Naz, LLC v. Philips Healthcare

Filing 25

ORDER granting in part & denying in part 11 Motion for More Definite Statement as stated herein. FURTHER ORDERED that, w/in 7 days, consistent with this Order & Reasons, pursuant to 28 U.S.C. 1653, the plaintiff must file an amended complaint correcting its defective jurisdictional allegations. Signed by Judge Martin L.C. Feldman on 7/26/2017. (caa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

NAZ, LLC

CIVIL ACTION

v.

NO. 17-2882

PHILIPS HEALTHCARE, A DIVISION OF
PHILIPS ELECTRONICS NORTH AMERICA CORPORATION

SECTION "F"

ORDER AND REASONS
Before the Court is the defendant’s Rule 12(e) motion for
more definite statement and Rule 12(b)(6) motion to dismiss or,
alternatively, for more definite statement.

For the reasons that

follow, the motion is GRANTED in part (insofar as the plaintiff
must amend its complaint to identify the citizenship of each of
its members) and DENIED in part (insofar as the plaintiff has
satisfied its notice pleading obligation with respect to its
allegations of the sale of the MRI and the defendant is not
entitled to a more definite statement).
Background
This litigation arises from a medical facility’s purchase of
allegedly

faulty

MRI

equipment,

the

manufacturer’s

allegedly

shoddy installation and service of the MRI equipment, as well as
1

its failure to provide the purchaser with the “complete package”
including the hardware and software components that should have
been delivered when the MRI equipment was installed.
This extensive factual summary is drawn from the allegations
of the complaint.

Philips Healthcare, a Division of Philips

Electronics

America

North

manufactures,

tests,

Corporation

markets,

sells,

(Philips),

installs,

and

designs,
services

medical and diagnostic equipment, including the Ingenia 3.0T Omega
MRI. 1

Philips Medical Capital (PMC) is the financing arm of

Philips, but Philips leads its customers to believe that Philips
controls the financing terms of its equipment sales in order to
coax sales.
NAZ,

LLC

owns

Metairie, Louisiana.

a

medical

facility

on

Kingman

Street

in

The medical facility at 2909 Kingman Street

was constructed to expand the existing medical center (2905 Kingman
St.) with the addition of a state of the art neuroscience center
and ambulatory surgery center.

Critical to this expansion, the

neuroscience center was to house an Ingenia 3.0T Omega MRI.

Dr.

Morteza Shamsnia, as principal of NAZ, decided that a new, state

MRI, or magnetic resonance imaging, is non-invasive imaging
technology that, using a large magnet and radio waves, produces
three-dimensional
detailed
anatomical
images
of
organs
and structures inside the body.
2
1

of the art 3T MRI would provide better services to patients, would
produce much higher quality MR images, would allow vast expansion
of his research into subjects such as autism, dementia, Alzheimer’s
disease,

concussions,

post-traumatic

stress

disorder.

Dr.

Shamsnia decided, with the proper computer hardware and software
equipment, it would expand the number and geographical reach of
services, and thereby increase NAZ’s revenue and profits.
After research and discussions with various manufactures, Dr.
Shamsnia, on behalf of NAZ, decided to purchase the Philips Ingenia
3.0T Omega MRI neurological complete package.

This complete

package was crafted to serve NAZ’s and Dr. Shamsnia’s particular
purposes for use of the machine.

Philips marketed its product

with promises and representations that the MRI package was the
equipment needed to achieve the particular purposes sought by Dr.
Shamsnia on behalf of NAZ.
In

December

2011,

relying

on

Philips’

representations

including those regarding the high level of skill, expertise, and
knowledge possessed by Philips, its engineers, and installation
specialists, Dr. Shamsnia signed a quote document that set forth
the price and components, package, and services Philips promised
to deliver.

In doing so, Dr. Shamsnia (on behalf of NAZ) made a

counteroffer to Philips’ quote or proposal by adding to the terms
3

a condition that acceptance was contingent upon Philips providing
financing for the purchase of the MRI at 3.9%.

The effective dates

of this quote document were December 11 and December 30, 2011.
Nevertheless, it is alleged, there was never a meeting of the
minds as to this quote document, which was never fully executed.
There

remained

disputes

regarding

the

terms

of

the

sale.

