weakness of their core breach of contract claim. Defendants filed this motion to dismiss to address the Demchak overlap and clear out the many legally deficient claims at the outset. To be clear, Defendants have not and do not “concede[]” that the core breach of contract claim in Count I is “valid.” Pls. Mem. at 12-13 (Dkt. No. 28). Rather, Defendants seek to strip the Complaint of facially improper claims and to focus on its disputed essence - namely, whether Plaintiffs were paid the right amounts under their leases. Plaintiffs seek to reframe their breach of contract claim at least eight different ways, shoehorning their allegations into legally defective counts that must be dismissed. As set forth below, the Court should: 1 Demchak v. Chesapeake Appalachia, L.L.C., No. 3:13-cv-02289-MEM (M.D. Pa.). Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 7 of 30 - 2 - • Dismiss Count II because (1) the alleged breach of the implied duty of good faith and fair dealing is not a separate cause of action, and (2) the implied covenant to operate for mutual benefit does not apply to Plaintiffs’ leases and does not impose the obligation Plaintiffs contend; • Dismiss Count III because the Oil and Gas Lease Act does not create a private right of action and was not violated; • Dismiss Counts IV, V, and VI because Plaintiffs failed to adequately allege the legal elements of tortious interference, unjust enrichment, and money had and received; • Dismiss Counts VII, VIII, and IX because injunctive and declaratory relief are remedies, not separate claims; • Dismiss Count VIII also because there is no implied duty in Pennsylvania requiring Defendants to cease production from Plaintiffs’ leaseholds based upon temporarily unprofitable production; • Dismiss Count X because Plaintiffs failed to identify either a right to an accounting for the Negative Royalty and Deductions Classes or a right to a second accounting for the Audit Group Class; and • Dismiss the Mowrys because they stand in breach of the very contract they seek to enforce. ARGUMENT I. Plaintiffs Should Not Be Permitted to Bring a Class Action of Opt-Outs. As Defendants already explained, Plaintiffs-having opted out of the certified Demchak settlement class-cannot simultaneously seek to certify a duplicative, conflicting class of lessors. Plaintiffs seek to minimize this obvious conflict, but their responses fail. First, the overlap between this purported class and the class certified in Demchak is not “hypothetical.” Pls. Mem. at 9 (Dkt. No. 28). Plaintiffs’ putative Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 8 of 30 - 3 - class of lessors with “Ready for Sale or Use” provisions in their leases are expressly included in the Demchak settlement. See Defs. Mem. at 9 (Dkt. No. 19). And as this Court knows, Plaintiffs are simply wrong that there is no preliminarily approved settlement class in Demchak. See Demchak, Order Granting Certification of Settlement Class and Preliminarily Approving Class Settlement (Dkt. No. 91). Second, Plaintiffs are similarly incorrect that Defendants are seeking an advisory opinion. Whether this case can proceed as a putative class has profound consequences in the near term. For example, the scope and timing of discovery, as well as the whole case schedule, turn on whether Plaintiffs are permitted to move for class certification. Nor does the only case Plaintiffs cite here advance their argument: In re Lazy Days’ RV Center Inc., 724 F.3d 418, 421 (3d Cir. 2013), was a bankruptcy case and had nothing to do with class certification. Third, Plaintiffs attempt to frame this as a motion to strike class allegations, citing cases in which defendants argued at the pleading stage that plaintiffs could never satisfy the requirements of Rule 23. This argument is wrong on several grounds. To begin, Defendants have not filed a motion to strike. Moreover, even if this were construed as such, motions to strike are granted in appropriate circumstances. See Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178, 182 (M.D. Pa. 2008) (granting pre-discovery motion to strike where “plaintiff cannot meet the Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 9 of 30 - 4 - requirements for a class action”); Bell v. Cheswick Generating Station, No. 12-929, 2015 WL 401443, at *5 (W.D. Pa. Jan. 28, 2015) (same). Finally, Defendants do not argue at this stage that Plaintiffs cannot meet Rule 23. Rather, Defendants point out that Plaintiffs are precluded from even attempting to meet the requirements of Rule 23 given that they opted out of an overlapping class-as other courts have held. Fourth, as Defendants previously explained-and Plaintiffs failed to refute-once lessors have opted out of a certified class, their only option to pursue their claims is to proceed individually. See Johnson v. Nextel Commc'ns, Inc., 293 F.R.D. 660, 667 (S.D.N.Y. 2013) (holding that “an opt-out Plaintiff cannot resurrect a putative class action under the guise of individual claims”), vacated in part on other grounds, 123 A.2d 123; In re WorldCom, Inc. Sec. Litig., No. 02- 5119, 2006 WL 2709855, at *8 (S.D.N.Y. Sept. 22, 2006); Ansoumana v. Gristede’s Operating Corp., 201 F.R.D. 81, 88 (S.D.N.Y. 2001); see generally Thomas Smith & Elizabeth Williams, 6 CYCLOPEDIA OF FED. PROC. § 23:33 (3d ed.); see also Defs. Mem. at 8-9. 2 In response, Plaintiffs pluck three-decade old dictum from In re Baldwin-United Corp., 105 F.R.D. 475, 481 (S.D.N.Y. 1984). But the quote plucked is not the holding of Baldwin and, moreover, the same court 2 Plaintiffs do not distinguish In re WorldCom or Ansoumana, because they cannot, and their attempted distinction of Johnson lacks merit. Plaintiffs identify no practical difference based on when absent class members opt out, whether from a final or preliminarily approved class, and there is none. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 10 of 30 - 5 - has repeatedly made clear since 1984 that opt outs cannot proceed on a class basis. See Johnson, 294 F.R.D. at 667; In re WorldCom, 2006 WL 2709855, at *8; Ansoumana, 201 F.R.D. at 88. II. Plaintiffs’ Duplicative, Overreaching Claims Must be Dismissed. Plaintiffs identify no legal basis or fail to adequately plead a right to relief for nine of the ten claims asserted in the Complaint. These claims should be dismissed. A. Plaintiffs’ Claim for Breach of the Implied Duty of Good Faith and Fair Dealing Fails. Plaintiffs improperly seek to proceed on two separate counts - breach of contract (Count I) and breach of the implied covenant of good faith and fair dealing (Count II) - based upon the same allegations of wrongdoing. In such circumstances, Pennsylvania law simply does not recognize a separate cause of action for breach of the implied covenant. E.g., Stewart v. SWEPI, LP, 918 F. Supp. 2d 333, 343-44 (M.D. Pa. 2013). As a result, Count II fails as a matter of law. In response to this well-established law, Plaintiffs did not cite a single decision that authorizes them to proceed on the implied covenant of good faith Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 11 of 30 - 6 - claim in Count II. 3 The only case they cite - Proper v. Crawford County Correctional Facility, No. 06-279, 2010 WL 3829640, at *2 & n.6 (W.D. Pa. Sept. 24, 2010) - has nothing to do with the implied duty of good faith and fair dealing, and it certainly does not authorize a stand-alone count for breach of that implied duty that duplicates a separately pleaded breach of contract claim. There is no legal basis for that claim in Count II; it must be dismissed. B. Plaintiffs Have No Support for Their Oil and Gas Lease Act Claim. Plaintiffs concede that there is no express private right of action under the Oil and Gas Lease Act (“the Act”), and they do not identify any authority to imply one. See Pls. Mem. at 23. Indeed, Plaintiffs identify no support whatsoever for the notion that the legislature intended to create a private right of action for alleged violation of the Act. Id. Accordingly, because the Act does not provide a private right of action, explicitly or implicitly, Plaintiffs’ claim in Count III must be dismissed. See Defs. Mem. at 16-17. Recognizing this, Plaintiffs argue that their claim allegedly “merges with Plaintiffs’ breach of contract claim even in the absence of a private right of action, leaving the substance of the case unchanged.” Pls. Mem. at 23 (emphasis added). In other words, Plaintiffs concede that there is no separate, viable claim in Count 3 Count II has two parts: (1) the implied duty of good faith and fair dealing, and (2) the implied covenant to develop and operate leasehold for the mutual benefit of the lessor and lessee. See Compl. ¶¶97-102 (Dkt. No. 1). Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 12 of 30 - 7 - III; they are simply seeking recovery on a breach of contract theory covered by Count I. Thus, Count III should be dismissed. See, e.g., Giannone v. Ayne Inst., 290 F. Supp. 2d 553, 566 (E.D. Pa. 2003) (dismissing duplicative count); Post v. Hartford Life & Accident Ins. Co., No. 02-1917, 2002 WL 31741470, at *5 (E.D. Pa. Dec. 6, 2002) (dismissing one of two “substantively identical” counts). Finally, the Pennsylvania Supreme Court’s decision in Kilmer is anything but “inapposite” on the issue of royalty calculations under the Act. Pls. Mem. at 23. In Kilmer, that Court held that the Guaranteed Minimum Royalty Act (“GMRA”) guarantees a minimum royalty based on the value of the gas at the wellhead, which may be determined utilizing the net-back method of accounting for post-production costs. See Kilmer v. Elexco Land Servs., Inc., 990 A.2d 1147, 1157-58 (Pa. 2010). Thus, deductions that result in a net royalty of less than 12.5% of the downstream sales price do not violate the GMRA so long as the royalty owner receives 12.5% of the wellhead price. Here, Plaintiffs claim that CALLC is allegedly violating the Act by temporarily paying zero royalties, Pls. Mem. at 23-24, but they do not dispute that CALLC is complying with the net- back method approved in Kilmer. C. Plaintiffs Have Not Stated a Claim for Money Had and Received. Plaintiffs next seek to reframe their breach of contract claim as breach of an alleged common law duty to return money that had been taken from another for a Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 13 of 30 - 8 - particular purpose, but not used towards that purpose. See First Nat’l Bank of Monongahela City v. Carroll Twp., Washington Cty., 27 A.2d 527, 529-30 (Pa. Super. Ct. 1942). Plaintiffs’ alleged claim for money had and received must be dismissed for several reasons. First, the duty to pay royalties to Plaintiffs arises from leases, Compl. ¶28, not common law. Where, as here, a contract covers the dispute, there cannot be an implied contract for the same subject matter, and thus there is no claim for money had and received. See Defs. Mem. at 24. Indeed, it makes no sense for Plaintiffs to argue that Pennsylvania law “assumes situations in which there are contractual relations between the parties” for purposes of such a claim. Pls. Mem. at 28. Under money had and received, courts imply a contract because there is no valid contract. See Springfield Twp. v. Mellon PSFS Bank, 889 A.2d 1184, 1186 n.2 (Pa. 2005). Second, Plaintiffs do not pay money to Defendants. See Defs. Mem. at 23- 24. Plaintiffs respond that the claim applies even where a plaintiff never had the money; for example, if the money at issue was mistakenly or fraudulently paid to the defendant. See Pls. Mem. at 27 (citing Caskie v. Phila. Rapid Transit Co., 184 A. 17, 19 (Pa. 1936)). But, here, the unaffiliated third party purchasers of gas did not mistakenly or fraudulently pay Defendants for Plaintiffs’ gas; that is the precise transaction contemplated by Plaintiffs’ leases. See Compl. Exs. C & D. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 14 of 30 - 9 - Third, Plaintiffs have no basis for money had and received against the non- contracting parties, Chesapeake Energy Corporation (“Chesapeake Energy”) and Chesapeake Energy Marketing, L.L.C. (“CEMLLC”). Plaintiffs have not alleged an implied promise on behalf of either entity to pay funds to Plaintiffs. See First Nat’l Bank, 27 A.2d at 530. Money had and received simply does not fit this dispute, and the claim should be dismissed. D. Plaintiffs’ Unjust Enrichment Claim Fails. In another attempt to recover for alleged breach of contract against non- contracting parties, Plaintiffs reassert their unjust enrichment claim without addressing Defendants’ dispositive cases. See Defs. Mem. at 22-23. Absent misleading conduct by a third-party, one cannot recover against the third-party for unjust enrichment when an express contract governs. See Meehan v. Cheltenham Twp., 189 A.2d 593, 596 (Pa. 1963); D.A. Hill Co. v. CleveTrust Realty Investors, 573 A.2d 1005, 1010 (Pa. 1990); Merrill Iron & Steel, Inc. v. Blaine Constr. Corp., No. 14-221, 2014 WL 2993774, at *9 (W.D. Pa. July 2, 2014). Plaintiffs allege no such misleading conduct as to Chesapeake Energy and CEMLLC; instead, Plaintiffs point to allegations that CALLC allegedly misled lessors while admitting that CALLC is not and cannot be a defendant for unjust enrichment. See Pls. Mem. at 25, 26. Whatever may be said of Plaintiffs’ suggestion that the doctrine of unjust enrichment is “flexible,” see id. at 26, it is not flexible enough to permit Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 15 of 30 - 10 - Plaintiffs to proceed against Chesapeake Energy and CEMLLC for CALLC’s alleged breach of contract. Count V should be dismissed. E. Plaintiffs’ Claims for Injunctive and Declaratory Relief Are Not Cognizable. Courts do not recognize separate counts for declaratory and injunctive relief. Instead of dropping the “counts,” however, Plaintiffs accuse Defendants of “quibbl[ing]” to divert the Court’s focus away from their defective pleading. Pls. Mem. at 32. Plaintiffs then seek to reframe their Complaint in their brief to tell the Court and Defendants what they are supposedly seeking the requested relief for in Counts VII, VIII, and IX. Id. at 32-34. Plaintiffs are not permitted to amend or reframe the Complaint in briefing. See Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988); Damiano v. Scranton Sch. Dist., 135 F. Supp. 3d 255, 279 (M.D. Pa. 2015) (Mannion, J.). Counts VII, VIII, and IX should be dismissed as superfluous and improperly pleaded. See Defs. Mem. at 24-25, 28-29. Moreover, they lack merit under Pennsylvania law, as explained below. i. Pennsylvania Does Not Recognize Plaintiffs’ Version of the Prudent Operator Duty. Plaintiffs vaguely premise Count VIII on the notion that Defendants purportedly violated the prudent operator duty. Plaintiffs have not adequately alleged that Defendants are subject to this duty as Plaintiffs define it, much less Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 16 of 30 - 11 - that they breached it. See Defs. Mem. at 25-28. Contrary to Plaintiffs’ suggestion, Defendants did not “claim there is no prudent operator standard in Pennsylvania.” Pls. Mem. at 19. Rather, Defendants argued that Plaintiffs’ alleged version of the duty-to operate all wells at a profit for landowners at all times (or time intervals) or otherwise stop production-is not supported by the leases, the law, or reality. See Defs. Mem. at 25-26; see also Pls. Mem. at 19 (seeking to hold Defendants in breach “any time they sell gas when their costs meet or exceed the price for gas” (emphasis added)). The Pennsylvania Supreme Court held that well operators are subject to a good faith business judgment standard, and that Pennsylvania law rejects artificially narrow timeframes for assessing well productivity. T.W. Phillips Gas & Oil Co. v. Jedlicka, 42 A.3d 261, 272-76 (Pa. 2012). Jedlicka directly contradicts Plaintiffs’ unsupported allegation that alleged temporary unprofitability for their wells requires immediate shut-in under Pennsylvania law. Pls. Mem. at 6-7, 22. Ignoring this controlling Pennsylvania decision, Plaintiffs cite an oil and gas treatise that likewise does not support their position. Id. at 21. That treatise recognizes that Jedlicka’s business judgment standard is the law of Pennsylvania, even though other jurisdictions take a different approach. 5-8 Williams & Meyers, Oil and Gas Law, § 806.2. Under the Jedlicka standard, CALLC’s good faith judgment to continue operating Plaintiffs’ wells is entitled to deference, where, as Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 17 of 30 - 12 - here, Plaintiffs have not pleaded and cannot plead fraud or dishonesty relating to well operations. 42 A.3d at 272-73; Colgan v. Forest Oil Co., 45 A. 119, 121 (Pa. 1899). In other words, the treatise actually reaffirms that Plaintiffs have not stated a claim because their construction of the prudent operator standard is contrary to Pennsylvania law. In addition to ignoring instructive Pennsylvania law, Plaintiffs misstate the holdings of the cases they cite. For instance, the Pennsylvania Supreme Court’s decision in Jacobs v. CNG Transmission Corp. [hereinafter Jacobs I] discussed an “implied covenant to develop and produce oil or natural gas”; it did not adopt Plaintiffs’ distorted view of the prudent operator standard. 772 A.2d 445, 452-53 (Pa. 2001). Like Jacobs I, in Highfield Co. v. Kirk, lessees failed to drill wells to develop the leasehold. 93 A. 815, 820-21 (Pa. 1915). Plaintiffs’ issue here, however, is not with Defendants’ development of and production from Plaintiffs’ property. Just the opposite - they want Defendants to stop producing. Jacobs I and Highfield do not support Plaintiffs’ theory. Moreover, Jacobs I explains that the lease language governs and courts generally will not imply duties. 772 A.2d at 453. There is nothing in the leases that requires Defendants to shut-in production when there is a temporary dip in gas prices or a well becomes temporarily unprofitable. Instead, this decision should be left to the lessee’s good faith business judgment. See Jedlicka, 42 A.3d at 275. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 18 of 30 - 13 - Allowing producers to exercise this judgment eliminates the absurdity where Plaintiffs want production one month and shut-in the next. 4 Whether construed as pleaded (an impermissible cause of action for “Declaratory and Injunctive Relief”) or as reframed in Plaintiffs’ brief (a claim for breach of a prudent operator obligation that does not exist as alleged), Count VIII should be dismissed. ii. Plaintiffs Do Not Adequately Allege That Defendants Are Subject to or Breached a Duty Not to “Commit Waste.” Similarly, Count VIII has embedded in it statements that Defendants have “commit[ted] waste,” without an explanation of the supposed duty’s source or scope. See Compl. ¶¶132-34. Plaintiffs also introduce concepts of “unitization” and “correlative rights,” which were not in the Complaint. Pls. Mem. at 17-19. As discussed below, these concepts-waste, unitization, and correlative rights-and Plaintiffs’ cases either do not support Count VIII or have nothing to do with the Complaint. First, to the extent avoiding waste is recognized in Pennsylvania, it is a “counteracting polic[y]” that tempers overdevelopment. See Jacobs v. CNG Transmission Corp., 332 F. Supp. 2d 759, 781-82 (W.D. Pa. 2004) [hereinafter 4 This absurdity is demonstrated by Plaintiffs’ exhibits. Exhibit G discusses lease disputes between CALLC and the Tylers, and between CALLC and the Witters. See Compl. Ex. G. Whereas the Tylers now demand shut-in, the Witters were complaining about CALLC’s failure to drill a second well under their lease. See id. at 3. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 19 of 30 - 14 - Jacobs II]. Plaintiffs identify no authority under Pennsylvania law or their leases that imposes an affirmative and actionable obligation not to “commit[] waste.” See Compl. ¶¶ 132-34. Indeed, the lone authority cited references waste to counterbalance the duty to develop, in that it is a “policy against overproduction, or economic waste.” Jacobs II, 332 F. Supp. 2d at 781-82 (emphasis added). But here, there is no allegation that Defendants are overproducing or overdeveloping; rather, Plaintiffs allege that the price obtained for the produced gas did not exceed the costs incurred to obtain that price during one month. See Compl. ¶¶65, 67, 130-34. Plaintiffs identify no authority making that actionable. Second, to the extent Pennsylvania recognizes waste, unitization prevents waste, as Plaintiffs acknowledge. 5 Pls. Mem. at 17. Defendants unitized Plaintiffs’ leaseholds in three separate units, thus preventing waste. See id. Finally, the concept of correlative rights does not require anything more than unitization and pooling of property, 6 because those acts preserve and maintain correlative rights. See Williams & Meyers, § 901; 1-5 Bruce M. Kramer & Patrick H. Martin, The Law of Pooling and Unitization, § 5.01 (3d ed. 1989). Correlative rights ensure the opportunity to produce; they do not guarantee any particular 5 Unitization refers to the joint operation of leasehold interests for the purpose of producing gas. Williams & Meyers, § 901; see Neuhard v. Range Res.- Appalachia, LLC, 29 F. Supp. 3d 461, 470 (M.D. Pa. 2014). 6 Pooling refers to the consolidation of oil and gas leasehold interests to obtain a drilling permit. Williams & Meyers, § 901. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 20 of 30 - 15 - share of production, see Kramer & Martin, § 5.01, and, therefore, do not guarantee any particular share of royalties. Unitization and correlative rights are not in the Complaint, but Plaintiffs acknowledge that CALLC unitized their property. See Pls. Mem. at 17. 7 Thus, CALLC has preserved and maintained Plaintiffs’ correlative rights. The cases Plaintiffs cite are inapplicable because they do not support Plaintiffs’ claim that Defendants are liable for failing to shut-in wells after a short or temporary period of alleged unprofitability, much less that Defendants have violated some other unpleaded obligation related to waste, unitization, or correlative rights: • Neuhard presented a contract dispute about whether a lessee properly unitized the leasehold when it unitized more acreage than the lease permitted, 29 F. Supp. 3d at 471, which is not at issue here; • Jacobs II focused on the development of a leasehold interest, not correlative rights or unitization (indeed, those terms never appear in the decision), 332 F. Supp. 2d at 779-82; and • Hague v. Wheeler refused to enjoin a landowner from expelling gas into the air, thereby depleting the reservoir from which plaintiffs were producing on adjacent property. 27 A. 714, 718, 720 (Pa. 1893). The defendant could not allow the escaping gas to harm his neighbors’ property, but was free to expel it. Id. at 719-20. 7 Notably, the leases expressly address pooling and unitization, including when the lessee exercises its judgment to unitize to preserve correlative rights. See Compl., Ex. C, Lease ¶¶6, 7. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 21 of 30 - 16 - Curiously, Plaintiffs’ authority would permit CALLC to expel the gas without selling or using it. See id. at 718, 720. But Plaintiffs take issue with CALLC’s efforts to sell the gas, and complain that CALLC was temporarily not able to obtain a price to cover the post-production costs incurred. Pl. Mem. at 18. Plaintiffs’ injection of “waste,” “unitization,” and “correlative rights” simply does not state a claim under Pennsylvania law, and Count VIII must be dismissed. F. Plaintiffs’ Alleged “Mutual Benefit” Covenant Does Not Exist. Plaintiffs have no support in the leases or the law for their alleged version of an implied duty to develop and operate the leasehold for the mutual benefit of lessor and lessee. Plaintiffs claim this duty includes an obligation to stop operation and temporarily shut-in unprofitable wells. See Pls. Mem. at 15-16. That is not the law of Pennsylvania. Rather, under Pennsylvania law, this implied duty is an obligation to develop natural resources and operate wells to produce oil and/or gas. See Jacobs, 332 F. Supp. 2d at 779. Pennsylvania courts implied this duty where the only form of consideration under the lease is royalties, so that lessors would be assured their end of the bargain. Id. at 779-80 (citing Hill v. Joy, 24 A. 293 (Pa. 1892)); Ray v. W. Pa. Nat. Gas Co., 20 A. 1065 (Pa. 1891)). The duty does not apply where, as here, royalties are not the only consideration. Defs. Mem. at 13. Indeed, Plaintiffs do not dispute that they received multiple forms of consideration. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 22 of 30 - 17 - Plaintiffs’ claim must be dismissed because Plaintiffs have identified no authority that imposes a duty to stop operation and to shut-in temporarily unprofitable wells. Pls. Mem. at 13-16. Their cases recognize the version of the implied covenant that exists in Pennsylvania (i.e., a duty to develop the leasehold and operate the wells where the sole form of consideration is royalties), not the version of the duty they have invented. See id. at 13-14. In the absence of legal authority to support their novel position, Plaintiffs purport to rely on Smith v. Steckman Ridge, LP, 590 F. App’x 189, 196-97 (3d Cir. 2014). See Pls. Mem. at 16 n.5. That reliance is misplaced. Smith considered whether a producer’s decision to stop production because of falling prices could be considered voluntary or involuntary cessation of production to determine which lease provision applied to the parties’ contract dispute. 590 F. App’x at 195-98. The court was not interpreting the scope of implied duties in Pennsylvania. Id. In other words, Smith does not say that producers must or should shut-in wells in any given circumstance. Id. at 197. 8 Pennsylvania defers to the lessee’s business judgment for developing and operating leaseholds. See Jedlicka, 42 A.3d at 275. 9 8 Plaintiffs’ reliance on Smith is further diminished as the decision “does not constitute binding precedent.” 590 Fed. App’x at 190 n.*. 9 Plaintiffs do not respond to Defendants’ argument that there is no basis to impose an implied covenant on Chesapeake Energy or CEMLLC. The Court should treat that basis for dismissal as unopposed. See M.D. Pa. L.R. 7.6. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 23 of 30 - 18 - Plaintiffs’ unsupported arguments provide no basis to second-guess that judgment, much less a legally viable cause of action for breach of an implied duty that does not exist as alleged. The second half of Count II should be dismissed. G. Plaintiffs Have Not Alleged a Claim of Intentional Interference. Plaintiffs failed to adequately allege facts to support tortious interference. Plaintiffs do not dispute that this claim requires Defendants to act with the primary purpose of interfering with the performance of the contract, Defs. Mem. at 20, but Plaintiffs fail to identify any allegations that interference was Chesapeake Energy’s or CEMLLC’s main objective. Similarly, Plaintiffs acknowledge that one of the elements is “intent on the part of the defendant to harm the plaintiff,” Pls. Mem. at 28, but do not allege that Chesapeake Energy or CEMLLC acted with intent to harm Plaintiffs. Plaintiffs point to allegations that Chesapeake Energy allegedly desired to enrich itself. See Compl. ¶¶8, 74. 10 Plaintiffs’ allegations do not plausibly allege intent to harm and the Complaint’s bare conclusions and recitation of the elements do not meet their burden under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Count IV should be dismissed. 10 These allegations say nothing about CEMLLC’s intent. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 24 of 30 - 19 - H. Plaintiffs’ Claim for Accounting Either Does Not Apply or Is Moot. Plaintiffs assert a claim for an accounting on behalf of each putative class without regard for which classes are actually entitled to an accounting. Pls. Mem. at 30-32. Plaintiffs recognize an accounting claim requires a valid contract “under which defendant had a duty to account,” but then contradictorily assert that Defendants “confuse the issues” by “prematurely focusing on whether class members in each of the three proposed classes have rights to an accounting.” Id. at 30-31. That is precisely the issue this Court should decide at the pleading stage - have Plaintiffs stated a claim for an accounting? If Plaintiffs are not entitled to an accounting, the claim cannot lie. See Defs. Mem. at 29-30. 11 Plaintiffs’ claim fails because Plaintiffs whose leases entitle them to an accounting already received one. See Pls. Mem. at 34 (“[CALLC] agreed to permit these [Audit Group Class] lessors to conduct an audit, which their accountant did, identifying numerous instances where [CALLC] underpaid royalties.” (emphasis added)). The issue for those Plaintiffs is not whether they were able to receive an 11 Plaintiffs argue that legal accountings can also be based on implied contracts. See Pls. Mem. 30 & n.7. As in Haft v. United States Steel Corp., however, there are “no facts which indicate that [Chesapeake Energy or CEMLLC] received any monies in any capacity” from Plaintiffs. 499 A.2d 676, 677 (Pa. Super. Ct. 1985). Moreover, Plaintiffs have not adequately alleged such an implied contract and otherwise identify no basis to imply an obligation on Chesapeake Energy or CEMLLC to account to Plaintiffs. