Stinson v. Twin Pines Coal Company, Inc., et al.
MEMORANDUM OPINION AND ORDER directing that Mr. Stinson's action against AMCOAL is DISMISSED with prejudice pursuant to Rule 12(b)(1) for lack of subject-matter jurisdiction, that Mr. Stinson's motion to exclude (Doc. # 18 ) is DENIED, and that AMCOAL's Rule 12(b)(6) motion to dismiss (Doc. # 9 ) is DENIED as moot; this lawsuit proceeds as to Mr. Stinson's action against Twin Pines Coal Co., Inc. Signed by Chief Judge William Keith Watkins on 9/11/14. (Attachments: # 1 Civil Appeals Checklist)(scn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
CHARLES BYRON STINSON,
on behalf of himself and a class of
others similarly situated,
TWIN PINES COAL CO., INC., and
THE AMERICAN COAL
CASE NO. 1:14-CV-334-WKW
MEMORANDUM OPINION AND ORDER
Before the court are Defendant The American Coal Co.’s (“AMCOAL”)
motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and
Plaintiff Charles Bryon Stinson’s motion to exclude the exhibits attached to
AMCOAL’s motion. (Docs. # 9, 18.) In this diversity, putative-class action, Mr.
Stinson has sued AMCOAL for breach of contract. AMCOAL contends that Mr.
Stinson cannot recover on behalf of himself or a putative class because he is
neither a party to that contract nor an intended third-party beneficiary.
motions have been fully briefed. (Docs. # 10, 13, 17, 18, 22, 25.) Based upon
careful consideration of the arguments of counsel and the relevant law, the court
finds that Mr. Stinson does not have standing to sue AMCOAL for breach of
contract because he lacks a legally protected interest in that contract. Because the
court does not have the power to entertain this action, dismissal is required under
Federal Rule of Civil Procedure 12(b)(1).1 In light of the Rule 12(b)(1) dismissal
AMCOAL’s Rule 12(b)(6) motion is due to be denied as moot. Additionally, Mr.
Stinson’s motion to exclude (Doc. # 18) is due to be denied.
I. JURISDICTION AND VENUE
Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1441 and the
Class Action Fairness Act, codified in part at 28 U.S.C. §§ 1332(d) and 1453.
Personal jurisdiction and venue are not contested.
II. STANDARD OF REVIEW
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1)
challenges the court’s subject matter jurisdiction. McElmurray v. Consol. Gov’t of
Augusta-Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007).
On a Rule
12(b)(1) facial attack, the court evaluates whether the plaintiff “has sufficiently
alleged a basis of subject matter jurisdiction” in the complaint and employs
standards similar to those governing Rule 12(b)(6) review. Houston v. Marod
Supermarkets, Inc., 733 F.3d 1323, 1335 (11th Cir. 2013).
Although AMCOAL urges dismissal under Rule 12(b)(6), the arguments for and against
dismissal are closely akin to the standing inquiry, and, thus, the arguments are helpful to the Rule
When evaluating a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court must take the facts alleged in the complaint as true
and construe them in the light most favorable to the plaintiff. Resnick v. AvMed,
Inc., 693 F.3d 1317, 1321–22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny,
“a complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[F]acial
plausibility” exists “when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556).
In contrast to a facial attack on subject matter jurisdiction, a Rule 12(b)(1)
factual attack “challenge[s] the existence of subject matter jurisdiction in fact,
irrespective of the pleadings, and matters outside the pleadings, such as testimony
and affidavits, are considered.” Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th
Cir. 1990) (internal quotation marks omitted). When the attack is factual, “the trial
court is free to weigh the evidence and satisfy itself as to the existence of its power
to hear the case.” Id . Therefore, “no presumptive truthfulness attaches to [the]
plaintiff’s allegations, and the existence of disputed material facts will not preclude
the trial court from evaluating for itself the merits of jurisdictional claims.” Id.