Negotiations regarding the sale terms continued.
In May 2012, a Philips financial sales representative sent
another “partial” quote document to Dr. Shamsnia, who countered by
attaching additional conditions of the sale.

Dr. Shamsnia noted

on the quote that any agreement on the sale of the Ingenia 3.1T
was conditioned upon Philips confirming its authority to lock in
the financing terms previously requested by Dr. Shamsnia and made
subject

of

a

financing

arrangement

with

PMC.

No

Philips

representative ever signed this partial quote document and the
Philips Standard Terms and Conditions of Sale were never sent or
explained to Dr. Shamsnia.

This partial quote document, which had

the effective dates of May 14, 2012 to June 28, 2012, was never
finalized and never became effective or binding on NAZ.
Negotiations between Philips and Dr. Shamsnia continued in an
attempt to reach an agreement on the sale terms and conditions and
on the services, instructions, and recommendations by Philips.
4

While the negotiations continued, because of the delays, Philips
and NAZ agreed that Philips would deliver the Ingenia MRI package,
and Dr. Shamsnia on behalf of NAZ agreed to follow Philips’
experts’ instructions and recommendations regarding installation
and services.
Before the MRI package could be installed, the facility and
room where it would be housed needed to be constructed and modeled
according to Philips’ experts’ specifications.

NAZ had expended

significant costs to construct and model the second floor of its
facility

at

2909

representations.
facility,

they

Kingman
But,

notified

Street

after
Dr.

based

Philips’
Shamsnia

on

Philips’

engineers
that,

due

experts’

visited
to

the

vehicular

movement below in the medical facility’s parking lot, the MRI
package needed to be located on the third floor.

NAZ then incurred

additional costs to reconstruct the third floor of the facility to
house the MRI package.

NAZ relied upon Philips’ engineers and

installation specialists, who installed the MRI package and its
components on the facility’s third floor.
Dr.

Shamsnia

and

his

construction

teams

and

Philips’

engineers participated in weekly meetings, discussing in detail
the issue of vibration and sound isolation.

NAZ articulated its

concerns regarding vibration and the support system for the MRI
5

unit.

Philips’ experts showed photographs and told NAZ that the

redesigned, special pads for 3T MRI units solved those concerns:
the experts reassured NAZ that the weight of the unit and the
special modified pads were adequate and safe to operate the MRI
package and prevent its movement during operation.

Philips never

mentioned the existence of anti-seismic brackets.
On December 22, 2014, the Philips’ team released the MRI
package to NAZ and represented that it was safe for patient use.
At that time, Philips began to request monthly payments on the MRI
package.

Dr. Shamsnia, on behalf of NAZ, began making payments to

Philips’ financing arm, PMC.

NAZ hired a board certified MRI

technician, who was sent to Philips’ headquarters in Cleveland,
Ohio to receive training on the 3T Philips MRI before January 5,
2015.
The MRI use on patients and volunteers began on January 5,
2015 and continued for only four days.

When the technician

returned on January 12, 2015, the technician noted improper signals
during calibration as well as gaps and separation of the covers on
the MRI unit.

Immediately, she notified Philips engineers.

That

afternoon, a Philips engineer made a site visit and noticed these
changes.

When the engineer opened the bottom cover of the MRI

unit, it revealed a significant, clear shift and sliding of the
6

vibration pads from their originally installed location.

The MRI

unit was inoperable and service was required to render it safe for
operation.
Philips agreed to service the MRI unit, which was tendered to
Philips’ engineering team for modifications and repairs to allow
Philips the opportunity to correct the faulty condition.

On

January 13, 2015, Philips’ senior engineers arrived at the facility
and discovered that the MRI had moved inches from where Philips’
engineers had originally installed it.

The engineers inquired

about the possibility of an earthquake as the explanation for the
movement.

After inspecting the unit, the engineers evacuated the

facility based on their concern that the unit might explode.

They

then “quenched” the MRI, which involved de-energizing the MRI and
discharging it of all of the helium gas in the MRI system; the
helium was released through a vent pipe on the roof.