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 25 of 30 - 20 - accounting (they did), but whether the deductions were proper. Compl. ¶¶79-80. That is a breach of contract claim, which the Audit Group Class does not assert. Plaintiffs have not alleged that the other two putative classes are entitled to accountings under their leases. They do not show that they have properly pleaded an accounting claim for the Deductions Class or the Negative Royalty Class, Defs. Mem. at 30-31, instead accusing Defendants of engaging in “speculation about what inconsistencies may exist with regards to class members,” Pls. Mem. at 32. Because Plaintiffs have not adequately alleged that these classes are entitled to the relief they seek, Count X should be dismissed. III. The Mowrys Failed to Satisfy a Condition Precedent and Should Be Dismissed. The Mowrys ask this Court to ignore the very contract they seek to enforce. Pls. Mem. at 11-12. Plaintiffs cannot have it both ways. The Mowrys’ lease states: “[n]o litigation shall be initiated … for a period of at least 90 days after Lessor has given Lessee written notice fully describing the breach or default, and then only if Lessee fails to remedy the breach or default within such period.” Compl. Ex. D, ¶12. Plaintiffs admit the Mowrys did not give notice before filing suit and therefore failed to satisfy a condition precedent for bringing litigation. Contrary to Plaintiffs’ argument, filing the lawsuit obviously is not pre-suit notice, and the case law on futility supports dismissing the Mowrys for failure to comply with the notice provision. See Borough of Lansdale, Pa. v. PP&L, Inc., No. 02- Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 26 of 30 - 21 - 8012, 2006 WL 859431, at *6 (E.D. Pa. Mar. 31, 2006) (refusing to find compliance with notice requirement would have been futile because notice could have provided “a narrowing of the claims brought in this suit”). 12 CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court dismiss Counts II-X and dismiss the Mowrys. 12 Plaintiffs’ cases stating “the law does not require useless acts,” Pls. Mem. at 12, are distinguishable because the “useless acts” those cases contemplated are not requirements set forth in a lease or agreement upon which the lawsuit is based. See Am. Paper & Pulp Co. v. Denenberg, 132 F. Supp. 802, 808 (E.D. Pa. 1955); Ware v. Idaho State Tax Comm’n, 567 P.2d 423, 429-30 (Idaho 1977). Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 27 of 30 - 22 - Dated: July 25, 2016 Respectfully submitted, /s/ Daniel T. Brier Daniel T. Brier John B. Dempsey MYERS BRIER & KELLY, LLP 425 Spruce Street, Suite 200 Scranton, PA 18503 Tel: (570) 342-6100 Fax: (570) 342-6147 Email: dbrier@mbklaw.com jdempsey@mbklaw.com Seamus C. Duffy (pro hac vice) Kathryn E. Deal (pro hac vice) DRINKER BIDDLE & REATH LLP One Logan Square, Suite 2000 Philadelphia PA 19103 Tel: (215) 988-2700 Fax: (215) 988-2757 Email: seamus.duffy@dbr.com kathryn.deal@dbr.com Daniel T. Donovan (pro hac vice) KIRKLAND & ELLIS LLP 655 Fifteenth Street, NW Washington, D.C. 20005 Tel: (202) 879-5000 Fax: (202)879-5200 Attorneys for Defendants Chesapeake Energy Corporation, Chesapeake Appalachia, L.L.C., and Chesapeake Energy Marketing, L.L.C. Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 28 of 30 CERTIFICATE OF SERVICE I hereby certify that on July 25, 2016, a copy of the foregoing was filed electronically. Notice of this filing will be sent to all parties who have appeared in this action via the Court’s electronic filing system. Parties may access this filing through the Court’s system. /s/ Daniel T. Brier Daniel T. Brier Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 29 of 30 CERTIFICATE OF COMPLIANCE I hereby certify pursuant to L.R. 7.8(b)(2) that the text of this filing contains 4,995 words, excluding the caption, Table of Contents, Table of Authorities, and signature blocks, which is within the limit of 5,000 words as permitted by the Local Rules. /s/ Daniel T. Brier Daniel T. Brier Case 3:16-cv-00456-MEM Document 31 Filed 07/25/16 Page 30 of 30 APPENDIX OF UNPUBLISHED OPINIONS A. Bell v. Cheswick Generating Station, No. 12-929, 2015 WL 401443 (W.D. Pa. Jan. 28, 2015) B. Borough of Lansdale, Pa. v. PP&L, Inc., No. 02-8012, 2006 WL 859431 (E.D. Pa. Mar. 31, 2006) C. Merrill Iron & Steel, Inc. v. Blaine Constr. Corp., No. 14-221, 2014 WL 2993774 (W.D. Pa. July 2, 2014) D. Post v. Hartford Life & Accident Ins. Co., No. 02-1917, 2002 WL 31741470 (E.D. Pa. Dec. 6, 2002) E. Proper v. Crawford County Correctional Facility, No. 06-279, 2010 WL 3829640 (W.D. Pa. Sept. 24, 2010) F. In re WorldCom, Inc. Sec. Litig., No. 02-5119, 2006 WL 2709855 (S.D.N.Y. Sept. 22, 2006) Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 1 of 56 A Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 2 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2015 WL 401443 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Kristie BELL and Joan Luppe, Plaintiffs, v. CHESWICK GENERATING STATION, GENON POWER MIDWEST, L.P., Defendant. Civil Action No. 12-929. | Signed Jan. 28, 2015. Attorneys and Law Firms James E. Depasquale, Pittsburgh, PA, Nicholas A. Coulson, Macuga, Liddle & Dubin, P.C., Steven D. Liddle, Liddle & Dubin P.C., Detroit, MI, for Plaintiffs. Scott C. Oostdyk, Matthew D. Fender, McGuire Woods, Richmond, VA, Branden P. Moore, Brian C. Root, McGuirewoods LLP, Pittsburgh, PA, for Defendant. MEMORANDUM ORDER CATHY BISSOON, District Judge. *1 For the reasons that follow, Defendant's Motion to Strike Class Allegations (Doc.44) will be granted. I. MEMORANDUM BACKGROUND Kristie Bell and Joan Luppe are the named Plaintiffs (“Plaintiffs”) in a class action complaint (the “Complaint”) filed in the Court of Common Pleas of Allegheny County against Cheswick Generating Station, GenOn Power Midwest, L.P. (“Defendant”) in April of 2012. Compl. (Doc. 1, Ex. 2). Defendant removed the case to the Western District of Pennsylvania on July 6, 2012. Notice of Removal (Doc. 1). Defendant filed a Motion to Dismiss the Complaint for failure to state a claim, which was granted by District Court Judge McVerry on October 12, 2012. Bell v. Cheswick Generating Station, 903 F.Supp.2d 314 (W.D.Pa.2012) (holding that property owners' putative class action against power company, alleging various claims, including nuisance and negligence, relating to coal power plant emissions were preempted by the Clean Air Act). Plaintiffs timely appealed to the Third Circuit Court of Appeals. Notice of Appeal (Doc. 16). On August 20, 2013, the Third Circuit reversed and remanded the case back to District Court. Bell v. Cheswick Generating Station, 734 F.3d 188 (3d Cir.2013) (finding that, as a matter of first impression, the Clean Air Act did not preempt private property owners' putative class action state tort claims). United States District Court Judge McVerry recused himself from the case, and it was transferred to the undersigned. Defendant appealed the decision of the Third Circuit, petitioning the Supreme Court for Writ of Certiorari. See GenOn Power Midwest, L.P. v. Bell, --- U.S. ----, 134 S.Ct. 2696, 189 L.Ed.2d 739 (2014). That Petition was denied on January 8, 2014, and the case was reopened in the Western District of Pennsylvania. Id.; Notice of Reinstatement of Case (Doc. 30). Before the Court today is Defendant's Motion to Strike Class Allegations from the Complaint. (Doc. 44). Plaintiffs seek damages and injunctive relief under the theories of nuisance, negligence and recklessness, trespass and strict liability, for “invasion of Plaintiffs' property” by particulates, odors, air contaminants, and chemicals, which cause Plaintiffs to suffer property damage. 1 Compl. at ¶¶ 37-41. The putative class (the “Class”) is comprised of “at least” 1,500 individuals who own or inhabit residential property within a one mile radius 2 of Defendant's Generating Station, a coal-fired electrical generation facility in Springdale, Pennsylvania (the “Plant”), “who have suffered similar damages to their property by the invasion of particulates, chemicals, and gases from Defendant's facility which thereby caused damages to their real property.” Compl. at ¶¶ 8(b), 20, 28. 1 Plaintiffs do allege in the Complaint that Defendant's particulates and air contaminants invaded “Plaintiffs' person and property.” See, e.g., Compl. at ¶ 58. Defendant characterizes Plaintiffs' Complaint as one alleging both personal injury and property damage. Def.'s Br. (Doc. 45) at 1. Plaintiffs state in their Response that they are not alleging personal injury claims. Pl.'s Resp. at 5. 2 Defendant accurately notes that Plaintiff inconsistently states that Class members reside within a one-mile diameter, and one-mile radius, of the Plant. Compl. at ¶ 21. Plaintiffs clarify this error Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 3 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 in their Response, stating that they intend the geographic region to encompass a circle around the Plant with a one-mile radius. Pl.'s Resp. (Doc. 46) at 8. Clarification in a briefing alone does not cure a defect in the pleadings. Bell v. City of Philadelphia, 275 Fed. Appx. 157, 160 (3d Cir.2008) (stating that a plaintiff “may not amend his complaint through arguments in his brief in opposition to a motion for summary judgment”). If Plaintiffs seek leave to amend the Complaint, the Court expects that they will correct this error in order to address Defendant's charge that a class so inconsistently defined lacks the requisite “particularity.” See Def.'s Br. at 11-12. ANALYSIS Defendant requests that the Court strike Plaintiffs' class allegations from the Complaint, pursuant to Federal Rules of Civil Procedure 23(c)(1)(A) and 12(b). Def.'s Br. at 24. This action would deny Plaintiffs' class certification prior to completion of discovery and prior to Plaintiffs filing a Motion for Class Certification. Id. A. Legal Authority to Strike Class Allegations Pre- Discovery *2 As an initial matter, the authority to strike class allegations stems from Federal Rules of Civil Procedure 12(f), 23(c)(1)(A), and 23(d)(1)(D), not 23(c)(1)(A) in conjunction with 12(b) as stated by Defendant. See Gray v. BMW of North America, LLC, 22 F.Supp.3d 373 (D.N.J.2014) (citing Fed.R.Civ.P. 12(f) as authority for the District Court to strike class allegations); In re Paulsboro Derailment Cases, 2014 WL 1371712, *2 (D.N.J.2014) (“A motion to strike class allegations implicates Federal Rules of Civil Procedure 12(f) and 23(c)(1)(a).... A further procedural vehicle is provided by Federal Rule of Civil Procedure Rule 23(d) (1)(D), which provides that a ‘court may issue orders that ... require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly.’ ”); see also 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 3:4 (11th ed. 2014) (Noting that Federal Rule of Civil Procedure 23(d) (1)(D) “expressly authorizes a motion to strike class action allegations by authorizing the court to issue an order ‘requiring that the pleadings be amended to eliminate allegations about representation of absent persons....' “ Rule 12(f) permits a district court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter,” and Rule 23(c)(1)(A) directs the court to make the class certification determination “[a]t an early practicable time.” Fed.R.Civ.P. 12(f), 23(c)(1)(A). These Rules, together, provide authority for the Court to strike the class allegations from Plaintiffs' Complaint, if appropriate, even before Plaintiffs move for class certification. The Court of Appeals for the Third Circuit has acknowledged that there are a “rare few [cases] where the complaint itself demonstrates that the requirements for maintaining a class action cannot be met,” although, “[i]n most cases, some level of discovery is essential.” Landman & Funk PC v. Skinder-Strauss Assoc., 640 F.3d 72, 93, 93 at n. 30 (3d Cir.2011). Class allegations may be stricken only when no amount of discovery will demonstrate that the class can be maintained. Goode v. LexisNexis Risk & Info. Analytics Group, Inc., 284 F.R.D. 238, 244 (E.D.Pa.2012) (citing Thompson v. Merck & Co., Inc., 2004 WL 62710 (E.D.Pa.2004)); see also Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178, 182 (M.D.Pa.2008) (noting that a “district court will strike class allegations without permitting discovery or waiting for a certification motion where the complaint and any affidavits clearly demonstrate that the plaintiff cannot meet the requirements for a class action”). Plaintiffs argue that Defendant's Motion is untimely, as Defendant cites Federal Rule of Civil Procedure 12(b) as partial authority for its Motion, and the time for Motions to Dismiss has passed. Pl.'s Resp., 3-4. Plaintiffs are correct that Rule 12(b) is inappropriately cited as authority for Defendant's Motion. See supra. Thus it cannot be the case that said rule simultaneously time- bars the motion; the Federal Rules indeed give Defendant room to file such a motion, and the Court the power to rule upon it. Id . B. Legal Standard *3 Plaintiffs set forth the Rule 12(b)(6) standard as that which governs the Court's review of Defendant's Motion. Pl.'s Resp., 3. Courts are divided on the question of the appropriate standard of review for pre-discovery motions to strike class allegations, and the Third Circuit has not spoken on the issue. See, e.g., Bessette v. Avco Fin. Serv., Inc., 279 B.R. 442, (D.R.I.2002) (holding that in an evaluation of a motion to strike class allegations “the burden is not on the party seeking class certification [;] rather, as the non-moving party, all reasonable inferences must be construed in [its] favor”); Szabo v. Bridgeport Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 4 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 Mach., Inc., 249 F.3d 672, 675-76 (7th Cir.2001) (“The proposition that a district judge must accept all of the complaint's allegations when deciding whether to certify a class cannot be found in Rule 23 and has nothing to recommend it.... Before deciding whether to allow a case to proceed as a class action, therefore, a judge should make whatever factual and legal inquiries are necessary under Rule 23.”). The Court is persuaded by the reasoning of the Court of Appeals for the Seventh Circuit, as well as that of the vast majority of District Courts in this circuit, i.e., accelerating the class certification question does not alter the traditional Rule 23 burdens, and Plaintiffs must advance a “prima facie showing that the class action requirements of Fed.R.Civ.P. 23 are satisfied or that discovery is likely to produce substantiation of the class allegations.” Trunzo v. Citi Mortg., 2014 WL 1317577, *5 (W.D.Pa.2014) (internal citations omitted). Compare Id., and Szabo, 249 F.3d at 675-76, and Royal Mile Co., Inc., v. UPMC, --- F.Supp.2d ----, 2014 WL 4187129 (W.D.Pa.2014) (holding that “regardless whether the defendant files a motion to strike class allegations pursuant to Federal Rule of Civil Procedure 12(f) based upon insufficient class allegations in a complaint, or a plaintiff files a motion to certify a class pursuant to Rule 23 based upon a more fully developed record, the plaintiff has the burden to prove that the requirements set forth in Rule 23 are met, and the court must accordingly apply Rule 23”), with Luppino v. Mercedes-Benz USA, LLC, 2013 WL 6047556 (D.N.J.2013) (“When evaluating a motion to strike allegations of a complaint, the court must accept as true all factual allegations in the complaint and view all reasonable inferences in the light most favorable to Plaintiffs, just as on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).”), and In re Paulsboro Derailment Cases, 2014 WL 1371712, *2 (“[W]here a motion is brought in advance of the close of class discovery, it is properly the defendant who must bear the burden of proving that the class is not certifiable.”) (internal citations omitted). In this instance, the burden is on Plaintiffs to demonstrate that the requirements of Rule 23 are satisfied. C. Allegation of “Fail-Safe” Class Defendant attacks the definition of the class itself, alleging that Plaintiffs have impermissibly alleged a “fail-safe” class, defining “the members as including all, and only, those who satisfy the elements of the class' cause(s) of action.” Def.'s Br. at 9. To be certified, a class must satisfy four explicit requirements set forth in Federal Rule of Civil Procedure 23(a): 1) numerosity; 2) commonality; 3) typicality; and 4) adequacy of representation. In addition, courts have incorporated the “implicit” requirement that a class be “definite” or “ascertainable.” See Byrd v. Aaron's, Inc., 2014 WL 1316055, *3 n. 3 (citing Marcus v. BMW of N. America, 687 F.3d 583, 596 (3d Cir.2012)). “Before delving into the ‘rigorous analysis' required by Rule 23, a court first should consider whether a precisely defined class exists and whether the named plaintiffs are members of the proposed class.” Bentley v. Honeywell Int'l, Inc., 223 F.R.D. 471, 477 (S.D.Ohio 2004). In order for a class to be ascertainable, the class must be precisely defined “with reference to objective criteria” and “there must be a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.” Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir.2013) (quoting Marcus, 687 F.3d at 593). *4 When a class is fail-safe-i.e., it “requires the court to address the central issue of liability in the case,”-it is impermissibly vague and “may be untenable.” Jackson v. Se. PA Transp. Auth., 260 F.R.D. 168, 182 (E.D.Pa.2009); see also William H. Rubenstein, Newberg on Class Actions § 3:6 (5th ed.) (“Class definitions that require a court to decide the merits of prospective individual class members' claims to determine class membership -sometimes referred to as “fail-safe” classes-may also run afoul of the definiteness requirement.”). When a class definition involves an ultimate issue of liability, the court must conduct mini-hearings in order to determine who belongs within the class and who does not, rendering the process administratively infeasible and therefore unascertainable. See Kondratik v. Beneficial Consumer Disc. Co., 2006 WL 305399, *10 (E.D.Pa.2006) (“[B]ecause mini-hearings on the merits are required here to determine class membership, this class definition is untenable and cannot be certified.”); Hayes, 725 F.3d at 355. The Class in the instant matter is defined as follows: All unnamed Plaintiff potential Class Members are residents or homeowners who live or own real estate within one (1) mile of the Cheswick Facility who have suffered similar damages to their property by the invasion of particulates, chemicals, and gases Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 5 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 from Defendant's facility which thereby caused damages to their real property. Compl. at ¶ 28. The Court finds that the Class, as stated, is indeed “fail-safe.” In order to determine whether one is a member of the Class, the Court must inquire into whether: 1) the individual lives within one mile of the Plant; 2) he/she has suffered “similar damages” to their property; 3) those damages resulted from the “invasion” of their property by particulates, chemicals and gases; and 4) the particulates, chemicals and gases originated from Defendant's Plant. These determinations would most certainly require mini-hearings into the particular facts of each purported class member's situation in order to determine ultimate issues of liability-damage and causation. As such, the asserted “Class” is “fail- safe” and unascertainable and will be stricken from the Complaint. See Kondratik, 2006 WL 305399 at*10; Hayes, 725 F.3d at 355. Albeit in dicta, and post-discovery, the Western District of Kentucky made a similar finding after conducting a persuasive analysis: Plaintiffs' proposed class definition limits membership to those “whose property was damaged by noxious odors, fallout, pollutants and contaminants which originated from the LG & E Cane Run facility.” This definition seems to make the ultimate issue in the case (property damage at the hands of LG & E) a component of the class definition, thereby front- loading the individualized damage determinations which ordinarily would be reserved until later in the proceedings. To properly define the class as Plaintiffs propose it, the Court would be required to determine on a person-by-person basis whether property damage had occurred and whether LG & E was responsible, which would seem to completely subsume the merits phase of the case into the class certification phase. This approach has little to recommend it, and runs contrary to the admonition that a class definition “should avoid ... terms that depend on resolution of the merits.” *5 Burkhead v. Louisville Gas & Elec. Co., 250 F.R.D. 287, 293-94 (W.D.Ky.2008) (emphasis in original) (quoting Manual for Complex Litigation (Fourth) § 21.222 (2004)). Plaintiffs' Class similarly “front-loads” the instant proceedings, requiring that the Court reach the merits of the case at the class certification stage, contrary to law and policy. In addition, a benchmark of having suffered “similar damages” is independently problematic: A “similarity” restriction presents its own problems, because a determination of similarity would not be based on objective criteria, as Marcus and other recent precedents demand, but on subjective degrees of likeness. Determining the degree of similarity likewise would require a[n individual] analysis of each [proposed class member's situation], making the class not readily ascertainable. Lipstein v. UnitedHealth Group, 296 F.R.D. 279, 291 (D.N.J.2013). The incorporation of a standard that turns on subjective criteria is administratively infeasible and additionally renders the Class un-certifiable. Not only is the “similarity criteria” subjective, but it further impedes into the area of ultimate issue determination, as the “damages” alleged by Plaintiffs are, inter alia, the result of the very nuisance and trespass that they allege. Compl.; see also Def.'s Br. at 12. If Plaintiffs were to move forward with the “Class” as constructed, the Court would be forced to first determine the ultimate issue of damages suffered by Plaintiffs, and then compare all potential class members to that subjective standard. Such a class is not ascertainable or workable. For the reasons set forth supra the Court will grant Defendant's Motion to Strike Class Allegations from the Complaint. As the Court has determined that the asserted Class, as currently styled, is “fail-safe,” there is no need to reach the merits of Defendant's additional arguments in favor of striking the class allegations. D. Plaintiffs' Shifting Class Definition It is noted by the Court that Plaintiffs respond to Defendant's arguments largely by redefining the putative class. The Court presumes that this redefinition reflects, in part, Plaintiffs' recognition that the Class as constructed in the Complaint in fact suffers from some or all of the defects alleged by Defendant. Contrary to the Complaint, Plaintiffs' Response states that “all owner-occupants and renters of residential property in the class area, preliminarily 3 defined as the area within one mile of the Cheswick facility, have in fact suffered similar property Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 6 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 damage. Membership in the class, like any appropriate class, will be ascertained by reference to objective criteria, here geographic criteria, and nothing else.” Pl.'s Resp. at 8 (emphasis in original). Plaintiffs' description of the Class in their Response clearly is inconsistent with that of the Complaint. It appears that Plaintiffs are attempting to account for Defendant's arguments by amending the Complaint in their briefing; this is impermissible. Cf. Bell v. City of Philadelphia, 275 Fed. Appx. 157, 160 (3d Cir.2008) (stating that a plaintiff “may not amend his complaint through arguments in his brief in opposition to a motion for summary judgment”). 3 As a point of correction, nothing about a class definition as stated in a complaint may be “preliminary.” Plaintiffs must carefully select the class construction they so choose, and litigate their claim accordingly. *6 Under Rule 15, the Court should “freely” grant Plaintiffs leave to amend the complaint, unless leave to amend would be futile. Fed.R.Civ.P. 15; see also Royal Mile Co., Inc., v. UPMC, 2014 WL 4187129, *20 (acknowledging the Court's ability to grant leave to amend the complaint in the context of a motion to strike class allegations). If Plaintiffs amend the Complaint in accordance with their Response and in light of Defendant's arguments-proposing a Class that is defined solely by objective, geographic criteria, as they state- such an amendment may not be futile. While the Court does not render any opinion with respect to whether or not the proposed amended class would ultimately merit certification, the amendment would directly respond to Defendant's concerns regarding their current class definition. An amendment to Plaintiffs' class, as contemplated in their Response, could cure Defendant's concerns regarding the “fail-safe” nature of the current Class. A class defined by a clear, objective criteria-geographic terms, in this instance-would not necessitate mini- hearings or require the Court to delve into the merits of the case at the class certification stage. A class so defined could not be said to be unascertainable, or untenable such that no amount of discovery could support it. Goode, 284 F.R.D. at 244; see also Woodard, 250 F.R.D. at 182. Thus, an amendment would not be futile with respect to Defendant's fail-safe arguments. See Fed.R.Civ.P. 15. Defendant further argues that Plaintiffs' Class is insufficiently particular. Def.'s Br. at 11. This argument turns on the inconsistency within the Complaint regarding Plaintiffs' simultaneous reference to a geographic area surrounding the Plant with a one-mile diameter, and a one-mile radius. Id. As Plaintiffs clarify in their Response that they intended to define the geographic scope of the allegedly affected area as having a one-mile radius, not diameter, from the Plant outward, an amendment to the Complaint would not be futile with respect to this argument either. See supra at n. 2. Lastly, Defendant posits that the Class as currently constructed elevates individualized issues over common claims. Def.'s Br. at 12-24. The gravamen of this argument turns on Class's reference to the putative class members' suffering similar damages to that of the Plaintiffs-i.e., loss of use of enjoyment of their properties, diminution in property value, and “mental anguish, suffering, embarrassment, humiliation, distress, agony and other related nervous conditions and emotional sequelae”-as a result of proximity to Defendant's Plant. Compl. ¶¶ 44-74. An amendment to the Class as framed by Plaintiffs, which would omit the reference to damages and turn solely on the objective criteria of geographic proximity to the Plant, would further cure this alleged defect. These amendments would result in Plaintiffs' heavy burden at the post- discovery class certification stage of these proceedings, to be sure. See, e.g., Burkhead, 250 F.R.D. at 292 (“Plaintiffs have presented no evidence from which the Court could infer that similar circumstances, whether ultimately attributable to [Defendant] or not, exist throughout the proposed two mile radius of [Defendant's] facility class area. Though Plaintiffs repeatedly describe the proposed class definition as ‘objectively reasonable,’ they offer no evidence whatsoever that the airborne contaminants might have spread in all directions from [Defendant's] facility for a distance of up to two miles.”); Boggs v. Divested Atomic Corp., 141 F.R.D. 58, 61-62 (S.D.Ohio 1991) (“[t]he fact that radioactive materials have escaped the confines of the plant, is, by itself, not sufficient to justify defining the class to include everyone who lives or owns property within six miles of the plant's boundaries. Although the class definition is subject to refinement ... there should be some evidence at this stage of the case that plaintiffs' definition is reasonable. This requires an examination of the plaintiffs' evidence of the dispersion of hazardous emissions.”). Nonetheless, amendment could cure the defects alleged at this early Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 7 of 56 Bell v. Cheswick Generating Station, Genon Power..., Not Reported in... 2015 WL 401443 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 stage of the proceedings, considering the legal standard. Goode, 284 F.R.D. at 244; see also Woodard, 250 F.R.D. at 182. CONCLUSION *7 In light of Defendant's arguments regarding “fail- safe” classes, and Plaintiffs' failure to defend the Class as currently articulated in response to those arguments, the Court will grant Defendant's Motion to Strike the Class Allegations-as stated-from the Complaint. Fed.R.Civ.P. 12(f), 23(c)(1)(A), 23(d)(1)(D). The Court is cognizant that an “order granting a motion to strike class allegations is tantamount to a denial of class certification after a motion to certify.” Royal Mile Co., Inc., v. UPMC, 2014 WL 4187129 at *20 (internal citations omitted). This action, however, will be without prejudice to Plaintiffs' amending the class allegations in their Complaint. 