Dean v. E. I. du Pont de Nemours and Company

Filing 31

ORDER by Judge Hamilton granting 22 Motion to Dismiss.(pjhlc2, COURT STAFF) (Filed on 3/23/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LEON E DEAN, et al.,

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Plaintiffs,

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v.

Case No. 15-cv-6032-PJH
ORDER GRANTING MOTION TO
DISMISS

E.I. DUPONT DE NUMOURS &
COMPANY INC.,

United States District Court
Northern District of California

Defendant.
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Defendant’s motion to dismiss came on for hearing before this court on March 16,

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2016. Plaintiffs Leon E. Dean and Wanda Dean appeared through their counsel, Shahid

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Manzoor. Defendant E.I. DuPont de Nemours & Co. (“defendant” or “DuPont”) appeared

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through its counsel, Andrew Mortl. Having read the papers filed in conjunction with the

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motion and carefully considered the arguments and the relevant legal authority, and good

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cause appearing, the court hereby GRANTS defendant’s motion, with partial leave to

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amend, as follows.

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BACKGROUND
This is an asbestos-related personal injury case. Plaintiff Leon Dean (“plaintiff”)

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was employed by defendant DuPont from 1956 to 1990, and alleges that he spent a

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significant portion of that time “dealing with asbestos, fiber glass products and other

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hazardous products.” See First Amended Complaint (“FAC”), ¶ 6.

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After plaintiff retired in 1990, he began to experience respiratory illness, which he

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alleges is “most likely cancer and caused by asbestos.” FAC, ¶ 6. Plaintiff originally filed

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suit in state court on November 2, 2015, asserting three causes of action: (1) premises

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liability, (2) negligence, and (3) negligent infliction of emotional distress.
Defendant removed the case to this court, and then filed a motion to dismiss,

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arguing that the claims were barred by California’s Workers’ Compensation Act, which

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provides the exclusive remedy for work-related injuries. In response, Dean filed the

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operative FAC, adding a new plaintiff (his wife, Wanda Dean), and asserting seven

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causes of action in total: (1) premises liability, (2) negligence, (3) negligent infliction of

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emotional distress, (4) products liability – manufacturing defect, (5) products liability –

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design defect, (6) products liability – failure to warn, and (7) loss of consortium (although

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the court notes that the FAC refers to “[Teresa] Dean” (brackets in original), rather than

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United States District Court
Northern District of California

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Wanda Dean, under the heading of the seventh cause of action).
The FAC also contains additional allegations about plaintiff’s attempts to pursue a

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workers’ compensation claim. The FAC alleges that, in May 2015, plaintiff sent a

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workers’ compensation claim form to defendant, but received no response. FAC, ¶ 7.

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Plaintiff then sent a follow-up letter in June 2015, but again received no response. Id., ¶

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8. Plaintiff characterizes this refusal to respond as “bad faith.” Id., ¶ 9.

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Plaintiff then contacted the Workers’ Compensation Insurance Rating Bureau, who

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told him that defendant’s insurance provider was Golden Eagle Insurance Company.

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FAC, ¶ 10. However, while that company had become insolvent, its parent company

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(Liberty Mutual Insurance Company) was still solvent, so plaintiff filed a workers’

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compensation claim naming Liberty Mutual as the insurer and claim administrator. Id.

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Plaintiff then received a letter from Liberty Mutual, denying the claim and stating that it

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was not defendant’s workers’ compensation insurance carrier. Id., ¶ 11.

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Plaintiff then re-contacted the Workers’ Compensation Insurance Rating Bureau,

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who admitted that it had provided the wrong information. FAC, ¶ 13. But when the

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Bureau repeated its search, it could not find any coverage records for defendant for the

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relevant time frame. Id. However, the Bureau also explained that it did not have records

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for self-insured companies, and recommended that plaintiff contact the California

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Department of Industrial Relations Office of Self-Insurance. Id. Plaintiff did so, but was
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told that there was no information available showing that defendant was self-insured. Id.

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Plaintiff explains that he is in the process of dismissing the workers’ compensation

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claim against Liberty Mutual, but because there is no other insurance agency that he can

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name as the claims administrator, he filed this suit. FAC, ¶¶ 14-15.
DISCUSSION

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A.

