GOMEZ et al v. SCEPTER HOLDINGS INC et al
Filing
29
ORDER granting in part and denying in part 22 and 23 Motions to Dismiss; finding as moot 12 and 13 Motions to Dismiss; lifting stay of discovery 25 ; ordering parties to comply with Court's Rules 16/26 Order 15 within twenty-eight days. Ordered by US DISTRICT JUDGE CLAY D LAND on 09/29/2017. (CCL)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ATHENS DIVISION
ROBERT V. GOMEZ, II, KAITLYN
ANN WILLE, and JENNIFER PRICE,
*
*
Plaintiffs,
*
vs.
*
SCEPTER HOLDINGS, INC., SCEPTER
CANADA, INC., SCEPTER
*
MANUFACTURING, LLC, and THE
MOORE COMPANY,
*
Defendants.
CASE NO. 3:17-CV-42 (CDL)
*
O R D E R
Plaintiffs
Robert
V.
Gomez,
II,
Kaitlyn
Ann
Wille,
and
Jennifer Price allege that they were injured when Gomez poured
gasoline from a Blitz portable gasoline container onto a mostly
extinguished fire and the container exploded.
Plaintiffs contend
that the gas container was defective because it did not have a
flame arrestor.
The gas container was manufactured by Blitz
U.S.A., which declared bankruptcy in 2011.
that
Defendants
Scepter
Holdings,
Inc.,
Plaintiffs allege
Scepter
Canada,
Inc.,
Scepter Manufacturing, LLC, and The Moore Company distributed the
gas container to Harbor Freight, where Gomez’s mother bought it.
Plaintiffs further allege that Defendants failed to provide an
adequate warning even though they knew the gas container was
dangerous when they distributed it to Harbor Freight.
Defendants
contend that Plaintiffs’ Amended Complaint must be dismissed for
failure to state a claim.1
As discussed below, the Court grants
Defendants’ motions to dismiss (ECF Nos. 22 & 23) Counts Two and
Four of the Amended Complaint but denies the motions as to Counts
One and Three.
MOTION TO DISMISS STANDARD
“To survive a motion to dismiss” under Federal Rule of Civil
Procedure 12(b)(6), “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)).
The
complaint
must
include
sufficient
factual
allegations “to raise a right to relief above the speculative
level.”
Twombly, 550 U.S. at 555.
In other words, the factual
allegations must “raise a reasonable expectation that discovery
will reveal evidence of” the plaintiff’s claims.
Id. at 556.
“Rule
well-pleaded
12(b)(6)
does
not
permit
dismissal
of
a
complaint simply because ‘it strikes a savvy judge that actual
proof of those facts is improbable.’” Watts v. Fla. Int’l Univ.,
1
After Defendants moved to dismiss Plaintiffs’ original Complaint,
Plaintiffs filed an Amended Complaint.
That Amended Complaint
supersedes the original Complaint. See Dresdner Bank AG, Dresdner Bank
AG in Hamburg v. M/V OLYMPIA VOYAGER, 463 F.3d 1210, 1215 (11th Cir.
2006) (“An amended pleading supersedes the former pleading; ‘the
original pleading is abandoned by the amendment, and is no longer a
part of the pleader’s averments against his adversary.’”) (quoting
Proctor & Gamble Defense Corp. v. Bean, 146 F.2d 598, 601 n.7 (5th Cir.
1945)). Therefore, the Court finds that Defendants’ motions to dismiss
the original Complaint (ECF Nos. 12 & 13) are moot.
2
495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S.
at 556).
FACTUAL ALLEGATIONS
Plaintiffs allege the following facts in support of their
claims.
Despite Defendants’ protestations to the contrary, the
Court must accept these factual allegations as true for purposes
of the pending motion.
Blitz U.S.A. manufactured the gas container at issue in this
action.
Am. Compl. ¶ 20, ECF No. 17.
Blitz U.S.A. filed for
bankruptcy protection after it was sued by multiple individuals
for injuries caused by its allegedly defective gas containers.
Id. ¶ 28.
Defendant Scepter Holdings, Inc. acquired the assets
of Blitz U.S.A. in 2012.
Id. ¶¶ 4, 43-46.
There was an asset
purchase agreement between Blitz U.S.A. and Scepter Holdings.
It
provided, in relevant part, that when Scepter Holdings purchased
certain assets from Blitz U.S.A., Scepter Holdings did not assume
any “Liabilities arising out of or related to” certain “Retained
Assets”
that
Blitz
U.S.A.
did
not
sell
to
Scepter
Holdings.
Scepter Defs.’ Mot. to Dismiss Ex. 1, Asset Purchase Agreement
¶ 2.4(a), ECF No. 23-2.