4 Fed.R.Civ.P. 15; see Zeiger v. Advance America, 2014 WL 7388365, *7 (D.Del.2014) (granting Motion to Strike Class Allegations and granting leave to amend the class allegations in the complaint). To the extent that Plaintiffs can cure the deficiencies in the Complaint, they have until February 5, 2015, to do so. 4 Absent unforeseen and extraordinary circumstances, no further amendments will be permitted. Although, generally, leave to amend freely is given, this rule cannot be read so broadly as to allow or require the Court and opposing parties to entertain endless requests for amendment. The purpose of Federal Rule 15 is not “to make the complaint ‘a moving target,’ “ Minter v. Prime Equip. Co., 451 F.3d 1196, 1206 (10th Cir.2006), and any further requests for amendment most likely will raise significant issues regarding undue delay and prejudice in this nearly three-year-old case. Accordingly, if Plaintiffs choose to seek leave to amend the class allegations in the Complaint, their second amended complaint must make a last, best effort to state any and all allegations and viable claims that Plaintiffs intend to pursue in this lawsuit. II. ORDER For the reasons stated above, Defendant's Motion to Strike Class Allegations (Doc.44) is GRANTED. IT IS HEREBY ORDERED that the Complaint's prayer for certification of a Plaintiff Class is STRICKEN without prejudice to a future motion by Plaintiffs for leave to amend the Complaint. If Plaintiffs intend to amend the Complaint, a Motion for Leave to Amend the Complaint with an attached proposed Amended Complaint shall be filed on or before February 5, 2015. IT IS SO ORDERED. All Citations Not Reported in F.Supp.3d, 2015 WL 401443 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 8 of 56 B Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 9 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2006 WL 859431 Only the Westlaw citation is currently available. United States District Court, E.D. Pennsylvania. BOROUGH OF LANSDALE, Borough of Blakely, Borough of Catawissa, Borough of Duncannon, Borough of Hatfield, Borough of Kutztown, Borough of Lehighton, Borough of Mifflinburg, Borough of Olyphant, Borough of Quakertown, Borough of Schuylkill Haven, Borough of St. Clair, Borough of Watsontown, Borough of Weatherly, Pennsylvania Plaintiffs, v. PP & L, INC., PPL Electric Utilities Corp., PPL Energy Plus, L.L.C., and PPL Generation, L.L.C., Defendants. No. Civ.A. 02-8012. | March 31, 2006. Attorneys and Law Firms C.J. Mustacchio, Scranton, PA, John F. Woods, Wheatley & Ranquist PA, Annapolis, MD, Jonathan B. Young, Dischell Bartle Yanoff & Dooley, Lansdale, PA, for Plaintiffs. Charles F. Wheatley, Jr., Wheatley & Ranquist PA, Annapolis, MD. Christopher D. Oatway, David L. Meyer, Edward H. Rippey, James R. Atwood, Covington & Burling Washington, DC, John G. Harkins, Jr., Karin E. Davis, Steven A. Reed, Harkins Cunningham, Philadelphia, PA, for Defendants. MEMORANDUM YOHN, J. *1 The Boroughs of Lansdale, Blakely, Catawissa, Duncannon, Hatfield, Kutztown, Lehighton, Mifflinburg, Olyphant, Quakertown, Schuylkill Haven, St. Clair, Watsontown, and Weatherly, Pennsylvania (“the Boroughs”) bring this action against PP & L, Inc., PPL Electric Utilities Corp., PPL Energy Plus, L.L.C., and PPL Generation, L.L.C. (collectively, “PPL”) alleging various antitrust violations and asserting claims for breach of contracts approved by the Federal Energy Regulatory Commission (“FERC”). Compl. ¶¶ 13-19, 20-22. Defendants asserted counterclaims for breach of contract as to all plaintiffs, Counterclaims ¶¶ 19-24, and tortious interference with existing and ongoing contractual relations as to Olyphant, 1 Counterclaims ¶¶ 25-36. Currently pending before the court is defendants' motion for partial summary judgment on their breach of contract counterclaims as to each plaintiff, except the Borough of Olyphant. 2 For the reasons set forth below, defendants' motion for summary judgment will be granted. 1 These same counterclaims were asserted by PPL against the Borough of Olyphant, as an individual plaintiff, in Borough of Olyphant v. PP & L Inc., et al, Civ. No. 03-4023, 2004 U.S. Dist. LEXIS 16684, at *1 (E.D.Pa. Aug. 19, 2004). This court granted defendants' motion for summary judgment dismissing Olyphant's breach of contract claims and antitrust claims. Borough of Olyphant v. PP & L Inc., et al, Civ. No. 03-4023, 2004 U.S. Dist. LEXIS 8958, at *1 (E.D.Pa. May 14, 2004). Defendants' motion for summary judgment on their counterclaims against Olyphant was granted as to the breach of contract claim, but denied as to their claim of tortious interference. Borough of Olyphant, 2004 U.S. Dist. LEXIS 16684 at *2 (Aug. 19, 2004). On September 27, 2005, the Third Circuit affirmed this court's decision as to both motions for summary judgment in Borough of Olyphant. See Borough of Olyphant v. PPL Corp., 153 Fed. Appx. 80, 82 (3d Cir.2005) (“We have carefully considered Olyphant's arguments on this appeal and find that they lack merit. For the reasons stated in the District Court's well-reasoned and thorough opinion, we find that summary judgment was properly granted.”) 2 Pursuant to Fed. R. Civ. Pro. 41(a)(1) and (c) and as part of a settlement agreement reached by defendants and plaintiff, the Borough of Olyphant, PPL's breach of contract counterclaim againt Olyphant was dismissed. See “Stipulated Dismissal of Count I of Defendants' Counterclaims Against Olyphant and Counts II and III,” Oct. 20, 2004 (Dkt. no. 51). PPL's other counterclaims in this litigation (Counts II and III) for tortious interference were alleged only against Olyphant and these claims were also dismissed by agreement. Id. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 10 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 BACKGROUND The facts of this case have been set forth at length in the court's order granting in part and denying in part defendants' motion for summary judgment on plaintiffs' claims, which will be filed shortly and in Borough of Olyphant v. PP & L Inc., et al, Civ. No. 03-4023, 2004 U.S. Dist. LEXIS 16684, at *1 (E.D.Pa. Aug. 19, 2004). Only those undisputed facts pertinent to the resolution of this motion for summary judgment on defendants' counterclaims will be reiterated here. The Boroughs are municipal corporations organized and existing under the laws of the Commonwealth of Pennsylvania. PPL Corporation is an energy and utility holding company of: (1) PPL Electric Utilities Corporation, a subsidiary that provides electric delivery service in Pennsylvania; (2) PPL Energy Plus, L.L.C., a subsidiary that markets wholesale electricity and acts as an EGS in Pennsylvania; and (3) PPL Generation L.L.C., a subsidiary that owns and operates generating facilities. In December 1998, PP & L, Inc. Entered into separate power supply agreements with the plaintiffs in this case (“Power Supply Agreements”). Each borough's individual Power Supply Agreement incorporates a settlement agreement, dated January 29, 1998, (“Settlement Agreement”) pursuant to which the Boroughs settled longstanding litigation with PP & L, Inc. that had been pending before FERC. Def. Exh. 2. As the result of a corporate realignment on July 1, 2000, PPL Electric Utilities Corporation assumed the rights and obligations of PP & L, Inc. under each of the Power Supply Agreements. Section 9 of the Power Supply Agreements provides a dispute resolution provision, which reads: In the event of a dispute between the Parties arising under this Agreement, the Parties will work together in good faith to resolve the dispute. If the Parties are unable to resolve such dispute between themselves within five days after written notification by one Party to the other of the existence of such dispute, they shall immediately refer such matter to their internal upper management for resolution. If the management of the Parties is unable to resolve the dispute within ten days after the matter is brought to that level for review[,] either Party may bring a claim or suit in accordance with applicable law. *2 Def. Exh. 2. In 2001, a dispute arose between the Borough of Olyphant and PPL regarding the furnishing of retail energy to customers in the Mid-Valley Industrial Park, which is located almost entirely within the borders of Olyphant. At the time, PPL sold electricity directly to many Park customers and Olyphant sought to be the electricity provider for all Park customers. After a series of letters and attempts to work out an agreement, the Borough of Olyphant filed suit against PPL on December 5, 2001 in the United States District Court for the Middle District of Pennsylvania, asserting antitrust violations and breach of contract claims. On February 25, 2001, PPL filed its answer, including defenses and counterclaims. On October 17, 2002, PPL filed a petition for a declaratory order with the Pennsylvania Public Utility Commission (“PUC”) seeking an order that Pennsylvania law allowed PPL to impose retail stranded costs on retail customers, even if such customers in the future received service from Olyphant instead of PPL. On October 18, 2002, PPL filed a petition for a declaratory order with FERC, seeking a determination that the Settlement Agreement did not preclude PPL from charging retail customers for stranded costs. The Boroughs of Lansdale, Blakely, Catawissa, Duncannon, Hatfield, Kutztown, Lehighton, Mifflinburg, Olyphant, Quakertown, Schuylkill Haven, St. Clair, Watsontown, and Weatherly, filed this lawsuit on October 22, 2002 against PPL alleging almost identical claims of antitrust violations and breach of contract as asserted by the Borough of Olyphant in it's individual lawsuit. 3 3 This court denied a motion made by Olyphant, and the boroughs who are parties to this action, including Olyphant, to consolidate the two cases because discovery in the Olyphant case had been closed for nearly a year, while fact discovery in this action had just begun. See “Order Denying Plaintiffs' Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 11 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 Joint Motion to Consolidate,” Borough of Lansdale v. PP & L, Inc., Civ. No. 02-8012, Dkt. # 22 (E.D. Pa., filed Nov. 10, 2003). STANDARD OF REVIEW Either party to a lawsuit may file a motion for summary judgment, and the court will grant it “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” FED. R. CIV. P. 56(c). “Facts that could alter the outcome are ‘material,’ and disputes are ‘genuine’ if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct.” Ideal Dairy Farms, Inc. v. John Lebatt, LTD., 90 F.3d 737, 743 (3d Cir.1996) (citation omitted). When a court evaluates a motion for summary judgment, “[t]he evidence of the non- movant is to be believed,” Anderson v. Liberty Lobby, Inc. ., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and “all justifiable inferences are to be drawn in [the non-movant's] favor.” Id. Additionally, “[s]ummary judgment may not be granted ... if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed.” Ideal Dairy, 90 F.3d at 744 (citation omitted). However, “an inference based upon a speculation or conjecture does not create a material factual dispute sufficient to defeat entry of summary judgment.” Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir.1990). *3 To defeat summary judgment, the non-moving party cannot rest on the pleadings, but rather that party must go beyond the pleadings and present “specific facts showing that there is a genuine issue for trial.” FED. R. CIV. P. 56(e). Similarly, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989) (citing Celotex v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Once the moving party has met the initial burden of demonstrating the absence of a genuine issue of material fact, the non- moving party must establish the existence of each element of its case. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir.1990) (citing Celotex, 477 U.S. at 323). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.” ’ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted). DISCUSSION Defendants claim the Boroughs breached the dispute resolution provision of the Power Supply Agreement between the parties. Def. Exh. 2 at 10, Sec. 9. More specifically, PPL alleges that the Boroughs never made a formal “written notification” to PPL identifying the existence of a dispute prior to filing this lawsuit. Consequently, the matters at issue were never referred to PPL's upper management, and, hence, the parties' upper management did not work together in an attempt to resolve the dispute. Def. Br. 1. To state a claim for breach of contract, defendants must show that (1) a contract existed; (2) there was a breach of a duty imposed by the contract; and (3) damages resulting from the breach. Cooper v. Broadspire Servs., Inc., 2005 U.S. Dist. LEXIS 14752, at *6 (E.D.Pa. Jul. 20, 2005). PPL's Memorandum presents evidence satisfying each element of a breach of contract claim. The parties do not contest that the Power Supply Agreements, signed by PPL and the Boroughs, are binding contracts. To prove there was a breach of the dispute resolution clause, defendants provide the affidavit of PPL's Manager of Pricing and Contract Administration, Oliver G. Kasper, where he attests that no plaintiff in this lawsuit sent written notification to PPL about the existence of a dispute before filing the complaint. Def. Exh. 1, ¶ 6. Additionally, defendants provide the depositions of each borough's designated representative. The representatives either explicitly testified that no written notification was given 4 to PPL or that they do not know of any such written notification. Def. Exh. 3. Defendants' assert they were damaged by the breach by incurring attorneys' fees and costs in defending this action that could have been avoided if the boroughs had complied with Section 9 because if the boroughs had engaged in good faith negotiations before suing PPL, some of the boroughs' claims could have been narrowed, saving time and expense in discovery. Answer, p. 15; Def. Reply, p. 5. 4 The representatives of the Boroughs of Catawissa, Hatfield, Lansdale, Leighton, Quakertown, St. Clair, Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 12 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 Watsontown, and Weatherly, explicitly testified that no written notification was given. See Def. Exh. 3 (Deposition of Catawissa, p. 135; Deposition of Hatfield, p. 65; Deposition of Lansdale, p. 173; Deposition of Lehighton, p. 97; Deposition of Quakertown, p. 56; Deposition of St. Clair, p. 54; Deposition of Watsontown, p. 62; Deposition of Weatherly, p. 67) *4 The Boroughs' response addresses one issue: whether they breached the dispute resolution clause. They first argue that there was no breach of contract as to the Borough of Olyphant because Olyphant fully complied with the dispute resolution clause, or if Olyphant didn't fully comply, PPL had actual notice of the dispute which substituted for written notification. Pl. Br. 2-7. However, as the defendants correctly point out, PPL does not have a counterclaim pending against Olyphant for breach of Section 9 because this counterclaim was voluntarily dismissed by stipulation of both parties pursuant to a settlement agreement. See “Stipulated Dismissal of Count I of Defendants' Counterclaims Against Olyphant and Counts II and III,” Oct. 20, 2004 (Dkt. no. 51). Defendants' pending motion for summary judgment on their counterclaims is against all plaintiffs except Olyphant. Def. Br. 1. Additionally, this court already decided in Borough of Olyphant v. PP & L, Inc., that Olyphant did not comply with the dispute resolution clause prior to filing suit and the Third Circuit affirmed this court's decision. See 2004 U.S. Dist. LEXIS 16684, at *21-27, aff'd 153 Fed. Appx. 80, 82 (3d Cir.2005). As to the other thirteen boroughs, plaintiffs provide no evidence that any of these boroughs gave written notification of the existence of a dispute over the terms of the Power Supply Agreement. Plaintiffs provide no evidence of any form of communication between these boroughs and PPL regarding a dispute. Instead, plaintiffs respond by claiming that even if there was a breach, the thirteen boroughs are excused from complying with the dispute resolution clause because it was futile or meaningless for these boroughs to comply prior to filing suit on October 22, 2002, or because PPL waived any right to compliance. Pl. Br. 7-10. Plaintiffs claim they were aware of the history of negotiations between PPL and Olyphant, the pending lawsuit filed by Olyphant against PPL alleging antitrust violations and breach of contract claims, PPL's defenses and counterclaims in the Olyphant lawsuit, and the pending petitions for declaratory orders before the PUC and FERC regarding stranded cost obligations. Pl. Br. 9. Plaintiffs believe that “by rejecting Olyphant's efforts to resolve disputes and repeatedly demonstrating the intransigency of its position on stranded costs and “firm” power, PPL waived any right it had to insist on compliance with the dispute resolution clause and gave the remaining plaintiffs ample reason justifiably to conclude that any attempt to invoke that clause in their contracts with PPL would be utterly futile.” Pl. Br. 1-2. Plaintiffs rely on Irving Trust Co. v. Nationwide Leisure Corp., 95 F.R.D. 51, 74 (S.D.N.Y.1982) to support their futility argument. In Irving Trust Co., the court was concerned with certifying a class action and discussed applying a sixty-day notice period to class participants, even though this notice period was not part of the contract between the plaintiffs, tour participants, and defendant, the tour operator; the sixty-day notice period was part of a surety contract between the tour operator and its insurer. Id . at 67. In dicta, the court discussed the application of the notice provision as part of a recommendation on how to determine what sort of notice would satisfy the sixty-day period in case “for some reason it does become necessary to do so in the interest of quickly resolving all issues relative to class certification.” Id . at 74. The court stated: *5 to the extent that the notice provision is a condition precedent to some claims, compliance could be excused if, under the circumstances, compliance would be meaningless, add nothing or be a gesture in futility. See, e.g., Restatement of Contracts, Second § 255.... Nationwide's rejection of one type of claim as to one tour participant might have to be viewed as a waiver of notice of the same type of claims from other tour participants. Id. In concluding that a notice provision may be excused if compliance would be meaningless, the court in Irving Trust Co. relied upon Restatement (Second) of Contracts § 255 (1979), which states, “where a party's repudiation contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.” 5 Thus, for the thirteen boroughs' failure to comply with the dispute resolution provision to be excused, PPL must have repudiated the contract and Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 13 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 this repudiation must have materially contributed to the boroughs' failure to comply with Section 9. 5 The Restatement defines repudiation as: (a) a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under § 243, or (b) a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach. Restatement (Second) of Contracts § 250 (1979). Section 243 discusses when the effect of a breach by non-performance gives rise to a claim for damages for total breach of contract.. Id. at § 243. In Pennsylvania, for there to be a repudiation of a contract there must be an absolute and unequivocal refusal to perform or a distinct and positive statement of an inability to do so. McCloskey & Co. v. Minweld Steel Co., 220 F.2d 101 (3d Cir.1955). A statement by a party that he will not or cannot perform in accordance with the contract will suffice; a “[m]ere expression of doubt as to his willingness or ability to perform is not enough to constitute a repudiation.” Oak Ridge Constr. Co. v. Tolley, 351 Pa.Super. 32, 38, 504 A.2d 1343 (Pa.Super.Ct.1985). Here there is no indication that PPL repudiated the Power Supply Agreements. Plaintiffs provide no evidence that PPL unequivocally refused to negotiate with the thirteen other boroughs or that PPL stated that it was unable to do so. Though the fact that litigation ensued after negotiations between PPL and Olyphant did not resolve that dispute (e.g. PPL didn't agree to put in a second transmission line based on Olyphant's “firm power” argument) might raise a doubt as to PPL's willingness to negotiate with the other thirteen plaintiffs, such actions do not rise to the definiteness necessary to constitute repudiation. Plaintiffs fails to show that PPL did not intend to negotiate with the other thirteen boroughs. Thus, there is no indication that PPL was repudiating the Power Supply Agreement so that the plaintiffs were excused from providing written notice prior to bringing this lawsuit. Other cases cited by the Boroughs do not support their futility argument. In the present case plaintiffs furnish no evidence that the thirteen boroughs gave any notice to PPL regarding the contract dispute prior to filing suit. However, the courts in the cases cited found that strict compliance with a notice provision was futile only where the plaintiff substantially complied with the contractual notice provisions by giving some form of actual notice to the defendants, the defendants were given an opportunity to remedy the dispute, and yet the defendants made it clear they would not do so. See Mills v. Pennsylvania Mut. Live Stock Ins. Co., 57 Pa.Super. 483, 490 (Pa.Super.Ct.1914) (plaintiff's failure to provide written notice was waived because plaintiff gave actual notice over the phone and defendants acted on this notice by directing a surgeon to do a post mortem and informing plaintiff that they denied liability); see also Midwest Payment Systems, Inc. v. Citibank Federal Sav. Bank, 801 F.Supp. 9, 11 (D.Ohio 1992) (plaintiff's failure to provide thirty-days written notice was waived where plaintiff gave eight-days written notice and no opportunity to cure was necessary because defendant had repudiated the contract), Irving Trust Co. v. Nationwide Leisure Corp., 95 F.R.D. 51, 71 (S.D.N.Y.1982) (class members failure to give written notice within sixty-days was not necessary where they gave actual notice via a signed petition directly to defendant's representative and where four class members' travel agents wrote a letter to defendant about the dispute that named these class members). *6 The essential purpose of a notice provision can be given effect so long as the party to be protected by the provision “received actual notice and was given an opportunity to cure.” Government Guar. Fund of Fin. v. Hyatt Corp., 960 F.Supp. 931, 940 (D.Vi.1997). However, plaintiffs provide no evidence that PPL had actual notice that the thirteen boroughs disputed the retail stranded costs and firm power provisions of the Power Supply Agreements. There is no indication that these boroughs gave oral notice to PPL of the contract disputes that form the basis for this suit or that PPL was even aware of any dispute with these thirteen boroughs prior to their filing of this lawsuit. Here, any actual notice of a dispute over firm power or retail stranded costs was given by the Borough of Olyphant; PPL remained unaware that the other thirteen boroughs planned on joining in the dispute. Plaintiffs fail to show how compliance with the dispute resolution clause would have been futile. Plaintiffs argue that “any efforts on the part of [a] member of the [Borough] Group, who included all of the boroughs who [sic] became plaintiffs in the instant action, would have been futile, in part because Olyphant had already complied with the disputes-resolution clause-identical to Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 14 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 the one in each of the other boroughs' supply contracts- to no avail, and in part because PPL could not take a position at odds with the one to which it had committed in federal district court, before FERC and before PUC.” Pl. Br. 9 First, Olyphant did not comply with the dispute resolution clause. See Olyphant, 2004 U.S. Dist. LEXIS 16684, at *21-27, aff'd 153 Fed. Appx. 80, 82 (3d Cir.2005). But even if Olyphant had complied with the dispute resolution provision, this does not make compliance with the dispute resolution clause on the part of the thirteen other boroughs' futile or meaningless. Though plaintiffs provide evidence showing that PPL was aware Olyphant disputed some of the terms in the Power Supply Agreement, this does not mean that PPL knew that the other boroughs also disputed these terms, prior to their filing suit on October 22, 2002. Thus, written notice would have informed PPL that the dispute with Olyphant extended to the other boroughs. Written notice would have given PPL an opportunity to negotiate the firm power and stranded cost disputes with each borough and attempt a resolution. Though PPL's negotiations with Olyphant were not fruitful, this does not mean that dispute negotiations with the thirteen boroughs would not have led to an agreement or at least a narrowing of the claims brought in this suit. Plaintiffs do not fully explain why they believe PPL could not take a position in negotiations with the thirteen boroughs that differed from the one it took in federal district court in Olyphant or the agency proceedings and cite no case law for support. If informed of the dispute with these boroughs prior to their filing suit, PPL could very well have decided that it was in its best interest to work out the dispute rather than risk a second lawsuit. *7 Additionally, under the circumstances of this case, PPL's ongoing dispute with Olyphant does not constitute a waiver of notice as to the claims brought by the other boroughs. In Pennsylvania, for the written notice requirement in a contract to be impliedly waived “there must be a clear, unequivocal and decisive act of the party with knowledge of such right and an evident purpose to surrender it.” Brown v. City of Pittsburgh, 409 Pa. 357, 186 A.2d 399, 401 (Pa.1962), See also Goodwin v. Hartford Life Ins. Co., 491 F.2d 332, 333, n .1 (3d Cir.1974). “In the absence of an express agreement a waiver will not be presumed or implied contrary to the intention of the party whose rights would be injuriously affected thereby, unless by his conduct the opposite party has been misled, to his prejudice, into the honest belief that such waiver was intended or consented to .” Brown, 186 A.2d at 401 (emphasis added). Plaintiffs provide no evidence that PPL became aware, prior to the filing of this lawsuit, that the thirteen boroughs each had a dispute under the Power Supply Agreement, so that PPL should be estopped from requiring compliance with the written notice requirement. Moreover, plaintiffs have failed to provide any evidence that PPL acted in a clear or unequivocal manner which showed an intent to relieve the thirteen boroughs from their duty to comply with the dispute resolution provision. Plaintiffs claim they were aware of the Olyphant litigation and knew PPL had filed counterclaims against Olyphant on February 25, 2002, thus they believed it was futile to comply with Section 9 prior to instituting their lawsuit on October 22, 2002. Pl. Br. 7-9. If plaintiffs were aware of these counterclaims, then they knew that one of the counterclaims against Olyphant was for failure to comply with the dispute resolution clause. Counterclaims ¶¶ 30-35, Olyphant v. PP & L, et al, Civ. No. 01-02308, Dkt. # 9 (M.D. Pa., filed Feb. 25, 2002). Thus, the thirteen boroughs were aware that PPL brought a claim against one of their group for failure to comply with the dispute resolution clause and they can not now argue that they were misled into thinking written notice was waived. In sum, the Boroughs have failed to show that there is a genuine issue of material fact regarding whether or not they breached the dispute resolution provision of the power supply agreement. The Boroughs' legal arguments to excuse their non-compliance with the dispute resolution clause are unavailing and plaintiffs have failed to provide any evidence that they did comply with the dispute resolution clause. Therefore, defendants are entitled to summary judgment on their breach of contract counterclaim. CONCLUSION Defendants' motion for summary judgment on its counterclaim for breach of contract will be granted as to the Boroughs of Blakely, Catawissa, Duncannon, Hatfield, Kutztown, Lansdale, Lehighton, Mifflinburg, Quakertown, Schuylkill Haven, St. Clair, Watsontown, and Weatherly, as there is no genuine issue of material fact Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 15 of 56 Borough of Lansdale, Pennsylvania v. PP & L, Inc., Not Reported in F.Supp.2d (2006) 2006 WL 859431 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 and it is clear that judgment is warranted as a matter of law. An appropriate order follows. ORDER *8 And now, this _____ day of March, 2006, upon consideration of the motion for summary judgment of defendants PP & L, Inc., PPL Electric Utilities Corp., PPL Energy Plus L.L.C. and PPL Generation, L.L.C. (Doc. # 77), the accompanying memoranda of law, and statements of facts, the plaintiffs' responses in opposition thereto, plaintiffs' accompanying statements of facts, and defendants' reply memoranda in further support of their motions for summary judgment, it is hereby ORDERED that the defendants' motion is GRANTED. Judgment is ENTERED in favor of PP & L, Inc., PPL Corporation, PPL Electric Utilities Corporation and PPL Generation, L.L.C. and against the Boroughs of Blakely, Catawissa, Duncannon, Hatfield, Kutztown, Lansdale, Lehighton, Mifflinburg, Quakertown, Schuylkill Haven, St. Clair, Watsontown, and Weatherly, Pennsylvania, as to liability on the breach of contract counterclaim. All Citations Not Reported in F.Supp.2d, 2006 WL 859431 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 16 of 56 C Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 17 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2014 WL 2993774 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. MERRILL IRON & STEEL, INC., Plaintiff, v. BLAINE CONSTRUCTION CORPORATION, Zurich American Insurance Company and its Subsidiary Fidelity & Deposit Company of Maryland, Travelers Casualty and Surety Company of America, Allegheny Ludlum Corporation, on its own behalf and as merged into ALC Merger, LLC, n/k/a Allegheny Ludlum, LLC a/k/a ATI Allegheny Ludlum, HOH Engineers, Inc., and Century Steel Erectors Company, Defendants. and Blaine Construction Corporation, Counterclaimant and Cross Claimant, v. Merrill Iron & Steel, Inc., Allegheny Ludlum Steel Corporation, on its own behalf and as merged into ALC Merger, LLC, n/k/a Allegheny Ludlum, LLC a/k/a ATI Allegheny Ludlum, HOH Engineers, Inc., and Century Steel Erectors Company, Defendants by Counterclaim and Crossclaim, and Liberty Mutual Insurance Company, and Great American