The MRI was

completely inoperable.
Two days later, NAZ employee discovered water from heavy
rainfall the night before had entered through the roof and flooded
the floors, walls, and ceiling of the MRI room, as well as the
floors of the surrounding rooms.

It was later determined that

Philips’ engineers had caused an opening in the roof through which

7

the water entered the facility.

NAZ had to pay $850,000 to repair

the damage.
Even after months of communication, Philips’ experts could
not determine the cause of the MRI’s malfunction.
its own experts at its own expense.

NAZ had to hire

NAZ’s experts determined that

the cause of the malfunction was the movement of the MRI in normal
operation; the support system for the MRI equipment was inadequate,
which caused the approximately 4,600 kilogram (10,000+ pound)
magnet to move while the MRI was being used.

When Philips was

notified of this discovery, it admitted that the support system it
had recommended and installed was neither suitable nor safe.
NAZ then had to spend additional time and money to obtain
additional equipment to repair the problem caused by Philips.

The

parties

the

agreed

that

this

remedial

work

was

subject

to

oversight, direction, control, and approval of Philips’ engineers
and done according to Philips’ specifications and modifications.
These included additional modifications to the door and the room
in which the MRI was housed.

Given the continuing inspections,

troubleshooting, repairs, reinstallation, and testing, the MRI
equipment was not re-activated until after April 2016.
the

MRI

equipment

has

never

been

clinical use.
8

recertified

by

To date,

Philips

for

Because the continuing repair, modification, reinstallation,
and redelivery of the MRI equipment took so long, it was not until
sometime after April 2016 that NAZ discovered that the computer
software and hardware package component that should have been
installed with the MRI equipment had not been installed.

Because

the software and hardware component of the MRI package was central
to NAZ’s agreement to purchase the MRI equipment from Philips at
the

particular

price

agreed

upon,

and

because

the

computer

component has not been delivered to this date, NAZ claims that
Philips has failed to deliver the MRI package it purchased.

NAZ

claims that Philips’ failure to properly install and configure the
MRI equipment and because of the structural alterations of the
building

caused

by

Philips’

actions,

an

application

to

the

appropriate governmental agency for approval of the ambulatory
surgery center cannot be initiated by NAZ, which has resulted in
loss of use and profits.
To

operate

the

MRI

equipment

for

clinical

use,

Philips

required NAZ to complete advance training, which did not occur
until after May 2016.

Certification for clinical use of the MRI

equipment by the American College of Radiology was not obtained
until August 2016.

9

On April 4, 2017, NAZ, LLC sued Philips Healthcare, alleging
gross fault (because, as a manufacturer of highly complex medical
diagnostic equipment, Philips should be held to a heightened
standard of care from which Philips grossly deviated) and several
breach of contract causes of action: breach of obligation to
provide a complete system that would fit NAZ’s particular purposes
of which Philips was aware, in violation of Louisiana Civil Code
article

2524;

bad

faith

breach

of

contract

in

violation

of

Louisiana Civil Code article 1997; bad faith seller in redhibition,
in violation of Louisiana Civil Code article 2520; failure to make
timely deliver, in violation of Louisiana Civil Code article 2485;
and breach of installation and service agreements.
recover

the

following

damages:

purchase

price

NAZ seeks to
and

expenses

occasioned by the sale; loss of business with respect to use of
the MRI package; loss of business with respect to use of NAZ’s
surgery center; loss of profits with respect to use of the MRI
package; loss of profits with respect to use of plaintiff’s surgery
center; loss of goodwill; costs and expenses incurred in relation
to damages to the facility caused by the quenching of the MRI;
loss of intellectual gratification and physical enjoyment of the
MRI and ambulatory surgery center; inconvenience; financing costs
and

interest;

costs

incurred

to

mitigate

damages

and

costs

associated with repairs and testing of the MRI and MRI room; costs
10

incurred to mitigate damages or costs associated with repairs to
and testing of the MRI and MRI room; costs incurred to preserve
the MRI and related equipment; depreciation; overhead costs and
expenses; in the event of rescission, return of the purchase price
with interest from the time of the sale and all expenses incurred
as a result of the sale; attorney’s fees and litigation costs; and
any and all penalties, punitive or exemplary damages, fines, fees,
including

treble

damages

afforded

under

Louisiana

law.