Those Retained Assets included “all
inventory (raw materials, work-in-progress,
finished goods, or
otherwise) used or initially held for use in connection with”
Blitz U.S.A.’s business.
Id. ¶ 2.2(f).
3
According to Plaintiffs, Scepter Holdings, Scepter Canada,
Inc., and Scepter Manufacturing, LLC
(collectively, “Scepter”)
nonetheless took possession of “old Blitz product, including the
subject 5-gallon gas can” when Scepter took possession of Blitz
U.S.A.’s facilities.
Am. Compl. ¶¶ 35-36.
Scepter decided to
distribute “the leftover Blitz product, including the subject gas
can.”
with
Id. ¶ 37.
The
Moore
Scepter maintained a marketing relationship
Company,
doing
business
as
Moeller
Marine
Products, Inc. (“Moeller”), and Moeller sold Scepter’s products
through
various
representatives
channels.
met
with
Id.
¶¶ 14, 30.
representatives
of
Moeller’s
the
retail
chain
Harbor Freight to discuss the distribution and sale of Scepter
products, including the leftover Blitz product inventory.
¶¶ 32-33, 41.
Holdings
and
Id.
And, after the asset purchase between Scepter
Blitz
U.S.A.
was
finalized,
Scepter
and
Moeller
distributed the gas container at issue in this case to Harbor
Freight, where Gomez’s mother purchased it in September 2012.
Id. ¶¶ 22, 24, 46-49.
At the time, both Scepter and Moeller knew
that the Blitz gas containers were defective but decided to sell
them anyway.
Id. ¶¶ 22-26, 50-59.
Plaintiffs brought claims against Scepter and Moeller for
negligence
provide
an
in
selling
adequate
the
gas
warning,
adequate post-sale warning.
container
including
and
failure
for
failure
to
to
provide
an
Plaintiffs also brought a claim for
4
breach of warranty, but they withdrew that claim.
motions
to
dismiss
Count
Two
of
the
Amended
Defendants’
Complaint
are
therefore granted.
DISCUSSION
Defendants seek to dismiss Plaintiffs’ claims pursuant to
Rule
12(b)(6)
as
implausible.
Defendants
do
not
argue
that
Plaintiffs cannot win under the applicable law if they prove all
the facts they allege.
anyone
could
Rather, Defendants are incredulous that
possibly
believe
Plaintiffs’
allegations.
Defendants’ argument suffers from what the Court has previously
labeled the “Twombly/Iqbal compulsion”:
Since Twombly was decided, many lawyers have felt
compelled to file a motion to dismiss in nearly every
case, hoping to convince the Court that it now has the
authority to divine what the plaintiff may plausibly be
able to prove rather than accepting at the motion to
dismiss stage that the plaintiff will be able to prove
his allegations. These motions, which bear a close
resemblance to summary judgment motions, view every
factual allegation as a mere legal conclusion and
disparagingly label all attempts to set out the
elements of a cause of action as “bare recitals.” They
almost always, either expressly or, more often,
implicitly, attempt to burden the plaintiff with
establishing a reasonable likelihood of success on the
merits under the guise of the “plausibly stating a
claim” requirement. While these cautious lawyers, who
have been encouraged by Twombly and Iqbal, have parsed
the Twombly decision to extract every helpful syllable,
they often ignore a less well known (or at least less
frequently
cited)
admonition
from
Twombly:
“[O]f
course, a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts
is improbable, and that a recovery is very remote and
unlikely.” Twombly, 550 U.S. at 556 . . . . Finding the
Twombly/Iqbal urge irresistible, many lawyers fail to
5
appreciate the distinction between determining whether
a claim for relief is “plausibly stated,” the inquiry
required by Twombly/Iqbal, and divining whether actual
proof of that claim is “improbable,” a feat impossible
for a mere mortal, even a federal judge.
Barker ex rel. U.S. v. Columbus Reg’l Healthcare Sys., Inc., 977
F. Supp. 2d 1341, 1346 (M.D. Ga. 2013).
As the Court has observed, Twombly and Iqbal did not rewrite
Rule 12(b)(6) or abandon notice pleading.
Again, to survive a
motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “state a claim to relief that is
plausible on its face.”
556 U.S. at 678.
Twombly, 550 U.S. at 570; accord Iqbal,
Here, Defendants’ chief argument is that no one
could possibly believe that discovery will reveal evidence of
Plaintiffs’ claims.
stage
in
the
Plaintiffs’
Once more, it is not the Court’s job at this
litigation
claims
is
to
divine
unlikely;
whether
“12(b)(6)
actual
does
proof
not
of
permit
dismissal of a well-pleaded complaint simply because ‘it strikes
a savvy judge that actual proof of those facts is improbable.’”
Watts, 495 F.3d at 1295 (quoting Twombly, 550 U.S. at 556).