Insurance Company, Additional Defendants by Counterclaim and Crossclaim. Civil Action No. 14-221. | Signed July 2, 2014. Attorneys and Law Firms O. Scott Barber, Zachary D. Jones, Angela R. Stephens, Stites & Harbison, PLLC, Louisville, KY, Patrick S. Casey, Casey & Chapman, PLLC, Wheeling, WV, for Plaintiff. Donald M. Lund, Ryan O. Hemminger, Leech Tishman Fuscaldo & Lampl, LLC, George B. Foster, Samantha L. Brutout, Dingess Foster Luciana Davidson & Chleboski LLP, Joseph H. Bucci, Ericson P. Kimbel, Michael J. Joyce, Saul Ewing, LLP, Pittsburgh, PA, Gina M. Vitiello, Seth Price, Chamberlain Hrdlicka White Williams & Aughtry, Atlanta, GA, Angela R. Stephens, O. Scott Barber, Zachary D. Jones, Stites & Harbison, PLLC, Louisville, KY, Patrick S. Casey, Casey & Chapman, PLLC, Wheeling, WV, for Defendants/ Counterclaimant and Cross Claimant. MEMORANDUM OPINION ROBERT C. MITCHELL, United States Magistrate Judge. I. INTRODUCTION *1 Presently before the Court are three separate motions to dismiss for failure to state a claim and for lack of jurisdiction filed by Defendant Century Steel Erectors Company, Defendant HOH Engineers, Inc., and Defendant Allegheny Ludlum Steel Corporation. See Defs.' Mot. to Dismiss [ECF Nos. 33, 38, and 40]. For the following reasons, Defendants Century Steel Erectors Company and Allegheny Ludlum Steel Corporation's motions are granted and Defendant HOH Engineers, Inc.'s motion is granted in part and denied in part. 1 1 All of the parties have consented to Magistrate Judge jurisdiction under 28 U.S.C. § 636, therefore this Court has the ability to decide dispositive motions and to eventually enter final judgment in this matter. II. BACKGROUND The present dispute involves payments allegedly owed to Plaintiff, Merrill Iron & Steel, Inc. (“Merrill”) for products and services, namely structural steel and other miscellaneous metals, it provided to Defendant Blaine Construction Corporation in connection with the construction of Defendant, Allegheny Ludlum Steel Corporation's (“ATI”) Hot Rolling Processing Facility in Brackenridge, Pennsylvania. See Compl. [ECF No. 1] at ¶¶ 1-3. Defendant Allegheny Ludlum Steel Corporation (“ATI”) is a Pennsylvania corporation involved in the business of marketing and producing specialty metal materials worldwide. Id. at ¶ 11. Plaintiff Merrill is a Wisconsin corporation whose primary business activity is to fabricate and supply structural steel and miscellaneous metal products. Id. at ¶ 5. Defendant Blaine Construction Corporation (“Blaine”) is a Tennessee corporation and Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 18 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 provides general contracting, construction management and pre-engineered metal building services to commercial and industrial clients. Id. at ¶ 6. Defendant HOH Engineers, Inc., (“HOH”) is an Illinois corporation and engineering-design firm serving the metal production industry. Id. at ¶ 12. Defendant Century Steel Erectors Company (“Century Steel”) is a Pennsylvania limited partnership and provides steel erection services. Id. at ¶ 13. On or about June 6, 2011, ATI contracted with Blaine to design and construct buildings for a Hot Strip Mill and a water treatment facility (the “Project”) for ATI. Id. at ¶ 2. Blaine was the general contractor and/or design builder for the Project and subcontracted with the defendants to fulfill its obligations under its contract with ATI. Id. at ¶ 6. Blaine subcontracted with HOH to serve as the engineer for the Project and provide the design for the structural steel. Id. at ¶ 12. Additionally, Blaine subcontracted with Century Steel to erect the structural steel for the Project. Id. at ¶ 13. On or about November 11, 2011, Plaintiff Merrill and Blaine entered into a Purchase Order for Merrill to furnish fabricated structural steel and miscellaneous metals necessary for the Project. Id. at ¶ 3. The Purchase Order incorporated by reference the contract between ATI and Blaine. Id. at ¶ 22. Merrill contends that it has delivered all of the structural steel and miscellaneous metals required under the Purchase Order, but has not received payment from Blaine for its delivered products. Id. at ¶¶ 23, 28. Additionally, because the Purchase Order was a unit price contract, the actual price varied depending upon the quantity of steel delivered by Merrill, and the actual amount of steel delivered exceeded the original estimate. Id. at ¶¶ 25-27. *2 After the Purchase Order was executed, the construction plans were revised requiring Blaine to order more fabricated structural steel from Merrill at a cost of approximately $1,302,164.71 and provided additional structural steel and miscellaneous metals at an increased cost of approximately $367,790.51. Id. at ¶¶ 29-34, 37. Merrill claims that the total owed to it by Blaine, including increased bond premiums, is $6,403,889.26 and that Blaine has not “made any progress payments to Merrill since June 27, 2013.” Id. at ¶ 44. Merrill claims that in 2012, Blaine raised concerns relating to paint discoloration on the coated steel, gaps at some of the column seats and bending of some connection plates along several of the back-up tresses (collectively “alleged deficiencies”) but continued to make payments in 2012 and 2013 as Blaine received and accepted delivery of the structural steel. Id. at ¶¶ 46-47. After Blaine received the structural steel in June 2013, it refused to make any further payments to Merrill and remitted its last payment to Merrill on June 27, 2013. Id. at ¶¶ 48-49. As for the alleged paint discoloration of the structural steel, Blaine claimed that this was a sufficient basis for withholding the amounts due to Merrill. Id. at ¶ 52. Specifically, the project specification provided for a coating of Sherwin Williams 646 Fast Cure Epoxy, but Blaine, at the request of Merrill, approved and requested that ATI approve PPG Amercoat 240 epoxy as an alternative to the specified Sherwin Williams product, and ATI approved of said coating on November 9, 2011. Id. at ¶¶ 54-58. Plaintiff alleges that the paint discoloration will not affect the performance of the structural steel and Blaine has not provided Merrill with the cost of repair for the paint discoloration. Id. at ¶¶ 59-60. As for the gaps in the column seats on the structural steel and bending connection plates, Merrill alleges that it will not affect the performance of the steel, that Blaine has not identified what caused the gaps and bending, nor a cost of repair for such alleged deficiencies and Merrill contends that the gaps and bending are a result of HOH's design error, Blaine's mismanagement and/or Century Steel's faulty erection. Id. at ¶¶ 64-77. Merrill filed suit in this Court on February 14, 2014. 2 Specific to the present motions, Merrill brings a declaratory judgment action against all defendants, a negligent misrepresentation claim against HOH Engineers, a right to indemnification against HOH Engineers and Century Steel, and an unjust enrichment claim against ATI 2 In addition to the Defendants named in this opinion, Plaintiff also brings a declaratory judgment, breach of contract claim, and Pennsylvania Contractor and Subcontractor Payment Act (“CASPA”) violations against Blaine, and a claim for joint and several liability of Blaine's Surety. Rather than filing a motion to dismiss, Blaine, and its Sureties, Zurich American Insurance Company and Travelers Casualty and Surety Company of America filed Answers to the Complaint. See Def. Blaine's Ans. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 19 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 [ECF No. 43]; Defs.' Zurich and Travelers Ans. [ECF No. 42]. Century Steel filed a motion to dismiss the claims against it on April 4, 2014 [ECF No. 33], HOH filed a motion to dismiss the claims against it on April 17, 2014 [ECF No. 38] and ATI filed a motion to dismiss the claims against it on April 18, 2014. [ECF No. 40]. Merrill has responded to the various motions, and defendants have filed replies. 3 3 Additionally, Blaine filed responses to its co- defendants motions and opposes their motions to dismiss. Blaine's argument echo those submitted by Merrill, therefore their briefing will not be included in this discussion, as it is duplicative. *3 Century Steel, HOH and ATI all move to dismiss the declaratory judgment against them and argue that any such judgment is not ripe for adjudication because no sufficiently concrete case or controversy exists between Merrill and the moving Defendants and should be dismissed for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Additionally, Century Steel and HOH Engineers seek to dismiss the indemnification claim against them as not ripe because Merrill has not suffered any reimbursable loss and lacks privity of contract with these defendants. Additionally, HOH Engineers moves to have the negligent misrepresentation claim dismissed as Merrill does not specify any factual averments made by HOH Engineers or allege any damages that were proximately caused from any alleged misrepresentation. Lastly, ATI moves to have the unjust enrichment claim dismissed against it as Merrill has not established that ATI was enriched nor has it been established that the enrichment was unjust. The Court will address each argument separately. III. STANDARD OF REVIEW A motion to dismiss pursuant to 12(b)(1) “may be treated as either a facial or factual challenge to the court's subject matter jurisdiction.” Gould Electronics Inc. v. U.S., 220 F.3d 169, 176 (3d Cir.2000). If the defendant attacks the legal sufficiency of the claim, as here, it is considered a facial attack, and the court “must only consider the allegations of the complaint and documents referenced therein and attached thereto in the light most favorable to the plaintiff.” Id. Alternatively, an attack based on the sufficiency of a jurisdictional fact is considered a factual challenge, and “the Court is free to weigh the evidence and satisfy itself whether it has power to hear the case.” Carpet Grp. Intern. v. Oriental Rug Importers, 227 F.3d 62, 69 (3d Cir.2000). a. Federal Rule of Civil Procedure 12(b)(6) To determine whether dismissal is proper under Federal Rule of Civil Procedure 12(b)(6) a complaint must include factual allegations that “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 697, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint and in making this determination, a court must read the complaint in the light most favorable to the plaintiff and all factual allegations must be considered true. Estelle v. Gamble, 429 U.S. 97, 99, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976). The court must also draw all reasonable inferences from all “well-pleaded” allegations contained in the complaint. Retail Clerks Intern. Ass'n, Local 1625, AFL-CIO v. Schermerhorn, 373 U.S. 746, 753 n. 6, 83 S.Ct. 1461, 10 L.Ed.2d 678 (1963). In determining whether a plaintiff has met this standard, the reviewing court must ignore legal conclusions, “[t]hreadbare recitals of the elements of a cause of action supported by mere conclusory statements [,]” ... “labels and conclusions[,]” and “naked assertions [that are] devoid of ‘further factual enhancement.’ “ Iqbal, 556 U.S. at 677 (citations omitted). Thus, “a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.2009). *4 A court may take into consideration matters of public record, exhibits attached to the plaintiff's complaint and undisputedly authentic documents attached to a motion to dismiss without converting a motion to dismiss into one for summary judgment. Delaware Nation v. Pennsylvania, 446 F.3d 410, 413 n. 2 (3d Cir.2006); Sentinel Trust Co. v. Universal Bonding Ins., 316 F.3d 213, 216 (3d Cir.2003). Therefore, the court may properly consider the documents Merrill attached to its complaint in addition to the undisputedly authentic documents attached by defendants to their motions to dismiss without converting defendants' motions into ones for summary judgment. IV. DISCUSSION 1. Declaratory Judgment against Century Steel, HOH and ATI Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 20 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 Merrill seeks declaratory relief for this Court to declare that all of the structural steel it supplied for the Project was fabricated and coated in accordance with the plans, specifications and approved alternatives and therefore any of the alleged deficiencies complained of by Blaine were the result of HOH's defective design, Century Steel's defective erection, ATI's mismanagement or another cause beyond Merrill's control due to the defendants' collective or individual fault, whichever the case may be. Compl. [ECF No. 1] at ¶ 101. While Merrill claims that under Pennsylvania law, a contractor who performs according to the detailed plans and specifications is not responsible for any alleged deficiencies in the structure, it cites to no authority for the proposition, nor does it expound upon this legal theory in its briefing or in the context of a declaratory judgment action. Id. at ¶ 104. Additionally, Merrill seeks a declaration that any of the alleged deficiencies will not affect the performance of the structural steel and for this Court to declare that it is owed the amounts due under the Merrill-Blaine contract. Id. at ¶ 105. Defendants all respond that Merrill's declaratory judgment claim is not yet ripe, as no case or controversy exists. Defendants' argument ignores the fact that Merrill's theory for a declaratory judgment against them is not legally recognized and has been rejected by other courts as it runs counter to the purposes of the federal Declaratory Judgment Act. Because Merrill's claim is dismissed with prejudice on the basis that its claim is not legally cognizable, the ripeness issue will not be discussed. Under the federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., “[i]n a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201. Generally, the federal Declaratory Judgment Act offers “a pragmatic approach to the determination of legal relations and controversy between interested parties. It enables parties uncertain of their legal rights to seek a declaration of rights prior to injury.” Federal Procedure, 10 Fed. Proc., L.Ed. § 23:2; see also Travelers Ins. Co. v. Davis, 490 F.2d 536, 543 (3d Cir.1974) (outlining purposes of the federal Declaratory Judgment Act). The Act does not create substantive rights for parties, but merely provides another procedure by which parties can obtain judicial relief. Farmers Alliance Mut. Ins. Co. v. Jones, 570 F.2d 1384, 1386 (10th Cir.1978). In this same vein, the Act does not allow a person to use a declaratory judgment action as a vehicle to create a cause of action for which it has no legal liability. Federal Procedure, 10 Fed. Proc. L.Ed. § 23:2. *5 Here, Merrill attempts to “try issues or determine the validity of defenses in pending cases,” which is prohibited under the Act. Cunningham Bros., Inc. v. Bail, 407 F.2d 1165, 1168 (7th Cir.1969). Importantly, other courts have found that “it is not one of the purposes of the declaratory judgment act to enable a prospective negligence action defendant to obtain a declaration of non-liability .” Sun Oil Co. v. Transcontinental Gas Pipe Line Corp., 108 F.Supp. 280, 282 (E.D.Pa. Nov.12, 1952) aff'd 203 F.2d 957 (3d Cir.1953). Additionally, “[i]t is inappropriate to use the declaratory judgment statute in what would otherwise be a run-of-the-mill negligence action.” Stradley, Ronon, Stevens & Young, LLP v. Sovereign Bank, N.A., 2013 WL 173022, at *7 (E.D.Pa. Jan.15, 2013) (refusing to apply a declaratory judgment action in a malpractice case) (citations omitted). Here, Merrill preemptively filed a declaratory action against HOH, Century Steel and ATI to lay the blame for a potentially prospective action by Blaine against Merrill for the deficient structural steel supplied and fabricated by Merrill. Merrill would have this court declare that essentially HOH, Century Steel and/or ATI were negligent in its duties to design the project, erect the steel or manage the project, and that this was the proximate cause or injury to Blaine by no fault of its own. This legal theory sounds in negligence and is not tenable for declaratory relief. Merrill attempts to have this court adjudicate it not liable for the deficiencies in the steel to shield itself from potential future liability. Simply stated, Merrill seeks a declaration of non- liability and nothing more. Because it is well settled that Merrill's legal theory is improper, its declaratory judgment action against HOH, Century Steel and ATI is dismissed with prejudice. 2. Indemnification against HOH and Century Steel Merrill brings a claim for common law indemnification against HOH and Century Steel in connection with the gaps at the column seats and the bending connection plates to the steel fabricated and supplied by Merrill and claims they are not due to Merrill's faulty fabrication, but rather a result of either HOH's design error and/or Century Steel's defective erection of the structural steel. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 21 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 Compl. [ECF No. 1] at ¶ 151. Merrill therefore claims it is entitled to indemnity over these parties for any liability it may be found to bear because they are the “sole, active, primary, or substantial contributing factor causing the nonpayment to Merrill.” Compl. [ECF No. 1] at ¶ 151. Both HOH and Century Steel argues that any claim for indemnification is premature and not ripe, because Merrill has not been required to pay any losses from the allegedly defective materials. Def. Century Steel's Br. in Supp. of Mot. to Dismiss [ECF No. 34] at 4; Def. HOH's Br. in Supp. of Mot. to Dismiss [ECF No. 39] at 7-8. Merrill argues that it has already suffered a loss and this alone allows it to bring a cause of action for common law indemnification against HOH and Century Steel. Further, Merrill argues that “[t]he right to indemnity may arise absent a court ordering a plaintiff to pay a third party[,]” but cites to no authority standing for this proposition. In fact, the applicable case law states the opposite. *6 The Pennsylvania Supreme Court has determined: “Indemnity is a common law remedy which shifts the entire loss from one who has been compelled, by reason of some legal obligation, to pay a judgment occasioned by the initial negligence of another who should bear it.” Willet v. Pennsylvania Med. Catastrophe Loss Fund, 549 Pa. 613, 702 A.2d 850, 854 (Pa.1997) (citations and quotation marks omitted) (emphasis added). A claim for common law indemnity requires that a judgment be entered prior to the claim being brought. See also TDY Indus. v. Nat'l Freight Transp., Inc., 2009 WL 691947, at *12 n. 9 (W.D.Pa. March 12, 2009) (“Under Pennsylvania law, that right to bring a common law claim for indemnification arises only after the party seeking indemnification makes a payment of a judgment to a third party.”). Here, no judgment has been entered against Merrill for any claim regarding the structural steel that it fabricated and supplied. Therefore, Merrill's claims are premature. Accordingly, Merrill's common law claim for indemnification against HOH and Century Steel is dismissed without prejudice to re-assert should a judgment be entered against Merrill for the defective steel it fabricated. 3. Negligent Misrepresentation against HOH Merrill brings a claim of negligent misrepresentation against HOH, and alleges that HOH's defective design of the Project constituted false information, HOH had a duty to exercise reasonable care and competence in designing and communicating that design, and failed to do so, that Merrill relied upon HOH's design to fabricate the structural steel, that HOH knew Merrill would rely upon its design for the Project and that as a result, Merrill has been damaged. Compl. [ECF No. 1] at ¶¶ 142-148. Pennsylvania has expressly adopted the Restatement (Second) of Torts section 552, which states in pertinent part: One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. Bilt-Rite Contrs., Inc. v. Architectural Studio, 581 Pa. 454, 866 A.2d 270, 273, n. 1 (Pa.2005) (quoting Restatement (Second) of Torts § 552 (1965)). Therefore, under Pennsylvania law, a claim for negligent misrepresentation requires proof of the following: “(1) a misrepresentation of a material fact; (2) made under circumstances in which the misrepresenter ought to have known its falsity; (3) with an intent to induce another to act on it; and (4) which results in injury to a party acting in justifiable reliance on the misrepresentation.” Bortz v. Noon, 556 Pa. 489, 729 A.2d 555, 561 (Pa.1999). Negligent and intentional misrepresentation differ “in that the misrepresentation must concern a material fact and the speaker need not know his or her words are untrue, but must have failed to make a reasonable investigation of the truth of these words. Moreover, like any action in negligence, there must be an existence of a duty owed by one party to another.” Milliken v. Jacono, 60 A.3d 133, 141 (Pa.Super.2012) (citations omitted). *7 Here, HOH argues that this claim should be dismissed against it because: (1) Merrill has not identified Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 22 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 any material fact that HOH misrepresented-and it only cursorily alleges that HOH's design was defective, and (2) Merrill has not properly alleged that any damages were proximately caused from HOH's alleged misrepresentation. Def. HOH's Br. in Supp. of Mot. to Dismiss [ECF No. 39] at 5. Therefore, the Court's discussion of this claim will be confined to these two discrete issues. A factual misrepresentation “is ‘material,’ so as to provide a basis for a negligent misrepresentation claim, when it is of such character, that had it not been made, the transaction in question would not have been consummated.” In re Brownsville Property Corp., Inc., 2013 WL 4010308, at *12 (Bkrtcy.W.D.Pa. Aug.1, 2013) (citing Sevin v. Kelshaw, 417 Pa.Super. 1, 611 A.2d 1232, 1237 (Pa.Super.1992)). In Bilt-Rite, the Pennsylvania Supreme Court recognized a cause of action for negligent misrepresentation by finding an architect's defective designs constituted a misrepresentation of material fact. The high court held that “where information is negligently supplied by one in the business of supplying information, such as an architect or design professional, and where it is foreseeable that the information will be used and relied upon by third persons, even if the third parties have no direct contractual relationship with the supplier of information[,]” the plaintiff had stated a claim for negligent misrepresentation. Bilt-Rite, 866 A.2d at 287. Merrill argues that it has sufficiently alleged that HOH has misrepresented a material fact to it by supplying a defective design for the Project and this was relied upon by Merrill. The Court agrees that Merrill has sufficiently pled the material misrepresentation of fact element to state a claim for negligent misrepresentation. Taking all of the allegations in the complaint as true, as the Court must as this point, it can be reasonably inferred that HOH's defective design of the Project led to Merrill's possibly defective fabrication of the metal for the Project. Additionally, Merrill has adequately alleged that its injury was proximately caused by HOH's material misrepresentation. While there is a dearth of Pennsylvania case law explaining damages recoverable under a cause of action for negligent misrepresentation, one court has opined: In Bobbin v. Sammarco, 1995 WL 303632, at *3 (E.D.Pa. [May 18,] 1995) the court stated that the measure is “actual loss.” Other courts have relied on [the] Restatement [ (Second) of] Torts, [section] 552B, entitled Damages for Negligent Misrepresentation, which provides: (1) The damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including a. the difference between the value of what he has received in the transaction and its purchase price or other value given for it; and *8 b. pecuniary loss suffered otherwise as a consequence of the plaintiff's reliance upon the misrepresentation. (2) the damages recoverable for a negligent misrepresentation do not include the benefit of the plaintiff's contract with the defendant. In re Brownsville Property Corp., Inc., 2013 WL 4010308, at *27 (quoting Restatement (Second) of Torts § 552B (1965)). Additionally, it is axiomatic that the general principals of tort law come into play in examining a negligent misrepresentation claim, as it is well established that “[a] cause of action in negligence requires allegations that establish the breach of a legally recognized duty or obligation that is causally connected to the damages suffered by the complainant.” Sharpe v. St. Luke's Hosp., 573 Pa. 90, 821 A.2d 1215, 1218 (Pa.2003) (citation omitted). HOH argues that no proximate cause exists because Merrill has failed to allege a proximate cause between its contractual losses and HOH's alleged misrepresentation. The Court disagrees. Here, plaintiff has sufficiently pled that the alleged misrepresentations made by HOH, i.e., the design defects, were the proximate cause of the loss incurred by Merrill. Merrill alleges that the gaps in the column seats and the bending of the connection plates were caused by HOH's defective design, and thus caused Blaine to withhold its payment under the contract between it and Blaine. Merrill has pled adequate facts to allow it to prove its case through evidentiary support. Should Merrill be correct in its assertion that HOH's design was defective and it caused the gaps in the column seats and bending Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 23 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 of the connection plates which in turn caused Blaine to withhold its payments, HOH can be found liable for negligent misrepresentation. Accordingly, HOH's motion to dismiss Merrill's claim for negligent misrepresentation against HOH is denied. 4. Unjust Enrichment against ATI Merrill claims that because it fabricated, coated and supplied the structural steel and other miscellaneous metals that were incorporated into the Project which benefitted ATI, and because Merrill has not been paid, an injustice would result if ATI “retain[s] the benefits of the labor and material Merrill provided without paying the full value thereof[.]” Compl. [ECF No. 1] at ¶¶ 156-157. Here, ATI argues that Merrill's claim for unjust enrichment fails because Merrill has not alleged any amount that ATI was benefitted nor has Merrill adequately alleged that any purported enrichment was unjust. Def. ATI's Br. in Supp. of Mot. to Dismiss [ECF No. 41] at 6. “Unjust enrichment is a creature of equity that seeks to balance the interests of parties who have exchanged a benefit without agreeing on terms.” Goldsmith Assoc., Inc. v. Del Frisco's Rest. Grp., 2009 WL 3172752, at *4 (E.D.Pa. Oct.1, 2009) (citing Mitchell v. Moore, 729 A.2d 1200, 1203 (Pa.Super.1999). Under Pennsylvania law, the elements to state a cause of action for unjust enrichment are as follows: “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Joyce v. Erie Ins. Exchange, 74 A.3d 157, 169 (Pa.Super.Ct.2013) (quoting Stoeckinger v. Presidential Fin. Corp. of Delaware Valley, 948 A.2d 828, 833 (Pa.Super.Ct.2008)). Whether a claim for unjust enrichment exists depends on the “unique factual circumstances of each case. In determining if the doctrine applies, we focus not on the intention of the parties, but rather on whether the defendant has been unjustly enriched.” Ibid. *9 Most importantly, the Pennsylvania Supreme Court has held that “a third party is not unjustly enriched when it receives a benefit from a contract between two other parties where the party benefitted has not requested the benefit or misled the other parties .” D.A. Hill v. Clevetrust, 524 Pa. 425, 573 A.2d 1005, 1010 (Pa.1990) (emphasis in original). A plaintiff “cannot merely allege its own loss as a measure of recovery -i.e., the value of labor and materials expended-but instead must demonstrate that [the defendant third party] has in fact been benefitted.” Meehan v. Cheltenham Twp., 410 Pa. 446, 189 A.2d 593, 595 (Pa.1963). The Pennsylvania Supreme Court has used an illustration from the Restatement of Restitution, section 110 which explains whether the retention of a particular enrichment by a party is unjust. See D.A. Hill, 573 A.2d at 1009; Meehan, 189 A.2d at 596. “Section 110 deals with the situation where a third party benefits from a contract entered into between two other parties. It provides that, in the absence of some misleading by the third party, the mere failure of performance by one of the contracting parties does not give rise to a right of restitution against the third party.” Ibid (quoting Restatement (First) of Restitution § 110 (1937). This is exactly what Merrill's legal theory of recovery against ATI entails: that the failure of Blaine, the contracting party, to pay Merrill under the contract somehow leads to the unjust enrichment of ATI, a third party subcontractor with no direct contractual relationship with Merrill. Such a cause of action is not recognized under Pennsylvania law absent some claim that ATI misled the parties to perform or fail to perform under the contract. Merrill does not allege that ATI retained any benefit and cannot bring a claim for unjust enrichment against ATI. Even assuming Merrill could show that ATI retained a benefit, i.e., that the contract for services between Merrill and Blaine for the Project, Merrill cannot show that it was unjust to do so. Accordingly, Merrill's claim for unjust enrichment against ATI is dismissed with prejudice. 