The

defendant now moves for a more definite statement as to the
plaintiff’s jurisdictional allegations and moves to dismiss, or
alternatively,

seeks

a

more

definite

statement

regarding

the

plaintiff’s claims arising from the alleged contract of sale.
I.
A.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.

Such a motion is rarely

granted because it is viewed with disfavor.

See Lowrey v. Tex. A

& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).

11

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure,
a pleading must contain a "short and plain statement of the claim
showing that the pleader is entitled to relief."

Ashcroft v.

Iqbal, 556 U.S. 662, 678-79 (2009)(citing Fed. R. Civ. P. 8).
"[T]he

pleading

'detailed

standard

factual

Rule

8

allegations,'

announces

but

it

does

demands

not
more

require
than

an

unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at
678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
In considering a Rule 12(b)(6) motion, the Court “accept[s]
all well-pleaded facts as true and view[s] all facts in the light
most favorable to the plaintiff.”

See Thompson v. City of Waco,

Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel. Magee
v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th
Cir. 2012)(en banc)).

But, in deciding whether dismissal is

warranted, the Court will not accept conclusory allegations in the
complaint as true.

Id. at 502-03 (citing Iqbal, 556 U.S. at 678).

To survive dismissal, “‘a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that
is plausible on its face.’” Gonzalez v. Kay, 577 F.3d 600, 603
(5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal quotation
marks omitted). “Factual allegations must be enough to raise a
right to relief above the speculative level, on the assumption
12

that all the allegations in the complaint are true (even if
doubtful in fact).”
footnote omitted).

Twombly, 550 U.S. at 555 (citations and
“A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the
reasonable

inference

misconduct alleged.”

that

the

defendant

is

liable

for

the

Iqbal, 556 U.S. at 678 (“The plausibility

standard is not akin to a ‘probability requirement,’ but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.”).

This is a “context-specific task that requires the

reviewing court to draw on its judicial experience and common
sense.”

Id. at 679.

“Where a complaint pleads facts that are

merely consistent with a defendant’s liability, it stops short of
the line between possibility and plausibility of entitlement to
relief.” Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).

“[A] plaintiff’s obligation to provide the

‘grounds’ of his ‘entitle[ment] to relief’”, thus, “requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”

Twombly, 550 U.S. at

555 (alteration in original) (citation omitted).
Finally, “[w]hen reviewing a motion to dismiss, a district
court ‘must consider the complaint in its entirety, as well as
other sources ordinarily examined when ruling on Rule 12(b)(6)
motions to dismiss, in particular, documents incorporated into the
13

complaint by reference, and matters of which a court may take
judicial notice.”

Funk v. Stryker Corp., 631 F.3d 777, 783 (5th

Cir. 2011)(quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007)).
B.
Rule

12(e)

allows

a

party

to

move

for

a

more

definite

statement of a complaint when it is “so vague or ambiguous that
the party cannot reasonably prepare a response.”

Fed. R. Civ. P.

12(e)(the moving party must “point out the defects complained of
and the details desired.”). Like other Rule 12 motions, Rule 12(e)
motions are generally disfavored because of the liberal pleading
standard articulated by Rule 8.

See Mitchell v. E-Z Way Towers,

Inc., 269 F.2d 126, 132 (5th Cir. 1959).

Rule 12(e) motions should

not be used as a substitute for discovery.

Id.

Rather, such

motions should be used sparingly to remedy “a pleading that states
a claim so vaguely or ambiguously that it cannot be answered.”
See Wright & Miller, Federal Practice and Procedure § 1376, at
315, 328 (3d ed. 2004)(“The narrow range of application of Rule
12(e) and the recognition that many motions for a more definite
statement are interposed largely for the purposes of delay, raises
the question of its contemporary value.

Some commentators and

judges have advocated that the motion be abolished entirely,
14

thereby remitting parties who desire the clarification of a claim
asserted against them to the discovery process.”).
II.
A.
First, Philips seeks “a more definite statement” concerning
the plaintiff’s allegations supporting this Court’s exercise of
diversity jurisdiction.

