Simmerman et al v. Ace Bayou Corp. et al

Filing 46

MEMORANDUM OPINION & ORDER: It is ordered that 33 MOTION to Reconsider and Set Aside, Alter, Amend or Vacate Judgment is DENIED. Signed by Judge Danny C. Reeves on 1/16/2015.(SCD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
ANDREW SIMMERMAN,
Individually and as Administrator of
ESTATE OF MKS (a minor), et al.,
Plaintiffs,
V.
ACE BAYOU CORPORATION, et al.,
Defendants.

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Civil Action No. 5: 14-382-DCR

MEMORANDUM OPINION
AND ORDER

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On November 21, 2014 the Court denied Plaintiffs Andrew Simmerman and Terri
Mills’s request for remand and dismissed all claims asserted against Defendant Teresa
Spears. [Record No. 22] The plaintiffs now move the Court to alter or amend the November
21, 2014 Memorandum Opinion and Order pursuant to Federal Rule of Civil Procedure
59(e). Alternatively, the plaintiffs ask the Court to vacate and set aside the prior opinion
pursuant to Rule 60(b). [Record No. 33]
Neither of these rules provides an appropriate means to challenge a non-final order.
Dierig v. Lees Leisure Indus., 2012 U.S. Dist. LEXIS 26181 (E.D. Ky. Feb 28, 2012). Rule
59(e), by its own terms, applies only to judgments. Likewise, Rule 60(b) applies only to
“final” orders and judgments. See Mallory v. Eyrich, 922 F.2d 1273, 1277 (6th Cir. 1991);
Payne v. The Courier-Journal, 193 F. App’x 397, 400 (6th Cir. 2006). The Court’s prior
Memorandum Opinion and Order was not a final order; it did not dismiss all of the
defendants, but instead left the plaintiffs with unresolved pending claims, and no separate
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judgment was entered. See Davey v. St. John Health, 297 F. App’x 4666, 469 (6th Cir. 2008)
(when a plaintiff’s case has remaining claims, an order of dismissal as to less than all
defendants is not a final order). No final order or judgment has been entered in this case.
The Sixth Circuit has held that district courts have inherent authority under Federal
Rule of Civil Procedure 54(b) to reconsider interlocutory orders and re-open any part of a
case prior to the entry of final judgment. Rodriguez v. Tenn. Laborers Health & Welfare
Fund, 89 F. App’x 949, 959 (6th Cir. 2004); Mallory, 922 F.2d at 1282. Rule 54(b) states, in
relevant part:
[A]ny order . . . that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.
Fed. R. Civ. P. 54(b). Generally, reconsideration of an interlocutory order is appropriate
“when there is (1) an intervening change of controlling law; (2) new evidence available; or
(3) a need to correct a clear error or prevent manifest injustice.” Rodriguez, 89 F. App’x at
959.
The plaintiffs contend that the November 21, 2014 order [Record No. 22] contained
clear errors suitable for correction through a motion to reconsider. Specifically, they argue
that the Court erred by: (i) applying the federal, rather than state, pleading standard; (ii)
misinterpreting Kentucky case law regarding manager liability; and (iii) issuing its decision
before the plaintiffs had an opportunity to fully brief the issues. [Record No. 33-1, p. 3]
The plaintiffs’ first argument is that the Court impermissibly applied the federal
pleading standards articulated in Federal Rule of Civil Procedure 8, Bell Atl. Corp. v.
Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), to state-law
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claims removed to federal court. They urge the Court to look to Kentucky’s pleading
requirements, since the Complaint was originally filed in Kentucky state court. However, it
is well-established that the Federal Rules of Civil Procedure apply to removed cases. See
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1983); Stern v. Inter-Mountain Tel. Co., 226
F.2d 409 (6th Cir. 1955). Although the Sixth Circuit has not addressed the issue since the
Supreme Court’s ruling in Iqbal, federal district courts, including this Court, have
consistently held that federal pleading requirements under Rule 8 and the Twombly-Iqbal
standard apply to removed complaints, even where the state pleading standard is more
lenient. See Vanhook v. Somerset Health Facilities, LP, 2014 U.S. Dist. LEXIS 173721
(E.D. Ky., Dec. 15, 2014) (federal, not state, pleading standard applies to removed actions).
Further, an analogous line of Sixth Circuit cases applies the Iqbal pleading standard to statelaw claims in diversity cases. See Foust v. Stryker Corp., No. 2:10-cv00005, 2010 U.S. Dist.
LEXIS 69771 (S.D. Ohio Jun. 22, 2010) (applying Twombly pleading standard in a motion to
dismiss state law claims); Wilkey v. Hull, 366 F. App’x 634, 637 (6th Cir. 2010 (unreported)
(applying Twombly pleading standard in a diversity case to assess the factual plausibility of
the plaintiff’s state-law claims).
The Federal Rules of Civil Procedure also address this situation.