5. Punitive damages against HOH The only claim that survives defendants' motions to dismiss is a claim for negligent misrepresentation against HOH. Therefore, the Court will only discuss whether a claim for punitive damages as to the negligent misrepresentation claim should be dismissed. Under Pennsylvania law, punitive damages are proper only where “the defendant's actions are so outrageous as to demonstrate willful, wanton or reckless conduct.” Hutchison v. Luddy, 582 Pa. 114, 870 A.2d 766, 770 (Pa.2005). Punitive damages “may be awarded for conduct that is outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others.” Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 24 of 56 Merrill Iron & Steel, Inc. v. Blaine Const. Corp., Not Reported in F.Supp.3d (2014) 2014 WL 2993774 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 8 Id. (citations omitted). “The same facts that plausibly allege that” a defendant materially misrepresented a fact for a negligent misrepresentation claim “establish[es] the recklessness require[ment] for a claim of punitive damages.” Howe v. LC Philly, LLC, 2011 WL 1465446, at *6 (E.D.Pa. April 15, 2011). Therefore, if a defendant is found to be reckless under a negligent misrepresentation theory of liability, that same standard applies in determining whether the defendant acted recklessly for purposes of awarding punitive damages. Taking all facts alleged in the complaint as true and drawing all reasonable inferences in Merrill's favor, it has adequately pled at this stage a claim for punitive damages on its negligent misrepresentation claim. Therefore, HOH's motion to dismiss an award of punitive damages for a negligent misrepresentation claim is denied at this time. V. CONCLUSION *10 Based on the foregoing, Defendants' motions to dismiss are granted in part and denied in part. Specifically, Defendant Century Steel Erector's Company motion to dismiss [ECF No. 33] is granted, Defendant HOH Engineers, Inc.'s motion to dismiss [ECF No. 38] is granted in part and denied in part as to Merrill's claim for negligent misrepresentation and an award of punitive damages as to that claim, and Defendant Allegheny Ludlum Steel Corporation's motion to dismiss [ECF No. 40] is granted. An appropriate Order follows. ORDER AND NOW, this 2nd day of July, 2014, after consideration of Defendant Century Steel Erectors Company's motion to dismiss [ECF No. 33] and brief in support [ECF No. 34]; Plaintiff Merrill Iron & Steel Inc.'s response [ECF No. 53]; Defendant Century Steel's replies [ECF Nos. 68, 69]; Defendant HOH Engineers, Inc.'s motion to dismiss [ECF No. 38] and brief in support [ECF No. 39]; Plaintiff Merrill's response [ECF No. 66]; Defendant Allegheny Ludlum Steel Corporation's motion to dismiss [ECF No. 40] and brief in support [ECF No. 41]; Plaintiff Merrill's response [ECF No. 71]; and Defendant Allegheny Ludlum Steel Corporation's reply [ECF No. 81], IT IS HEREBY ORDERED that: Defendant Century Steel Erector's Company motion to dismiss [ECF No. 33] is GRANTED; Defendant HOH Engineers, Inc.'s motion to dismiss [ECF No. 38] is GRANTED IN PART and DENIED IN PART as to Merrill's claim for negligent misrepresentation and an award of punitive damages as to that claim; and Defendant Allegheny Ludlum Steel Corporation's motion to dismiss [ECF No. 40] is GRANTED. All Citations Not Reported in F.Supp.3d, 2014 WL 2993774 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 25 of 56 D Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 26 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2002 WL 31741470 United States District Court, E.D. Pennsylvania. Carol A. POST, Plaintiff, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant. No. CIV.A. 02-1917. | Dec. 6, 2002. Opinion ROBERT F. KELLY, Sr.J. *1 Presently pending before this Court is Defendant's Motion to Dismiss Counts II-V of Plaintiff's Complaint. For the following reasons, Defendant's Motion will be granted. I. Facts Carol A. Post (“Plaintiff”) brought claims against Hartford Life and Accident Insurance Company (“Defendant”) for allegedly violating the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.A. § 1001 et seq., and breaching its fiduciary duty. This case involves a dispute over an ERISA § 3(1) Employee Welfare Benefit Plan. Specifically, the case involves a group disability insurance plan (the “Plan”) provided by Plaintiff's employer, Overlook Hospital of New Jersey. Plaintiff claims that she is totally disabled from any and all work. 1 As a result, Plaintiff contends that she is entitled to the contractually promised benefits of her group disability insurance plan. In late 2001, Defendant terminated Plaintiff's benefits based on her alleged refusal to submit to medical examinations required by Defendant under the Plan. 2 Plaintiff alleges that this request is unwarranted and medically unsound given Plaintiff's condition. Plaintiff also contends that Defendant's request is indicative of a pattern of conduct which shows a breach of Defendant's fiduciary duties. 1 Plaintiff is certified as both a Dentist and a Pharmacist. (Pl.'s Mem. Law Contra. Def.'s Mot. to Dismiss at 2). On November 27, 1993, Plaintiff was involved in a motor vehicle accident. (Compl., ¶ 10). Between 1995 and 2001, a series of disputes arose between Plaintiff and Defendant regarding Defendant's right to seek medical information to establish Plaintiff's ongoing entitlement to benefits. (Id., ¶¶ 13-57). 2 The Plan vests Defendant with full discretion and authority to determine eligibility for benefits and to construe and interpret all provisions of the Plan. (Def.'s Mem. Law Supp. Mot. to Dismiss at 1-2) (citing Compl., Ex. A (copy of the Plan)). II. STANDARD A motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), tests the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). A court must determine whether the party making the claim would be entitled to relief under any set of facts that could be established in support of his or her claim. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (citing Conley, 355 U.S. at 45-46); see also Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273 (3d Cir.1985). In considering a motion to dismiss, all well pled allegations in the complaint must be accepted as true and viewed in the light most favorable to the non-moving party. Rocks v. City of Phila., 868 F.2d 644, 645 (3d Cir.1989) (citations omitted). III. DISCUSSION 3 3 Defendant's Motion to Dismiss pertains only to Counts II, III, IV and V of Plaintiff's Complaint. (Def.'s Mem. Law Supp. Mot. to Dismiss). Defendant does not seek dismissal of Plaintiff's Count I, a claim for denial of benefits pursuant to section 502(a)(1) of ERISA, 29 U.S.C.A. § 1132(a)(1). (Id. at 1). ERISA section 502(a)(1)(B) provides that a participant or beneficiary of an ERISA plan may bring a civil action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C.A. § 1132(a)(1) (B). Although Defendant disputes Plaintiff's liability contentions regarding Count I, it concedes that her Complaint sets forth a claim for denial of benefits pursuant to ERISA section 502(a)(1). (Def.'s Mem. Law Supp. Mot. to Dismiss). A. Count II Plaintiff's Count II is a claim for breach of fiduciary duty arising out of an alleged injury to the Plan under Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 27 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 ERISA section 502(a)(2), 29 U.S.C.A. § 1132(a)(2) and 29 U.S.C.A. § 1109. 4 (Compl., ¶¶ 75-78). “[A] claim under § 1132(a)(2) must be premised upon harm to the entire Plan, rather than harm to a particular individual.” Bellas v. CBS, Inc., 73 F.Supp.2d 493, 498 (W.D.Pa.1999) (citing McMahon v. McDowell, 794 F.2d 100, 109 (3d Cir.1986), cert. denied, 479 U.S. 971, 107 S.Ct. 473, 93 L.Ed.2d 417 (1986) (stating that “damages for breach of fiduciary duty do not go to any individual plan participant or beneficiary, but inures to the benefit of the plan as a whole”)) (citations omitted). “Plan participants or beneficiaries may sue a plan fiduciary for breach of a fiduciary duty pursuant to § 1132(a)(2).” DeFelice v. Daspin, No. 01-1760, 2002 WL 1373759, at *6 (E.D.Pa. June 25, 2002). However, “[t]hey may not do so ... to obtain individual relief but only for the benefit of the plan.” Id. (citing Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985); McMahon, 794 F.2d at 109). “ERISA functions to prevent ‘possible misuse of plan assets,’ and its remedies function to ‘protect the entire plan....’ ” Mose v. U.S. Health Care Sys. of PA., Inc., No. 95-6553, 1996 WL 397465, at *2 (E.D.Pa. July 9, 1996) (citing Mass. Mutual, 473 U.S. at 141). Therefore, “a simple denial of benefits cannot form the basis of a suit for breach of fiduciary duty to the plan itself.” Id. (citations omitted). 4 29 U.S.C. §§ 1109 and 1132(a)(2), state in relevant part: § 1109 Liability for breach of fiduciary duty (a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.... § 1132 Civil enforcement (a) Persons empowered to bring a civil action A civil action may be brought- (2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title. 29 U.S.C. §§ 1109, 1132(a)(2). Defendant seeks dismissal of Plaintiff's Count II based on the grounds that a simple denial of benefits cannot form the basis of a suit for breach of fiduciary duty to the Plan itself. (Def.'s Mem. Law Supp. Mot. to Dismiss at 3). Defendant argues that “the gravamen of plaintiff's complaint is that she has been denied long term disability benefits to which she claims to be entitled.” (Id. at 4). Based upon this argument, Defendant goes on to state that Count II of Plaintiff's Complaint should be dismissed for failure to state a claim “[b]ecause a simple denial of benefits does not qualify as fiduciary malfeasance.” (Id.). Plaintiff counters Defendant's argument with the contention that “[t]his case is nowhere near a ‘simple denial of benefits' claim.” (Pl.'s Mem. Law Contra Def.'s Mot. to Dismiss at 3). In relation to the Plan, Plaintiff argues that her Complaint includes “over fifty factual allegations detailing the malfeasance of Defendant in the administration of the Plan.” (Id.). *2 The Court finds that Plaintiff's Count II must be dismissed. The contentions in Plaintiff's Complaint relate to her alleged entitlement of benefits and clarification of her rights under the Plan. Therefore, Plaintiff's claim is based upon an allegedly wrongful denial of her disability benefits in contravention to the Plan. As stated above, “a simple denial of benefits claim cannot form the basis of a suit for breach of fiduciary duty to the Plan itself.” Mose, 1996 WL 397465, at *2. As a result of the aforementioned, the Court dismisses Plaintiff's Count II regarding Defendant's alleged breach of fiduciary duty to the Plan. The Court takes this opportunity to note that Plaintiff's remaining count, Count I, provides her with the opportunity “to recover benefits due to [her] under the terms of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the plan.” 29 U.S.C.A. § 1132(a)(1) (B). Thus, Plaintiff's contentions regarding her alleged entitlement to benefits and clarification of her rights under the Plan will be addressed in Count I. B. Count III Plaintiff's Count III is a claim for equitable relief under ERISA section 502(a)(3), 29 U.S.C.A. § 1132(a)(3). 5 (Compl., ¶¶ 79-80). “[A]n individual plan participant or beneficiary may sue any party acting in a fiduciary capacity under § 1132(a)(3) for ‘appropriate’ equitable relief for breach of fiduciary duty.” Blahuta-Glover v. Cyanamid Long Term Disability Plan, No. 95-7069, 1996 WL 220977, at *4 (E.D.Pa. Apr. 30, 1996) (citing Varity Corp. v. Howe, 516 U.S. 489, 506-515, 116 S.Ct. 1065, Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 28 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 134 L.Ed.2d 130 (1996); Bixler v. Cent. PA. Teamsters Health & Welfare Fund, 12 F.3d 1292, 1298 (3d Cir.1993)). That is, “[t]hey may sue under § 1132(a)(3) but only for ‘appropriate equitable relief.’ ” DeFelice, 2002 WL 1373759, at *6. Generally, “[r]elief is ... not appropriate if otherwise provided elsewhere under ERISA.” (Id.). 5 Section 502(a)(3) provides: A civil action may be brought by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. 29 U.S.C. § 1132(a)(3). “There are no reported cases in which a plan beneficiary was permitted to maintain a § 1132(a)(3) claim for an alleged erroneous denial of benefits.” Blahuta-Glover, 1996 WL 220977, at *5. “Recognizing that § 1132(a)(1) (B) specifically provides a remedy to a beneficiary for a wrongful denial of benefits, the Supreme Court assumed that § 1132(a)(3) was designed to provide ‘other remedies for yet other breaches of other sorts' or ‘appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.’ ” (Id. at *4) (citing Varity, 516 U.S. at 510-514). Since “§ 1132(a)(1)(B) provides an adequate remedy, a claim for equitable relief for an alleged simple wrongful denial of benefits cannot be maintained under § 1132(a)(3).” Id. at *5 (citing Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 916 F.Supp. 843, 844 (N.D.Ill.1996)). *3 Defendant's Motion to Dismiss Plaintiff's section 1132(a)(3) claim is premised upon the argument that Plaintiff has an adequate remedy under Count I, ERISA section 1132(a)(1)(B), which provides a remedy to a beneficiary for a wrongful denial of benefits. 6 (Def.'s Mem. Law Supp. Mot. to Dismiss at 4). Defendant argues that “[b]ecause ERISA section 1132(a)(1)(B) (Count I) provides plaintiff with an adequate remedy, plaintiff's claim for equitable relief for an alleged simple wrongful denial of benefits cannot be maintained under section 1132(a)(3).” (Id. at 5). Defendant's argument relies upon the decision in Varity Corporation v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). In Varity, the Supreme Court opined that if Congress provided plaintiffs with an adequate remedy for their injury elsewhere in ERISA, then “there will likely be no need for further equitable relief, in which case such relief would normally not be ‘appropriate’ ” under ERISA section 1132(a)(3). Id. at 515. Based upon the aforementioned argument, many courts have cited the language in Varity in dismissing claims for breach of fiduciary duty upon a motion to dismiss where a plaintiff has also asserted a claim for benefits under ERISA section 1132(a)(1)(B). 7 Plaintiff counters Defendant's argument by stating that Count I, which seeks to recover benefits and guarantee them in the future, does not afford the equitable relief sought by Plaintiff in Count III. (Pl.'s Mem. Law Contra Def.'s Mot. to Dismiss). In support of her argument, Plaintiff claims that ERISA section 502(a)(3) sculpts the equitable relief that she seeks, whereas, Count I “does not afford the type of relief such as mandating the manner of requesting medical information, the frequency of requesting information, the manner of accounting for the benefits, and the deference that should be afforded to treating physicians.” (Id. at 5). 6 As mentioned earlier, ERISA section 502(a)(1)(B) provides that a participant or beneficiary of an ERISA plan may bring a civil action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C.A. § 1132(a)(1)(B). Plaintiff's Count I is based upon Section 502(a)(1)(B) and seeks a judgment that she is entitled to benefits and a clarification of her rights under the Plan. 7 See Reilly v. Keystone Health Plan East, Inc., No. 98-1648, 1998 WL 422037, at *4 (E.D.Pa. July 22, 1998); Smith v. Thomas Jefferson Univ., 52 F.Supp.2d 495, 498 n. 4 (E.D.Pa.1999); Feret v. CoreStates Fin. Corp., No. 97-6759, 1998 WL 426560, at *5 (E.D.Pa. July 27, 1998). But see Nicolaysen v. BP Amoco Chem. Co., No. 01-5465, 2002 WL 1060587, at *2 (E.D.Pa. May 23, 2002); Moore v. First Union Corp., No. 00- 2512, 2000 WL 1052140, at *1 (E.D.Pa. July 24, 2000); Parente v. Bell Atl. PA., No. 99-5478, 2000 WL 419981, at *2-*4 (E.D.Pa. Apr. 18, 2000). The Court finds that Plaintiff's Count III must be dismissed. After examining Plaintiff's claim, it is apparent that the claim is based upon Defendant's alleged wrongful denial of benefits. However, as stated earlier, “a claim for equitable relief for an alleged simple wrongful denial of benefits cannot be maintained under § 1132(a) (3).” Blahuta-Glover, 1996 WL 220977, at *5. Plaintiff's Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 29 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 request for equitable relief in the form of regulating the manner of requesting medical information, the frequency of requesting such information and the manner of accounting for benefits relate to questions regarding Plaintiff's rights under the Plan. As such, these contentions are properly part of Plaintiff's denial of benefits claim in Count I. As for Plaintiff's contention relating to her request for equitable relief regarding the issue of what deference should be afforded to treating physicians, the question of how an administrator evaluates various types of medical evidence is common in denial of benefits claims. Based upon the aforementioned, appropriate relief for Plaintiff's alleged injuries is available under ERISA section 1132(a)(1)(B) in Count I. Since Plaintiff's Count I provides appropriate relief to Plaintiff under ERISA section 1132(a)(1)(B), the Count dismisses Count III seeking equitable relief under ERISA section 1132(a)(3). C. Count IV *4 Plaintiff's Count IV is a claim for relief for Defendant's alleged “Failure to Follow Plan Documents.” (Compl., ¶¶ 81-82). Relying upon ERISA section 502(a)(1)(B), 29 U.S.C.A. § 1132(a)(1)(B), Plaintiff's claim is based upon the allegation that “[i]n addition to failing to meet the minimum standards as are set forth under ERISA, Defendant's actions breached their own Summary Plan Description.” (Id., ¶ 82). Defendant contends that this claim must be dismissed because it is duplicative of Count I. Defendant argues that in Count IV, Plaintiff merely recharacterizes her Count I (denial of benefits) as a claim for “Failure to Follow Plan Documents.” (Def.'s Mem. Law Supp. Mot. to Dismiss 5-6). Defendant states that “ERISA does not provide any separate relief to plaintiff based on her recasting of her denial of benefits claim as a failure to follow Plan documents.” (Id. at 6). Defendant goes on to argue that “it is implicit in Count I of plaintiff's complaint that she is alleging that [Defendant] failed to follow Plan documents.” (Id.). Thus, Defendant seeks dismissal of Plaintiff's Count IV for failure to state a claim for relief. (Id.). Plaintiff counters Defendant's argument with the assertion that ERISA sets the floor and the Plan sets the ceiling. (Pl.'s Mem. Law Contra Def.'s Mot. to Dismiss at 6). Plaintiff fails to identify any case law or provision of ERISA suggesting that a separate cause of action exists for denial of benefits for failure to follow Plan documents. Without providing any legal support for her argument, Plaintiff contends that various acts of misconduct by Defendant not only constitute ERISA violations, but also constitute breaches of contractual provisions above and beyond ERISA's minimums. (Id.). Although not specifically presented as a breach of contract claim, it appears that Plaintiff's Count IV closely resembles a breach of contract claim. If Plaintiff is attempting to assert a breach of contract claim, such claim would be dismissed because “ERISA has consistently been interpreted to specifically preempt state law actions for breach of contract.” Nice v. Indep. Blue Cross, 1997 WL 299428, at *2 (E.D.Pa. May 22, 1997)(citing Pane v. RCA Corp., 868 F.2d 631, 635 (3d Cir.1989); Arber v. Equitable Beneficial Life Ins. Co., 848 F.Supp. 1204, 1215 (E.D.Pa.1994); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)). In support of her claim under Count IV, Plaintiff also relies upon the principle of “contra proferentem ... which means that all ambiguous terms must be construed against the drafter of the document.” (Pl.'s Mem. Law Contra Def.'s Mot. to Dismiss at 6). However, Plaintiff does not identify any term(s) of the Plan that are allegedly ambiguous or subject to being construed against Defendant. Even if there was a dispute as to the construction of the terms of the Plan, it would not provide an independent theory of liability because that dispute is part of Plaintiff's ERISA section 1132(a)(1)(B) denial of benefits claim. *5 Based upon the above reasons, the Court finds that Plaintiff's Count IV must be dismissed. The Court is unaware of any “Failure to Follow Plan Documents” claim under ERISA. In fact, Plaintiff fails to provide any indication of a legal basis for this claim. After reviewing this claim, it is evident that it is substantively identical to Count I. Since Count I addresses Plaintiff's arguments in Count IV, the Court dismisses Count IV of the Complaint. D. Count V Plaintiff's Count V, entitled “State Claim to the Extent Same is not Pre-empted by ERISA,” is a state claim for relief. 8 (Compl., ¶¶ 83-84). Count V of Plaintiff's Complaint provides, in pertinent part: 8 29 U.S.C.A. § 1144(a) (preemption clause) states in relevant part: Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 30 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 Except as provided in subsection (b) of this section [the saving clause] the provisions of this title and title IV shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. 29 U.S.C.A. § 1144(a) The actions of Defendant are in violation of Pennsylvania law regarding the Fiduciary Duty owed by an Insurer and/or its fiduciary to a policy holder and/or beneficiary, and despite the fact that this is an employer/employee relationship, there does not appear to be a complete preemption of the claims arising in this particular case, namely, the improper denial of benefits in contravention to the Summary Plan Benefits. 9 9 Despite the fact that Plaintiff alleges that the Plan is governed by New Jersey law, her claim is premised upon Pennsylvania law. (Compl., ¶¶ 19, 83-84). Based upon the allegations in the Complaint, even if Pennsylvania common law and statutory claims were not preempted and even if Plaintiff could assert a private cause of action under them, Count V would still be dismissed because, according to Plaintiff, the Plan is not subject to Pennsylvania law. (Compl., ¶ 83) (emphasis added). The Court notes that Plaintiff's claim fails to identify what state law claim she is attempting to allege. 10 10 Plaintiff does not identify which Pennsylvania law allegedly governing the relationship between herself and Defendant has been violated. However, it appears that Plaintiff is attempting to state a claim premised upon violation of the Pennsylvania Unfair Insurances Practices Act (the “UIPA”), 40 Pa.C.S.A. section 1171.1 et seq. Any claim by Plaintiff under the UIPA must be dismissed because there is no private right of action under the UIPA. See Lites v. Great Am. Ins. Co., No. 00-525, 2000 WL 875698, at *6 (E.D.Pa. June 23, 2000) (stating “[i]t is well settled in Pennsylvania that no private allegation of a UIPA violation can be maintained.”); Smith v. Nationwide Mut. Fire Ins. Co., 935 F.Supp. 616, 620 (W.D.Pa.1996) (stating “it is clear that there is no private cause of action under the UIPA....); Parasco v. Pacific Indem. Co., 870 F.Supp. 644, 647 (E.D.Pa.1994). “Section 502(a)(1)(B), the civil enforcement provision of the ERISA statute, completely preempts all state law claims to recover benefits due, or to clarify the rights to future benefits under the terms of an ERISA plan.” Oslowski v. Life Ins. Co. of N. America, 139 F.Supp.2d 668, 676 (W.D.Pa.2001) (citing 29 U.S.C. §§ 1001, et seq., § 1132(a)(1)(B); Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). “Section 502(a) (1)(B) of ERISA provides the exclusive civil enforcement mechanism for beneficiaries to recover benefits from a covered employee benefit plan.” Walker v. Aetna Life Ins. Co., No. 98-5154, 1999 WL 84112, at *2 (E.D.Pa. Feb. 19, 1999) (citing 29 U.S.C. § 1132(a)(1)(B); Metro. Life, 481 U.S. at 62-63). “ERISA preempts all state laws insofar as they ‘relate to’ an employee benefit plan under ERISA.” Id. (citing 29 U.S.C. § 1144(a)). “A state law or common law cause of action relates to a benefit plan if it has a connection with or reference to such a plan.” Id. (citing Pilot Life, 481 U.S. at 47-48). An action “relates to” an ERISA plan and is preempted “[w]here the existence of an ERISA plan is a critical factor in establishing liability and the court's inquiry must be directed to the plan.” Id. (citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139-140, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990)). Upon reading Plaintiff's state law claim, it is clear that it is based upon Defendant's alleged “improper denial of [Plaintiff's] benefits in contravention to the Summary Plan Benefits.” (Compl., ¶ 83). Thus, by her own description, Plaintiff's state law claim clearly involves, or “relates to,” the ERISA plan at issue in this case. Since Plaintiff's Count V “relates to” an ERISA plan, it is preempted by 29 U.S.C. § 1144(a). Thus, Plaintiff's Count V is dismissed. IV. CONCLUSION *6 Based upon the aforementioned, Plaintiff's Counts II, III, IV and V are dismissed. ORDER AND NOW, this 6th day of December, 2002, upon consideration of Defendant's Motion to Dismiss Counts II-V of Plaintiff's Complaint (Dkt.No.2), the Response and Reply thereto, it is hereby ORDERED that the Motion is GRANTED. All Citations Not Reported in F.Supp.2d, 2002 WL 31741470, 29 Employee Benefits Cas. 2931 Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 31 of 56 Post v. Hartford Life and Acc. Ins. Co., Not Reported in F.Supp.2d (2002) 2002 WL 31741470, 29 Employee Benefits Cas. 2931 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 32 of 56 E Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 33 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2010 WL 3829640 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Dean PROPER, Plaintiff, v. CRAWFORD COUNTY CORRECTIONAL FACILITY, et al., Defendants. C.A. No. 06-279 Erie-LEAD. | Sept. 24, 2010. Attorneys and Law Firms Bonnie L. Kift, Law Office of Bonnie L. Kift, Ligonier, PA, for Plaintiff. Jeffrey K. Millin, Shafer Law Firm, Meadville, PA, Francis J. Klemensic, Peter W. Yoars, Jr., Knox, McLaughlin, Gornall & Sennett, Erie, PA, for Defendants. MEMORANDUM OPINION SUSAN PARADISE BAXTER 1 , United States Magistrate Judge. 1 In accordance with the provisions of 28 U.S.C. § 636(c)(1), the parties have consented to have a United States Magistrate Judge conduct proceedings in this case, including entry of a final judgment. ECF Nos. 161, 162, and 163. I. Relevant Procedural History *1 On November 28, 2006, Plaintiff, an inmate formerly incarcerated at the Crawford County Correctional Facility, initiated this pro se action, raising various civil rights claims arising out of his incarceration at the Crawford County Correctional Facility during 2004 and 2005. A) The Original Pro Se Complaint In his Original Complaint, Plaintiff alleges that he advised prison staff that his personal safety was being threatened by fellow inmates, but Defendants did nothing to protect him. On November 19, 2004, Plaintiff was attacked by inmate Lonnie Williams and on November 24, 2004, Plaintiff was again physically attacked, this time by inmate Justin Q. Smith. Plaintiff alleges that both attacks resulted in serious physical injuries and that prison officials delayed in providing him with proper medical attention. ECF No. 3. 2 2 The nineteenth edition to The Bluebook: A Uniform System of Citation (Columbia Law Review Ass'n, et al. eds., 19th ed.2010) provides citation form for court documents filed with the Electronic Case Management system. Rule B7.1.4. Although The Bluebook advises pinpoint citation to a document's original page number, this Court finds its practice of citing to the page number contained in the PACER header more efficient and will continue its prior practice of citing to that page number herein. Named as Defendants to the Original Complaint were: the Crawford County Correctional Facility; Jail Nurse “Rick”; Jail Doctor Richard Moran; Warden Tim Lewis; Lt. Minor; Lt. Denman; Lt. Wyant; Correctional Officer Patterson, Correctional Officer Mrs. Fox; Correctional Officer Shrekengost; Correctional Officer Grundy; Correctional Officer Snow; Correctional Officer Mrs. Brown; Correctional Officer Shinko; Counselor Trisha Wolf; Counselor Ronda Kingston; Sgt. Meal; Sgt. Kosher; and Lt. McCune. Id. On June 18, 2007, Plaintiff filed a Supplement to the Original Complaint expanding upon his claims and adding Jane Doe, a Correctional Officer who allegedly delayed his medical treatment following the first attack, as a Defendant. ECF No. 36. Meanwhile, in December of 2006, Plaintiff filed a separate civil action in this Court at C.A. No. 06-304E alleging a false imprisonment claim against Crawford County Correctional Facility, Lewis, Kosher, Meal, Wyant, Denman and Minor (all Defendants named in the original complaint in this action). By Order dated June 27, 2007, this Court granted Plaintiff's motion to consolidate C.A. 06-304E with the instant matter and directed Plaintiff to file an amended complaint in this case to fully allege all his claims. B) The First Amended Complaint Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 34 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 In his First Amended Complaint filed on September 7, 2007, Plaintiff expanded upon his earlier claims regarding the two separate assaults by fellow inmates and the subsequent delay in medical care. First Amended Complaint, ECF No. 52. Plaintiff also added the additional claim of false imprisonment stemming from a miscalculation of his sentence (consolidated from C.A. No. 06-304). Id. at ¶¶ 36-44. Plaintiff summarized his allegations into the following counts: Count I-False or Wrongful Imprisonment; Count Two-Assault and Battery; Counts Three, Four and Five-Negligence; Count Six-Gross Negligence; Count Seven-Negligent Infliction of Mental Distress; and Count Eight-Intentional Infliction of Mental Distress. Id. Named as Defendants to the First Amended Complaint were: the Crawford County Correctional Facility, Warden Tim Lewis, John and Jane Doe of the protective housing unit, Deputy Warden Sausberry [sic], Minor, Denman, Wyant, McCune, Coleman, Stewart, Meal, Kosher, Wolf, Kingston, Fox, Schrekengost, Grundy, Snow, Patterson, Barns, Brown, Shinko, Stevens, Rick, and Moran. Id. at ¶ 8. 