The defendant submits that the plaintiff

has failed to identify the citizenship of each member of its LLC
and, therefore, has failed to sufficiently allege that this Court
has diversity jurisdiction.

The plaintiff counters that it pled

sufficient facts to allow the Court to infer that the parties are
diverse, and that the identity and citizenship of its members is
readily ascertainable by performing a search on the internet.

The

Court finds that the plaintiff’s jurisdictional allegations are
defective, but will permit amendment.
For

diversity

purposes,

the

citizenship

of

determined by the citizenship of all of its members.

an

LLC

Harvey v.

Grey Wolf Drilling, 542 F.3d 1077, 1080-81 (5th Cir. 2008). 2

2

is

The Fifth Circuit observed:
Supreme Court precedent, case law from other circuits,
and the statutory language of both Section 1332 and
Louisiana
Revised
Statutes
§
12:1301(a)(1)
overwhelmingly support the position that a LLC should
not be treated as a corporation for the purposes of
15

It

follows

that

a

plaintiff

invoking

this

Court’s

diversity

jurisdiction must identify members of an LLC and allege each
member’s citizenship in order to sufficiently allege that the Court
has jurisdiction.
Here, it is undisputed that the plaintiff made only conclusory
allegations concerning diversity jurisdiction. 3

Simply put, the

citizenship of an LLC is determined by the citizenship of all of
its members; the burden is on the party invoking this Court’s
jurisdiction to sufficiently allege jurisdictional facts on the
face of the complaint -- it is not for the Court to assume that
all unnamed members of the plaintiff LLC are diverse from the
defendant, nor is it for the respondent to consult resources
outside of the complaint to search for jurisdictional facts.

When

a party has the affirmative burden to allege particular facts
within its knowledge, its burden is discharged when it explicitly
pleads those facts.

See Getty Oil Corp., a Div. of Texaco Inc. v.

diversity jurisdiction. Rather, the citizenship of [an]
LLC is determined by the citizenship of all of its
members.
Id.
The plaintiff
pursuant to 28
are citizens
amount...is met
3

alleges:
“This Court has original jurisdiction
U.S.C. § 1332(a) because Plaintiff and Defendant
of different states, and the jurisdictional
in that the amount in controversy exceeds $75,000.”
16

Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988)(Where
“jurisdiction
‘distinctly

depends
and

on

citizenship,

affirmatively

citizenship

alleged.’”).

must

However,

be

because

“[d]effective allegations of jurisdiction may be amended” pursuant
to 28 U.S.C. § 1653, the plaintiff will be permitted to amend its
complaint

to

specifically

identify

its

members

and

their

citizenship.
III.
The defendant moves to dismiss, or seeks a more definite
statement regarding, the plaintiff’s allegations relative to any
alleged “sale” of the MRI equipment.

The defendant identifies

what it perceives as several deficiencies in the plaintiff’s
allegations.

First, the defendant contends that the plaintiff

fails to plead facts sufficient to identify the parties to the
sale; the defendant submits evidence to support its belief that
the true purchaser of the 3T MRI was Advanced Neurodiagnostics
Center, not NAZ. Second, the defendant contends that the plaintiff
fails to adequately plead the requisite elements concerning a valid
sale under Louisiana law, in particular, that the plaintiff fails
to properly plead “the parties’ concurrence on the thing sold” and
fails to plead the price it paid for the thing sold.

17

The Court

disagrees; the plaintiff’s detailed allegations amply satisfy the
liberal pleading standard and policy of Rule 8, Twombly, and Iqbal.
Although the plaintiff alleges several different claims for
relief, the defendant focuses its challenge on the allegations
concerning

its

sale

of

the

MRI

equipment

to

the

plaintiff.

Louisiana Civil Code article 2439 defines a “sale” as “a contract
whereby a person transfers ownership of a thing to another for a
price in money.