Legal Standard
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the

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legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, Inc., 349 F.3d

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1191, 1199-1200 (9th Cir. 2003). Review is generally limited to the contents of the
complaint, although the court can also consider a document on which the complaint relies

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United States District Court
Northern District of California

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if the document is central to the claims asserted in the complaint, and no party questions

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the authenticity of the document. See Sanders v. Brown, 504 F.3d 903, 910 (9th Cir.

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2007).

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To survive a motion to dismiss for failure to state a claim, a complaint generally

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must satisfy only the minimal notice pleading requirements of Federal Rule of Civil

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Procedure 8, which requires that a complaint include a “short and plain statement of the

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claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2)

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A complaint may be dismissed under Rule 12(b)(6) for failure to state a claim if the

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plaintiff fails to state a cognizable legal theory, or has not alleged sufficient facts to

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support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir.

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2013). While the court is to accept as true all the factual allegations in the complaint,

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legally conclusory statements, not supported by actual factual allegations, need not be

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accepted. Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009); see also In re Gilead Scis.

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Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

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The allegations in the complaint “must be enough to raise a right to relief above

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the speculative level,” and a motion to dismiss should be granted if the complaint does

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not proffer enough facts to state a claim for relief that is plausible on its face. Bell Atlantic

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Corp. v. Twombly, 550 U.S. 544, 555, 558-59 (2007) (citations and quotations omitted).
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A claim has facial plausibility when the plaintiff pleads factual content that allows the

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court to draw the reasonable inference that the defendant is liable for the misconduct

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alleged. Iqbal, 556 U.S. at 678 (citation omitted). “[W]here the well-pleaded facts do not

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permit the court to infer more than the mere possibility of misconduct, the complaint has

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alleged – but it has not ‘show[n]’ – ‘that the pleader is entitled to relief.’” Id. at 679.

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Where dismissal is warranted, it is generally without prejudice, unless it is clear the

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complaint cannot be saved by any amendment. Sparling v. Daou, 411 F.3d 1006, 1013

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(9th Cir. 2005).

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B.

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Legal Analysis
Defendant’s primary argument is that all of the claims asserted in the FAC are

United States District Court
Northern District of California

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barred under the exclusive remedy provision of the California Workers’ Compensation

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Act. Specifically, California Labor Code section 3600(a) provides that “[l]iability for the

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compensation provided by this division, in lieu of any other liability whatsoever to any

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person ..., shall, without regard to negligence, exist against an employer for any injury

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sustained by his or her employees arising out of and in the course of the employment,”

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and section 3602(a) further provides that such compensation shall be “the sole and

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exclusive remedy of the employee or his or her dependents against the employer.” See

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also Wright v. State, 233 Cal.App.4th 1218, 1229 (2015). Thus, because the FAC

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alleges that DuPont was plaintiff’s employer, that plaintiff was exposed to asbestos

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products in the course of his employment, and that he developed injuries as a result of

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that exposure, defendant argues that the elements of sections 3600 and 3602 are met.

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In his opposition brief, plaintiff argues that the exclusive remedy bar does not

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apply, pointing to Labor Code section 3706, which provides that “[i]f any employer fails to

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secure the payment of compensation, any injured employee or his dependents may bring

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an action at law against such employer for damages.” Plaintiff argues that defendant

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failed to secure workers’ compensation insurance (either through a third-party or by self-

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insuring), pointing to his interactions with the Workers’ Compensation Insurance Rating

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Bureau and the California Department of Industrial Relations Office of Self-Insurance as
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support for his allegations.
However, defendant has submitted screenshots from the website of the

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Department of Industrial Relations, showing a “self-insured verification” for DuPont. See

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Dkt. 23, Ex. A at 6. At the hearing, plaintiffs’ counsel challenged the authenticity of the

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screenshot, and thus argued that it cannot be considered as part of this motion. But in

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addition to the screenshot, defendant also submitted a “certification of self-insurance of

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workers’ compensation,” showing that a certificate of consent to self-insure was issued to

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DuPont on March 8, 1930, and has been “in full force and effective since that date.” Dkt.

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27-1, Ex. B. Defendant has also requested that the court take judicial notice of the
certification. Plaintiff does not question the authenticity of the certification, and because

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United States District Court
Northern District of California

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plaintiff’s ability to assert his claims in this court is dependent on defendant’s alleged

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failure to secure insurance, the court GRANTS the request for judicial notice, and will

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consider the certification as part of this motion. And because the certification does

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indeed establish that defendant is self-insured, Labor Code section 3706 does not apply.