3 3 Within the body of the First Amended Complaint, Plaintiff referred to fellow inmates Lonnie Williams and Justin Q. Smith as Defendants, but they were not added as Defendants. C) The Second Amended Complaine 4 4 An amended complaint generally supercedes (or takes the place of) the previously filed complaint. See New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101 F.3d 1492, 1504 (3d Cir.1996) quoting Boelens v. Redman Homes, Inc., 759 F.2d 504, 507-08 (5th Cir.1985); see also Hemispherx Biopharma, Inc. v. Asencio, 2000 WL 807012, at * 2 (E.D.Pa.2000). *2 Plaintiff obtained counsel around February of 2009. ECF No. 86. New counsel requested an extension of time in which to conduct discovery which was granted. On May 11, 2009, Plaintiff, through his newly obtained counsel, filed a Second Amended Complaint. ECF No. 92. Named as Defendants to the Second Amended Complaint are all Defendants from the First Amended Complaint, plus Nurse Cynthia Saulsbury, and fellow inmates Lonnie Williams and Justin Q. Smith. The Second Amended Complaint alleges that Plaintiff's constitutional rights under the Eighth and Fourteenth Amendments were violated and also alleges “specific state claims based on the torts of False Imprisonment, Assault and Battery, Negligence, Gross Negligence, Negligent Infliction of Mental Distress and Intentional Infliction of Mental Distress, all of which were done with deliberate indifference and retaliation 5 .” The Second Amended Complaint lists the following counts: 5 “Retaliation for the exercise of constitutionally protected rights is itself a violation of rights secured by the Constitution actionable under section 1983.” See White v. Napoleon, 897 F.2d 103, 111-12 (3d Cir.1990). “Government actions, which standing alone, do not violate the Constitution, may nonetheless be constitutional torts if motivated in substantial part by a desire to punish an individual for exercise of a constitutional right.” Mitchell v. Horn, 318 F.3d 523, 530 (3d Cir.2003) quoting Allah v. Seiverling, 229 F.3d 220, 224-25 (3d Cir.2000). In order to state a prima facie case of retaliation, a prisoner plaintiff must allege: 1) the conduct in which he was engaged was constitutionally protected; 2) he suffered “adverse action” at the hands of prison officials; and 3) his constitutionally protected conduct was a substantial or motivating factor in the decisions to discipline him. Carter v. McGrady, 292 F.3d 152, 157-58 (3d Cir.2002) quoting Rauser v. Horn, 241 F.3d 330, 333 (3d Cir.2001). Despite the repeated use of the word retaliation peppered throughout the Second Amended Complaint, Plaintiff has failed to allege the basic elements of a retaliation claim. Count I-False or Wrongful Imprisonment; Count II-Assault and Battery; Count III-Negligence (failure to protect); Count IV-Negligence (failure to provide medical care); Count V-Negligence (failure to hire/train/supervise employees relating to both failure to protect and failure to provide medical care); Count VI-Gross Negligence; Count VII-Negligent Infliction of Mental Distress; Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 35 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 Count VIII-Intentional Infliction of Mental Distress; and Count IX-Attorney Fees, Costs and Expenses. ECF No. 92. Although the counts of Plaintiff's counseled complaint are titled as state law tort claims only, Plaintiff makes federal civil rights allegations and arguments in his filings as well. The content of the claims will be analyzed as pled, not as titled. 6 The allegations and organization of the Second Amended Complaint do not indicate which claims are levied against which individual Defendants. 6 To draw a distinction based upon the headings of a particular pleading would be to “elevate form over substance, which is inappropriate in reviewing pleadings.” Valentine v. Legendary Marine FWB, Inc., 2010 WL 1687738, at *2 (N.D.Fla.2010). See also Fed.R.Civ.P. 8(e) (requiring courts to construe pleadings “so as to do justice”); Hussain v. Boston Old Colony Ins. Co., 311 F.3d 623, 633 n. 39 (5th Cir.2002) (noting that courts should construe a pleading liberally according to its substance rather than its form or titles); Trustees of I.A.M. Dist. No. 15 Health Fund v. Operant Material Solutions of New York New Jersey LLC, 2008 WL 4601792, at * 3 (D.N.J.2008) (“Rule 8(e) directs district courts to construe pleadings ‘so as to do justice,’ which courts have understood to discourage the practice of dismissing a case for minor technical defects in the pleadings.”). On June 2, 2009, Attorney Jeffrey Millin filed an Answer to the Second Amended Complaint on behalf of: Patterson, Fox, Shrekengost, Grundy, Snow, Brown, Shinko, Wolf, Kingston, Meal, Kosher, McCune, Crawford County Correctional Facility, “Rick”, Moran, Lewis, Minor, Denman and Wyant. ECF No. 94. On August 6, 2009, during a status conference, Jane Doe was identified as Kerri Thayer Boozer, John Doe was identified as Phil Smith, and Plaintiff voluntarily withdrew his claims against fellow inmates Lonnie Williams and Justin Smith. ECF No. 106. On September 11, 2009, Defendants Deputy Warden Saulsbury, Nurse Cynthia Saulsbury, Kerri Thayer Boozer (formerly identified as Jane Doe), Stewart, Coleman, Barnes, and Phil Smith (formerly identified as John Doe) filed a motion to dismiss based upon the statute of limitations. ECF No. 109. By Report and Recommendation dated November 4, 2009, this Court recommended that the motion to dismiss be granted and that these named Defendants be dismissed from this action. ECF No. 126. Objections were filed and Judge McLaughlin heard oral argument on the matter before adopting the Report and Recommendation as the Opinion of the Court on December 29, 2009. ECF No. 151. *3 The Defendants who remain as parties to this litigation are Crawford County Correctional Facility, Jail Nurse Rick, Doctor Moran, Warden Lewis, Lt. Minor, Lt. Denman, Lt. Wyatt, Officer Patterson, Officer Fox, Officer Shrekengost, Officer Grundy, Officer Snow, Officer Brown, Officer Shinko, Counselor Wolf, Counselor Kingston, Sgt. Meal, Sgt. Kosher, Lt. McCune, and Stevens. Defendant Nurse Rick is represented by Fran Klemensic, Esq., while all other Defendants are represented by Jeffrey Millin, Esq. Defendants moved for summary judgment against several of the counts of the Second Amended Complaint. ECF Nos. 144, 146. Concise Statements of Material Facts did not accompany the motions as required by Local Rule 56(B)(1), but each was filed one month later. ECF Nos. 157, 158. In early February, 2010, the parties filed their respective consents to have an United States Magistrate Judge conduct proceedings in this case, including entry of a final judgment. ECF Nos. 161, 162, and 163. Plaintiff filed an opposition brief to the motions for summary judgment in March 2010. ECF No. 178. About a month later, Plaintiff filed “First Motion for Leave to File Motion's Exhibits 1 and 2 as New Evidence received this date for Inclusion in Plaintiff's Appendix and all other Plaintifffiled documents responsive to Defendants' motion for summary judgment.” ECF No. 193. Because the purported “new evidence” directly impacted the statute of limitations defense raised by Defendants, this Court reopened the long-closed discovery phase of this litigation on the limited issue of timeliness with respect to the filing of the Original Complaint. Defendants were allowed to supplement their pending motions for summary judgment and Plaintiff was allowed to supplement his opposition brief. ECF Nos. 205-209. The issues are ripe for disposition by this Court. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 36 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 II. Standards of Review A) Motion to dismiss pursuant to 12(b)(6) A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) must be viewed in the light most favorable to the plaintiff and all the well-pleaded allegations of the complaint must be accepted as true. Erickson v. Pardus, 551 U.S. 89, 93-94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). A complaint must be dismissed pursuant to Rule 12(b)(6) if it does not allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570 (rejecting the traditional 12(b) (6) standard set forth in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). See also Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (specifically applying Twombly analysis beyond the context of the Sherman Act). A Court need not accept inferences drawn by a plaintiff if they are unsupported by the facts as set forth in the complaint. See California Pub. Employee Ret. Sys. v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir.2004) citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). Nor must the Court accept legal conclusions set forth as factual allegations. Twombly, 550 U.S. at 555, citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). See also McTernan v. City of York, Pennsylvania, 577 F.3d 521, 531 (3d Cir.2009) quoting Iqbal, --- U.S. at ----, 129 S.Ct. at 1949 (“The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”). A plaintiff's factual allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 556, citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed.2004). Although the United States Supreme Court does “not require heightened fact pleading of specifics, [the Court does require] enough facts to state a claim to relief that is plausible on its face.” Id. at 570. *4 In other words, at the motion to dismiss stage, a plaintiff is “required to make a ‘showing’ rather than a blanket assertion of an entitlement to relief.” Smith v. Sullivan, 2008 WL 482469, at * 1 (D.Del.) quoting Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008). “This ‘does not impose a probability requirement at the pleading stage,’ but instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary element.” Phillips, 515 F.3d at 234, quoting Twombly, 550 U.S. at 556 n. 3. Recently, the Third Circuit expounded on the Twombly/ Iqbal/Phillips line of cases: To prevent dismissal, all civil complaints must now set out ‘sufficient factual matter’ to show that the claim is facially plausible. This then ‘allows the court to draw the reasonable inference that the defendant is liable for the alleged misconduct.’ * * * [A]fter Iqbal, when presented with a motion to dismiss for failure to state a claim, district courts should conduct a two-part analysis. First, the factual and legal elements of a claim should be separated. The district court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Second, a district court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’ In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts. As the Supreme Court instructed in Iqbal, ‘[w]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief.’ This ‘plausibility’ requirement will be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11(3d Cir.2009) (emphasis added) (internal citations omitted). B) Motion for summary judgment pursuant to Rule 56 Federal Rule of Civil Procedure 56(c)(2) provides that summary judgment shall be granted if the “pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Rule 56(e)(2) further provides that when a motion for summary judgment is made and supported, “an opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must-by affidavits or as otherwise provided in this rule-set out specific facts showing a genuine issue for trial. If the opposing party does not so respond, summary Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 37 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 judgment should, if appropriate, be entered against that party.” A district court may grant summary judgment for the defendant when the plaintiff has failed to present any genuine issues of material fact. Fed.R.Civ.P. 56(c). *5 The moving party has the initial burden of proving to the district court the absence of evidence supporting the non-moving party's claims. Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir.2007); UPMC Health System v. Metropolitan Life Ins. Co., 391 F.3d 497, 502 (3d Cir.2004). The burden then shifts to the nonmovant to come forward with specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(e); Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460- 461 (3d Cir.1989). The non-moving party “must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue.” Garcia v. Kimmell, 2010 WL 2089639, at *1 (3d Cir.2010) quoting Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir.2005). Further, the non-moving party must go beyond the pleadings and show specific facts by affidavit or by information contained in the filed documents (i.e., depositions, answers to interrogatories and admissions) to meet his burden of proving elements essential to his claim. Celotex, 477 U.S. at 322; see also Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.2001). The court must consider the evidence, and all reasonable inferences which may be drawn from it, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). See also El v. SEPTA, 479 F.3d 232, 238 (3d Cir.2007). When considering a motion for summary judgment, the court is not permitted to weigh the evidence or to make credibility determinations, but is limited to deciding whether there are any disputed issues and, if there are, whether they are both genuine and material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A material fact is a fact whose resolution will affect the outcome of the case under applicable law. Id. at 248. Summary judgment is only precluded if the dispute about a material fact is “genuine,” i.e., if the evidence is such that a reasonable jury could return a verdict for the non- moving party. Id. at 247-249. III. Analysis A) The Prison Litigation Reform Act 1) The Exhaustion Requirement The Crawford County Defendants argue that some of Plaintiff's remaining claims (those of false imprisonment, failure to protect and the assault and battery) should be dismissed for failure to comply with the exhaustion requirements of the Prison Litigation Reform Act. The Prison Litigation Reform Act (“PLRA”), 42 U.S.C. § 1997e(a), provides: no action shall be brought with respect to prison conditions under section 1983 of this title ... by a prisoner confined in any jail, prisons, or other correctional facility until such administrative remedies as are available are exhausted. Id (emphasis added). 7 7 It is not a plaintiff's burden to affirmatively plead exhaustion. Jones v. Bock, 549 U.S. 199, 217, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007) (“... failure to exhaust is an affirmative defense under the PLRA, and that inmates are not required to specially plead or demonstrate exhaustion in their complaints.”);. Instead, the failure to exhaust must be asserted and proven by the defendants. Ray v. Kertes, 285 F.3d 287, 295 (3d Cir.2002). The requirement that an inmate exhaust administrative remedies applies to all inmate suits regarding prison life, including those that involve general circumstances as well as particular episodes. Porter v. Nussle, 534 U.S. 516, 122 S.Ct. 983, 152 L.Ed.2d 12 (2002). See also Concepcion v. Morton, 306 F.3d 1347 (3d Cir.2002) (for history of exhaustion requirement). Administrative exhaustion must be completed prior to the filing of an action. McCarthy v. Madigan, 503 U.S. 140, 144, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992). Federal courts are barred from hearing a claim if a plaintiff has failed to exhaust all the available remedies. Grimsley v. Rodriquez, 113 F.3d 1246 (Table), 1997 WL 2356136 (Unpublished Opinion) (10th Cir. May 8, 1997). 8 The exhaustion requirement is not a technicality, rather it is federal law which federal district courts are required to follow. Nyhuis v. Reno, 204 F.3d 65, Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 38 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 73 (3d Cir.2000) (by using language “no action shall be brought,” Congress has “clearly required exhaustion”). 9 8 Importantly, a plaintiff's failure to exhaust his administrative remedies does not deprive the district court of subject matter jurisdiction. Nyhuis v. Reno, 204 F.3d 65, 69 n. 4 (3d Cir.2000) ( “... [W]e agree with the clear majority of courts that § 1997e(a) is not a jurisdictional requirement, such that failure to comply with the section would deprive federal courts of subject matter jurisdiction.”). 9 There is no “futility” exception to the administrative exhaustion requirement. Banks v. Roberts, 2007 WL 3096585, at * 1 (3d Cir.) citing Nyhuis, 204 F.3d at 71 (“[Plaintiff's] argument fails under this Court's bright line rule that ‘completely precludes a futility exception to the PLRA's mandatory exhaustion requirement.’ ”). See also Woodford v. Ngo, 548 U.S. 81, 85, 126 S.Ct. 2378, 165 L.Ed.2d 368 (2006) (“Indeed, as we held in Booth, a prisoner must now exhaust administrative remedies even where the relief sought -monetary damages-cannot be granted by the administrative process.”). *6 The PLRA also requires “proper exhaustion” meaning that a prisoner must complete the administrative review process in accordance with the applicable procedural rules of that grievance system. Woodford v. Ngo, 548 U.S. 81, 87-91, 126 S.Ct. 2378, 165 L.Ed.2d 368 (2006) (“Proper exhaustion demands compliance with an agency's deadlines and other critical procedural rules ...”). Importantly, the exhaustion requirement may not be satisfied “by filing an untimely or otherwise procedurally defective ... appeal.” Id. at 83; see also Spruill v. Gillis, 372 F.3d 218, 228-29 (3d Cir.2004) (utilizing a procedural default analysis to reach the same conclusion). 2) The Administrative Process Available to County Inmates So then, no analysis of exhaustion may be made absent an understanding of the administrative process available to state inmates. “Compliance with prison grievance procedures, therefore, is all that is required by the PLRA to ‘properly exhaust.’ The level of detail necessary in a grievance to comply with the grievance procedures will vary from system to system and claim to claim, but it is the prison's requirements, and not the PLRA, that define the boundaries of proper exhaustion.” Jones v. Bock, 549 U.S. 199, 218, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007). The Crawford County Correctional Facility has established a multi-tier system whereby an inmate may seek formal review of any aspect of his imprisonment. The procedure is detailed in the General Population Handbook which is provided to every inmate upon his arrival. The written policy indicates that, initially “most routine housing unit questions and matters can be handled directly by speaking with your housing unit officer.” Exhibits to Motion to Dismiss, ECF No. 55-1, page 15. Next, the inmate must fill out a request form which is made available in his housing unit and which must be submitted to the housing unit officer. Inmate grievances can be obtained from the housing unit officer. Appeals of grievances are to be submitted to the deputy warden. Id. The Inmate Handbook does not indicate whether there are time limitations to the filing of a grievance. Id. 3) Exhaustion applied The Crawford County Defendants argue that Plaintiff has failed to exhaust his administrative remedies in relation to his claims of false imprisonment, failure to protect and assault and battery. In support of their argument in this regard, the Crawford County Defendants have provided evidence that Plaintiff did not exhaust his administrative remedies as to these issues 10 . Affidavit of Warden Tim Lewis, ECF No. 55- 1, pages 2-5. During his incarceration at the Crawford County Correctional Facility, Plaintiff filed only two inmate grievances (one dated November 30, 2004 and the second dated December 6, 2004). Id. The November 30th grievance complains about Mr. Wykoff's “lying” to Plaintiff for three weeks regarding alcohol and drug counseling (ECF No. 61, page 7), while the December 6th grievance complains about the lack of pain medications (id. at 9). This evidence demonstrates that Plaintiff did not file any grievance regarding the failure to protect, the false imprisonment, or the assault and battery claims. 10 By Report and Recommendation dated May 8, 2008, the undersigned recommended that Plaintiff's Eighth Amendment claims be dismissed based upon his failure to exhaust his administrative remedies in accordance with the requirements of the PLRA. ECF No. 64. Following the filing of Objections by Plaintiff, acting pro se, District Judge McLaughlin declined to adopt the Report and Recommendation based upon Plaintiff's contention that he was thwarted/hindered Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 39 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 in his efforts to exhaust. Judge McLaughlin indicated that Defendants retained the right to revisit the issue of exhaustion on a more fully developed record. ECF No. 72. *7 In opposition, Plaintiff generally swears under oath that he was repeatedly hindered or thwarted in his attempts to exhaust all of his administrative remedies on all of his claims. Affidavit of Plaintiff Dean Proper, ECF No. 176-2, pages 20-24. The Third Circuit has invariably held that interference with an inmate's attempts at exhaustion impact the availability of the administrative remedy process. Mitchell v. Horn, 318 F.3d 523, 529 (3d Cir.2003) (“A grievance procedure is not available even if one exists on paper if the defendant prison officials somehow prevent a prisoner from using it.”). See also Berry v. Klem, 283 Fed. Appx. 1, 5 (3d Cir.2009) (“[Plaintiff] contended that the severity of his injuries prevented him from timely filing his initial grievance. [ ... and] also argued that the administrative grievance process was not available to him because he feared serious harm for filing a grievance. While that claim may not ultimately prevail, his allegations put in question the availability of the remedy.”); McKinney v. Guthrie, 2009 WL 274159, at *1 (3d Cir.2009) (“[A]n administrative remedy may be unavailable if a prisoner is prevented by prison authorities from pursuing the prison grievance process.”); Brown v. Croak, 312 F.3d 109, 113 (3d Cir.2002) (“Assuming security officials told Brown to wait for the termination of the investigation before commencing a formal claim, and assuming the defendants never informed Brown that the investigation was completed, the formal grievance proceeding required by DC-ADM 804 was never “available” to Brown within the meaning of 42 U.S.C. § 1997e.”). In this case, Plaintiff's affidavit creates a genuine issue of material fact as to whether the administrative remedy process was available to him. Although Plaintiff's general statement that he was hindered in his ability to fully exhaust his administrative remedies as to all of his claims is suspect, credibility determinations are not to be resolved by the Court on a motion for summary judgment, but are best left to the jury. Therefore, Defendants' motion for summary judgment is denied in this regard. B. Statute of Limitations The Crawford County Defendants, as well as Defendant Nurse Rick, once again raise the issue of the untimeliness of the filing of the Original Complaint. The federal civil rights laws do not contain a specific statute of limitations for § 1983 actions, but, it is well established that the federal courts must look to the relevant state's statute of limitations. Wilson v. Garcia, 471 U.S. 261, 266, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985) (later overruled only as to claims under the Security Exchange Act of 1934). In Pennsylvania, the statute of limitations for a civil rights violation is two years from the date of the alleged violation. See Garvin v. City of Philadelpia, 354 F.3d 215 (3d Cir.(Pa.) 2003); Urrutia v. Harrisburg County Police Dept., 91 F.3d 451 (3d Cir.(Pa.) 1996). 11 11 To the extent that Plaintiff purports to raise pendent state law claims, a two-year statute of limitations period applies to those arising both in negligence (42 Pa.Cons.Stat.Ann. § 8371) and intentional torts (42 Pa.Cons.Stat.Ann. § 5524). *8 As Defendants correctly point out, the Original Complaint in this case was not received and filed by the Clerk of Courts until November 28, 2006, beyond the statute of limitations as to some of the claims alleged. Because he was a prisoner, acting pro se, at the time of the filing of the Original Complaint, this Plaintiff has repeatedly been given the benefit of the prison mailbox rule which provides that an inmate's pleadings are deemed filed at the moment he delivers the documents to prison officials to be mailed, not the date the documents were received by the court. See Houston v. Lack, 487 U.S. 266, 275-76, 108 S.Ct. 2379, 101 L.Ed.2d 245 (1988); Nichols v. Bowersox, 172 F.3d 1068, 1074 (8th Cir.1999) (explaining “the ‘prison mailbox rule’ which, as the name suggests, would establish the date of filing as the date on which the prisoner puts the proverbial ‘letter’ in the proverbial ‘mailbox’-in other words, the date on which he or she deposits the petition in the prison mail system.”); Longenette v. Krusing, 322 F.3d 758 (3d Cir.2003); Burns v. Morton, 134 F.3d 109, 113 (3d Cir.1998) (prison mailbox rule provides that “a pro se prisoner's habeas petition is deemed filed at the moment he delivers it to prison officials for mailing to the district court.”). “Given the ‘evidentiary difficulty in determining when a prisoner relinquishes control of the complaint to prison personnel’ this date is presumed to be the date plaintiff Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 40 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 8 gave the notice to prison officials to be mailed.” Crooker v. Wachovia Bank, 2010 WL 1996377 (E.D.Pa. May 13, 2010) quoting Taylor v. Naylor, 2006 WL 1134940, *3 (W.D.Pa.2006). See also West v. Lockett, 2009 WL 1270225, at *4 n. 2 (W.D.Pa. May 6, 2009) (“Absent proof of the exact date of delivering the ... petition to the prison authorities, the court will presume the date whereon Plaintiff signed his ... petition is the date he gave the prison authorities his ... petition for mailing.”); Hodge v. Klopotoski, 2009 WL 3572262, at *15 (W.D.Pa. Oct.26, 2009) (“In the absence of contrary evidence, a court will typically assume that a prisoner presented his or her petition to prison authorities for filing the same date that he or she signed it.”). However, the prison mailbox rule only creates a presumption, which may be overcome in the appropriate circumstances. Here, the original pro se complaint indicates on its face that it was signed and dated on November 15, 2006, even though it was not received by the Clerk of Courts until November 28, 2006. See ECF No. 1-1, pages 14-15; ECF No. 1-3, the accompanying motion for appointment of counsel, page 1. This length of time between November 15 and November 28 is suspect, especially in light of other documents now before this Court. The date the complaint was signed is not necessarily entitled to the presumption that it was delivered to prison officials for mailing on that same date. Defendants have provided evidence in support of their position. While Plaintiff's Original Complaint is dated November 15, a letter from Schenck & Long, Attorneys at Law, to Plaintiff dated November 16th, references Plaintiff's letter to them received that same day and seeks their legal representation. ECF No. 144-1, page 59. This letter demonstrates that as of that date (presumably sent a day or two before November 16th), Plaintiff was still seeking counsel to represent him in this forthcoming action, which raises doubts as to Plaintiff's assertion that he delivered the pro se complaint to prison authorities for mailing to the District Court on November 15th. *9 Even more damning for Plaintiff is his letter dated November 25, 2006, to the Clerk of Courts of this district explaining his tardy filing: I also sent a sepaerate [sic] pakage [sic] (white vanialla [sic] envelope) today it contains my complaint and lawsuit Im' filing pro se against the Crawford County Correctional Facility [ ... ] this jail here that I'm at (Mercer County Jail) the Lietentant (sic) named Lt. Heartsaw and Sgt. Crosby both told me Monday night that they would make me the copies I needed to send you I explained I was indigent and Lt. Heartsaw told me the “Mercer County Jail” would take care of all expensives (sic) (They will pay for the copies and the postage and handling to send the “white vallina [sic] envopel” that contains my lawsuit. I filed pro se. well, this jail made a mistake with the postage and haling they only put $1.97 [ ... ] on the postage to sent to you, and I received the package (white vallina envoleop) back yesterday11-24-06 and it said on the white valling evnvolope postage due. [ ... ] You would of got the white vallina enviope (my lawsuit) on 11-23-2006. ECF No. 144-1, page 61. The envelope indicates that it was mailed on November 22, 2006. Id. at 62. So then, Plaintiff's own letter indicating that the Clerk of Courts should have received the complaint on November 23, 2006, and the accompanying envelope postmarked November 22, 2006, are proof enough for this Court to overcome the presumption associated with the date of November 15, 2006, which was handwritten by Plaintiff on the motion for in forma pauperis and the Original Complaint. A prisoner who wishes to invoke the presumption of the prison mailbox rule has an obligation to obtain as much information as to mailing dates as possible. Thomas v. Kyler, 2004 WL 267391, at *4 (E.D.Pa.2004); Koch v. Roberts, 68 F.3d 1191, 1193 n. 3 (9th Cir.1995) (prisoner who uses method that does not offer proof of when mailed assumes risk that he won't be able to prove when he handed items to prison authorities). Here, after much discovery of this issue, it appears that the Mercer County Jail, at which Plaintiff was incarcerated at the time of the filing of the Original Complaint, had a less than precise system for logging outgoing prisoner Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 41 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 9 mail. As counsel for the Crawford County Defendants acknowledges: it appears that Plaintiff submitted an envelope to Mercer County Prison personnel that was addressed to the District Court, on November 15, 2006. The Mercer County Prison personnel do not verify what was included for mailing. The envelope was ultimately mailed from Mercer County Prison with a postmark of November 22, 2006 and subsequently returned for postage due. There seems to be no explanation as to why there was insufficient postage for the initial mailing. Thereafter, a subsequent mailing, in what appears to be a different envelope, was mailed out from Mercer County Prison on November 27, 2006 (which is also not included on the Mercer County Prison Mail Log). This latter mailing presumably is the Plaintiff's Complaint with the letter from Schenck & Long, a law firm in Butler dated November 15, 2006. *10 ECF No. 205, page 3. So then, Defendants' own position is that Plaintiff delivered an envelope to the Mercer County Prison authorities for mailing to the District Court on November 15, 2006, the date indicated on the Original Complaint, which makes this action timely filed. Defendants' motions for summary judgment are denied in this regard. C) Eighth Amendment-Medical Claims All Defendants argue that Plaintiff's Eighth Amendment claim should be dismissed as they were not deliberately indifferent to his serious medical needs. Despite the vague and general allegations of the counseled Second Amended Complaint, this Court construes the Eighth Amendment claims as consisting of four separate components. First, Defendants delayed in their medical treatment of Plaintiff on November 19th, following the first assault. Second, Defendants failed to provide the appropriate followup care to Plaintiff by way of the suture removal. Third, Defendants delayed in their medical treatment of Plaintiff on November 24, following the second assault. Fourth, Defendants denied Plaintiff's requests for psychological care. In the medical context, a constitutional violation under the Eighth Amendment occurs only when prison officials are deliberately indifferent to serious medical needs. Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976). The standard is two-pronged, “[i]t requires deliberate indifference on the part of prison officials and it requires that the prisoner's medical needs be serious.” West v. Keve, 571 F.2d 158, 161 (3d Cir.1978). A serious medical need is “one that has been diagnosed by a physician as requiring treatment or one that is so obvious that a lay person would easily recognize the necessity for a doctor's attention.” Monmouth County Corr'al. Inst. Inmates v. Lanzaro, 834 F.2d 326, 347 (3d Cir.1987). A serious medical need may also arise “... when a delay in or denial of requested medical treatment causes an inmate to suffer a lifelong handicap or permanent loss.” Peterson v. Achebe, 2007 WL 1381753, at * 3 (D.N.J.2007) citing Lanzaro, 834 F.2d at 347. Deliberate indifference to a serious medical need involves the “unnecessary and wanton infliction of pain.” Estelle, 429 U.S. at 104. Such indifference is manifested by an intentional refusal to provide care, delayed medical treatment for non-medical reasons, denial of prescribed medical treatment, a denial of reasonable requests for treatment that results in suffering or risk of injury, Durmer v. O'Carroll, 991 F.2d 64, 68 (3d Cir.1993), or “persistent conduct in the face of resultant pain and risk of permanent injury” White v. Napoleon, 897 F.2d 103, 109 (3d Cir.1990). However, mere misdiagnosis or negligent treatment is not actionable under § 1983 as an Eighth Amendment claim because medical malpractice is not a constitutional violation. Estelle, 429 U.S. at 106 (“Medical malpractice does not become a constitutional violation merely because the victim is a prisoner.”). “Neglect, carelessness or malpractice is more properly the subject of a tort action in the state courts.” Hampton v. Holmesburg Prison Officials, 546 F.2d 1077, 1081 (3d Cir.1976). See also White, 897 F.2d at 108 (“mere medical malpractice cannot give rise to a violation of the Eighth Amendment.”). Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 42 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 10 “While the distinction between deliberate indifference and malpractice can be subtle, it is well established that so long as a physician exercises professional judgment, his behavior will not violate a prisoner's constitutional rights.” Brown v. Borough of Chambersburg, 903 F.2d 274, 278 (3d Cir.1990) citing Youngberg v. Romeo, 457 U.S. 307, 322-23, 102 S.Ct. 2452, 73 L.Ed.2d 28 (1982). See also Powell v. Symons, 2010 WL 1485682, at *3 (M.D.Pa. March 22, 2010). *11 Furthermore, deliberate indifference is generally not found when some level of medical care has been offered to the inmate. Clark v. Doe, 2000 WL 1522855, at *2 (E.D.Pa.2000) (“courts have consistently rejected Eighth Amendment claims where an inmate has received some level of medical care”). There is necessarily a distinction between a case in which the prisoner claims a complete denial of medical treatment and one where the prisoner has received some medical attention and the dispute is over the adequacy of the treatment. United States ex rel. Walker v. Fayette County, 599 F.2d 533, 575 n. 2 (3d Cir.1979). Any attempt to second-guess the propriety or adequacy of a particular course of treatment is disavowed by courts since such determinations remain a question of sound professional judgment. Inmates of Allegheny County Jail v. Pierce, 612 F.2d 754, 762 (3d Cir.1979) quoting Bowring v. Goodwin, 551 F.2d 44, 48 (4th Cir.1977). At this point, I will examine each of the four separate components of this claim individually. 12 12 While Defendants have provided this Court with an expert report opining that the challenged medical care does not rise to the level of deliberate indifference, this conclusion is not entitled to any weight as it represents a legal conclusion. Whether Defendants' actions constituted deliberate indifference is a legal conclusion for the trier of fact to determine- an expert may not opine as to the actual legal question. “While experts may opine as to facts relevant to a legal conclusion, they are not permitted to draw that conclusion themselves.” See In re Derivative Litigation, Herley Industries Inc., 2010 WL 1375195 (E.D.Pa. Feb.5, 2010) quoting VIM, Inc. v. Somerset Hotel Ass'n, 19 F.Supp.2d 422, 428 n. 4 (W.D.Pa.1998). 1) Emergency Care following the first assault on November 19th In the Second Amended Complaint, Plaintiff alleges that “[d]ue to the severe injuries sustained, Plaintiff after a delay by Defendants that constituted deliberate indifference, was transported to the Meadville Medical Center where he was treated for lacerations and subsequently sutured.” ECF No. 92, ¶ 27. The evidentiary record reflects that on November 19, 2004, Plaintiff was admitted to the Emergency Room of Meadville Medical Center at 1:35 pm. ECF No. 144-1, page 88. Despite the general allegation that there was a delay in Plaintiff's receiving medical treatment following the November 19th assault, there is no factual allegation as to the length of the alleged delay. The evidence points instead to emergency room treatment on the same day as the assault. See Rhines v. Bledsoe, 2010 WL 2911628, (3d Cir. July 27, 2010) (holding that one-month delay in inmate's receiving MRI for torn meniscus, while possibly negligent, did not rise to the level of deliberate indifference); Small v. Visinsky, 2010 WL 2650497, at *3 (3d Cir. July 2, 2010) (holding that delay in providing therapy three times a week does not amount to deliberate indifference). Accordingly, the motion for summary judgment will be granted as to this claim. 2) Followup Care for Removal of Sutures Here, Plaintiff alleges that Defendants delayed in the followup care as prescribed by the Emergency Room physician following the first assault-i.e., that Plaintiff was to have the sutures removed from his mouth within five to seven days. Deliberate indifference will be found where prison officials “intentionally deny[ ] or delay [ ] access to medical care or intentionally interfere[ ] with the treatment once prescribed.” Hankey v. Wexford Health Sources, Inc., 2010 WL 2222923, at *3 (3d Cir. June 4, 2010) quoting Estelle, 429 U.S. at 104-05. Further, as the Third Circuit has explained: *12 Acting with “reckless disregard” to a substantial risk of serious harm to a prisoner is consistent with deliberate indifference. See Farmer, 511 U.S. at 836. This Court has found that the standard is met when prison officials: 1) deny reasonable requests for medical treatment, and the Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 43 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 11 denial exposes the inmate to undue suffering or the threat of tangible residual injury, 2) delay necessary medical treatment for non-medical reasons, 3) erect arbitrary and burdensome procedures that result in interminable delays and outright denials of care, or 4) prevent an inmate from receiving recommended treatment for serious medical needs, or deny access to a physician capable of evaluating the need for treatment. See Monmouth, 834 at 346-47; see also Durmer, 991 F.2d at 68. Cooleen v. Lamanna, 248 Fed. Appx 357, 360 (3d Cir.2007). The record reflects that upon his treatment at the Meadville Medical Center on November 19th, Plaintiff was released from the Emergency Room with written instructions: “for suture removal see your doctor or return to ED in 5-7 days.” ECF No. 144-1, page 88. The record further reflects that only some of the sutures were removed the following March and one stitch was removed the following April. Id. at page 106 (March 2005 removal); page 83 (April 2005 removal). 13 Further, the record reflects that Plaintiff sought the removal of the stitches beginning in late November. Id. at page 94. Because the Second Amended Complaint does not name individuals, it is not clear who should have provided the followup care and who is being charged with not providing the care. Nonetheless, the record demonstrates that followup care was prescribed by a doctor, Plaintiff made prison officials aware that followup care was overdue, and prison officials did nothing. 13 Another document from the March 2005 visit explains: “using a pair of forceps and traction, it was rather difficult but I was able to pull the sutures from the underlying embedded skin and cut them out. I was only able to remove three stitches and the patient insisted that there were six .... I told the patient that it [sic] these sutures were not dissolvable and I had told him back then and he knew that they were not dissolvable. I told the patient that these sutures should have been removed in November.” ECF No. 1-2, page 3. For these reasons, Defendants' motions for summary judgment will be denied as to this claim. 3) Emergency Care following the second assault on November 24th Summary judgment will be granted in favor of Defendants as to the Eighth Amendment claim stemming from the alleged delay in medical treatment following the second assault. The evidence shows that Plaintiff was assaulted around 8:10 am and was received at the Meadville Medical Center on November 24, 2004 at 8:47am. Thereafter, Plaintiff was transferred to Dr. Baretta's dental office for care. ECF No. 144-1, page 4 (Lt. Denman's Memorandum); id. at page 68 (Meadville Medical Center Discharge Instructions). Furthermore, the medical record reflects that Plaintiff was examined by a dentist on November 30, 2004, and again on December 15, 2004. Id. at 89, 94, and 100. The record belies any delay in medical treatment following the assault on November 24th. Accordingly, the motion for summary judgment is granted as to this claim. 4) Requests for Mental Health Care Plaintiff makes the general allegation that his requests for psychological treatment were denied during his incarceration. Plaintiff does not specify when this denial of treatment took place, but for purposes of this motion and because Plaintiff is the non-movant, this Court will assume that these requests occurred after the assaults (otherwise, this claim may be barred by the statute of limitations). Indeed, the only mention of it in the Second Amended Complaint states that Defendants acted “with deliberate indifference with respect to Plaintiff's medical condition. These acts included but are not limited to ... a failure or refusal to address Plaintiff's request for mental health counseling.” ECF No. 92, ¶ 3 3. *13 Again, the medical records before this Court belie Plaintiff's allegation that Defendants failed to address his mental health issues. The record reflects that Plaintiff was on the Mental Health Roster/Dr. Qureshi Patient List on December 27th and December 10th of 2004, and April 15th and March 18th of 2005. Patient List, ECF No. 144- 1, pages 124, 125, 130, 132. Also, in a Memo dated April 24, 2005, Nurse Saulsberry indicates: Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 44 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 12 ... in reference to Inmate Dean Proper's request for counseling. Inmate Proper has seen Dr. Qureshi at Doctor Call numerous times as scheduled and also upon his request several times d/t problems he stated he was having. Dr. Qureshi has suggested to Inmate Proper that he should seek the services of the counselors available to him here at the [Crawford County Correctional Facility] vs. obtaining psychological services from an outside source. If this does not work he should then seek the services of a psychologist on the outside. It is my understanding that he has some counseling available to him if he so chooses thru (sic) Drug and Alcohol ... Id. at 93. Prison medical staff “do not violate the Eighth Amendment when, in the exercise of their professional judgment, they refuse to implement a prisoner's requested course of treatment.” Long v. Nix, 86 F.3d 761, 765 (8th Cir.1996). Here, some level of mental health care was offered to the inmate and he simply did not believe it to be adequate. Such disagreement does not rise to the level of an Eighth Amendment violation. See Josey v. Beard, 2009 WL 1858250, at * 6 (W.D.Pa.) citing Walker v. Fayette County, 599 F.2d at 575 n. 2 (noting a distinction between a case in which the prisoner claims a complete denial of medical treatment and one where the prisoner has received some medical attention and the dispute is over the adequacy of the treatment). The motion for summary judgment will be granted in this regard. D) Medical Negligence Claims Plaintiff also raises all four claims addressed above as allegations of medical negligence under Pennsylvania law. Defendants argue that these claims should be dismissed because Plaintiff has failed to provide an expert as required by Pennsylvania law. In order to establish a cause of action in medical negligence, plaintiffs bear the burden of demonstrating that there was (1) a duty or obligation owed by the physician, (2) breach of that duty by the defendants, (3) a causal connection between the defendants' breach of that duty and the resulting injury, and (4) actual loss or damage suffered by the complainant. Wooding v. United States of America, 2007 WL 951494, at *3 (W.D.Pa.) quoting Quinby v. Plumstead Family Practice, Inc., 589 Pa. 183, 907 A.2d 1061, 1070 (2006). Because the actions of a physician encompass matters not within the ordinary knowledge and experience of a layperson, Pennsylvania law requires that “as a general rule, a plaintiff has the burden of presenting expert opinions that the alleged act or omission of the defendant physician or hospital personnel fell below the appropriate standard of care in the community, and that the negligent conduct caused the injuries for which recovery is sought.” Wooding, 2007 WL 951494, at *3, quoting Simpson v. Federal Bureau of Prisons, 2005 WL 2387631, at *5 (W.D.Pa.). The Pennsylvania courts have explained this requirement: *14 Courts sitting in medical malpractice cases require detailed expert testimony because a jury of laypersons generally lacks the knowledge to determine the factual issues of medical causation; the degree of skill, knowledge, and experience required of the physician; and the breach of the medical standard of care. [ ... ] Not only does the plaintiff have the burden of proving that the defendant did not possess and employ the required skill and knowledge, or did not exercise the care and judgment of a reasonable professional, he or she must also prove that the injury was caused by the failure to employ that requisite skill and knowledge. We have previously concluded that this must be accomplished with expert medical testimony presented at trial by doctors testifying as expert witnesses. [ ... ] we affirm our earlier conclusion, set forth in numerous decisions of this Court Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 45 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 13 that, medicine being an applied science, the realm of reasonable choice is best defined by those engaged in the practice, and expert medical testimony on this issue is required. Toogood v. Rogal, 573 A.2d 1140, 1149 (Pa.2003). However, “expert testimony is not required when a matter ‘is so simple or the lack of skill or care is so obvious as to be within the range of experience and comprehension of even non-professional persons.’ ” Wooding, at *3, quoting Simpson, at *5. In opposition to Defendants' argument, Plaintiff argues that many of the matters at issue here are “of lay understanding and are so obvious that any reasonable lay person would know that they needed to be done medically.” ECF No. 178, page 17. This Court agrees with Plaintiff in regard to the failure to provide followup care for the removal of the stitches as even a layperson understands that the failure to remove stitches may result in pain and an exacerbation of the original injury. However, this Court does not agree with Plaintiff in regard to the three other claims of medical negligence- the alleged delay in treatment on both November 19th and 24th, as well as the alleged failure to provide mental health care. These claims require an expert to opine as to the breach and the proximate cause prongs of the negligence case. Montgomery v. South Philadelphia Medical Group, 441 Pa.Super. 146, 656 A.2d 1385, 1390 (Pa.Super.1995); Mitzelfelt v. Kamrin, 526 Pa. 54, 584 A.2d 888, 892 (Pa.1990). Because Plaintiff has not identified such a medical expert, summary judgment should be granted as to these three portions of the state law medical negligence claims. E) “Negligence” in Hiring, Training and Supervising Staff Plaintiff entitles Counts 3, 4 and 5 as “negligence” claims, but makes allegations of both state law negligence and constitutional violations. The Crawford County Defendants move for summary judgment as to the state law negligence portion of these claims only. Pennsylvania recognizes a cause of action for negligent hiring, supervision and retention under common law and the Restatement (Second) of Torts § 317. See Croyle v. Smith, 2005 WL 4904831 (Pa.Com.Pl.2005); Mahan v. Am-Gard, Inc., 841 A.2d 1052 (Pa.Super.2003). *15 Defendants argue that these negligence claims should be dismissed because Plaintiff has failed to provide an expert to establish the standard of care as to the negligent hiring, supervision and retention. However, Defendants do not provide any legal citation for this proposition and this Court could find none. Accordingly, the motion for summary judgment will be denied in this regard. F) False Imprisonment Claim In the Second Amended Complaint, Plaintiff makes the following allegations at this Count: 38.... Plaintiff repeatedly advised Defendants, Crawford County Correctional Facility and its agents and employees, that he was indeed entitled to such jail time credit of sixty-six (66) days and further sets forth that Defendants had both actual and constructive knowledge of this fact, but were deliberately negligent and deliberately indifferent in that they deliberately failed and/or refused to act upon this information when there was clear and unambiguous duty of their part to do so ... 39. Had Plaintiff been provided his said jail credit within a reasonable time, he would have been released from Defendant Crawford County Correctional Facility custody and control on October 13, 2004. However, Plaintiff [ ... ] was not released until June 8, 2005. 40. Plaintiff avers that from October 13, 2004 through June 8, 2005 he was held against this will, falsely imprisoned and wrongfully incarcerated by Defendants Crawford County Correctional Facility, their agents and employees ... 41. Despite diligent and continual demands by Plaintiff for the Defendants to investigate his entitlement, Defendants deliberately failed or refused to do so.... 42. All said Defendants' actions, and each of them, were recklessly negligent, wanton and willful and deliberately indifferent with respect to and as did regard Defendants' wrongful incarceration/false imprisonment of Plaintiff for that period of time from October 13, 2004 through June 8, 2005 and were done without justification, mitigation or excuse. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 46 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 14 44. As a direct and proximate result of the Defendants and each of their conduct, Plaintiff suffered painful and permanent physical and mental injuries and disabilities ... ECF No. 92. The Crawford County Defendants argue that Plaintiff's allegations at this Count are insufficient as a matter of law. 14 In opposition, Plaintiff argues that “Plaintiff properly pled his 1983 claim as a due process violation and, depending on the facts alleged, could also properly assert an Eighth Amendment violation.” ECF No. 178, page 9. Despite Plaintiff's argument, there is nothing in the Second Amended Complaint to indicate that Plaintiff is pursuing this issue as a due process violation. 14 Defendants also argue that Plaintiff's credit claims are barred by Heck v. Humphrey, 512 U.S. 477, 114 S.Ct. 2364, 129 L.Ed.2d 383 (1994) and its progeny, an argument that this Court need not reach here. In order to state an Eighth Amendment claim against a prison official arising out of false incarceration, a plaintiff must demonstrate three elements: (1) a prison official had knowledge of the prisoner's problem and thus of the risk that unwarranted punishment was being, or would be, inflicted; *16 (2) the official either failed to act or took only ineffectual action under the circumstances, indicating that his response to the problem was a product of deliberate indifference to the prisoner's plight; and (3) a causal connection between the official's response to the problem and the unjustified detention. Montanez v. Thompson, 603 F.3d 243, 255 (3d Cir. May 25, 2010) citing Sample v. Diecks, 885 F.2d 1099, 1110 (3d Cir.1989). See also Moore v. Tartler, 986 F.2d 682, 686 (3d Cir.1993). In assessing these factors, relevant circumstances include “the scope of the official's duties and the role the official played in the life of the prison.” Montanez, 603 F.3d at 255. Here, Plaintiff has not met the pleading standard as he has identified no prison official besides “Crawford County Correctional Facility, their agents and employees.” Further, the Crawford County Defendants have provided an expert in support of their motion for summary judgment on this claim. In his report, Jeff Eiser, Criminal Justice Consultant and Jail Operations Expert, provides: Inmate Proper's complaint that he did not get immediate credit for days he served in a jail in South Carolina (awaiting extradition) was not within the authority of the jail to resolve. [ ... ] When he served his time on the local charges in South Carolina, he was extradited back to Crawford County. Inmate Proper claims the jail should have immediately credited him the days he spent in the South Carolina jail awaiting his extradition to Pennsylvania. Based upon my training, education and experience, a jail or prison does not have the statutory or legal authority to credit time for days served in a jail in another state. Generally, that is a decision made by the court having original jurisdiction on the warrant. * * * In this case, the responsibility of the facility is to ensure Mr. Proper's access to his legal counsel and is able to correspond freely with the authorities in South Carolina. A jail facility must have proper documentation to receive a prisoner and must also have proper documentation to release a prisoner. That is exactly what happened in this case. * * * Therefore, based upon my training, education and experience, the policies, procedures and practices of the Crawford County Correctional Facility, as it relates to the Inmate Release Procedure, particularly as applied in this case to the Plaintiff, are adequate and in compliance with corrections industries, practices and standards. Expert Report, ECF No. 133. Plaintiff has not provided any evidence to the contrary, as he must in the face of a supported motion for summary judgment, see Celotex, 477 U.S. at 322, and so, summary judgment will be granted in favor of the Crawford County Defendants on this claim. G) Qualified Immunity Alternatively, the Crawford County Defendants contend that they are entitled to qualified immunity because it was Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 47 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 15 objectively reasonable for the Individual Defendants to believe that they did not violate any clearly established constitutional rights by making the decisions at issue in this case. Defendants only raise this defense in relation to the lack of medical treatment. ECF No. 145, page 18. *17 The doctrine of qualified immunity insulates government officials from liability for damages insofar as their conduct does not violate clearly established rights. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). An officer performing his discretionary functions is “shielded from liability for civil damages insofar as [his] conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Curley v. Klem, 278 F.3d 271, 277 (3d Cir.2002). “Qualified immunity operates to ensure that before they are subjected to suit, officers are on notice that their conduct is unlawful.” Hope v. Pelzer, 530 U.S. 730, 739 (2002). 15 15 In other words, “[w]hen an officer's actions give rise to a § 1983 claim, the privilege of qualified immunity, in certain circumstances, can serve as shield from suit. The primary purpose of affording public officials qualified immunity, thus insulating them from suit, is to protect them from undue interference with their duties and from potentially disabling threats of liability. The privilege of qualified immunity, however, can be overcome when state officials violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Wright v. City of Philadelphia, 409 F.3d 595, 599-600 (3d Cir.2005) (internal citations omitted), declined to follow on other grounds, Kossler v. Crisanti, 564 F.3d 181, 193 (3d Cir. Apr.21, 2009). The analytical framework that district courts have traditionally employed in determining whether the defense of qualified immunity applied was set forth by the Supreme Court in Saucier v. Katz, 533 U.S. 194, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001). The Third Circuit summarized that framework as follows: The [Supreme] Court explained that a qualified immunity analysis must begin with this threshold question: do the facts alleged, viewed in the light most favorable to the party asserting the injury, show that the officer's conduct violated a constitutional right? Saucier, 121 S.Ct at 2156. If the plaintiff fails to allege the violation of a constitutional right, no further inquiry is necessary. If, however, the alleged facts show that there was a constitutional violation, then the next step is to ask whether the right was clearly established. See id. In other words, a court must consider whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted. Id. This inquiry, the Court noted, must be undertaken in light of the specific context of the case, not as a broad general proposition. Id. If a court concludes that an officer's conduct did violate a clearly established constitutional right, then it must deny him the protection afforded by qualified immunity. See id. at 2156- 57. Curley, 278 F.3d at 277. See also Hope, 536 U.S. 730, 122 S.Ct. 2508, 153 L.Ed.2d 666; Doe v. Delie, 257, F.3d 309 (3d Cir.2001). 