A valid sale in Louisiana requires concurrence on

three elements:

(1) the thing sold, (2) the price, and (3) the

consent of the parties.”
Viewing all well pleaded facts in the light most favorable to
NAZ, the plaintiff alleges that Dr. Shamsnia, on behalf of NAZ,
decided to and ultimately did buy from Philips the Philips Ingenia
3.0T

Omega

MRI

neurological

complete

transaction was financed through PMC.

package,

and

that

the

Negotiations among Dr.

Shamsnia and Philips were extensive and prolonged; there were many
discussions and disputes regarding the terms of the sale, the
financing of the sale, and the specifications of Philips’ services,
instructions, and recommendations.

Despite an impasse among NAZ

and Philips on some terms and conditions of the sale, the parties
performed,

or

began

performing

governing the transaction.

their

respective

obligations

Philips delivered and installed the
18

MRI machine in NAZ’s medical facility in Metairie, and in exchange
for delivery and other obligations performed by Philips, NAZ began
making its payments based on the financing arrangement it had with
PMC.

NAZ then alleges that Philips’ careless installation of the

MRI equipment (among other failings) and the way its experts
handled the consequences of that faulty installation, it has
suffered very specific and wide ranging damages.

Suffice it to

say, this is a simplistic summary of the plaintiff’s very detailed
factual allegations.
Philips
first

taking

challenges
issue

the

with

sufficiency

whether

the

of

these

complaint

allegations,
pleads

facts

sufficient to identify the parties to the alleged sale. But simply
consulting the face of the complaint -- as the Court must at the
pleadings stage -- reveals the identities of the parties to the
sale:

the complaint clearly alleges that NAZ, Inc. purchased from

Philips the MRI equipment, and that the sale was financed through
PMC. Although the complaint specifies that Dr. Shamsnia negotiated
the sale, it is alleged that he did so “on behalf of NAZ, Inc.”
Philips concedes that the face of the complaint identifies
these particular parties as the parties to the alleged sale (which
should end the Court’s inquiry at this stage), but Philips urges
the Court to consider an extraneous exhibit it submits in support
19

of its “belief” that the true purchaser of the 3T MRI was, in fact,
Advanced Neurodiagnostics Center, not NAZ, Inc. 4

At this, the

pleadings stage, the Court’s task is not to resolve disputed fact
issues by resort to matters outside the pleadings.

Rather, the

Court’s task is to view the alleged facts in the light most
favorable to the plaintiff to determine whether a claim upon which
relief

may

be

granted

is

plausibly

stated.

Even

if

this

“Quotation” was an exhibit ordinarily considered in assessing the
sufficiency

of

pleadings,

the

Court

finds

that

it

is

wholly

inappropriate to consider it for the purpose advanced by the

4

Submitting an exhibit that it says calls into question whether
NAZ was the purchaser of the MRI equipment, Philips draws the
Court’s attention to a “Quotation” document that indicates:
Presented to:
ADVANCED NEURODIAGNOSTIC CENTER
2905 Kingman St.
Metairie, LA 7006
MARTY SHAMSNIA
OWNER
...
The second page of this “Quotation” document describes as the
product subject to the “lease” or “purchase order” the Ingenia
3.0T Omega product. The purchase price is redacted, and there are
other portions of the document that are scratched through, in
addition to handwritten note at the end of the document indicating
that the [redacted] purchase price is agreed upon subject to
financing; the handwritten note also references “our previous
agreement.”
20

defendant.
transaction

Relative
at

to

issue,

the

there

identity
is

no

of

the

credible

parties

dispute

to

the

that

the

plaintiff alleges that it, NAZ, Inc., purchased from Philips the
3T MRI, which was financed through PMC.
no more.

The Federal Rules require

If discovery exposes otherwise, Philips will enjoy

summary judgment efforts. 5
Even if the complaint alleges facts sufficient to identify
the parties to the alleged sale, as the Court finds that it does,
Philips

then

advances

three

additional

challenges

to

the

sufficiency of the plaintiff’s allegations, arguing that: the
plaintiff fails to properly plead the parties’ concurrence on “the
thing sold” (in that the plaintiff itself alleges that there was
no meeting of the minds on the terms and conditions of the sale);
the plaintiff fails to plead facts regarding the price of the thing
sold; and the plaintiff fails to plead facts sufficient to show a
concurrence on the consent of the parties element of a sale under