For the reasons discussed in Part IV.A., the Rule 12(b)(1) analysis takes the
form of a facial challenge. That challenge also properly includes consideration of
the contract at issue, which is appended to AMCOAL’s motion to dismiss.
The facts essential to resolution of the motion to dismiss, construed in Mr.
Stinson’s favor, are as follows.
Beginning in September 2008, Mr. Stinson
received high electric bills for properties he owns in Southeast Alabama. Mr.
Stinson blames the increased costs on rate hikes he says resulted from the failure of
coal suppliers, including AMCOAL, to abide by their contracts for coal deliveries
to PowerSouth Energy Cooperative (“PowerSouth”) for electric power generation.
PowerSouth is a “non-profit power generation and transmission cooperative”
that sells wholesale power to its member retail electric distribution cooperatives.
(Am. Compl. ¶ 3.)
Hence, “PowerSouth generates power[,] and its member
cooperatives distribute that power.”
(Am. Compl. ¶ 5.)
Cooperative, Inc. (“CEC”), and South Alabama Electric Cooperative (“SAEC”), as
member cooperatives, purchase electricity from PowerSouth. (Am. Compl. ¶ 9.)
CEC and SAEC are “non-profit member-owned[,] retail electric distribution
cooperatives” that serve rural communities in south Alabama, including the
communities (Enterprise and Glenwood) where Mr. Stinson owns three parcels of
property. (Am. Compl. ¶¶ 2, 4.) Mr. Stinson purchases power from CEC and
SAEC to service these properties and, thus, is a member of both CEC and SAEC.
Mr. Stinson alleges that, at some point between January 2008 and July 30,
2008, AMCOAL breached a coal supply agreement dated November 1, 2003 (“the
Agreement”), between it and PowerSouth by failing to supply coal to PowerSouth
in accordance with the Agreement’s terms. (Am. Compl. ¶¶ 7–8.)
AMCOAL’s breach of the Agreement “resulted in PowerSouth paying a
higher price to other suppliers of coal in order to keep its power plant in
production.” (Am. Compl. ¶ 9.) PowerSouth passed those increased costs to its
retail electric distribution cooperatives, including CEC and SAEC, which in turn
passed the costs to their own members, including Mr. Stinson, in the form of a 30percent rate increase, beginning in approximately September 2008.
Mr. Stinson originally filed this action in the Circuit Court of Coffee
County, Alabama, on April 30, 2013, against four fictitious Defendants, described
as “those persons or entities who or which failed or refused to provide coal in
accordance with their contracts with PowerSouth . . . .” (Compl. ¶ 7.) On April 7,
2014, Mr. Stinson amended his Complaint to substitute AMCOAL and Twin Pines
Coal Co., Inc. (“Twin Pines”), for “Fictitious Defendant A” and “Fictitious
Defendant B.”2 In the Amended Complaint, Mr. Stinson asserts claims for breach
of contract against AMCOAL and Twin Pines on behalf of himself and “[a]ll
individual persons in the State of Alabama who were members of cooperatives that
were members of PowerSouth and who paid those cooperatives for power from
July 30, 2008 to present.” (Am. Compl. ¶ 14.) Mr. Stinson asserts that he and the
putative class “were the intended and direct third party beneficiaries” of the
Agreement and incurred damages as a result of AMCOAL’s breach. (Am. Compl.
¶¶ 6, 10.)
AMCOAL timely removed this action to federal court as one arising under
the court’s original diversity jurisdiction under CAFA and 28 U.S.C. § 1441, and
filed the pending Rule 12(b)(6) motion to dismiss. In support of its motion to
dismiss, AMCOAL submitted as exhibits the Agreement and its subsequent
amendments. Mr. Stinson opposes the motion to dismiss on the merits and moves
to exclude the exhibits from consideration.