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Plaintiff then offers a separate reason why the exclusive remedy bar should not

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apply, arguing that defendant acted in bad faith by failing to respond to plaintiff’s workers’

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compensation claim. At the hearing, the court asked defendant about the reason for its

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non-responsiveness, and its counsel explained that plaintiff sent his claim to defendant’s

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corporate office, rather than to the self-insurance administrator (Broadspire) listed on the

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certification of self-insurance. Defendant further explained that the claim is now being

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properly processed. Moreover, plaintiff has not cited any authority for a “bad faith”

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exception to the exclusive remedy bar.

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Plaintiff offers no other reasons as to why the exclusive remedy bar should not

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apply to the first, second, third, and seventh causes of action (for premises liability,

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negligence, negligent infliction of emotional distress, and loss of consortium,

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respectively), and thus, the court GRANTS defendant’s motion to dismiss as to those four

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claims, without leave to amend. However, as to the fourth, fifth, and sixth causes of

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action (all of which are products liability claims), plaintiff argues that he has “pled around”
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the exclusive remedy bar by alleging that defendant “manufactured and/or distributed

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asbestos products,” and thus, was acting as a manufacturer/distributor rather than as an

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employer with respect to the asbestos products. See FAC, ¶ 16; Dkt. 22 at 8.

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In its motion, defendant argues that this theory (referred to as the “dual capacity”

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doctrine) was abrogated by the 1982 amendment to Labor Code section 3602.

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Specifically, the 1982 amendment limited the dual capacity exception “to the narrow

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factual circumstances presented where the employee’s injury was caused by the

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employer’s product, which itself was provided to the employee not by the employer, but

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by an independent third person who obtained the product from the employer for valuable
consideration.” Ashdown v. Ameron Int’l Corp., 83 Cal.App.4th 868, 876 (2000)

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United States District Court
Northern District of California

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(emphasis in original). Plaintiff has not alleged facts that would trigger the dual capacity

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doctrine, as amended.

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Moreover, even if the dual capacity doctrine had not been so limited, plaintiff has

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not adequately pled that defendant was actually a manufacturer or distributor of

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asbestos. The FAC relies on the conclusory allegation that “[o]n information or belief,

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defendant manufactured and/or distributed asbestos products.” FAC, ¶ 16. This is

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exactly the type of legally conclusory statement, not supported by actual factual

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allegations, that the court need not accept as true. Nor has plaintiff presented any

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additional facts that could be alleged if leave to amend were to be granted. Accordingly,

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the court GRANTS defendant’s motion to dismiss the fourth, fifth, and sixth causes of

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action, without leave to amend.

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Finally, plaintiff requests leave to amend to assert a claim for fraudulent

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concealment, arguing that Labor Code section 3602(b) contains an exception to the

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exclusive remedy bar “[w]here the employee’s injury is aggravated by the employer's

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fraudulent concealment of the existence of the injury and its connection with the

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employment.” The court will allow plaintiff an opportunity to assert such a claim, though

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the statute makes clear that any alleged fraudulent concealment must relate to the

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“existence of the injury itself.” To the extent that plaintiff alleges that defendant’s failure
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to timely resp
pond to his workers’ co
w
ompensatio claim was itself a fra
on
audulent co
oncealment
t,

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suc allegatio will not suffice, bec
ch
ons
cause at th e time that plaintiff submitted his claim, he
s

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necessarily already knew of (1) the injury itself and (2) its connectio with his
w
f
s
on

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em
mployment. Plaintiff may file a second amen
nded compl
laint, assert
ting only a single

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cla for fraud
aim
dulent conc
cealment, by April 20, 2016. Def
b
,
fendant will have 21 d
days

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the
ereafter to answer or otherwise re
a
o
espond to t he complai
int. No new claims or parties
w

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ma be added without le
ay
d
eave of court or the co
onsent of all parties.
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United States District Court
Northern District of California

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IT IS SO ORDER
S
RED.
Da
ated: March 23, 2016
h
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__________
__________
__________
_______
PH
HYLLIS J. H
HAMILTON
Un
nited States District Ju
s
udge

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