Although this Quotation document is referenced in NAZ’s
complaint, along with other quote documents and other terms and
conditions of sale, considering this exhibit to make a factual or
merits determination on the issue of whether NAZ was the true
purchaser of the MRI equipment is procedurally improper. The only
issue for this Court to determine on a Rule 12(b)(6) motion is
whether the plaintiff’s allegations plausibly state a claim for
relief. And the Court does so by taking the allegations as true.
By attempting to call into question the truth of the plaintiff’s
allegations, the defendant perverts the limited inquiry the Court
makes on a motion challenging the sufficiency of pleadings.
21
5

Louisiana law.

The plaintiff counters that it has alleged facts

sufficient to show or allow the inference that Philips sold NAZ
the MRI machine. The plaintiff contends that it adequately alleges
that, while there was a meeting of the minds and consent on the
thing, price, and delivery, there was no meeting of the minds nor
consent regarding Philips’ Standard Conditions of Sale, and there
was only partial delivery of the MRI package because the software
component was never delivered; the complaint alleges that after
much negotiation, the defendant delivered and installed complex
and expensive MRI equipment and that a financing arrangement was
made for doing so.

The plaintiff’s allegations withstand the

defendant’s three remaining challenges.
To be sure, a plaintiff alleging breach of contract arising
from a sale under Louisiana law must plead facts sufficient to
notify the defendant of the thing sold, that a price was paid for
the thing sold, and that the parties consented to the sale.
La. C.C. art. 2439.

See

The plaintiff pleads facts sufficient to

satisfy the federal pleading standard on these substantive state
law elements.

NAZ alleges that it purchased a 3T MRI complete

package (which at various places in the 22-page complaint is
alleged to include a variety of equipment, software, hardware,

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installation, service, among other components) 6 from Philips for
a price agreed to by the parties and financed by PMC, 7 and that
both parties performed some or part of their obligations pursuant
to their agreement; the facts alleged by NAZ, including that
Philips delivered and installed and serviced an MRI machine it
sold to NAZ, compels the Court to infer that the parties consented
to the sale.

That performance began while negotiations regarding

the terms of the sale were ongoing, or that the some terms of the
sale may not be finalized or contained in any one document, does
not detract from the sufficiency of the factual allegations or
reasonable

inferences

from

those

factual

allegations

that

plausibly suggest that Philips sold its MRI equipment to NAZ.
Finally, insofar as the defendant seeks a more definite statement
from the plaintiff to “properly identify the parties to the alleged

Philips takes issue with what it regards as “inconsistencies” and
the plaintiff’s failure to “clearly identify” what it means by
“complete package.”
But the plaintiff alleges many facts in
support of what was included in the sale and one may infer from
these facts that the thing sold included not just the MRI machine
and equipment needed to properly physically install it, but also
hardware, software,, installation, and service.
7 Like its other arguments, Philips’ argument that the plaintiff
failed to sufficiently plead a “sale” under Louisiana law because
the plaintiff did not specify the exact price paid for the
equipment and service elevates form over substance. Moreover, it
appears that Philips itself redacted the purchase price listed on
the two-page quote it asks this Court to consider; that same
exhibit warns that the quote contains confidential information
that may not be disclosed without Philips’ consent.
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6

contract of sale, the item(s) sold and the price paid for that
item(s)” the defendant seeks to expand Rule 12(e) beyond its
confined (if not obsolete) scope and appears to misunderstand the
liberal pleading policy of Rule 8.
Accordingly, for the foregoing reasons, IT IS ORDERED: that
the

defendant’s

motion

is

GRANTED

in

part

(insofar

as

the

plaintiff’s jurisdictional allegations are defective as stated
herein) and the motion is otherwise DENIED in part (insofar as the
plaintiff’s allegations concerning the sale of the MRI complete
package satisfy Rule 8). IT IS FURTHER ORDERED: that, within seven
days, consistent with this Order and Reasons, pursuant to 28 U.S.C.
§ 1653, the plaintiff must file an amended complaint correcting
its defective jurisdictional allegations.
New Orleans, Louisiana, July 26, 2017

_____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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