Mr. Stinson’s Motion to Exclude Consideration of Extrinsic Documents
Mr. Stinson argues that discovery may reveal that the Agreement and the
subsequent amendments to the Agreement, which are attached to AMCOAL’s
The Amended Complaint also names Fictitious Defendants C and D. “As a general
matter, fictitious-party pleading is not permitted in federal court.” Richardson v. Johnson, 598
F.3d 734, 738 (11th Cir. 2010) (citing New v. Sports & Recreation, Inc., 114 F.3d 1092, 1094 n.1
(11th Cir. 1997)). No demonstration has been made that an exception to the general rule applies
in this case. The fictitious-party claims are not properly before the court and are disregarded.
motion to dismiss, are not authenticate, and, thus, the documents are not proper for
consideration on a motion to dismiss. AMCOAL responds that “the Agreement
need not be verified or authenticated under these circumstances,” as Mr. Stinson
“has no basis upon which to dispute the authenticity or completeness of the
Agreement.” (Doc. # 22, at 6.) Moreover, AMCOAL has submitted an affidavit
from one of the signatories to the Agreement who attests that the Agreement and
its amendments are in fact “true and correct.” (B. J. Cornelius’s Aff. at 1–2 (Doc.
Although Mr. Stinson makes his arguments in Rule 12(b)(6) terminology,
his arguments also are relevant to whether the Rule 12(b)(1) motion should be
treated as a facial or factual attack. A Rule 12(b)(1) facial-attack mimics a Rule
12(b)(6) challenge, see Houston, 733 F.3d at 1335, and under the Rule 12(b)(6)
rubric, a “district court may consider an extrinsic document if it is (1) central to the
plaintiff’s claim, and (2) its authenticity is not challenged.”3 SFM Holdings, Ltd. v.
Banc of Am. Sec., LLC, 600 F.3d 1334, 1337 (11th Cir. 2010). Another district
court has succinctly explained that “[t]he clearest cases for admitting extrinsic
documents on a motion to dismiss are those where the plaintiff’s complaint alleges
a breach of contract or some other contract-related claim, and the plaintiff does not
No reason can be discerned why resolution of a Rule 12(b)(1) facial attack should not
include consideration of extrinsic documents in the same manner permitted under Rule 12(b)(6).
attach the contract to the complaint.” ABN AMRO, Inc. v. Capital Int’l Ltd., No.
04cv3123, 2007 WL 845046, at *6 (N.D. Ill. Mar. 16, 2007). “In such cases,
defendants are allowed to attach the contract to their motion to dismiss, and the
court is allowed to consider it as part of the pleadings.” Id. Moreover, “a plaintiff
cannot defeat consideration of a[n] integral document on a motion to dismiss
unless it can offer a factual basis questioning its authenticity.” Oshinsky v. N.Y.
Football Giants, Inc., No. 09cv1186, 2009 WL 4120237, at *3 (D.N.J. Nov. 17,
The two requirements for permitting consideration of extrinsic documents on
Rule 12(b)(6) review are met and, thus, are appropriate for consideration on Rule
12(b)(1) review. First, although Mr. Stinson did not attach the Agreement to the
Complaint or the Amended Complaint, he does not dispute that the Agreement is
“central” to his breach-of-contract claim. See SFM Holdings, 600 F.3d at 1337.
Indeed, the Agreement is at the heart of Mr. Stinson’s claim against AMCOAL, for
the claim is that AMCOAL breached the Agreement between it and PowerSouth
by failing to supply coal to PowerSouth in accordance with the Agreement’s terms
and that Mr. Stinson is a third-party beneficiary to that Agreement. (Am. Compl.
¶ 7.) Second, AMCOAL submits an affidavit authenticating the Agreement and its
amendments. Mr. Stinson offers no factual basis for questioning the documents’
authenticity, and his assertion that perhaps discovery will show that documents are
not authentic is insufficient to prevent the court from considering the Agreement.
Accordingly, for purposes of AMCOAL’s motion to dismiss, the Agreement
and its amendments are presumed authentic and properly are part of the Rule
12(b)(1) analysis. Mr. Stinson’s motion to exclude is due to be denied.