In this case, Defendants contend that the asset purchase
agreement between Scepter Holdings and Blitz U.S.A. shields them
from liability as a matter of law because Scepter Holdings did
not purchase Blitz U.S.A.’s gas container inventory and did not
assume
any
appear
to
liability
dispute
for
that
that
the
inventory.
leftover
6
Plaintiffs
inventory
of
do
not
Blitz
gas
containers was not part of the asset purchase agreement between
Blitz and Scepter, and they do not appear to dispute that Scepter
did not agree to accept liability resulting from Blitz’s conduct
in
manufacturing
and
selling
defective
gas
containers.
Therefore, Plaintiffs seem to acknowledge that they cannot pursue
claims against Scepter based on successor liability.
But
successor
the
allegations
liability
allegations
are
of
based
in
a
on
this
product
action
are
not
manufacturer.
Defendants’
own
alleged
based
Rather,
decision
on
the
to
distribute, without an adequate warning, the Blitz gas containers
that Scepter allegedly found in a warehouse when it purchased
Blitz’s facilities even though Scepter and Moeller both allegedly
knew the gas containers were defective (and even though Scepter
did
not
actually
purchase
the
gas
containers).2
If
these
allegations are true, then Defendants could be held liable under
a negligent seller theory.
Under Georgia law, a product distributor can be “liable for
negligent failure to warn only if, at the time of the sale, it
had ‘actual or constructive knowledge’ that its product created a
danger for the consumer.”
Bishop v. Farhat, 489 S.E.2d 323, 328
2
Defendants also contend that Plaintiffs must be alleging that Scepter
colluded with Blitz U.S.A. on a plan to sell the gas containers, which
were not sold to Scepter as part of the asset purchase agreement, even
though the Bankruptcy Court expressly found that there was no
collusion. But Plaintiffs do not allege that Blitz U.S.A. and Scepter
made a plan for Scepter to sell the gas containers. Rather, Plaintiffs
allege that Scepter and Moeller decided to sell the leftover Blitz
U.S.A. inventory that Scepter found in a Blitz U.S.A. warehouse.
7
(Ga. Ct. App. 1997) (quoting Stiltjes v. Ridco Exterminating Co.,
386
S.E.2d
696,
698
(Ga.
Ct.
App.
1989)).
“The
seller
is
required to warn if [it] ‘has knowledge, or by the application of
reasonable,
developed
human
skill
knowledge of the danger . . . .’”
and
foresight
should
have
Id. (quoting Chrysler Corp. v.
Batten, 450 S.E.2d 208, 211 (Ga. 1994)) (finding that a jury
question existed on whether a product distributor reasonably knew
of
the
danger
should
not
Although
associated
have
with
labeled
Defendants
here
its
the
latex
gloves
contend
gloves
as
that
such
that
it
“hypoallergenic”).
Plaintiffs
did
not
adequately allege that Defendants had sufficient knowledge of the
danger
associated
with
Blitz
gas
containers,
Plaintiffs
did
allege facts which, if proven, would establish that Defendants
did
have
such
knowledge.
See
(alleging that Defendants knew
containers
without
explosions).
flame
Am.
Compl.
¶¶ 22-26,
or should have known
arrestors
were
50-59
that gas
susceptible
to
The Court thus denies Defendants’ motion to dismiss
Counts One and Three of the Amended Complaint.
The Court, however, grants Defendants’ motions to dismiss
Count Four of the Amended Complaint, which is based on a postsale
failure
to
warn
theory.
“Georgia
law
recognizes
a
manufacturer’s duty to warn consumers of danger arising from the
use of a product based on knowledge acquired after the product is
sold.”
DeLoach v. Rovema Corp., 527 S.E.2d 882, 883 (Ga. Ct.
8
App. 2000) (emphasis added).
“But Georgia law imposes a duty on
a seller to warn only of dangers actually or constructively known
at the time of the sale.”
Id. (emphasis added); accord Bishop,
489 S.E.2d at 328 (emphasizing that a distributor’s liability for
negligent failure to warn is based on what the distributor knew
or should have known “at the time of the sale”).
For this
reason, Plaintiffs’ post-sale failure to warn claim fails as a
matter of law and must be dismissed.
CONCLUSION
As
discussed
above,
Defendants’
motions
original Complaint (ECF Nos. 12 & 13) are moot.
to
dismiss
the
The Court grants
Defendants’ motions to dismiss Counts Two and Four of the Amended
Complaint (ECF Nos. 22 & 23) but denies Defendants’ motions as to
Counts One and Three.
Within
twenty-eight
The discovery stay (ECF No. 25) is lifted.
days
of
today’s
Order,
the
parties
shall
comply with the Court’s Rules 16/26 Order (ECF No. 15).
IT IS SO ORDERED, this 29th day of September, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
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