16 16 However, the rigid two-step inquiry set forth in Saucier has been relaxed by the Supreme Court in Pearson v. Callahan, 555 U.S. ----, 129 S.Ct. 808, 172 L.Ed.2d 565 (Jan. 21, 2009). See also Bumgarner v. Hart, 2009 WL 567227 (3d Cir.2009). As the Supreme Court explained: “[b]ecause the two-step Saucier procedure is often, but not always, advantageous, the judges of the district courts and the courts of appeals are in the best position to determine the order of decisionmaking [that] will best facilitate the fair and efficient disposition of each case.” Pearson, 555 U.S. at ----, 129 S.Ct. at 821. See also DeLauri v. New Jersey Div. of State Police, 2009 WL 222983, at *5 (D.N.J.2009) quoting Pearson, --- U.S. at ----, 129 S.Ct. at 818-20; Jarovits v. Monroe County Children and Youth Services, 2009 WL 3004044, at *3 (3d Cir.Sep.21, 2009) (proceeding directly to the second step of the Saucier analysis). “The relevant, dispositive inquiry in determining whether a right is clearly established is whether it would be clear to a reasonable officer that his conduct was unlawful in Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 48 of 56 Proper v. Crawford County Correctional Facility, Not Reported in F.Supp.2d (2010) 2010 WL 3829640 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 16 the situation he confronted.” Saucier, 533 U.S. at 202. The Supreme Court has observed: for a constitutional right to be clearly established, its contours must be sufficiently clear that a reasonable official would understand that what he is doing violates that right. This is not to say that an official action is protected by qualified immunity unless the very action in question has previously been held unlawful; but it is to say that in the length of preexisting law the unlawfulness must be apparent. Hope, 536 U.S. at 739. In other words, “if the law did not put the officer on notice that his conduct would be clearly unlawful, summary judgment based on qualified immunity is appropriate.” Montanez v. Thompson, 603 F.3d 243, 251 (3d Cir. May 25, 2010) quoting Bayer v. Monroe County Children & Youth Serv.., 577 F.3d 186, 193 (3d Cir.2009). *18 In this case, the legal precedent regarding a prisoner's Eighth Amendment right to be free from cruel and unusual punishment has been well established for many years. Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976); Farmer v. Brennan, 511 U.S. 825, 114 S.Ct. 1970, 128 L.Ed.2d 811 (1994). Thus, a reasonable government officer would be on notice that the conduct alleged here (the failure to provide the prescribed followup medical treatment) was unlawful. Accordingly, Defendants are not entitled to qualified immunity and the motion for summary judgment will be denied in this regard. An appropriate Order follows. ORDER AND NOW, this 24th day of September, 2010; IT IS HEREBY ORDERED that Crawford County Defendants' motions for summary judgment [ECF Nos. 144 and 205] are GRANTED IN PART AND DENIED IN PART. More specifically, summary judgment is granted as to the false imprisonment claim, and granted as to the medical claims arising under the Eighth Amendment and state negligence law relating to the delays in treatment on November 19th and 24th, and the requests for mental health care. The motion for summary judgment is denied as to the medical claims arising under the Eighth Amendment and state negligence law from the failure to provide followup care for the sutures, and denied in all other regards. IT IS FURTHER ORDERED that Defendant Nurse Rick's motion for summary judgment [ECF No. 146] is GRANTED IN PART AND DENIED IN PART. More specifically, the motion is granted as to the medical claims arising under the Eighth Amendment and state negligence law relating to the delays in treatment on November 19th and 24, and the requests for mental health care. The motion for summary judgment is denied as to the medical claims arising under the Eighth Amendment and state negligence law from the failure to provide followup care for the sutures, and denied in all other regards. All Citations Not Reported in F.Supp.2d, 2010 WL 3829640 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 49 of 56 F Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 50 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2006 WL 2709855 Only the Westlaw citation is currently available. United States District Court, S.D. New York. In re WORLDCOM, INC. SECURITIES LITIGATION. Hallisey & Johnson Profit Sharing Plan, Hallisey & Johnson Money Purchase Pension Trust, individually and on behalf of all others similarly situated, Plaintiffs, v. Citigroup Global Markets, Inc. f/k/a Salomon Smith Barney Inc., Jack Grubman, Defendants. No. 02 Civ. 5119. | Sept. 22, 2006. Attorneys and Law Firms Steven Williams, Joseph Cotchett, Bruce Simon, Aron Liang, Cotchett, Pitre, Simon & McCarthy, Burlingame, CA, for Plaintiffs Hallisey & Johnson Profit Sharing Plan and Hallisey & Johnson Money Purchase Pension Trust. Richard A. Rosen, Brad S. Karp, Eric S. Goldstein, Walter Rieman, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Peter K. Vigeland, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, for Defendants Citigroup Inc., Citigroup Global Markets Inc. f/k/a Salomon Smith Barney Inc., and Jack Grubman. OPINION AND ORDER DENISE COTE, District Judge. *1 Hallisey & Johnson Profit Sharing Plan and Hallisey & Johnson Money Purchase Pension Trust (“Hallisey”) have moved for relief from a July 26, 2004 Order dismissing their lawsuit as part of the In re Salomon Analyst WorldCom Litigation (“Salomon Analyst WorldCom”). Hallisey, a member of the class certified in 2003 for purchasers of the securities of WorldCom, Inc. (“WorldCom”) who opted out of that class action (“WorldCom Class Action”), seeks by this motion practice to revive a separate putative class action against Salomon Smith Barney (“SSB”) and Jack Grubman (“SSB Defendants”). Hallisey was not appointed lead plaintiff in that latter action, and the action was dismissed in connection with the settlement of the WorldCom Class Action. Hallisey's motion to vacate dismissal of its putative class action is denied. Procedural History The background to this motion practice requires a description of the WorldCom Securities Litigation as well as Salomon Analyst WorldCom. 1 On June 25, 2002, WorldCom announced a massive restatement of its financials. Shortly thereafter it filed for bankruptcy. Beginning on April 30, 2002, even before WorldCom announced its financial restatement, class action litigation had been filed in the Southern District of New York alleging that WorldCom and those associated with it had violated federal securities laws. That litigation was assigned to this Court. In the months following WorldCom's restatement, multiple lawsuits were filed alleging violations of both federal and state laws. Those actions filed in state courts were removed as “related to” WorldCom's bankruptcy. Actions outside this district were then transferred to this Court by the Judicial Panel on Multi-District Litigation (“MDL Panel”). 1 The history of both WorldCom's collapse and the resulting litigation has been described in many prior opinions by this Court. See, e.g., In re WorldCom, Inc. Sec. Litig., 02 Civ. 3288(DLC), 2004 WL 2591402 (S.D.N.Y. Nov. 12, 2004) (approval of consolidated class action settlement with Citigroup defendants); In re WorldCom, Inc. Sec. Litig., 346 F.Supp.2d 628 (S.D.N.Y.2004) (addressing Underwriter Defendants' motion for summary judgment); In re WorldCom, Inc. Sec. Litig., 294 F.Supp.2d. 392 (S.D.N.Y .2003) (deciding a number of defendants' motions to dismiss class action, including the motion of Citigroup, Inc., Salomon Smith Barney and Jack Grubman). Consolidation of WorldCom Class Action This Court consolidated all class actions into the WorldCom Class Action by Order dated August 15, 2002. A consolidated amended class action complaint was filed on October 11, 2002, on behalf of “all person and entities who purchased or otherwise acquired publicly traded securities of WorldCom, Inc. during the period beginning April 29, 1999 through and including June 25, Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 51 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 2002.” The defendants included WorldCom officers and directors, underwriters of WorldCom bond offerings, and the Citigroup Defendants, that is the SSB defendants and SSB's corporate parent Citigroup, Inc. The Citigroup Defendants were named in a Section 10(b) securities fraud claim based on inter alia Jack Grubman's conflict of interest in his role as a lead telecommunications analyst at SSB. By Order dated December 23, 2002, the Court determined that all individual actions (“Individual Actions”) and the WorldCom Class Action involved common questions of law and fact and that they should be consolidated for pretrial purposes. See In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288(DLC), 2002 WL 31867720 at *1 (S .D.N.Y. Dec. 23, 2002). The consolidated WorldCom securities litigation is referred to as the Securities Litigation. Consolidation of In re Salomon Analyst Litigation *2 Hallisey filed its complaint on July 2, 2002 (“Hallisey Action”). The complaint was styled as a class action and was brought on behalf of “investors in [WorldCom] who purchased WorldCom common stock during the period July 1, 1999 through April 22, 2002.” It also sought to recover under federal securities law for damages caused by Jack Grubman's conflict of interest in his role as a lead telecommunications analyst at SSB. On July 12, 2002, Hallisey filed a motion seeking to be appointed Lead Plaintiff in all related cases. The Hallisey Action was initially assigned to the Honorable Lewis Kaplan. On August 16, 2002, it was consolidated with fourteen other actions as In re Salomon Analyst Litigation. What these actions had in common was the identity of the defendants: each named one or more of the Citigroup Defendants. The actions were brought, however, on behalf of investors in a variety of securities. On November 14, 2002, In re Salomon Analyst Litigation was reassigned to the Honorable Barbara Jones. On January 24, 2003, Judge Jones issued a case management order (“January 2003 Order”) consolidating the actions that had been consolidated by Judge Kaplan with approximately sixty-five other actions brought against the Citigroup Defendants. The January 2003 Order noted that all of the actions being consolidated involved “allegations relating to analyst research reports” and that the actions asserted claims on behalf of shareholders of nine issuers. The new action continued to be called In re Salomon Analyst Litigation but also further consolidated the approximately eighty actions under nine separate lead actions based on nine different issuers of stock. The Hallisey action was made part of Salomon Analyst WorldCom, which consolidated seventeen actions for all purposes “on behalf of purchasers of the common stock of WorldCom, Inc.” Appointment of NYSCRF as Lead Plaintiff On February 4, 2003, the In re Salomon Analyst Litigation was reassigned to the Honorable Gerard Lynch. On March 20, 2003, Judge Lynch issued a second case management order (“March 2003 Order”). The March 2003 Order designated a Lead Plaintiff in each of the nine Salomon Analyst actions, and rejected all unsuccessful pending motions for appointment as Lead Plaintiff, including Hallisey's. The New York State Common Retirement Fund (“NYSCRF”) was named the Lead Plaintiff in Salomon Analyst WorldCom. The same order also appointed Lead Counsel in each of the actions; Bernstein Litowitz Berger & Grossman, L.L.P. (“Bernstein Litowitz”) was appointed Lead Counsel in Salomon Analyst WorldCom. With the March 2003 Order, control of the fate of the WorldCom Class Action and Salomon Analyst WorldCom rested in the hands of a single Lead Plaintiff and its counsel, and Hallisey became simply a class member. NYSCRF and Bernstein Litowitz had been chosen and appointed as Lead Plaintiff and Lead Counsel in the WorldCom Class Action in August 2002. *3 The responsibilities of the Lead Counsel in Salomon Analyst WorldCom were described in the March 2003 Order. Those responsibilities included, inter alia, to “sign any consolidated complaint, motions, brief, discovery requests, objections, stipulations, or notices on behalf of plaintiffs in their action for any matter arising during pretrial proceedings;” to “conduct all pretrial proceedings on behalf of plaintiffs in their action;” and to “conduct settlement negotiations with defense counsel on behalf of plaintiffs in their action.” (Emphasis supplied.) The March 2003 Order noted the “pendency of similar claims” in the Securities Litigation and that there were fully submitted motions to sever analyst related claims in the Securities Litigation and join them with the class claims asserted against the Citigroup Defendants in Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 52 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 Salomon Analyst WorldCom. The March 2003 Order stated that should the severance motion be denied “further proceedings in [Salomon Analyst WorldCom] shall be stayed pending further Order of this Court.” The Order also stated that the “complaints filed in any of the Salomon Analyst Litigation cases already before this Court shall be deemed withdrawn and shall be dismissed two weeks after the filing of the consolidated amended complaints....” On March 25, 2003, the motion to sever in the Securities Litigation was denied and Salomon Analyst WorldCom was stayed. In re WorldCom Sec. Litig., 02 Civ. 3288(DLC), 2003 WL 1563412 (S.D.N.Y. Mar. 25, 2003). No consolidated amended complaint in Salomon Analyst WorldCom was filed. Individual Actions The WorldCom Individual Actions alleged individual, rather than class, claims and were filed in venues across the country, primarily in state courts. Most were removed to federal court as “related to” the WorldCom bankruptcy and tranferred by the MDL Panel to this Court. Beginning in the fall of 2003, the defendants in the Securities Litigation began to bring four waves of motions to dismiss the Individual Actions. See, e.g., In re WorldCom Sec. Litig., 02 Civ. 3288(DLC), 2006 WL 770561, *1 (S.D.N.Y. Mar. 24, 2006); In re WorldCom Sec. Litig., 02 Civ. 3288(DLC), 2006 WL 728518, *1 & n. 2 (S.D.N.Y. Mar. 22, 2006). Meanwhile, fact discovery in the WorldCom Class Action and the Individual Actions was consolidated. A November 14, 2003 Order set a schedule for discovery to be taken of defendants by both the Class Action and Individual Action plaintiffs in the Securities Litigation. Fact discovery, excluding discovery of the plaintiffs in the Individual Actions, closed in the Securties Litigation on July 9, 2004. The schedule for fact discovery of the plaintiffs who had filed Individual Actions was addressed in an Order of March 6, 2006, and will close on November 3, 2006. Citigroup Defendants Settle In May 2004, after a significant period of negotiations under the supervision of two judicial officers, Hons. Robert W. Sweet and Michael Dolinger, a settlement between the Lead Plaintiff and the Citigroup Defendants was reached. A statement on May 10, 2004 announced the settlement and on July 1, 2004, the settlement was executed (“Citigroup Settlement”). As a provision of the Citigroup Settlement, the parties agreed to move to transfer Salomon Analyst WorldCom to this Court. They also agreed to submit an order of dismissal of the claims in Salomon Analyst WorldCom with prejudice to become effective “upon the Final Approval of this Settlement” in the WorldCom Class Action and to provide notice to the class in the Securities Litigation of the intent to dismiss Salomon Analyst WorldCom as part of the notice of settlement of the class action. The Citigroup Settlement stated that it was “a condition to the effectiveness of the [Citigroup Settlement]” that the order dismissing the claims in Salomon Analyst WorldCom “be entered and becomes final.” Dismissal of Salomon Analyst WorldCom *4 On July 16, 2004, the Lead Plaintiff and the Citigroup Defendants executed a stipulation, eventually entered on August 10, 2004 (“August 2004 Stipulation”) transferring Salomon Analyst WorldCom to this Court and “providing for dismissal of the claims in [Salomon Analyst WorldCom] with prejudice and without costs or expenses to any party, which dismissal of claims will only become effective upon Final Approval” of the Citigroup Settlement. The stipulation also provided for immediate dismissal of Salomon Analyst WorldCom pursuant to Rule 54(b), conditioned on final approval of the Citigroup Settlement. The August 2004 Stipulation was signed by Judge Lynch on July 26, 2004. The August 2004 Stipulation provided that notice of Salomon Analyst WorldCom would be provided as part of the notice of the Citigroup Settlement. While the notice of the Citigroup Settlement provided to class members, including Hallisey, in the WorldCom Class Action did not explicitly mention Salomon Analyst WorldCom, the notice described the claims that were released by those who participated in the Settlement as including “all claims arising out of or relating to any analyst research reports or other statements made or issued by the Citigroup Defendants concerning WorldCom....” Such a description left no doubt that the claims in Salomon WorldCom Analyst were being dismissed. On November 12, 2004, the Citigroup Settlement was approved (“November 2004 Order”). The November 2004 Order described the notice that had been provided to the class, that class members had been given the opportunity Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 53 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 to request to be excluded and stated that “all members of the Class who did not elect to exclude themselves by written communication postmarked or delivered on or before September 1, 2004, as required in the Notice of Class Action and extended by the Hearing Order of July 16, 2004, or who revoked their exclusion request prior to September 1, 2004, are bound by this Judgment.” On August 31, 2004, Hallisey served a request for exclusion from the WorldCom Class Action on the Claims Administrator. Hallisey's timely request for exclusion was noted in exhibit A of the March 9, 2005 Order Regarding Class Membership in the WorldCom Class Action. On September 30, 2005 (“September 2005 Order”), this Court issued an Order taking note of the August 2004 Stipulation and stating that the “[f]inal approval of the Citigroup Settlement having been given on November 12, 2004” the dismissal of the Salomon Analyst WorldCom “is effective” and ordered the Clerk of Court to close the actions that had been consolidated as Salomon Analyst WorldCom in Judge Jones' January 2003 Order. The Hallisey Action was listed as one of the actions to be closed. On November 5, 2005, Hallisey filed its motion seeking relief from the September 2005 Order. Discussion Under Federal Rule of Civil Procedure 60(b), a court may relieve a party from a “final judgment, order or proceeding” for “(1) mistake, inadvertance, surprise or excusable neglect” or “(6) any other reason justifying relief from the operation of the judgment.” Fed R. Civ. P. 60(b). A Rule 60(b) motion must be made “within a reasonable time” and for a motion made pursuant to Rule 60(b)(1) must be made “not more than one year after the judgment, order, or proceeding was entered or taken.” Fed R. Civ. P. 60(b). While Hallisey frames its request for relief under both Rule 60(b)(1) and 60(b)(6), “if the reasons offered for relief from judgment can be considered in one of the more specific clauses of 60(b), such reasons will not be considered under Rule 60(b)(6).” United States v. Int'l Bhd. of Teamsters, 247 F.3d 370, 391-92 (2d Cir.2001). Because all of Hallisey's arguments are properly characterized as supporting relief under Rule 60(b)(1), Hallisey may not separately seek relief under Rule 60(b)(6). *5 “A motion for relief from judgment is generally not favored and is properly granted only upon a showing of exceptional circumstances .” Id. at 391. Rule 60(b) “should be broadly construed to do substantial justice, yet final judgments should not be lightly reopened.” Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir.1986) (citation omitted). “In deciding a Rule 60(b) motion a court must balance the policy in favor of hearing a litigant's claims on the merits against the policy in favor of finality.” Kotlicky v. U.S. Fidelity & Guar. Co., 817 F.2d 6, 9 (2d Cir.1987). Before granting relief from a final judgment, courts generally require that evidence in support of the motion be “highly convincing”; that the party show good cause for failure to act sooner; and that no undue hardship be imposed on other parties. Id. (citation omitted). A motion under Rule 60(b)(1) may be dismissed as not within a “reasonable time” despite the fact that it was filed within a year of the judgement. Amoco Overseas Oil Co. v. Compagnie Nationale Algerienne de Navigation, 605 F.2d 648, 656 (2d Cir.1979). “[A]s the delay in making the motion approaches one year there should be a corresponding increase in the burden that must be carried to show the delay was reasonable.” Id. (citation omitted). Hallisey improperly frames its motion as relief from the September 2005 Order. The relief Hallisey seeks is from the August 2004 Stipulation, which dismissed Salomon Analyst WorldCom. Because Hallisey's motion was not filed within a year of the entry of the August 2004 Stipulation, it is denied as untimely. Hallisey was one of group of plaintiffs or groups of plaintiffs who sought to bring a class action on behalf of all WorldCom shareholders. In order to avoid duplicative litigation and pursuant to the Private Securities Litigation Reform Act of 1995 (“PLSRA”), the January 2003 Order combined his putative class action with sixteen other actions that sought to certify essentially the same class based on the same claims. Once Hallisey's action was consolidated as part of Salomon Analyst WorldCom and NYSRF was appointed Lead Plaintiff in that action, Hallisey lost any role in directing the claims it had sought to bring. Those claims, as described in Hallisey's complaint, belonged to the class, of which Hallisey was a member. All decision-making authority for the class, including the power to sign stipulations and to conduct settlement negotiations on behalf of the class was given to the Lead Plaintiff, NYSCRF. In the Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 54 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 August 2004 Stipulation, Lead Plaintiff, acting within its authority under the March 2003 Order, stipulated to the dismissal of the Salomon Analyst WorldCom litigation as part of the Citigroup Settlement. When that stipulation was approved by Judge Lynch, the action was effectively dismissed. Since Salomon Analyst WorldCom was entirely duplicative of the WorldCom Class Action, Hallisey's rights as a class member continued unimpaired in the WorldCom Class Action. *6 Hallisey concedes that its application is subject to an exercise of this Court's discretion. Hallisey makes four arguments as to why it should be granted relief from the August 2004 Stipulation. None are persuasive. Hallisey argues that its Rule 60(b) motion only seeks to modify the September 2005 Order and thus is timely. Hallisey suggests that reading the August 2004 Stipulation as dismissing its claim ignores the plain language of the stipulation, and that, if the August 2004 Stipulation is read to have dismissed Hallisey's claims, the September 2005 Order would have been meaningless. Hallisey's reference to the plain language of the August 2004 Stipulation refers to the condition that the dismissal would only “become effective upon the Final Approval of the [Citigroup Settlement].” The language to which Hallisey points only emphasizes that the dismissal of the Salomon Analyst WorldCom claims was understood to be an intergal part of the settlement with Citigroup, a settlement that encompassed and benefitted all members of the putative Salomon Analyst WorldCom class. Each member of that putative class action was able to recover as part of the already certified WorldCom Class Action. The fact the dismissal was conditioned on the entry of the November 2004 Order does not make the intent to dismiss Salomon Analyst WorldCom expressed in the August 2004 Stipulation any less clear. Even if the November 2004 Order were treated as the day of the judgment from which Hallisey seeks relief, Hallisey's motion would still be denied as untimely. If measured from the November 2004 Order, Hallisey waited almost a year to bring its motion, and therefore still faces a heavy burden in showing that its delay was reasonable. Hallisey has entirely failed to satisfy that burden. As for the meaning of the September 2005 Order, it simply clarified for the Clerk of Court that the claims in the cases that had been consolidated as Salomon Analyst WorldCom had been dismissed by the August 2004 Stipulation and the November 2004 Order and that as a result those cases should be closed. The relief Hallisey seeks is not from the closing of its case, but from the dismissal of those claims. Second, Hallisey argues that it should be granted relief because it timely and validly opted out of the WorldCom Class Action and therefore was not subject to the November 2004 Order. By timely filing a request for exclusion from the WorldCom Class Action, Hallisey was entitled to file its own Individual Action and was not bound by the judgment entered in the WorldCom Class Action. This decision to opt out of the WorldCom Class Action did not revive any rights, however, that Hallisey had to control the action it filed in 2002. Hallisey lost all control over the action it filed in 2002 when the action was consolidated in 2003 with the other Salomon Analyst WorldCom litigation and NYSCRF was appointed as Lead Plaintiff. Hallisey's failure to take any action within Salomon Analyst WorldCom, including its failure to object the August 2004 Stipulation, is entirely understandable given its loss of its motion to be appointed lead plaintiff. *7 Third, Hallisey argues that it never consented to dismissal of its action in 2004, and that the September 2005 Order closing its action is inconsistent with Federal Rule 41, Fed R. Civ. P. 41, because it never gave Lead Plaintiff authority to dismiss its non-class claims and because it never received notice of the July 1, 2004 “Dismissal Stipulation.” Hallisey's arguments based on its “non-class claims” are difficult to fathom. Hallisey is unable to point to any claims in its complaint that were separate from those that were pursued in the consolidated Salomon Analyst WorldCom putative class action. If Hallisey believed that its action was somehow different from the other actions brought in Salomon Analyst WorldCom, the time to raise that concern was at the time its action was consolidated in front of Judge Jones. The plaintiffs who opted out of the WorldCom Class Action and filed Individual Actions actively litigated those lawsuits within the Securities Litigation. Fact discovery went forward, motions to dismiss were decided, and for those few Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 55 of 56 In re WorldCom, Inc. Securities Litigation, Not Reported in F.Supp.2d (2006) 2006 WL 2709855 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 Individual Actions that did not settle, a scheduling order has provided for discovery of plaintiffs, expert discovery, and the filing of summary judgment motions. If Hallisey felt it wished to pursue individual claims, as its counsel well knew, it had the right to file an Individual Action and actively litigate it in the context of the Securities Litigation. 2 2 Hallisey's counsel filed an Individual Action on behalf of the Regents of the University of California and has actively pursued these claims in Regents of the University of California v. Salomon Smith Barney Inc., 03 Civ. 6219, one of the Individual Actions in the Securities Litigation. See, e.g., In re WorldCom Sec. Litig., 02 Civ. 3288(DLC), 2003 WL 22768231 (S.D.N.Y. Nov. 24, 2003). There is no evidence that Hallisey ever believed that it had filed an individual action in 2002 or that it expected to conduct an individual action within the context of its putative class action. For at least three years it stood silent as the action was consolidated and treated as a duplicative, putative class action. To the extent that any individual claims could be located within that action, Hallisey abandoned them and has not shown it is entitled to an exercise of discretion to revive them. The fundamental question remains why did Hallisey do nothing between August 10, 2004, the day the August 2004 Stipulation was entered on the docket, and November 5, 2005. Even if Hallisey had somehow overlooked the August 2004 stipulation when it was entered on the Court's docket, Hallisey's decision in August 2004 to opt-out of the WorldCom settlement class should have prompted Hallisey to evaluate its options for pursuing any individual claims it sought to bring against the SSB Defendants. Hallisey's alleged failure to become aware at that time, more than a year before it filed the instant motion, that Salomon Analyst WorldCom has been dismissed is inexcusable. Hallisey argues that it cannot be accused of being dilatory because prosecution the Salomon Analyst WorldCom was stayed, first by the March 2003 Order and than by the Citigroup Settlement, which enjoined further prosecution of suits against the Citigroup Defendants during the settlement approval process. While the stay might have prevented Hallisey from prosecuting its action, it would not have prevented Hallisey from raising concerns that its claims were being improperly dismissed. Even if Hallisey was right that it was unable to speak until the end of the settlement approval process, that process ended on November 12, 2004. Hallisey provides no explanation for why it then waited a whole year after the approval of the settlement to raise its concerns that its “individual” claims had been inadvertently dismissed. *8 Finally, Hallisey argues that the August 2004 Stipulation offends due process. This argument is similarly empty. Hallisey was given an opportunity to opt-out from the class, and thereby preserve its right to pursue an individual action against Citigroup. That choice satisfied due process. Hallisey was not free to sit on its hands and wait for fifteen months before attempting to resurrect a putative class action that had been fairly settled and to recharacterize it as an individual action. Hallisey fails to raise any due process concerns. Conclusion Hallisey's Rule 60(b) motion for relief from the July 26, 2004 Order is denied as untimely. SO ORDERED: All Citations Not Reported in F.Supp.2d, 2006 WL 2709855 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 3:16-cv-00456-MEM Document 31-1 Filed 07/25/16 Page 56 of 56