AMCOAL’s Motion to Dismiss
AMCOAL briefs the issue of Mr. Stinson’s status as a third party beneficiary
as a challenge to the sufficiency of the Amended Complaint’s allegations to state
the elements of a breach-of-contract claim pursuant to Rule 12(b)(6); however, at
the same time, it argues that Mr. Stinson “has no standing to sue AMCOAL for
breach of contract” as he is not a third-party beneficiary to the contract. (Doc.
# 10, at 2.) For its standing argument, AMCOAL relies upon Alabama case law
providing that “[a] third person has no rights under a contract between others,” and
“no standing to enforce” the contract, “unless the contracting parties intend that the
third person receive a direct benefit enforceable in court.” Russell v. Birmingham
Oxygen Serv., Inc., 408 So. 2d 90, 93 (Ala. 1981).
“Where, as here, jurisdiction is predicated on diversity of citizenship, a
plaintiff must have standing under both Article III of the Constitution and
applicable state law in order to maintain a cause of action.” Mid-Hudson Catskill
Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 173 (2d Cir. 2005);
see also Avenue CLO Fund Ltd. v. Bank of Am., NA, 709 F.3d 1072, 1077 (11th
Cir. 2013) (citing Mid-Hudson for the aforementioned principle).
raises a potential problem with respect to state-law standing, although it focuses
the bulk of its argument on Rule 12(b)(6) pleadings deficiencies rather than on
justiciability concerns. And, although AMCOAL does not mention Article III
standing, this court is obliged to address it. See Bochese v. Town of Ponce Inlet,
405 F.3d 964, 968 (11th Cir. 2005). For the reasons that follow, Mr. Stinson fails
to demonstrate that he has standing to sue AMCOAL for breach of contract.
To establish standing for Article III purposes, Mr. Stinson must show,
among other things, that he has a “legally protected interest” in the Agreement that
AMCOAL injured. See id. at 980. In this diversity, breach-of-contract action, the
standing analysis converges under Article III and state law because “[t]he question
of whether, for [Article III] standing purposes, a non-party to a contract has a
legally enforceable right therein is a matter of state law.” Id. at 981. In other
words, the court looks to Alabama law to determine if Mr. Stinson has a legally
protected interest in the Agreement that allows him to sue AMCOAL.
Under Alabama law, “one who seeks recovery in contract as a third-party
beneficiary must establish that the contract was intended for his direct, as opposed
to incidental, benefit.” Zeigler v. Blount Bros. Constr. Co., 364 So. 2d 1163, 1166
(Ala. 1978). Conversely, “[i]f the benefit to the third person is not intended to be a
direct benefit, but rather to be merely an incidental benefit, the third person will
not be entitled to damages based on a breach of that contract.” Collins Co. v. City
of Decatur, 533 So. 2d 1127, 1132 (Ala. 1988). “[T]o ascertain the intent of the
parties, [the court] must first look to the contract itself, because while the intention
of the parties controls in construing a written contract, the intention of the parties is
to be derived from the contract itself where the language is plain and
unambiguous.” Locke v. Ozark City Bd. of Educ., 910 So. 2d 1247, 1251 (Ala.
2005) (citation, internal quotation marks, and alterations omitted). “The court’s
inquiry may stop when it determines from the face of the contract that the parties
did not intend to confer upon the third person a direct benefit.”
Homeside Lending, Inc., 858 So. 2d 233, 249 (Ala. 2003).
“It is only where a
contract provision is found to be ambiguous that it may become necessary to
consider the surrounding circumstances and the construction the parties gave the
language in order to determine the intent of the contracting parties.” H.R.H.
Metals, Inc. v. Miller, 833 So. 2d 18, 24 (Ala. 2002); see also Collins Co., 533 So.
2d at 1132 (“[C]ourts must look to the surrounding circumstances of the
transaction only when the contract is unclear as to whether the contracting parties
intentionally conferred upon a third person a direct benefit.”).