Rule 81(c)

specifically provides that “[t]hese rules apply to a civil action after it is removed from a state
court.” Fed. R. Civ. P. 81(c)(1). The Supreme Court has noted that this “expansive language
contains no express exceptions.” Willy v. Coastal Corp., 503 U.S. 131, 134 (1991). In short,
the Rule 8 pleading standards apply to all district court proceedings, including those that
originated in state courts. See Vanhook, 2014 U.S. Dist. LEXIS 173721 at *6.

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The plaintiffs’ Complaint was initially filed in Fayette Circuit Court, where, as they
correctly note, notice pleading standards apply. E.g., Grand Aerie Fraternal Order of Eagles
v. Carneyhan, 169 S.W.3d 840, 844 (Ky. 2005). Even so, once this action was removed to
this court, the Federal Rules of Civil Procedure – including Rule 8(a)(2) and the plausibility
pleading standard articulated in Iqbal and Twombly – apply. Thus, the plaintiffs’ first
argument does not supply a basis for the Court to reconsider and set aside its prior
determination.
The plaintiffs’ second ground for reconsideration suggests that “the Court concluded
that a manager of a retailer owes no duties to the purchaser of a defective product.” [Record
No. 33-1, p. 3] This characterization seriously misstates the Court’s Order. The Court did
not find a blanket prohibition of manager liability under Kentucky law. Rather, the facts
alleged in the plaintiffs’ Complaint were found to be insufficient to assert a colorable
negligence claim against Spears and were further precluded by Kentucky’s Middleman
Statute.1 [Record No. 22, pp. 6-7] The issue was previously addressed in the November 21,
2014 Memorandum Opinion and Order. [Record No. 22, pp. 5-8] Nothing in the plaintiffs’
current motion alters the Court’s original analysis. Thus, the plaintiffs’ second argument
does not provide a basis for reconsideration or other relief.  

In connection with this assertion, the plaintiffs also argue that the Court improperly

shifted the burden of proof of fraudulent joinder from the defendants. [Record No. 33-1, p.

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In fact, the Court cited to Jones v. Abbott Laboratories, 212 WL 32581 (W.D. Ky. 2012), in
which a store manager was properly sued where the product had been recalled and the manager actively
overrode a cash register block on the product to allow the plaintiffs to purchase it. In the case at bar, the
Court found that “the facts do not suggest that Defendant Spears personally sold a recalled product – or
any product at all – to the plaintiffs. Without an allegation of a breach of a duty to the plaintiffs, the
Complaint does not assert a colorable negligence claim against Spears.” [Record No. 22, p. 7]

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24] This assertion is also unfounded. Not only did the Court determine that it “must resolve
all disputed questions of fact and ambiguities in the controlling state law in favor of the nonremoving party, and all doubts as to the propriety of removal are resolved in favor of
remand,” it also concluded that “the removing party bears the ‘heavy’ burden of establishing
fraudulent joinder. Walker, 442 F. App’x at 953.” [Id., pp. 3-4] Notwithstanding this high
burden, the defendants sufficiently demonstrated that Spears was fraudulently joined in the
action. [Id., p. 8]
Finally, the plaintiffs argue that they were “denied the opportunity to file a Reply”
under Local Rule 7.1(c). [Record No. 33-1, p. 3] They are correct. However, the plaintiffs’
current motion “asserts the substantive arguments that would have been raised in a Reply.”
[Id.] Therefore, the Court has given these arguments the consideration afforded a reply brief
and finds that the issues raised have been sufficiently addressed in the Court’s prior
Memorandum Opinion and Order [Record No. 22] and in the above analysis. Accordingly,
the matter being fully briefed and the Court being sufficiently advised, it is hereby
ORDERED that the plaintiffs’ Motion to Reconsider and Set Aside, Alter, Amend, or
Vacate Judgment [Record No. 33] is DENIED.
This 16th day of January, 2015.

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