AMCOAL contends that the Agreement is plain that it does not provide a
direct benefit to Mr. Stinson, as an electricity consumer, but rather “directly
benefit[s] PowerSouth alone.” (Doc. # 10, at 7.) AMCOAL argues that this case
“is exactly like” Zeigler. (Doc. # 10, at 7 (citing Zeigler, 364 So. 2d at 1163).) In
Zeigler, customers of Alabama Power Company (“APCO”), who incurred higher
bills for electricity after APCO’s dam collapsed, sued APCO and its contractors for
breach of contract, alleging that proper construction of the dam would have
resulted in lower electricity bills for APCO’s customers. The customers sought
recovery under the theory that they were third-party beneficiaries of APCO’s
contracts for the construction of the dam. See Zeigler, 364 So. 2d at 1164–65. The
Supreme Court of Alabama affirmed the judgment dismissing the third-party
beneficiary, breach-of-contract claim. See id. at 1168.
As to the contracts themselves, the Supreme Court of Alabama observed that
the contracts made “[n]o reference . . . to any third parties,” and nothing contained
in the[ ] contracts . . . suggest[ed] that in their making [APCO] was directly
concerned with the amount of money subscribers for electrical power would be
charged each month.” Id. at 1166. Rather, “[p]erformance of the contracts would,
and did, result in an enhancement of APCO’s real and riparian property holdings,
to the direct benefit of the corporation itself.” Id. The Supreme Court of Alabama
concluded that, “[a]t best, . . . the plaintiffs are not direct, but only incidental
beneficiaries who claim the loss of an economic benefit based upon the alleged
failure of a promised performance by a party contractually bound to another.” Id.
The court explained that
while it might be necessary for APCO to construct dams (or to
purchase a multitude of other services) in order to establish or
maintain a hydroelectric network so that its utility business might
serve members of the plaintiffs class, nevertheless the existence of
those contracts does not Ipso facto make all subsequent purchasers of
the end product the direct beneficiaries of the promised performances
simply because they have an ultimate economic interest in those
Id. at 1167.
On the other hand, Mr. Stinson contends that this case is more analogous to
Harris v. Board of Water and Sewer Commissioners of City of Mobile, 320 So. 2d
624 (Ala. 1975), and Davidson v. Marshall-DeKalb Electric Co-operative, 495 So.
2d 1058 (Ala. 1986).
In Harris, a fire ignited at the plaintiff’s motel and
restaurant. The fire department responded, but the closest hydrants were dry.
With no water to extinguish the fire, the motel and restaurant burned completely.
The plaintiff sued the Board of Water and Sewer Commissioners of Mobile which
had contracted with the City of Mobile “to provide fire hydrants and to maintain an
adequate supply of water for the proper functioning of those hydrants.” 320 So. 2d
at 626. The Supreme Court of Alabama held that the plaintiff could maintain his
breach-of-contract claim against the board under a third-party-beneficiary theory:
In our present situation, how can it be said that [the plaintiff] is not the
very party for whose benefit the contract was made? We agree that
the City itself enjoys some degree of direct benefit from their contract
with the Board since its own property is protected. But, in the end,
the most direct benefit inures to the people of the City, like [the
plaintiff], who rely on these city-provided services for the protection
of their property. This is not to say that the Board is an insurer against
all fire losses, but it should be answerable to all those who are injured
by its breach of the contract to supply water or its negligent
maintenance of nonfunctioning fire hydrants where damage results
proximately therefrom. We find that the facts alleged are sufficient to
show that benefits of the contract in question flow to [the plaintiff],
and thus make him a third-party beneficiary entitled to sue on the
contract for its breach.
Id. at 628.
In Davidson, the plaintiffs, owners of a mobile home park, received electric
power from a non-profit electric cooperative. The plaintiffs sued the cooperative,
alleging that its change in billing practices, which made the owners responsible for
the electric bills of the park’s tenants, breached the contract between the
cooperative and the Tennessee Valley Authority (“TVA”). The Alabama Supreme
Court held that the plaintiffs were intended third-party beneficiaries of the
cooperative’s contract with the TVA based upon an express clause in the contract
stating that the cooperative’s “operation of an electric system and TVA’s
wholesale service thereto are for the benefit of the consumers of electricity.” 495
So. 2d at 1060 (emphasis omitted).
After careful consideration of the authorities relied upon by the parties, the
court finds that this case is more comparable to Zeigler than it is to Harris and
The Agreement governs PowerSouth’s purchase of coal from
It is, as the title designates, a “Coal Supply Agreement.”
Agreement sets out the terms for the sale and shipment of coal and specifies the
requirements in terms of the quantity, price, and quality of the coal. There is no
provision in the Agreement that refers to a third party whom PowerSouth and
AMCOAL intended to benefit directly from PowerSouth’s acquisition of coal. In
fact, the Agreement mentions neither PowerSouth’s power-generation operations
nor its relationship with its retail electric distribution cooperatives nor the ultimate
consumers of the electricity.
There was the potential, of course, that a breach of the Agreement by
AMCOAL would force PowerSouth to have to pay a higher price for its coal from
another supplier and that down the line – after PowerSouth used the coal to carry
out its power-generation operations and provided that power to its member retail
electric distribution cooperatives – the breach could result in increased electricity
bills for consumers. But this potentially adverse economic effect on the end user is
too far downstream to infer from this Agreement that AMCOAL and PowerSouth
entered into a coal-supply agreement with the intention that Mr. Stinson and other
electricity consumers benefit directly from that Agreement. The Agreement is
plain – through its omission of any reference to third parties, much less to
electricity consumers – that it was not formed for the direct benefit of Mr. Stinson.
Rather, at best, Mr. Stinson and his proposed class of Plaintiffs are “only incidental
beneficiaries who claim the loss of an economic benefit based upon the alleged
failure of a promised performance by a party contractually bound to another.”
Zeigler, 364 So. 2d at 1166. Mr. Stinson is not, therefore, an intended third-party
beneficiary to the Agreement.
Mr. Stinson argues that Harris should control the outcome, not Zeigler, but
Harris is distinguishable. In Harris, the plaintiffs directly received the services the
board provided pursuant to its contract with the City of Mobile. Namely, the
board’s agreement to keep the city’s hydrants supplied with water provided the
direct benefit of fire protection for the plaintiffs, who were city business owners.
Here, the Agreement was for the sale of coal, and PowerSouth received the direct
benefit by the purchase of this natural resource, as the coal allowed PowerSouth to
carry out its power-generation operations. The benefit that accrued to Mr. Stinson
was not direct. It did not accrue until after PowerSouth used the coal to generate
electric power and sold that power to its member retail electric distribution
cooperatives, which then re-sold the power to Mr. Stinson. In other words, before
Mr. Stinson could benefit from the Agreement, the natural resource PowerSouth
purchased from AMCOAL had to be converted into electricity and then sold twice,
first to CEC and SAEC, and then finally to Mr. Stinson. At best, Mr. Stinson was
a remote, indirect user of a twice-sold, converted natural resource.
Mr. Stinson also argues that Zeigler’s analysis is inapposite because APCO
is a for-profit organization and PowerSouth is a non-profit organization. Mr.
Stinson emphasizes that for-profit organizations “are allowed to act in self-interest
and reap the financial benefit of their contracts, but non-profit cooperatives are
not.” (Doc. # 17, at 10.) Hence, according to Mr. Stinson, “[a]ny benefit flowing
to PowerSouth from a contract was automatically a benefit to the ultimate
consumer of its electricity.” (Doc. # 17, at 10.) AMCOAL counters that to accept
Mr. Stinson’s premise would be to “transform him and every other member of a
cooperative into an intended third-party beneficiary to each and every contract
entered into by that cooperative.” (Doc. # 25, at 4.) AMCOAL also points out
that, although AMCOAL does not seek “entrepreneurial profit,” it still must
generate sufficient revenue to compensate employees and construct infrastructure
and, in this regard, Mr. Stinson “mischaracterizes an electrical cooperative
purpose.” (Doc. # 25, at 4.) AMCOAL has the better argument.
It is recognized that Alabama law distinguishes between non-profit and
profit corporations in their formation, purposes, and governance, but the authorities
on third-party beneficiaries upon which the parties rely also consistently reinforce
that the intent of the parties “derive[s] from the contract itself where the language
is plain and unambiguous.”
Locke, 910 So. 2d at 1251.
For example, the
Davidson case cited by Mr. Stinson involved, as here, a non-profit electric
cooperative, but Davidson is distinguishable because the contract between the
electric cooperative and the TVA included express, plain, and unambiguous
language that the parties had entered into the contract “for the benefit of the
consumers of electricity.” Davidson, 495 So. 2d at 1060; see also H.R.H. Metals,
Inc., 833 So. 2d at 25 (holding that an injured subcontractor was a third-party
beneficiary to the general contractor’s building contract because it expressly
provided that the general contractor was to “maintain its own safety and health
program for its employees, subcontractors, and agents sufficient to prevent injury
or illness to such persons resulting from their presence on the Vulcan premises”).
There is no such express language in the Agreement at issue here. The Agreement
does not reference third parties, does not include an express declaration that it
intended to benefit third parties, and does not provide any third party a right to sue
to enforce the coal-supply contract. The non-profit/profit distinction between
APCO and PowerSouth does not compel a different conclusion than the one
reached in Zeigler because it is plain that the Agreement confers no right upon Mr.
Stinson to sue on the Agreement between AMCOAL and PowerSouth.
Finally, Mr. Stinson argues that the intent of the contracting parties cannot
be discerned from the Agreement alone because the Agreement “does not clearly
and unambiguously preclude the possibility of a third party beneficiary.” (Doc.
# 17, at 6.) He cites no authority for his argument, however, and support for his
argument does not emanate from Zeigler, where, as here, the contracts were silent
as to third parties. In Zeigler, it was the fact that the contracts clearly did not
mention third parties that was decisive. See 364 So. 2d at 1166. Zeigler did not
require that a contract include affirmative language rejecting a third party from
claiming a beneficiary status.
In short, no provision in the Agreement creates an ambiguity as to whether
AMCOAL or PowerSouth intended electrical power consumers, like Mr. Stinson,
to be direct beneficiaries of the Agreement. And, as stated, under Alabama law,
“[i]t is only where a contract provision is found to be ambiguous that it may
become necessary to consider the surrounding circumstances and the construction
the parties gave the language in order to determine the intent of the contracting
parties.” H.R.H. Metals, 833 So. 2d at 24. Accordingly, the court need not look to
the surrounding circumstances to ascertain intent.
Based upon the plain and
unambiguous terms of the Agreement, Mr. Stinson is not a third party beneficiary
to the Agreement.
Because Mr. Stinson is not an intended, third-party beneficiary to the
Agreement, he does not have a legally protected interest in the Agreement. He
lacks standing, therefore, to bring a breach-of-contract action against AMCOAL –
in an individual or representative capacity – under both Article III of the U.S.
Constitution and state law. Accordingly, Rule 12(b)(1) dismissal is required.4
For the foregoing reasons, it is ORDERED that Mr. Stinson’s action against
AMCOAL is DISMISSED with prejudice pursuant to Rule 12(b)(1) for lack of
subject-matter jurisdiction, that Mr. Stinson’s motion to exclude (Doc. # 18) is
DENIED, and that AMCOAL’s Rule 12(b)(6) motion to dismiss (Doc. # 9) is
DENIED as moot. This lawsuit proceeds as to Mr. Stinson’s action against Twin
Pines Coal Co., Inc.
DONE this 11th day of September, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
Even if it is assumed that Mr. Stinson has standing, the Amended Complaint would be
subject to dismissal for failure to state a claim pursuant to Rule 12(b)(6).
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